Housing and Migration

Pic courtesy the Wire.

One of the memes doing the rounds in social media at the moment, gentle reader, connects migration with the housing crisis.

Lets have a look at that, and attempt to establish the reality.

First up, what are the actual existing migration rates in Australia?

The graph (from the ANZ Bank) is interesting. We see peaks in 2007, 2011 and 2024. Between 2006 and 2019, the rate was more or less steady around 400,000. Then we see a precipitous drop with the pandemic, with a rebound about 650,000 peaking in 2023.

The rate began to fall after this peak, and continues to trend down.

A graph (from Adviser voice) of the accumulated shortfall doesn't match all that well with migration. It was higher between 2012 and 2015 than it is now.

No doubt migration is a factor, but it part of a complex picture that has been developing for decades. Issues such as planning systems and zoning are important.

Interest rate changes, fewer people per household, and investment policy are also significant.

So why has it become a political issue?

That's much easier to understand. The alleged link has become a meme (an idea that spreads). Social media amplifies memes, and they develop a momentum of their own very quickly.

This is especially the case if gross oversimplification provides the structure of the meme as it does in this case. 

Link that with the xenophobia that lurks in the dark corners of Australian politics, and before you know it, some people take to the streets.

Maybe we should be looking at better solutions than restricting migration. This would have a minor impact on housing, and conceivably would have unintended harmful consequences.

Any housing reform needs to address the issues of construction and supply. It should also look at less restrictive zoning and planning. Approval pathways should be streamlined and development approvals fast tracked. 

The use of prefabricated and modular homes needs to be considered. It's always been a mystery to me that homes in Australian are built one at a time. As a petrol head I understand that motor vehicles haven't been built as unique units since Henry Ford invented the assembly line. Most cars are not custom built these days, and if they are, they cost an arm and a leg.

Social  housing seems to have been abandoned completely by one side of politics, and only halfheartedly promoted and supported by the other. Of course, it's difficult to make money out of investing in social housing. Social housing seeks to provide affordable rents which limits revenue.

Given the dimensions of the crisis, maybe it's time for some radical measures. Here are some suggestions -

1. Remove negative gearing beyond the residential home.

2. Abolish the Real Estate industry. It's unnecessary, and its costs to buyers and sellers operate as a handbrake for people trying to enter the market.

3. Remove stamp duty and land tax.

These radical measures terrify most politicians, so we probably won't see them anytime soon.

What operates now in the housing sector defies Maslow's hierarchy of needs. The first level on his pyramid specifies shelter after all.

Assumptions and Spin

 

Image courtesy Richard Bradley

To be perfectly honest, gentle reader, AI gives me the yips.

But every now and again, just to stir the possum, I ask it a question.

I asked - "Why have energy prices in Australia increased?"

The answer didn't mention "net zero". 

Here it is in full -

Australia is a major energy exporter, and domestic prices for gas and coal have been driven up by high global demand and geopolitical factors, such as Russia's invasion of Ukraine. 

Gas-fired generators are often used to top up supply when other sources are insufficient, and the high cost of gas in the wholesale market effectively sets the price for all electricity during those periods.

A large portion of an energy bill (around 40-50%) covers the cost of the poles and wires network. Significant investment is currently required to replace aging infrastructure, improve cybersecurity, and build new transmission lines to connect remote renewable energy projects to the main grid. 

These costs are passed directly onto consumers through network charges.

Many of Australia's coal-fired power stations are old and becoming less reliable, leading to frequent unplanned outages. When these major generators fail, backup power (often more expensive gas) is required, causing price spikes in the wholesale market.Inflation and Interest Rates.

The general rise in inflation and interest rates has increased the cost of capital expenditure for energy companies, which in turn influences the final price for consumers.

The only rationale across this list with a direct relationship to the current government's policy refers to the cost of replacing infrastructure. Some of this replacement is simply maintenance, as what is in place now is aging. This would be necessary irrespective of how the energy is generated.

Certainly, the cost of networking wind and solar is a factor. The Australian Energy Council has presented estimates, but they don't necessarily show that the generation source is the prime factor driving increased costs. There are a range of factors, it's very complicated, and a long way from the "Net Zero is to blame" meme.

Perhaps there is another very significant factor which arises from how energy is marketed and sold, not how it is generated.

Electricity costs in Australia rose by 183% between 1996 and 2016, which was about three times the general rate of inflation. South Australia is  fully privatised and has the highest prices. Marketing, advertising, managerial and sales staff (increasing by over 200% in comparison with pre-privatisation) has a cost attached. 

Privatisation has delivered high rates of return to private owners, who were able to inflate the asset based used to calculate permitted returns at a net loss to the taxpayer.

Private companies face higher borrowing costs than government, and these are passed on to customers. Contrary to expectations of increased efficiency with privatisation, the sector experienced a marked decline in labour productivity after privatisation.

The history shows that privatisation was not the efficiency silver bullet expected, and it's worth considering whether nationalisation of the grid might at least be worth consideration. It's an essential service, after all.

But then ideology would emerge as a consideration, and debates over ideology never end well....

Disappearing Retreats

 

Pic courtesy Veterans' Retreats Australia

In the process of testing my homebuilt RV, I visited a veteran's retreat just outside Miles last week.

For ten years I'd driven past it, up and down the Warrego Highway, but because I was working on EQ's time, I was never able to take the 14km of gravel road to check it out.

It's worth a visit. The location is perfect for anyone wanting peace and solitude for a while. The owner is a veteran, and like most of us is approaching the age where managing such a site is difficult.

He'd like to sell it, but hasn't as yet found a buyer. It occurred to me that an ex-service organisation (the RSL) might consider it a worthwhile project.

There are many of these retreats scattered across the country. They typically offer cheap basic accommodation to veterans, but many are open to the general public. I've stayed at one or two over the years, as they provide an interesting option if you're not in a hurry.

I gave up hurrying on my 70th birthday.

The first retreat I'm aware of was Pandanus Park, set up by Les Hiddins of Bush Tucker Man fame. It's still listed as open, but subject to road conditions.

There is a website (a work in progress) which lists, state by state, retreats across the country.

It would be a great shame if these retreats shut down, but the inevitability is that they will, as we run out of veterans. If we run out of veterans, we have run out of wars, and that has to be a good thing.

Scots of the Riverina

 

Pic courtesy John Schumann - The Vagabond Crew

Today, gentle reader, I offer a poem.

The poet is Henry Lawson, and as a consequence of studying a surfeit of his works at primary school, I have never been an admirer of Lawson. Perhaps it's all my Dad's fault. He was, after all my teacher from grades five to eight, and was very fond of Lawson.

Sixty two thousand Australians were killed in the First World War, and the narrative of the poem no doubt held true for many. 

We forget the deep wounds left by this conflict until we understand that with a population of 4.9 million, as it was then, the casualty figure set proportionally in today's Australia would have generated three hundred thousand deaths.

Scots of the Riverina Henry Lawson 1917 The boy cleared out to the city from his home at harvest time — They were Scots of the Riverina, and to run from home was a crime. The old man burned his letters, the first and last he burned, And he scratched his name from the Bible when the old wife's back was turned. A year went past and another. There were calls from the firing-line; They heard the boy had enlisted, but the old man made no sign. His name must never be mentioned on the farm by Gundagai — They were Scots of the Riverina with ever the kirk hard by. The boy came home on his "final", and the township's bonfire burned. His mother's arms were about him; but the old man's back was turned. The daughters begged for pardon till the old man raised his hand — A Scot of the Riverina who was hard to understand. The boy was killed in Flanders, where the best and bravest die. There were tears at the Grahame homestead and grief in Gundagai; But the old man ploughed at daybreak and the old man ploughed till the mirk — There were furrows of pain in the orchard while his housefolk went to the kirk. The hurricane lamp in the rafters dimly and dimly burned; And the old man died at the table when the old wife's back was turned. Face down on his bare arms folded he sank with his wild grey hair Outspread o'er the open Bible and a name re-written there. John Schumann put the poem to music on the Vagabond Crew's Behind the Lines album. It's worth a listen - one of Lawson's better works and Schumann does a good job of it.

"Peace" in our Time

 

Pic courtesy NYT.

We're being bombarded with media (both mainstream and social) about the arrival of "peace" in the Middle East.

When you've lived as long as I have, and observed the history of that part of the world, the notion that there is now "peace" is greeted by at the least incredulity, and at the most derisive laughter.

I am the same age as the state of Israel, after all.

Granted, credit should be allocated to Trump, as he seems to have driven much of the negotiation. His financial connections in Saudi Arabia though his son-in-law have no doubt greased the palms of the oligarchs that run the show in that country, and his family businesses will no doubt benefit from the reconstruction benefits and the contracts they generate.

He needed them to be onside, and along with the Qataris, the Egyptians and the less compromised Europeans, in the end they were.

He is, after all, in the same business as Osama Bin Laden.

Let's identify what has actually changed after the agreement.

First, and most critical, the Israelis aren't continuing to kill scores of Gazans using air-delivered high explosives daily. I have personal experience as a conscript, of being on the receiving end of misguided ordnance. It was a long time ago, but it's not something you forget. To be delivered from that is, I suppose, a kind of "peace".

Second, the living hostages have been released, along with thousands of Palestinians imprisoned by the Israelis. 

And there is hope of something more permanent. Excuse my cynicism, but I'll believe it when I see it.

Migration

 

It's a long time since I've heard Gaelic spoken in a church, gentle reader, but I had that experience on Sunday.

The last time was August 1980, when my bride and I were visiting the Irish Republic and we went to mass in Cork. Forty five years is a long time, and viewed from the perspective of the marches a few weekends ago, we've actually gone backwards in this country in our views on migration.

Yesterday was celebrated as Migrant Sunday in our local parish, and speakers of different languages, all migrants, read the prayers of the faithful in their own tongues. 

Thus we heard Irish, Spanish, Swahili, Pidgin, Vietnamese, Tagalog, Fijian, Arabic, and Bahasa Indonesian. 

The fact that one of the speakers was native Irish, and physically indistinguishable from the bulk of the population was especially significant. 

My father, a descendant of Irish migrants used to describe being called a "dirty little tyke" as he was horse whipped by an Orangeman in Warwick back in the day.

This in a relativelly conservative regional city like Toowoomba, could be considered remarkable, but it isn't. These people are members of our community, welcomed and contributing. Unfortunately migration is frequently used as a dog whistle by those who are happy to use fear and bigotry as their ticket to political influence. 

That was very clearly demonstrated in the recent marches.

Perhaps our Filipino parish priest expressed it best with a garden metaphor. 

He noted that the magnificent floral displays witnessed in our carnival of flowers are comprised of a wide variety of diverse blooms, and this diversity is largely responsible for the spectacle. 

Same Same, But Different (USA & Australia)

Pic courtesy EF.com

I'm surprised, gentle reader, at the outrage generated by the speech given to the United Nations by the incumbent POTUS.

We share democratic values with the Americans, but we certainly don't share democracy. About a third of them don't vote, and those that do are often pretty ignorant of anything beyond their district.

Nothing expressed on that occasion at the UN should come as a surprise to anyone who understands the USA. It's revealing to look at a few statistics gathered recently about American culture. They explain the bizarre platform that drives what currently masquerades as the GOP.

Gallup Polling indicates that 67% of Americans identify as Christian. Of those, 33% are Protestant. Of those calling themselves Christian, the Pew Centre found in 2021 that within Protestantism, evangelicals continue to outnumber those who are not evangelical.

Currently, 60% of protestants say "yes" when asked whether they think of themselves as a "born again" or evangelical Christian, whilst 40% say "no" or decline to answer the question.

Now Evangelicals hold pretty rigidly to some core concepts. They include a belief in divine healing, and by a wide margin, evangelical leaders surveyed reject the idea that human beings and other living things have evolved over time due to solely to natural processes.

As recently as 2005, the issue of the teaching of Creationism in public schools was before the courts in Louisiana. It was declared unconstitutional, but recent surveys show that between 12 and 18% of high school biology teachers teach it as a valid scientific alternative, or give mixed messages by endorsing both Creationism and Evolution.

In other words, a fair slice of US voters, particularly in the South, have been taught anti-scientific theory at school.

So Americans are prone to accept a range of simply preposterous notions because they basically know no better. Twenty-three percent of Americans have never left their shores, and as a consequence have little understanding of foreign cultures or value systems.

There are other more pragmatic reasons for the dissemination of the opinions expressed by the POTUS. They include the necessity to gain and hold attention, the capacity to pick up on prevailing social anxiety, and a mercantilist view of the world.

All of these factors coalesced on September 23rd. They revealed the gulf between the values held by mainstream Australia, and those who elected the 47th President.

Such an individual would never be elected in this country, due to the strength and stability of our democracy. We have, in this country, the blessed trinity which underpins it.

This blessed trinity includes first of all, compulsory voting, introduced in 1924, obliging governments to deliver ballots into every citizen's hands. which ensures complete civic participation, legitimacy, and majority consensus. 

Then there is preferential voting (1918) which eliminated vote-splitting, ensured representative majoritarian electoral outcomes, responded to popular preferences, and encouraged policy dialogue amongst both niche and broad political interests.

The institutional element of this trinity is the Australian Electoral Commission (1984), which professionalised and depoliticised electoral management, provided impartial electoral management, and maintains voter rolls and facilitates fair redistributions.

None of this should be taken for granted. If ever it is, we would deserve the dysfunction and chaos we observe across the Pacific.