John Howard's final years hit households

[Deathridesahorse]

Stephen Lunn, Social affairs writer | July 24, 2008
PAY packets bulged by a healthy 31 per cent over the final five years of the Howard government, but the extra household cash was whittled away by the cost of housing, which grew over the same period by 60 per cent.

When living costs such as food, petrol, education and childcare were also taken into account, household income in Sydney and Melbourne ended up growing by a mere 1.5 per cent a year from 2001 to 2006. Adelaide was only slightly higher at 2 per cent a year.

New economic modelling released today by AMP/NATSEM reveals that Western Australia and Queensland performed better, with Brisbane averaging 3.2per cent income growth a year after cost-of-living changes were factored in, and Queensland generally managing 4.2 per cent, the study showed. For Perth, the figure was 4 per cent and WA overall, 4.8 per cent.

"(Outside of WA and Queensland) it appeared that many households had only managed to tread water between 2001 and 2006, with what initially appeared as substantial increases in household income over this period being offset by rising prices for housing and costs of living," the analysis said.

The report, entitled Advance Australia Fair?, showed that for average Australian households, a 31 per cent increase in gross income between 2001 and 2006 was gouged by rising household costs - mortgage payments and rents - of an average 62 per cent for the same period.

Middle-income households were least able to enjoy their higher gross incomes, "with housing costs (rents or mortgage repayments) in these areas increasing almost 65 per cent (compared) with 54 per cent for affluent areas and 48 per cent for the poorest areas.

"A lot of the richer households already own their houses, so they aren't going to be recent purchasers buying into a high market and taking out a big mortgage.

"That group is the middle-income sector," the report's author, NATSEM principal research fellow Robert Tanton told The Australian.

"And they aren't even necessarily buying into the first-home market, but upgrading and therefore, giving themselves higher loan repayments," Mr Tanton said.

The study explains why Australians, despite receiving signals the economy was powering ahead on the back of the resources boom between 2001-2006, have nevertheless felt themselves struggling.
"The perception has not met the reality in that while the economy has been strong and incomes have been on the up, housing costs in particular were really biting into incomes," Mr Tanton said.

AMP managing director financial services Craig Mellor agreed.

"We've all been earning more money and that's great, but at the end of the day we've been using that money to pay for the houses we live in," Mr Mellor said.

"One thing we'd like to find out more about is whether the higher housing costs are for us to live in nicer houses, or is it costing us twice as much to live in the same house? I think it's somewhere between the two, but weighted toward costing more to live in the same house because of the increase in interest rates and house prices."

The rich widened the gap from the poor, with gross incomes for the 10 per cent living in the most affluent areas increasing 36.5 per cent compared to 29 per cent for the 10 per cent in the poorest neighbourhoods. Those affluent areas are mainly in the capital cities, with regional pockets chiefly in West Australia and Queensland mining areas.

"I think the geographical differences are more pronounced now after the last three years. People in the west of Sydney are doing it tough, while people in the west of Australia are doing it relatively easier," Mr Mellor said.


source: http://www.theaustralian.news.com.au/st ... 01,00.html

[freediver]

In the end Howard's was the highest taxing government in Australia's history, at a time when they could have been the lowest. There was no need for all those silly handouts. It's a shame Rudd isn't getting rid of them.

[slimD]

In the end Howard's was the highest taxing government in Australia's history, at a time when they could have been the lowest. There was no need for all those silly handouts. It's a shame Rudd isn't getting rid of them.

Rudd is getting rid of them, in the form of carbon tax. And alcohol tax. sex tax will be on the agenda soon, as costello was wrong when he said "one for mum, one for dad, and one for the country". The "one for the country" actually comes from another country.
And was howard also to blame for the massive increase in property prices in the UK/USA/NZ?

[freediver]

Rudd is locked into carbon trading, not taxes, and may end up handing out a lot of the permits. Carbon Taxation would be a good idea, if used to reduce other taxes.

[slimD]

carbon tax has to be the "fools gold" of all taxes. It will not have one ounce of benefit to global warming. For every dollar raised by a carbon tax, 90 cents will go to beauracrats, shareholders and every other leech who will be in it for the money, not the climate. You pay the tax, you're allowed to pollute!

[freediver]

It will not have one ounce of benefit to global warming.

Of course it will. Only someone completely ignorant of how our economy works would suggest otherwise.

You pay the tax, you're allowed to pollute!

The whole point of it is that you are still allowed to pollute if you really want to. We don't need the government to tell us when we can and when we cannot pollute. It is better to let market forces determine where it is cheapest to reduce emissions. We aren't communists. Yours is the same logic that has people carrying buckets of water round the backyard while you can pour it down the sink for $1 per ton.

[IQSRLOW]

Of course it will. Only someone completely ignorant of how our economy works would suggest otherwise.

Only someone of who is completely ignorant of the scale of the supposed problem would suggest that it will have a benefit beyond insignificant

Yours is the same logic that has people carrying buckets of water round the backyard while you can pour it down the sink for $1 per ton.

Yours is the same logic that charging $20-50 a ton to try and stop someone pouring a bucket of water down a sink will make a difference on a global scale

[freediver]

Only someone of who is completely ignorant of the scale of the supposed problem would suggest that it will have a benefit beyond insignificant

The impact will depend on the level of the tax. You can have anywhere between a 0% and 100% reduction, in whatever time frame you want. To suggest it will be insiginificant because of the mechanism is absurd.

Yours is the same logic that charging $20-50 a ton to try and stop someone pouring a bucket of water down a sink will make a difference on a global scale

It doesn't have to. Water is a local issue. All the water flowing out the Ord River won't help the Murray. The nature of the problem necessitates a local solution.

[slimD]

"It doesn't have to. Water is a local issue. All the water flowing out the Ord River won't help the Murray. The nature of the problem necessitates a local solution."

I totally agree. It could also be re-phrased to say "All the carbon emissions being cut from australia won''t help the planet. The nature of the problem necessitates a global solution".
And how do we stop mother earth from being the biggest polluter and destroyer of nature since time began? We are here at her whim, not vice-versa.

[freediver]

Just because a global solution is necessary doesn't mean you can't start locally. Or at the very least, follow the leaders.