Behind the blather

November 10, 2007

No housing crisis in la-la land

Writing in the Australian Financial Review, former Labor leader Mark Latham opines that the "housing crisis" is completely manufactured, a creation of people who are having trouble upgrading from two- to three-car garages.

The facts show otherwise. The November 8 Melbourne Age reported that, according to Fujitsu Consulting, "at least 117,000 households will be under such severe mortgage stress that they may have to sell within six months" if interest rates rise again. Meanwhile the Housing Industry Association (HIA) reckons that 650,000 households suffer "mortgage stress", defined as having to spend more than 30% of income paying the mortgage.

According to the HIA, the main regions of mortgage stress are Sydney (145,855 households), Melbourne (118,235) and rural NSW (90,279).

For Labor and Liberal the obsession is how increased mortgage and housing stress caused by interest rate rises will affect the swinging voters in marginal seats. However, the real story of housing crisis is to be found elsewhere: in safe Labor seats.

According to the Financial Review, the epicentre of housing stress — as measured by house price movements, mortgage stress and mortgage default rates — is the south-western Sydney seat of Blaxland, once parliamentary fief to Paul Keating.

In Blaxland — which covers working-class Sydney suburbs from Cabramatta and Fairfield to Bankstown and Punchbowl — 49% of borrowers are in mortgage stress and 49% of tenants in rental stress (spend more than 30% of their income on rent), even though house prices have fallen since 2004.

According to Michael McNamara of Australian Property Monitors, "It's so bad there [in Blaxland] because these things affect each other in terms of a downward spiral. Rising rates cause mortgage stress. More forced [house] sales add to the unsold inventory, because we have this backlog of stock on the market ...

"The outlook is extremely bleak. We know that each successive rise in the cash rate is going to send another wave of forced sales through the market."

Was Mark Latham once mayor of Liverpool, or la-la land?

I'll try Rubik's cube

The Work Choices debate is easy to understand ... if you have a degree in rocket science. According to industrial relations minister Joe Hockey the legislation has both boosted real wages and contained labour costs (and hence inflation).

According to his Labor counterpart Julia Gillard, it has both reduced real wages and made no contribution to containing inflation (so far).

Any Green Left Weekly reader with the solution to this conundrum should send it to

Wide brown land in energy splurge

As anyone involved in the global warming debate knows, the most immediate reductions in greenhouse gas emissions can be won by boosting energy efficiency. On this score, according to the Climate Institute, Australia's performance between 1990 and 2004 was miserable, a 0.3% annual improvement compared to an average for the OECD countries of 0.9% and a top score of 1.5% (Germany).

The research for Australia was done by Dr Hugh Saddler, author with Mark Diesendorf and Richard Denniss of the book A Clean Energy Future for Australia. It shows that Australia could save billions of dollars and make significant cuts in its greenhouse gas emissions just by applying standards already in place in other advanced industrial countries.

By the same token, a serious program of energy efficiency — based on an emergency program to install the most energy efficient systems of heating, light and cooking — would lift annual efficiency growth well above the German rate.

Prisoners' rights vary from state to state

Prisoners' rights group Justice Action has decided to build on a High Court victory over prisoners' voting rights by pressuring prison authorities to allow prisoners to receive political parties' material as well as a special election issue of Justice Action's Just Us newspaper.

But the response of prison authorities has been uneven. As Justice Action explains. "Six of the eight states and territories have responded so far. Two were blank refusals — NSW and SA — without any reason or the requested changes that they were invited to suggest. Two states 'need more time', two are still responding and two have said yes — WA and NT."

In response, Justice Action has decided to run a case in the NSW Supreme Court on both constitutional and administrative law grounds. Also, "since no state took exception to the draft content of Just Us we have now printed twenty thousand copies in tabloid size".

Anyone who wants to help get Just Us out to prisoners should contact Lara Daley at

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