Finance & Fury: The Lucky Country isn’t what most think – A look back in history on how we are destroying our own luck

The Lucky Country isn’t what most think – A look back in history on how we are destroying our own luck

May 17, 2019

Welcome to Finance and Fury, the Furious Friday edition

A reminder of how lucky we are and why we are called the lucky country. Also, what we have to lose if we neglect to remember this

You don’t know what you have until you have lost it
Taking things for granted like our power, because blackouts suck
What about the billions of people who don’t have power or deal with rolling blackouts daily?
Who would value having power more?
The hatred of the rich shows the lack of gratitude by those who do it
Countries with the highest number of millionaires/billionaires per capita have the highest GDP per capita and quality of life
- They are wealthy (some exceptions) because they provide more value to our lives
We are lucky to have “rich people

Few places on earth better suited for middle-class prosperity than Australia
British convicts and free settlers – first government in 1788 were autocratically governed by a British Governor (mini-dictatorship)
Considerable unhappiness with the way some colonies were run
The monopoly of Rum used as currency and Australia has a history of a beer economy
English common law was introduced, the rights of Magna Carta and the Bill of Rights 1689 were introduced.
The number of settlers increased and they were given resources and land from the government. Convicts were used as Laborers
Land assigned back then as “Liberty Plains” is now Homebush and Strathfield in Sydney
Then had the gold rush and entrepreneurs came flocking in
Given the freedom and vast resource-rich country Australia is, it provides an ideal environment for upward mobility
From the pioneering ranches of the nineteenth century to the middle-class suburbs of the late twentieth

Or did we change our luck?
Became a socially divided society like most first world countries
The political influence will either make it or break it
Bob Hawke – Legendary figure for Labour, 1983 – 1991. Did you know the Hawke Government implemented financial deregulation and reform?
Australian dollar float, dismantled the tariff system, privatized state sector industries, ended the subsidisation of loss-making industries and introduced full dividend imputation.
Did also have some popular ALP policies, with tax system reforms and introduction of Fringe benefits tax as well as capital gains tax
He would be considered moderate these days, if not closer to the LNP
A political party for the working class is now dominated by those operating outside the tangible economy
Some people are focused on achieving one thing and will do whatever it takes to do it
Pushing for climate change mitigation programs will further deindustrialise Australia
What about all of the people who will lose their jobs? Or those in other countries that rely on our Coal for energy?

Gradual deindistrialisation stems directly from policies imposed by local governments in NSW, VIC, and QLD
Sydney’s manufacturing employment is down 50% in the last 2 decades
Politics was slowly transformed into an instrument of the bureaucracy and “progressive” gentry
Why are the yellow vests protesting?
We are sabotaging our economy, dependent on resources sales to China
Our commitment to renewable energy dwarfs EU, US, and China. Per capita, we have 5 times the number of renewables
Our energy costs are now among the highest in the world
ALP want to boost renewables from 20% to 50% in 2030 and the Greens want 100%
Ironically just as Australia is to replace Qatar as the world’s largest producer of natural gas, industrial enterprises in Australia are under pressure from high energy prices
Imports are replacing the closing Australian producers
With more taxes, energy prices, fuel, and super payments, there is less disposable income to you
OECD households were considered middle class, but this has dropped 1% per decade since the 1980s and now ranks below the OECD average

How our luck may have run out?
Decline in Australia’s middle class resulting in the regulation of land and expenditure to promote urban density
1981 to 2016 - property-ownership rates fell from 60% to 45% for 25 - 34-year-olds
UK has only 6% of the land urbanised
US has 3% and Canada has 2.1% urbanised
3% of Australia is urbanised
Major cities in the first world have a “smart growth” model
Helping turn once affordable cities into some of the world’s costliest
According to the RBA, planning regulations are a major addition to this cost
Inner core of Brisbane, Sydney, and Melbourne represents 11%, 7% and 13% of the greater metro population (31%)
More than four-fifths of families living in single-family homes in suburban areas
Market manipulation can leave limited choices
Not enough supply to keep up with the demand adds to increased prices
Projections show 50% of Sydney’s dwellings will be apartments by 2050
40% of Sydney 35-49 year old’s live in townhomes or apartments, which is double the rest of Australia
This is a market-distorting approach that doesn’t let supply free and restricts demand choices
The threat of a financial meltdown as urban-core property prices decline is real

The issues reflect policy decisions and not our economic or social fundamentals
Unless something changes, we may have a bleak future
Urged to settle where supply is allowed, making it unaffordable and congested
An ever-increasing demand for government revenues
With a little direction, this can be undone which is what will be tackled in next Friday’s episode

Thanks for listening, if you want to get in contact you can do so here.

Also, I am doing the St Vinnies CEO sleepout in June. If you could help support that would be greatly appreciated.