Wednesday, October 19, 2016

How the housing boom is remaking Australia’s social class structure

This is quite a sober article but it does fall into the mould of a Green/Left scare story:  "We'll all be rooned, said Hanrahan".  It's fault lies in its confidence that accurate prophecies are possible.  In particular, it relies on straight-line extrapolation: The really dumb belief that all trends will continue unchanged.  It does not allow for Taleb's "Black Swan" events. And just such an event is now happening.  So it is sad that the erudite academic below has not allowed for it.  He has  seen it but has not understood it.

I refer to the huge inflow of Chinese money that is behind the orgasm of apartment building which has now been going on in the big cities for a year or more. Huge apartment buildings are springing up like mushrooms all over the place.  There must be a dozen within 5 minutes' drive of where I live in Brisbane. The process has already brought new accommodation to glut proportions in Melbourne.

And the law of supply and demand tells us what must happen.  A prediction based on the law of supply and demand is as certain as a prediction based on straight-line extrapolation is not.  As the supply of apartments races ahead of the normal demand, the prices will fall and the demand will expand to take up the supply.  We are in other words looking at a major fall in the price of housing in roughly a year's time.  The apartment glut will even hit house prices as the demand for accommodation is somewhat fungible.  Some people who might have been in the market for a house will be diverted by the good value of a cheap apartment.

So the predictions below were out of date the moment they were written

The relentless housing boom in Australia’s cities, especially Melbourne and Sydney, is often framed as an intergenerational conflict in which younger generations are being priced out of the market by baby boomers. However, sociological theories of social class suggest parents’ wealth and social status will eventually be passed onto their children anyway.

So, by focusing on intergenerational inequalities that will eventually be reversed, we are framing the housing affordability question the wrong way. At the same time, the impact of the housing boom is so deep that some long-established ideas about social class may be no longer relevant.

The housing boom has blurred existing boundaries between upper, middle and lower classes that applied to the baby boomers and previous generations. New social class boundaries and formations are being produced.

This does not mean younger generations, as a collective, are disadvantaged compared to their parents. Rather, these younger generations will be subdivided differently and more unequally.

The renting class

In the industrial city, the term “working class” was defined by the experiences of low-income workers in manufacturing jobs. Yet in a post-industrial Australian city it makes more sense to talk about the “renting class”.

Not all renters are poor, and not all poor households are private renters. However, the correlation between the two is significant and strengthening. The proportion of private renters in the total population is slowly but surely increasing – from 20.3% in 1981 to 23.4% in 2011.

Simultaneously, public housing – once a symbol of the working class – is undergoing a dramatic demise.

Largely abandoned by the state to fend for itself, with weak regulation for security of tenure or rent control, the renting class faces the unrelenting burden of ever-rising rents. The average renter paid 19% of their income on rent in 1981. In 2011, this proportion increased to 26.9%.

And, in 2014, around 40% of low-income private renters were in housing affordability stress, paying more than one-third of their income on housing.

With hardly enough “after-housing” disposable income to meet basic living standards, savings for retirement is almost impossible for the low-income renter. And with little or no wealth to assist their children to buy a home, the renter’s social class status is likely to be passed from one generation to the next.

The home-owner class

More than just a status symbol, home ownership has become increasingly central to the way most Australians accumulate wealth. About half of the home-owner’s wealth is held in their own home. Each housing boom enriches them further through tax-free capital gain on their homes.

The housing boom also creates work in the construction industry, which is the third-largest employer in Australia with more than one million workers. These are no longer working-class occupations, with most skilled jobs paying average weekly earnings of close to A$1,500. So, it is arguably the home-owner class that benefits most from each construction boom.

One consequence of the housing boom is that a growing cohort of moderate-income households is now priced out of home ownership. Had they been born a generation earlier, they would have probably been able to afford a house. Now it is beyond their reach.

Over the years, as their rents rise and their wealth stagnates, the gap between the renter and a home owner will become unbridgeable. Their experience of retirement will be worlds apart.

One lifeline for this cohort is the prospect of inheriting some of the housing wealth of their baby boomer parents. But when this will happen is highly uncertain.
The housing elite

The housing elite is rewarded by the housing boom well beyond the capital gain on their own homes. Much of the massive wealth of Australia’s elite is generated through the housing market – through investment, construction and financing of housing.

Harry Triguboff, Australia’s third-richest person, earned his fortune in the apartment development business. So did the three youngest entrants into the 2016 BRW Rich List. Their entry marks the rising importance of housing in the making of Australia’s super-rich.

The top 20% of the wealthiest Australians hold most of their wealth in their home and in other investment properties. They also hold significant wealth in the sharemarket, which is commanded by big banks whose portfolios are heavily dominated by housing loans. Each housing boom significantly adds to their wealth.

Social class, however, is more than just financial wealth. The wealthiest Australians secure their social class position by living in exclusive suburbs where they are able to associate with the right people and live an elite lifestyle. The astronomical prices of houses in some of these suburbs ensure their hermetically exclusive nature.

Breaking the loop

None of these social class categories is natural or universal. These categories will not apply in some European countries, for example, that have very different housing systems.

The deepening fusion between Australia’s housing system and its social class system creates a dangerous cycle. The further house prices grow, the more important housing becomes as a determinant of social class. And when social class is increasingly defined by housing, people are willing to bid even higher to enter home ownership or the housing elite.

Unless we break this cycle, Australia will continue in its path of becoming a more polarised society, with a weakened renting class, an impenetrable elite, and a shrunken home-owner class between them.


Climate change gloom lessons for kids

Students are being led to believe that global warming will destroy sunsets.  The course materials are clearly far-Left  rather than scientific

DOOMSDAY climate change lessons are being taught to children as young as eight who are concluding that human activity threatens to destroy beautiful sunsets and ­waterways.

Six schools in the state’s north are trialling a “world first” curriculum that is expected to be adopted across the state, if successful.

The NSW Education Department-approved trial is being run by Southern Cross University’s Lismore campus and proposes to give students from Year 3 to Year 8 “political agency” and allow them to be “experts in their own lives”.

Running in tandem with the curriculum is a challenge project in which students form their own response to climate change and how they can personally prevent mass extinctions of animals, plants and their habitats.

Some children have concluded that humans have “succeeded in destroying much of the physical world”.

One student researcher in northern NSW said: “It is selfish and horrible how humans are causing animal and plant species to die.”

Another said: “We must band together to reverse the effects of climate change.”

Organiser and Southern Cross University education lecturer David Rousell said schools in Bexhill, Mullumbimby and Alstonville had taken on the interdisciplinary model, which could be taught in English, creative arts, science and history classes.

“This challenge is about bringing schools together to embark on projects that have a public outcome and can create real change,” he said.

“Kids are doing amazing work where they take a photo which represents some aspect of climate change and they write about it. Some students take photos of beautiful things such as sunsets or waterways and then write about how it could be lost or destroyed because of climate change.”

An Education Department spokesman referred Telegraph inquiries on the new curriculum to the Board of Studies Teaching and Educational Standards, which said the program was being trialled but was not formally endorsed.

Last week more than 300 students came together in a Climate Change Challenge at the uni’s Lismore campus. One student said: “We were not placed on this Earth to make an acquisitive and ideal life that supports the human race only.”


Tensions flare over 'Q&A' advice

Grace is certainly a no-nonsense lady

Tensions flared on Monday night's Q&A when industrial relations expert Grace Collier said the unemployed could solve their problems by starting their own businesses.

On a night when industrial relations was a key focus of the program, Ms Collier's remarks sparked several on the panel into life and surprised many in the Melbourne studio audience.

The panel was discussing the future of manufacturing — namely whether governments should subsidise certain industries to keep them afloat and save jobs.

But Ms Collier, a News Corp columnist, said governments did not owe workers any favours.

"Nobody has an entitlement to a job. Society doesn't owe you a job. The Government can't get you a job. The Government shouldn't have to get you a job. There's no such thing as Government money. There's your money and my money," she said.

"Everybody has something that they're good at … You work out what you're good at and you try and make a career out of that."

When Greens Leader Richard Di Natale pointed out there were less jobs than people in Australia, Ms Collier fired back.

"People can start their own businesses," she said, leading to several people in the audience to start heckling.

"It's terrible, isn't it? Wouldn't it be awful to have to start your own business because someone else has to give you a job?" Ms Collier said.

"Why don't you start a business and hire some people? Go on. I dare you." "I'm busy at the moment," Mr Di Natale replied.

Australian Council of Trade Unions president Ged Kearney interjected, saying "nobody has any money in their pockets to spend in that business".

"We are losing our manufacturing industry and there's been absolutely no plan from this Government to try to reinvigorate manufacturing, to find where we can have a competitive edge in the global economy," she said.

Labor MP Tim Watts said the Coalition Federal Government had "nothing" for manufacturing industry workers.

However John Roskham, the executive director of right-wing think tank Institute of Public Affairs, said it was "desperately unfair" for the Government to have to subsidise each job in the car industry to the tune of tens of thousands of dollars.

Economist Judith Sloan disagreed with the whole panel, saying the Australian labour market had been strong for some time.

Has Trump killed the conservative movement?

Meanwhile, Donald Trump's lewd comments led the panel to consider what Australians would need to do to prevent a similar character taking the nation's top job.

Mr Watts labelled the Republican candidate's emergence as the death knell of the conservative movement.

"He's been able to enter the scene in the US because conservative ideology has imploded," Mr Watts said.

"There was a time when conservatives believed in things. What's happened in the US is they've invited people who have subverted these conventions, trashed these institutions into the mainstream."

Mr Di Natale said people were "fed up with establishment politics", leading them to turn to extreme candidates.

"What you're seeing, in my view, is people like Trump and One Nation and others who are scapegoating individuals, who are looking to foreigners and easy targets to blame for what are very complex social problems," he said.

But Mr Roskham said Mr Trump did not represent true conservatism because of his stance on importation tariffs.

"Trump would not have been my candidate or the candidate of a lot of conservatives of a lot of liberals and libertarians … If I was in America I would not know how to vote," he said. Ms Collier was more optimistic about the future, saying she didn't care who the US elected, provided Australia wasn't negatively impacted.

"Don't lose sleep over the stupid things Trump said, because there's going to be another one tomorrow. Don't worry about it," she said.


One Nation soars post-election, Newspoll shows

Support for Pauline Hanson’s One Nation party has risen fourfold across the nation since the election and almost doubled to 10 per cent in Queensland, Newspoll shows.

Newspoll surveys taken exclusively for The Australian since the July 2 election reveal support in the House of Representatives for One Nation has climbed to 6 per cent, up from 1.3 per cent on polling day.

One Nation appears to have made its gains over the past four months from other minor parties and independents, as well as ­taking a slice of support from the Turnbull government.

By contrast, support for the other non-major party force at the election, the Nick Xenophon Team, has remained largely ­unchanged at about 2 per cent ­nationally and 21 per cent in its home state of South Australia.

One Nation’s primary vote has jumped to 10 per cent in Queensland, up from 5.5 per cent at the election, where it ran 12 lower-house candidates. The party vote there is also higher than its Senate election vote of 9.2 per cent, which delivered seats for Senator Hanson and Malcolm Roberts.

In NSW, One Nation’s support is 6 per cent, from only 0.6 per cent achieved by its three candidates and, again, is higher than the 4.1 per cent Senate vote that elect­ed Brian Burston.

Similarly, One Nation is polling at 6 per cent in Western Australia, where it did not run any lower-house candidates but where Rodney Culleton won a spot in the Senate with a vote of 4 per cent.

In South Australia, One Nation is polling at 4 per cent and in Victoria at 3 per cent, both slightly higher than in the Senate election. The party did not run lower-house candidates in those states in July.

Senator Hanson and her colleagues hold the balance in the Senate because the government cannot pass legislation opposed by Labor and the Greens without One Nation’s support.

Since the election Senator Hanson has courted controversy, including saying in her first speech that Australia was in danger of being swamped by Muslims.

Last week the government gave Senator Hanson one of its seats, held by the Nationals, on an important parliamentary committee inquiring into the National Broadband Network after she lost a ballot among senators. Communica­tions Minister Mitch Fifield said the government was keen to allow crossbenchers to participate.

Tomorrow Senator Hanson is making a three-day “fact-finding mission” to Norfolk Island, skipping most of this week’s Senate ­estimates hearings.

Newspoll shows voters have continued to move away from the major parties since the election, when 23.2 per cent of people did not vote for the Coalition or Labor — the highest percentage since 1934.

The latest Newspoll shows support for the Greens, minor parties and independents has climbed to 25 per cent, with the Greens ­unchanged since the election at 10 per cent, One Nation’s rise to 6 per cent, NXT at 2 per cent and other parties and independents down from 10 to 7 per cent.

The Coalition’s primary vote of 39 per cent is down three percentage points since the election, while Labor is up 1.3 points to 36 per cent. Based on preference flows from the election, Labor holds a two-party-preferred lead of 52 per cent over the Coalition’s 48 per cent.


Posted by John J. Ray (M.A.; Ph.D.).    For a daily critique of Leftist activities,  see DISSECTING LEFTISM.  To keep up with attacks on free speech see Tongue Tied. Also, don't forget your daily roundup  of pro-environment but anti-Greenie  news and commentary at GREENIE WATCH .  Email me  here

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