A Country Going Backwards …
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Reserve Bank boss Philip Lowe, the man who has inflicted 9 straight interest rate rises on Australian homeowners, said last week that Australians actually have it “pretty good” and should stop ‘complaining’.
Dr Lowe, who apparently lives in a $4 million house and earns over $1 million a year, told the media that ‘nothing keeps him up at night’.
In fact, his only real ‘worry’, is the growing “retreat from globalisation and free trade”, which he claims made Australia “a wealthy and prosperous country”.
It is a complete mystery to me how any economist, let alone one as eminent as Dr Lowe, can seriously think that offshoring a population’s productive capacities and skills base can possibly maintain a country’s prosperity for long.
In fact, it was globalisation which systematically dismantled all the elements needed for a free and prosperous economy in Australia.
The move offshore of production resulted in the moving offshore of our GDP, tax base, consumer income and irreplaceable career opportunities for young Australians.
The ladders of upward mobility that once made Australia an “opportunity society”, were kicked away in the interest of higher corporate profits.
Without growth in consumer incomes to drive the economy, the RBA substituted it with consumer debt.
This allowed Australians with stagnant or declining incomes to access more and more spending monies on credit, creating the illusion of growth.
The massive expansion of debt tied heavily to the property bubble is now coming to an end.
The ‘New Economy’ jobs we were promised, turned out to be insecure, casual jobs in non-tradeable services such as retail, travel, waitresses, bartenders, aged care and hospital workers.
Today, a thin layer of very rich people in Australia rule over those “who have been left behind”—a shrinking middle class and a growing underclass.
Australia’s median family income hasn’t increased for a quarter of a century, while real wages have gone backwards.
Many businesses now only survive well enough to service their debts, with most too broke to expand or raise productivity.
Even the good ones are so burdened with debt, they are in no position to invest further.
Offshoring jobs may have benefitted bankers, corporate executives and their shareholders, but it ruined the income and employment prospects of a whole generation of Australians.
Many have chosen to opt out of insurance altogether.
According to the recent ACCC report, the rate of uninsured households in the North is now double the rest of the country.
The other day I had a call from a constituent whose mother had just received her latest home insurance renewal notice from Suncorp.
The poor lady was shocked to find her premium had increased more than 25% to $6,100.82.
(Over $1,000 of that amount was State Government Stamp Duty and GST).
The Mum is on a pension of just $26,000 a year, and a $6,100.82 insurance premium would reduce that to just $19,900.
She is not alone in this either.
My electorate phone rings constantly from people in distress after being hit with similar premium hikes, or even refused coverage altogether.
Those calls are just a drop in the bucket of what is happening throughout Queensland’s reef-adjacent regions.
Many are scrambling to find affordable coverage, often calling dozens of companies to find one willing to cover them at a reasonable price.
Flood cover is now pretty much out of reach for most people.
One couple told me they received quotes of between $15,000 and $20,000 for flood cover on their property in an area designated as ‘flood risk’, despite it never having flooded in the 30 years they had been there.
The blowout in insurance costs is adding significantly to the financial stress of households already struggling with similar hikes in mortgage payments, groceries, fuel and electricity.
Something needs to be done to fix it, and I’m not talking about another round of ‘disaster mitigation project studies’ money for councils either.
First up, stamp duty on insurance should be abolished.
It’s a complete tax rort and needs to go.
Other things the government could do would be direct subsidies and rules that insurers provide a minimum number of policies in northern Australia.
Insurance is not a luxury, it’s a necessity, and it’s disgraceful that it is our old people and other vulnerable groups who are being made to suffer the most.
There’s only so much you can cut back on, when you’re a pensioner.
Queensland has suffered a massive blow to its economy due to lockdowns and restrictions to prevent the spread of the coronavirus pandemic. Recovering from this disaster will not be easy. It will take a comprehensive strategic plan to kick-start the economy and get the State moving again. That’s where KickStart Queensland comes in.