The cost of living:
David Hand writes: Re. “Deflating the myth of cost of living pressures” (yesterday, item 1). Sometimes I wonder if Bernard Keane throws a few sentences together to meet a deadline without much regard to the complexity of the subject matter. The “cost of living pressure” item is a case in point. Maybe it was an attempt to have a crack at state premiers as he does. Superficially, it all seems so obvious but let me insert another factor — household debt.
It doesn’t make average punters feel better off if a major part of their income, rising in real terms though it may be, is devoted to debt. The story of the past decade is that as house prices were rising strongly, households were spending money like there was no tomorrow and running up ever increasing mortgages on things such as new cars, mansions and overseas holidays.
The GFC changed all that and as confidence in a benign future disappeared, peoples sense of risk grew. About the same time, houses stopped going up in value so for the first time in about 20 years, average householders were less well-off than 12 months before. We are now seeing a focus on debt reduction as households pay off their huge mortgages and retail has done it tough in the past two years. There is a positive side to this as the banks are finding an increasing ability to lend from their own deposits as people pay back debt.
But don’t expect people to feel good about it or better off at the same time.
Justin Templer writes: Re. “Price gouging: it’s all about consumer convenience, see” (Monday, item 1). If we want to measure price gouging what better than a “super yacht” index, along the lines of The Economist‘s Big Mac index.
On the super yacht index would be James Packer (media, gambling) with his Arctic P, 46th biggest in the world. Then we have Reg Grundy (media) with Reborn (nee Boadicea) at No.90. And Frank Lowy (retail premises) with Ilona at No.98.
With Pitt Street Mall being extraordinarily the fourth most expensive shopping strip in the world rental-wise, it is little wonder that we feel gouged. I’m shopping off the internet and I won’t be putting my super into a retail property fund.
The Media Entertainment and Arts Alliance:
Robin Howells writes: Re. “Fairfax body swap? Being forced to stay is the big concern” (yesterday, item 4). Crikey published:
“The Media Arts and Entertainment Alliance is pushing for Fairfax staffers whose positions are cut to be redeployed to other publications rather than face the spectre of compulsory redundancy.”
Do readers presume none of your staff belong to the MEAA and are not aware of its correct title?