Jun 2, 2014

Why is Australia so expensive — and who’s responsible?

If business wants to complain about the high cost of operating in Australia, it should demonstrate some courage and call out the culprits -- other businesses and the politicians that pander to them, Bernard Keane and Glenn Dyer write.

Recent months have brought the emergence of one of the perennials of economic debate in Australia — the lament that Australia is a high-cost place to do business.

Last week Scottish economist James Mirrlees declared that Australian wages needed to be closer to Chinese levels, or the government would have to subsidise them, in order for Australia to compete for international investment with China. That came after one of the annual winter rituals in Canberra, “Minerals Week”, in which the men (and woman) who run our mining companies flock together to collectively insist that Australian workers need to be more “flexible” and cheaper — though no one said aloud what many of them probably think, that Gina Rinehart’s idea of $2 a day was an appropriate benchmark.

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8 thoughts on “Why is Australia so expensive — and who’s responsible?

  1. danger_monkey

    For shame, Bernard Keane, for shame. You should never, ever print the entire Donald Horne quote, which effectively flips the meaning of ‘Lucky Country’ most Australians understand.

    That’s un-Australian, mate.

  2. C R

    Thank you, thank you, thank you Bernard for putting into black and white what many people have needed to hear for a long time.

    With “deregulation” and selective “user pays”, the cost of doing business here will only get more expensive. It won’t be long before the increasing debt burden of all third level graduates puts pressure on wages. The knock on effects will be felt by everyone.
    We have been telling our kids for years they will have careers in jobs that haven’t even been invented yet, that they will have to retrain several times over their careers. Well, not now. How many will take on even more debt related to retraining? How much debt can individuals or couples cope with?
    Australians have to decide what kind of society they want to live in. Education is not an end user product – we all benefit from an educated society. Nobody minds co-payment, but there has to be a balance, and the idea that some ideological “market” b/s should dictate our social policy is an utter disgrace.

    Australia – the stuck on stupid country.

  3. Scott Grant

    On real estate prices, one should not leave out the rate at which Australia’s population is increasing, largely driven by a massive and excessive immigration rate.

    “Australia has the highest population growth in the developed world” – from The Big Australia Illusion by Callam Pickering, Business Spectator.

    Along with housing, this high rate of population growth makes it very hard for governments to keep up with the required infrastructure. Could this be a direct cause of higher costs, generally?

  4. AR

    Sooo, we the people,who (s)elect the oligarchs, political or commercial, every time we put our hand in our pocket, are not to blame. Whew, that’s relief.
    Nuttin’ to do with me mate, I only live here.

  5. scott redford

    Excellent piece but one thing is forgotten. With the Right wanting to bring down wages and cost of living rising no one seems to have thought about whether the masses will be able to live. How will the young and pensioners be able to live. The 1% live in fear of the masses so everything is aimed at controlling them. That’s why Gina bought part of Fairfax and that’s why terrorism is used as the reason for the gross invasion of privacy by the NSA and also Australian Governments. But the terrorists the Governments are afraid of are the terrorists NOW it’s the terrorists SOON they are afraid of. These are the people now who when faced with degradation of their way of life by those they elected start to turn on their ‘masters’. This is why social media and emails and face recognition and meta data spy’s on us. When or if it will happen remains to be seen but it isn’t paranoia on my behalf. I think we all know what’s happening.

  6. BookishMisfit

    Thanks for putting all this together so clearly. Great piece.

  7. The Pav

    Re the Comment on Cars

    “Who’s responsible? Successive governments (the Abbott government honourably excepted), rentseeking manufacturing unions and car transnationals.”

    Two things Bernard & Glen

    Please do not use the word “honourable” in regards to th current govt unless preceeded with “dis”

    Secondly, Abbotts negotiations could hardly be called successful for FTA’s unless you want to call rape consensual sex

  8. Helen Stevens

    Great article. It’s quite sad actually, Australia has such a beautiful landscape and some innovative intelligent people. Our infrastructure is highly antiquated (look at the train system of Sydney an international city, that has lost it social life), restrictive business rules and for the most part of what I’ve seen in my career – not all but far too many lazy, incompetent and narrow-minded public servants who have carriage to develop policy who should be handed a package. I’m Gen X though, there won’t be a golden handshake for me – the baby boomers have a tight lid on it and Gen Y are coming up behind me saying I’m better educated.

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