Two articles — Bernard Keane on Australia’s flawed electricity market and Jason Murphy on Australia’s flawed housing market — hit close to home with Crikey readers yesterday. The former saw calls to avoid over-simplifying neoliberalism’s impact on our power consumption, while the latter prompted debate on how to avoid a housing crash.
Ian Lowe writes: All of what Bernard says is true, but there is another aspect of this comprehensive demonstration of the failure of the neoliberal economic ideology. The recent review of Victorian power prices found that 30% of the average household bill was the marketing costs of the competing retail companies, paying piece-workers to cold-call us at dinner time to lie about their impossibly confusing packages. The ideology says that competition will drive down prices, but the pathetically inadequate regulation of the private sector cowboys means the consumer is paying through the nose.
Meredith Williams writes: The ACCC seems to be interested in helping consumers reduce our power bills. It also seems to separate that goal from the greater good of reducing greenhouse gas emissions. I say that as consumers we have the ability to do both at once by using less power. Most of us probably don’t need to use as much power as we do. I regard this as doing my bit for the planet. Saving money is a bonus.
Geoff Edwards writes: Bernard Keane may be justified in identifying neoliberalism as the villain responsible for the atomisation of the electricity sector and the present uncoordinated mess. But in poking fun at the “public-sector feather-bedding that characterised the government-owned sector”, he fell into the neoliberal trap of disparaging government expenditure as waste. The former electricians at Yallourn referred to this so-called “feather-bedding” as “preventative maintenance”. One generator at a time was always out of service, pulled down to its last bolt and rebuilt, when the public sector was proud to make reliability a feature of their service.
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Damien writes: This is exactly like the US subprime housing market situation because interest only loans are sub-prime loans and never should have been offered in the first place. And yes, a housing price crash would “bring down the economy”, and drastically reduce the cost of living. Because house prices (and by extension, rents) are the cost of living. And yet, in all we hear in debates about cost-of-living pressures is the incessant whining about power prices.
Bref writes: The US subprime housing market meltdown happened in a time of massive oversupply of dwellings. We have the reverse, a massive undersupply. The only reason our house prices are so high is the availability of land. Releasing more land (not necessarily in Sydney or Melbourne) to fit demand would stabilise and lower prices, the actual price of building is quite within reason. Government policy is to blame, its time the pollies stopped fiddling and got on with it. Canberra itself is an example of a city rising out of nothing, surely its not beyond current politicians to actually do something constructive in this area.
Jack Robertson writes: It’s a Ponzi scheme, and it’s now in the collapse phase. So no, APRA can’t re-pump the ludicrous overpricing up again just by re-enticing interest only loans. Ponzis only rise once. Folks get wise after folks get burned.
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