Economics, Carbon and Karaoke

I'm very excited about moving to our new house; just two weeks away now. Gill is breaking the lease on her flat three months early, which means that we would have to pay rent here until that expires - unless new tenants can be found. Fortunately, that won't be a problem - the flat is in a really good spot on a quiet road in Mosman, minutes walk from the beach and is ideal for one person (but not two!). There was a viewing yesterday, which given the good weather and the morning sunshine flooding the lounge, was an ideal time to see it.

I've been asked a few times from people back home about buying a place here. Whilst that would be great, it's just not possible at the moment - it's stupidly expensive. Figures out last week showed that house prices in Australia have risen 150% in ten years; Sydney is the most expensive place by some way, but even in the outer areas along the NSW coast - Newcastle to the north and Wollongong to the south - have seen massive price rises which have not been matched by wage increases. The average house price is now around half a million dollars (330K pounds). With interest rates at 5.5% this doesn't make borrowing an attractive option; especially as this is relatively low in Australian terms (it wasn't long ago that rates were at 17%). All this means an insanely competitive rental market; one would think prices cannot continue to outstrip wages, but they seem to keep going up.

Australia has a multi-speed economy; interest rates are rising steadily as the Reserve Bank struggles to keep on top of inflation, which is now running at 3% - given it's target is between 2% and 3% it's barely succeeding. It's a confusing picture - manufacturing is declining (and shedding jobs) and retail is, if not yet in a state of crisis, really struggling; the high Aussie dollar (pumped up by interest rates that outstrip many other countries) means that many consumers are using the internet to shop abroad. Throw in to that mix the natural disasters that have befallen the east coast this year - Hurricaine Yasi in Queensland and severe flooding in Victoria and parts of NSW - and it's no surprise that food prices have soared. So what's driving the ecconomy? Mining. Take that out of the equation and Australia probably isn't doing it any better than elsewhere in the world (though regulation and state investment meant for a soft landing after the GFC); but it is Australia's natural resources - so needed to fuel Chinese power stations - that is causing this. Unfortunately, few people here seem to have the foresight that comes with hindsight: few predicted the GFC and the devastation wreaked on the UK economy, and this boom - whilst it has only really just started - will, at some point, come to an end. Will Australia be able to cushion itself when it does? Not given the current crop of politicians, it won't.

For those interested, my favourite author Richard Flanagan has written an excellent editoral for the Guardian on Australia's carbon tax debate - the subject that has dominated the news here for months. Morally the right thing to do, the whole enterprise is being bungled by an inept and weak government lead by a PM who, shortly having knifed the previous PM Kevin Rudd when she was his deputy, said she would not introduce a carbon tax before the last election - and then afterwards said she will. The Opposition have launched a massive fear campaign threatening the arrrival of the apocalypse should this come to pass. Gillard needs the votes of the Greens to maintain this minority government, and the house of cards will come crashing down if she doesn't force it through. Australia is one of the biggest polluters per capita on the planet (if not the biggest) so has no right to wag its finger at India and China - and yet few seem to see the irony of introducing a price on carbon whilst happily selling coal to the Chinese.

In other news, yesterday Gill and I spent the afternoon at Newington watching the rugby, my team having played in the morning at Centennial Park. It was a glorious winter's day - clear skies and 20 degrees - and a enjoyable way to spend the afternoon. In the evening we ended up going to karaoke at the pub in Mosman; why I decided "Goodbye Yellow Brick Road" was a good choice I don't know (it's fine at 2am in Andy's house - not in a pub in Mosman); but redemption came courtesy of my old friend Tony Christie - I know it was a bit lame to drag out one of the classics, but there are around 21 million Australians who haven't heard the routine before - and who am I to deny them?