Margaret Court’s comments provoke predictable responses

I don’t think much of what Margaret Court has been saying lately, but my earlier blog predicted the reaction to it (21/9/2016.) You can’t express an opinion on some subjects without invoking a fury of indignation and reprisals. Her opinions are out of the mainstream now but they were well inside the mainstream when she was a champion tennis player. I applaud her for sticking her neck out.

In this world, people have beliefs based on what they have been taught or grown up with. Other people have newer, more fashionable ideas. Who’s right? Are we making progress or going around in circles? Once we took half-caste children from their mothers and took children from their unmarried mothers. We thought it right then, but we think it wrong now.

It’s a very strange world today in many ways. In recent times you have seen the anguish of victims of molestation at the hands of Catholic clergy and other institutional abuse – young people put into harms way by the institutions that were supposed to protect them. But if someone would now question the right of gay couples to adopt children they would be hounded down as homophobic! They would be the worst kind of bigoted, narrow minded, reactionary troglodytes.

Recently my employer’s homepage was actively promoting a gay male couple who were raising a pair of boys. Of course, a pair of loving gay men can raise two boys without harming them, but then we once thought that priests were beyond reproach, too.

Today, people have the right to live their lives fairly freely without the law interfering. Consenting adults can do anything, which is the way it should be. But children, who gives consent for them? Why is it always children that we choose to experiment with?

 

Innovation and exploitation

The Australian economy is fundamentally exploitative rather than innovative.

The problem with our type of economy is that what you exploit eventually gets used up and turned to waste. The Australian rich-list is dominated by miners and developers. Look at other countries and see who are their wealthiest – American IT entrepreneurs, Italian designers, German automotive engineers, Chinese trading magnates and Japanese industrialists. What do we do? Our wealthy become rich by digging up the ground or chopping up the land. Then we sell it off cheaply to foreigners anyway. There’s no skill in that, there’s no intelligence and there is no future either. But we are addicted to this lazy life of thoughtless exploitation. When Australia does innovate, what happens? If we manufacture, regular booms in commodity prices bring a rising dollar, killing competitiveness in our secondary industries. When the commodity boom ends, the dollar falls and our industry is ripe for takeover by foreign interests.

And our government is complicit in perpetuating this paradigm of exploitation, rabidly defending and promoting coal mining and the destruction of our environment while undermining and denigrating those who seek more intelligent solutions to the world’s problems.

Why we have the current house price crisis.

We need to explain why house prices have risen throughout Australia and why Sydney and Melbourne house prices seem to be out of control.

The main influence is interest rates. People will pay what they can afford. As interest rates have consistently gone down house prices have gone up. However, even though the home buyer can afford to repay larger loans with lower interest, the size of the required deposit rises out of proportion and the consistent growth in home prices has made getting a deposit is blocking out some new home buyers.

The second influence is population growth. With a static population house prices would settle at some fixed standard and would move pretty much in fixed ratio with incomes. With population growth comes competition for the existing stock of houses. Not only is the population of Sydney and Melbourne rising but there is a change in the demographic. Home ownership is important to new immigrants from Asia, and not just one home but several. Some young immigrants from China came here as the children of wealthy Chinese. They have resources behind them and a desire to have the best. They also have resources to overcome the deposit gap.

Negative gearing and CGT concessions are a strong signal to these buyers. Even if these will not actually make a person richer, the existence of these sanctioned tax avoidance mechanisms is attracting people to make certain investment decisions, even to make bad ones. For people who see homes as a store of wealth these are special incentives. Again, this goes to the special nature of the current home-buying demographic. As prices have continued to rise the investment decision is proven to be correct and entices another round of bidding up.

Overseas buyers may only be ten percent of total new home sales, especially apartments, but as many of these are remaining vacant, this investment is actually diverting resources from adding to the supply. Sydney and Melbourne are stand-outs because of their stature as ‘World Cities.’ The attraction of having an asset in such a city at a time when prices are rising at much higher rates than other investments can be a status thing for overseas buyers. Given the populations of countries involved dwarf the Australian population of home buyers there is likely to be some pressure on housing for some time.

Is there a bubble? There appears to be a bubble in Sydney and possibly in Melbourne. Will it burst? If interest rates rose to what they were twenty years ago prices would have to come down but that is unlikely. It would cause such a recession that interest rates would drop back to even lower levels. It’s likely that the principal factors at play continue for some time. Overseas buyers will continue to try to buy property in Sydney and Melbourne. Those who have amassed wealth through tax-incentivised investment will continue to do so.

The oft-stated proposition that houses are ‘unaffordable’ is nonsense, as someone can afford them, or thinks they can. The statement that the problem is a lack of supply is partly nonsense because it cannot be used as a basis for policy. The number of homes within 10 kilometres of the city or with a harbour view or on a decent-sized block of land is fixed. So, what can be done?

Here are some policies that would work:

  • Reduce population growth
  • Remove the dual incentives for investing in houses as the only way to amass wealth – either CGT concessions or negative gearing has to go.
  • Increase taxes on unoccupied dwellings to remove incentives to buy property just for the capital gain.

Some policies that would not work:

  • Allow people to access superannuation to get a deposit
  • Increasing first homebuyer grants
  • Any policy at all that is aimed at the demand side

The Evolution of Australian Democracy to a higher level

So, here’s the plan thus far. We want to be a republic, but we don’t want to risk getting some Donald Trump or political hack as our president. The current system has served us well because the Queen is not elected, is perfectly respectable and represents a form of ideal, while the Governor-General is above politics and has to live up to this ideal. So, if we take the Queen out of the equation what can we insert that achieves this ideal state? My answer is to retain the ideals but remove the actual, real person. This virtual president would be a new section of the constitution and would retain all of the good features of the Queen while giving Australia a bridge to a republic. I see it as the evolution of democracy to a higher level.

What then would be the ideals and principles of the virtual president? Here are my suggestions.

  1. To uphold the Constitution of the Commonwealth of Australia
  2. To be dedicated to truth
  3. To uphold the equality of all people, regardless of their background or circumstances
  4. To respect the unique value of the original inhabitants of our continent and of their descendants
  5. To preserve the environment that we share and attribute to it its true value
  6. To move toward perfecting a harmonious society through laws that respect the rights and freedoms of individuals
  7. Uphold the freedom of the press to report in the best interests of the people
  8. Uphold people’s basic right to freedom of thought and belief
  9. Uphold people’s basic right to freedom of truthful expression
  10. Uphold people’s right to assemble and express their views whether in public or private.
  11. Ensure that people under the jurisdiction of the Commonwealth are free from torture, cruelty and punishments incompatible with humanity
  12. Ensure the rights of all the people of the nation to the basics of life: food, clothing and shelter.

A Virtual President

A virtual president isn’t a politician, doesn’t belong to a political party, doesn’t grow old, doesn’t have donors and would never become a tyrant. A virtual president is dedicated to certain ideals that would be newly-written in the constitution. Then we could become a republic.

Of course, you would need to have an actual person represent this ideal president. The parliament would appoint a real person, a highly-regarded citizen, to represent the virtual president. We could give this person a novel title such as “Governor-General.”

The Governor-General would conduct his executive powers in line with the current constitution, i.e. on the advice of the Prime Minister, only in-so-far as they did not contradict the ideals and principles that are set out in the constitution regarding the virtual president.

So, what would be the ideals and principles that form the virtual president? I would like any reader to contribute any ideas in the comments box below and send a link to their friends who might also want to contribute.

My initial view is that these principles should not be too prescriptive, not too narrow or encumbering. I think ideals like freedom of speech, freedom of belief or non-belief, free press and the rights of individuals would get in there somehow. The virtual president would treat all people equally and work for the good of all, working for the powerless against the powerful.

The words would be important. Please contribute.

Players, spectators or commentators?

At a football game you have players on the field, spectators in the stands and commentators writing and talking about the game. It seems to me the Australian government doesn’t realise it should be on the field playing. Often, its seems they are just spectators, watching what’s happening, or commentators, just talking about it.

Take energy policy. The country needs one; business needs one; consumers need one. But the government is still just talking about it, floating ideas, commentating and as Josh Frydenberg said on tonight’s news, “we haven’t made any decisions yet.” I think almost four years is long enough.