Personal Sacrifice is Needed in Tough Economic Times

A mother sits with her daughter at her home in Bondi Beach in Sydney, Australia, on April 29, 2020. Lisa Maree Williams/Getty Images

Commentary

Being a truly independent statutory officeholder requires integrity and grit. Be it the Director of Public Prosecutions (DPP), a judge or the Reserve Bank of Australia (RBA) governor, you have to take your official duty with utmost seriousness.

With the privilege of high office comes the countervailing obligation of responsibility. The temptation to give in to short-term populism or sentiment needs to be resisted.

Given the debacle in the Australian Capital Territory with its DPP’s handling of the Higgins issue and the New South Wales judge who thought it a good idea to involve himself in controversial political matters, it was refreshing to see and hear the RBA governor calling things out as they are, especially in an era of the entitlement mentality.

The sage advice from the governor, Philip Lowe, that given the housing affordability situation, it might be worth thinking about having more people per household led to a predictable pushback from those who express concern but never provide solutions.

His comments were used by some to highlight how allegedly out of touch some of our leaders are.

If there is an undersupply of a commodity, the price will increase. It’s simple economics. So it is with housing.

Clearly, Australia needs to increase its housing stock given the never-ending population increase mainly emanating from immigration. Migrants come with all sorts of skills and personal items but never with a house.

If affordability becomes an issue, then it makes obvious sense to share, if possible, to save money. Housing is no different.

A general view of homes in the suburb of Balmain is seen in Sydney, Australia, on Sept. 7, 2022. Lisa Maree Williams/Getty Images

Expectations have risen, and as society changes, the pressure has intensified to a point where some people are now at a financial breaking point.

Common sense advice that sharing might be a consideration was hardly a left-field suggestion, yet the response to the governor’s observation was as hysterical as it was absurd.

Changing Family Structures

The simple fact is that, at present, the demand for housing requires a reflection on how we house ourselves and with whom.

Some 50 years ago, the average house was half the size it is today, with twice the occupancy level.

The higher rate of marital separations has seen the parting couple both wanting a family home so that the children on visits can have their own bedroom at the other parent’s home. A reasonable aspiration. But it does impact the housing supply.

The idea of young people living at home longer or sharing premises with others reduces the cost per person in the household and lessens demand.

To condemn these suggestions as out of touch in the absence of housing stock emerging from outer space at no cost exposes a paucity in the public policy space and thinking.

Rather, it reflects on those making the criticism as craving popularity regardless of how irresponsible their utterings are in raising or maintaining unachievable expectations.

In times of difficulty, people need to adjust their lifestyles. They need to make their own decisions and engage in a bit of self-help.

Pedestrians move along George Street in Sydney CBD, Australia on Oct. 22, 2022. Lisa Maree Williams/Getty Images

An interesting observation made by a housing demographer was that when the Coalition increased the jobseeker allowance, it led to a decrease in the number of people living in a share house in that particular demographic.

Marginal though it was, the statistics indicated a change of behaviour when more money was forthcoming, and affordability increased. Similarly, it makes sense that if money is tighter and affordability is stretched that the reverse takes place.

Clearly not a palatable outcome but one worthy of consideration and implementation if practical.

Instead, there is a howl of protest from those who want to virtue signal and be seen as the champion of what everybody, in fact, wants. But when it can’t be delivered, alternatives need to be considered and put on the public policy table.

Take a Moment to Think

As inflation shows no sign of abating and planning regulations continue to stifle the residential building sector, the housing shortage won’t be easy, let alone quickly, resolved.

Those virtue signalling to seek to condemn the governor’s pragmatic and realistic advice for those caught in the housing affordability crisis might want to contemplate and reflect for a moment.

Do the restrictive planning laws that they so often champion, along with the demand for a greater immigration intake, have any impact on the crisis?

Not to mention the ever-increasing demand for government spending, which has fuelled inflation. This, in turn, fuels interest rates and, as a consequence, housing affordability.

Such logical rational thinking is missing from the public discourse at the moment, as is the suggestion that people may, can and should engage in a bit of self-help.

In that context, it was so very refreshing to see a bit of sensible self-help advice injected into the public discussion by the Governor of the Reserve Bank. His intervention actually does show how out of touch our leaders are in not backing the governor.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.