* The term ‘Hanrahan’ devolves from an Australian poem ‘Said Hanrahan’ by John O’Brien and is descriptive of someone who always sees the downside of a circumstance, never the good, forever seeing only doom and gloom. The view is aptly reflected in Hanrahan’s comment: ‘We’ll all be rooned, if ________!’ Just complete the statement with the relevant issue or negativity.
Back in July 2011, I commented that Australians appeared to be a grumpy, grizzly, moaning, unhappy, blame everyone except ourselves, bunch (The Rant #2). And elsewhere asked the question: ‘Are the Hanrahan’s of Australia, those moaners, groaners and whingers who, whatever the news, immediately adopt the default position of, ‘we’ll all be rooned’, well, right?’ (Food for Thought #8) and if we were a bunch of Aussie whingers (Food for Thought #7).
In the three posts the arguments , that we weren’t so bad off as the trumpeting, scare-monger media, business and opposition politicians were indicating, was based on data about the Gini Coefficient for various countries as well as Credit Suisse Data. Here’s the Gini Coefficient data.
The Gini Coefficient is a measure of equality where 0 is equivalent to complete equality and 1.0 equivalent to complete inequality. A value of 0.5 is considered a dangerous point to reach. Australia is 9th on the table at a value of 0.32. In terms of equality we are not doing too badly, but could always do better.
The Credit Suisse data.
We sit at second place with a gross wealth of US$498,827. Not bad eh?
Some 64.9% of our gross wealth is in non-financial assets leaving 35.1% in financial intangibles. Given the level of global debt and the willingness of countries like the USofA to print money, having a low level of our wealth tied up in financial stuff is probably a good thing.
Australia ranks 7th with an indebtedness per person of some 20.5% on our gross wealth. What does that mean in financial monetary terms?
Australia ranks 4th in terms of the amount of debt, representing US$102,268 of personal debt per adult. That much personal debt is a bit of a worry, especially if you are unable to repay it.
Regarding debt, the Reserve Bank has recently reported that Australian’s owed some A$50 billlion on credit cards and some $36.3 billion of that was accruing interest. God! Wouldn’t you just love to be a creditor given the interest rates charged on credit cards!
The latest addition to information about Australia’s well-being is the recently released AMP.NATSEM Income & Wealth Report (May 2012) which examines the cost of living in Australia. It puts under the microscope that widely expressed view that the cost of living is spiralling out of control and that families are at breaking point, struggling to make ends meet.
That epitome of journalistic excellence and balanced reportage the Daily Telegraph, puts the issue so succinctly: ‘The No. 1 concern for put-on families is the cost of living’! So what does this latest report conclude? See for yourself:
While living pressures dominate the debate, that pressure is less to do with the politically sensitive prices of petrol, energy and fresh fruit. It’s more to do with changes in spending habits and expectations, and outsourcing to the services industry.
For the last two decades price inflation and living costs have been relatively benign. Incomes have risen more sharply than living costs with a concomitant higher standard of living for Australian families. The average family is ahead by $224 per week and the income growth has been spread right across the income and socio-economic spectrum.
More household money is relegated to discretionary expenditure with basic essentials expenditure still around 38% of household budgets – virtually unchanged from 1984. This approaches around 50% for lower income households. Overall all households (including low income and pensioner households) spend one in three dollars on a discretionary basis.
Despite strong inflation in some items (eg. health, tobacco, education) this has been compensated for by lower or negative price inflation elsewhere (eg. audio visual, computing equipment, clothing, footware). Overall result: Expenses and living costs stability.
Almost without exception incomes have grown well beyond living costs, regardless of the type or socio-economic position of the household.
A greater share of Australian household expenditure is apportioned to services and discretionary spending. Some of this is aspirational (eg. private education, higher education) and some on services once performed ‘in-house’ (eg, child care, food preparation).
Housing expenditure had impacted on the cost of living but differs between household groups. For example, those with recent mortgages or renters pay much higher prices than in past decades.
While Adelaide and Hobart are the least expensive cities in terms of living pressures, average incomes are also much lower. Despite high incomes Sydney’s financial standard of living is lower that other large capital cities due to the very high housing costs. With incomes 23% higher than in Sydney, but a comparable price level, Canberra offers the best financial standard of living in Australia.
Because of the adequate compensation package (reduced income tax, higher government payments) the carbon price is not expected to alter the overall cost of living picture, especially for families most at risk of cost of living pressures.
Globally, Australian cities rank amongst the most expensive, based on a representative basket of goods and services. While a strong Australian dollar makes the country an expensive destination for international travellers and workers, this doesn’t affect Australians paid in Australian dollars.
Australia enjoys a standard of living higher than in most of the world and is one of the richest nations (see the Credit Suisse data).
While cost of living pressure appears a fact of life for many households they are more related to larger household incomes and expenditure on a whole range of new goods and services (in particular). These are either aspirational or necessary to deal with modern society’s demands. The pressures are not primarily sourced from such things as petrol prices, electricity bills or banana prices.
Work/life balance is a more important pressure point for Australian families and the current narrowly focused debate on electricity and petrol prices removes the spotlight from developing policy on matters which would help maintain Australia’s enviable standard of living into the future.
My read of all this information is that Australians are generally are pretty well off. and that there is no real basis for all the moaning and groaning about life being hard and unforgiving in this wide brown land. Given the evidence, it’s about time that the Hanrahan’s amongst us stopped peddling their doom and gloom scenarios and started pushing the reality. And that is that, given the parlous state of the global financial crisis, Australia has ridden the storm remarkably well with its financial system and residual wealth remarkably intact. Yes, there are pockets of the economy which are going through some tough patches but this appears to be primarily because people have gone a bit far on the debt wagon and have also shifted their discretionary spending to other places. So basically for some businesses the world has changed (so stop bitching and adapt). People are a bit more careful about their expenditure and will remain so until they feel comfortable that their debt is once again manageable (so being Hanrahan’s is not going to make them feel comfortable and want to spend again). And, despite there being a general ignoring of the global economy by the doom-sayers and chattering media, people are concerned and the GFC it will remain a dampener on the purse strings until it starts to improve.
So how about we start talking our country and the good news up, eh? Rather than telling everyone that ‘We’ll all be rooned’ and just making the situation a whole lot worse than it should be.
Ask yourself: ‘Given the information provided and the current state of the global economy, what country would you prefer to be living in?’ I know what my answer is. How about your’s? And that’s food for thought . . . . . .!
- Food For Thought#8: The Gini (Coefficient) Of The Lamp – Or, Are We A Country of Inequality? (deknarf.wordpress.com)
- I Dream of Gini (cssanalytics.wordpress.com)
- Lindsay: Income inequality rising in many rich countries (globalpublicsquare.blogs.cnn.com)
- Public spending and equality (stumblingandmumbling.typepad.com)