Cost of Living
Of recent the notion of Cost of living has gained an important
place in Australian public debates. It evokes different experiences for
different people! From rumblings about exorbitant electricity and gas bills,
affordable housing, inadequate wages, inequitable taxes and so forth.
Take your pick. To my list I
thought I will add the following:
- Improve methods and scope for Council Rates levy as part of tax reforms
- Questions on Government delivering wage adequacy in a contracting capitalist era?
- Questions on Government delivering wage adequacy amidst exploding autonomous technologies?
- Musings on cost of living and ‘Real Australians’
- Enforcement of non-traffic infringement fine payment & cost of living
On Council Rates
& Tax Reforms
For me, Council Rates are one of the things that exercise my mind when I
think of cost of living. Before anyone gets the wrong idea, I like the concept
of Local Governments in our suburbia. I’m no supporter of Council amalgamation
and such. This safely on record, I can turn back to my musings.
When I saw my last council rate
account rightly or wrongly I was at a loss as to why Council rates seemed on
the rise when the WA economy had relatively declined. The price of housing has
fallen in many WA suburbs over the last few years, I told myself. The rental
incomes have gone down compared to the boom years, so why the rate rise, I
wondered.
I value the role of Local Councils
and the part they play as a Third-Tier of Australian Government. I value the demonstrable
developments in my area and all that enhances local liveability. For all I
know, a mark of a good council includes providing and maintaining local roads
and libraries, great walking paths, reserves, parks and gardens, safe children
playgrounds, community and recreational spaces, etc.
Money has to come from somewhere
to make our suburbs liveable, right? This is not a point of contention. We should
all pay our council rates. And I suspect Local Councils also benefit
financially from other State and Commonwealth financial arrangements to support
making our localities liveable.
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Garvey Park Reserve with great walking path and family recreational areas maintained by City of Belmont |
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Locals enjoy the Garvey Park greenery by the Swan River |
Still, in my puzzling about how
these rates are determined I learnt that in WA, the State Landgate plays a role in providing information underpinning determination
of property rating valuations (other States may have similar authorities under
varied names).
These valuations reflect property
market based on equivalent average rental values regardless of whether or not
the property is owner-occupied or used for rental. Valuations also take account
of age of the property, building material and how many carports you have. The
WA Landgate web link explains in more
detail:
Also,
So Councils utilises this info
from Landgate to formulate their particular unique rate levels taking account
of local service requirements.
Extend scope of levy as part of
tax reforms – For me as I think aloud this is what goes on in my mind, surely
there should be more to factors we consider in levying council rates.
If we are serious, we know these
are taxes except the notion of levy rates gives them a different name. And surely
there should be more factors to consider in the size of this levy than just the
size of dwelling, age, number of carport and shadow rental value.
These Council rates are essential, but as we know they
are only levied from home owners.
Nothing wrong with taxing these home owners, but this leaves out many people who have ability to pay.
See, Council rates include many things like partial
cost provision for our libraries in all our local areas that we all enjoy and
our children benefit from. As already noted, rates also include Bin
Collection fees. Why
should the cost continue to be simply met by home owners and exclude local
residents who earn high incomes, benefits from local services but are not
subject to these taxes or levies?
In WA a substantial State
Government Emergency Levy is also incorporated in Council rates. Presumably
we all accept the State Government wisdom that the Emergency Levy is essential
to support our Fire and Emergency Services. According to the State government,
it ‘benefits all West Australians as emergency response involves a cohesive
approach from across the state’. Fair enough.
However, many residents in
suburbia living on good solid incomes don’t pay emergency levy and most
probably have never heard of an emergency levy. They are largely able to escape
such charges simply because they don’t own properties – and most likely they
choose to invest their monies elsewhere.
We also have a sizable population
of transient FIFOs (Fly in Fly Out) from interstate and across the globe who
are benefiting from the WA economy. They too benefit from the security that our
State Emergency Levy. This is whether they use AirBNB, hotels or house rental
share. They have ability to pay, so how can we ensure they contribute to the
likes of emergency levy? Whether we
think about emergency to do with floods, fire and we all value these services
right?
Casting a wider net so that everyone
with ability to pay will mean we are fairly and equitably minimising free riding, and also are doing so by
taking account of people’s ability to
pay. As we all largely benefit from the economy and the living environment
in our local area, it is fair to give something back in our localities. There
are many of our regional towns that could benefit such changes. It could add to regional and remote liveability especially for mining towns.
If you apply a principle of ability
to pay in levying these kinds of local indirect taxes, then surely
there is scope to modernise our levy practices.
Why bother to modernise? Well,
the economy is changing. The middle and working class are squeezed and ‘are
crying cost of living’. A fair tax base benefits from keeping abreast with
economic change.
This is where the tax reform can
also come in. Clearly, under the Constitution only the Feds are vested with
powers to levy taxes. But there are clear gaps here. Is it not possible to
spread the burden of levies we pay at local? It seems to me these could be some
of the creative ways that we address issues of cost of living.
But to do so obviously the Feds
may need to come to the party. And importantly, if ever the scope of local
levies was extended to capture a wider net as in payers, then the money should
stay at local and State level to serve the purpose for which such monies were intended.
If not, it defeats the whole purpose.
Living Wage in Contracting
Era?
After the triumph of
neo-liberalism, who would have thought sooner than later a public debate will
once again be raging on connection between cost living and wage earnings! And this comes not long after changes to Australia’s
weekend penalty rates. I had a good
laugh as I heard some make a reference to the historical Harvester Judgement.
One can’t also be blind that the
political shock of Brexit and the Trump
elections may have influenced emergence of a space where cost of living can now be discussed in public fora. Who knows what’s
ahead as we strap our seats in this fast changing world?
Historically, the Unions and
Labor movement led the charge on living-wage. In their recent public pronouncements
it sounds like wage adequacy is to form part of their push to address cost of living in Australia.
But the world has changed and
fast changing since the days we used to understand and make sense of capitalist
economy and wage-earners welfare.
Now this is where it gets really
interesting. It is no secret that Federal and State Australian governments have
long contracted out their provide-delivery roles to private entities and NGOs.
The policy underpinnings were put in place long ago under National Competition
Policy (including contracting and tendering practices).
So when we talk about wage
adequacy, this has implications for billions and billions of $ that the
government contracts out. To cite a few examples, this includes NDIS
operations, Job Active (former Job Networks), wide ranging human services
funded by State and federal governments that are delivered by NGOs.
So in an era of government
contracting out for programs that are short-lived often changing every three
years (if that), it remains to be seen how wage
adequacy is going to be fostered.
Who wouldn’t welcome wage
increase especially to the NGOs carrying out work in these areas? Here, I get a
bit sceptical about political rhetoric when I look at the context of modern day
economic realities.
How are our Australian governments
able to boost wages for sectors such as those mentioned here unless they boost
their own expenditure as part of their contracting out practices?
Governments have also long sold
significant assets such as public utilities or implemented reforms that limit their
role in these areas. Remember the days when State Governments owned and run
electricity and gas? Remember when they split them up, sold off or
commercialised public utilities?
We were told these reforms would
bring efficiency, reduce costs, foster innovation and good value for tax-payers
and consumers. It seems something didn’t work to plan (perhaps a subject for
another day). Or whatever good came out of it, it did not quite include the
rising cost of energy.
Presumably the government role
(across most States) as an employer has largely diminished as it no longer
exercises as much control as employer/provider in public utilities. I presume
some in the trades in these industries found some opportunities as contractors.
It is not clear though how governments are going to bring about greater wage
adequacy as some seem to be talking in recent debates.
Then we have an expansive private
economy itself experiencing significant changes as partly digital technologies
are re-working the nature of our capitalist economic production.
Automation is everywhere. Someone
was telling me recently a majority of his IT team lost their jobs because their
IT Help-Desk services can be done from Bungalow. ‘You mean Call Centres?’ I
naively asked. No, a lot of substantive IT work we do in supporting the company
is gone, was his response.
Growing semi-professionals and
professionals roles alike are gradually being automated. They can’t be wished away, they
are here. Businesses that deploy these technologies appear to be driven by cost
saving, efficiencies, safety and profit imperatives. Just to cite some new
technologies gradually being introduced:
- Autonomous hauling trucks in some mining centres
- Autonomous surveying drones
- Autonomous drilling
- Emerging software that over time may replace some accounting and legal practice functions
- Rail automation in some mining centres
- Serve-self supermarket checkouts
- Automated airport check-in systems
- Automated kiosk orders at food outlets such as McDonald’s
I will let you add your own
examples to this list.
When you consider the masses of
young people that historically work in supermarkets and fast food outlets such
as McDonalds (albeit on minimum wage), you can start to appreciate the economic
transformations before us.
When you consider the number of
blue collar and white collar workers that may be impacted by autonomous
drilling, surveying drones, autonomous trucks and rail automation in mining
centres, you realise technology is matching fast.
But it is hard to see evidence of
how policy makers and politicians incorporate their understanding of the
massive technological revolution at hand as they engage on debates about
incomes, let alone adequacy.
It doesn’t seem to me like we can
just solve this through regulation. These changes are phenomenal. Perhaps some
deeper engagement and understanding are necessary so that future policies align
with people’s experiences with the emerging economy.
Real Australians,
Patronising Venues & Cost of Living!
There is always something to
laugh about even when lamenting about cost of living. Not long ago I bumped
into a couple of people who asked me if I didn’t mind them checking out if I
fitted the notion of what they call ‘Real Australians’. Before I could respond
questions were flowing. They had been to one of the ‘last’ cricket games at
WACA Stadium.
They asked questions like ‘do I
go to see cricket games? Which team do I support?’ Another insisted visiting
various venues is something all migrants should do as a demonstration of their
integration in Australian society. They emphasised that this is part of social
norms here.
I laughed my head off. And confessed
it’s a while since I saw a match. And not cricket for that matter, but a Hopman
Cup Tennis game. Even as we joke about these things, it came to mind that these
dominant social norms leave many people out. In my mind I couldn’t help
laughing – the thoughts went like this:
- If you have not been regularly eating out at restaurants with friends or family are you a fair dinkum Aussie?
- Did you visit Embargo and many pop up bars recently?
- How often have you made it to Perth Arena or the new Perth (Optus) Stadium to attend events?
- What notes have you been swapping with friends on your sampling experiences at Elizabeth Quays or Freo’s Little Creatures Breweries, Burswood Towers, Riverside 506, Coffee shops around Yagan square and so on and so forth?
- Did you make it to community cinemas at Burswood Park, UWA, Murdoch or ECU?
- And perhaps you took a holiday to the country or nearby Bali or far off overseas?
As I think of cost of living in
these terms, I am reminded of our traditional notions of relative and absolute
poverty. For example, if young people, families and individuals are not
partaking in the sorts of events and spaces mentioned above, what does that
say? Should we be able to capture this as part of cost of living debate (i.e. absolute
VS relative poverty)?
Cost of Living &
Enforcement of Non-Traffic Infringement
Generally we assume all those
suspended from driving on our roads are serving a fair penalty for breaking
traffic laws and endangering people’s safety on the road. So perhaps we worry
less about how driver’s licence suspension impacts their livelihood – we focus
on the common good - safety.
But did you know Australia’s government authorities use
driver license suspension as tool to nudge people to pay their outstanding
fines for reasons completely unrelated to driving. You don’t need to break
traffic laws to lose your license – if you don’t pay some government Infringement Notices you could lose
your license. Many easily lose their license with consequences on cost of living.
This is not new. Many years back
I came across info on effects of Driver License suspension for non-traffic
infringement while undertaking research on job-seekers at Job Network service.
So I know this issue is real and there are patterns to it if our politicians
decide to look at it.
Here is a recent anecdote. A hard
working gentleman recently told me he lost his Driver’s License because of
non-traffic Infringement Notice. This also meant he could no longer keep his
job as a Driver’s License is an essential requirement. I asked him, why didn’t
he contact the Infringement Registry
in his State to make alternative payment arrangements? Too late, he said.
According to him, when the notice
arrived, he was in Europe. It has impact on some trades people for example
those whose jobs require a worker to be mobile. Security jobs can be easily
affected, he said. How, I asked?
He told me he has taken up a good
job at a pub that pays $500 per week. This is means his fine repayments to the
Enforcement Registry take longer to pay. How much can you do with $500 a week?
There is rent or mortgage, food for Xmas, transport, he cited examples. I can’t
even renew my passport, he added.
The story he told me this is how
infringements can make cost of living circumstances worse: First because he
lost his license, he can’t secure a better paying job in area of his expertise.
And when seeking a new job in those areas, his training must be current. His 1st
and 2nd Aid Training, his security training must be updated. He also
needed current documentation such as passport.
So even when eventually he
finishes the fine repayments, it will take him a long time to go back into
training and find money to pay for all those courses. Talk about cost of
justice!
If even a handful of Politicians
take up these seemingly simple causes to improve policy and the rigid
bureaucratic processes, we could go some way in tackling cost of living. Why
should a penalty for non-traffic infringement go beyond fine payment to effects
that extend to loss of career and better paying jobs?
Middle class are probably more
easily managing to negotiate their way through infringement enforcement
processes. Those less versed with bureaucratic processes appear to be paying a
far higher price.
End
As the debate and contestation on
cost
of living continues, hopefully it can only assist Australia as it charts
new paths in this transforming economy, and simultaneously maintain an
inclusive and cohesive society.
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