We are living beyond our means

and unless we want a level of inflation similar to that of some economies with dictators at the helm then we have to cut back.

I am no economist. I manage my personal finances and I have managed the finances of those for whom I have had power of attorney. I am fortunate enough not to currently be in debt. That does not mean I will never be in debt so I tend to be "careful".

I wonder however how careful the present government is being. They insist the industrial legislation they are trying to rush through parliament before Christmas is a good thing. It will, they claim, give workers more money in their pockets.

Really? Where's the money coming from? If I employ someone at say $10 an hour then I need more than that to pay them. There are all the largely hidden costs of employing them. There is the employer superannuation contribution, the long service leave contribution, parental leave, the payroll tax and so on. When wages go up those costs go up too. The money has to come from somewhere so I charge more to provide goods or a service. The people who buy those goods or that service then pass the cost on and the whole cycle continues and inflation rises. 

The idea of home ownership is still something for which many people are aiming. It's a great aim and there are still plenty of people who will achieve it. The problem is not with that aim in itself it is what they are aiming for within it. 

There was a serious housing shortage when I was born. It was still very serious for a considerable number of years after that. Building materials were in short supply. Land had not been divided into those "quarter acre" blocks people thought were so desirable. As such things became available people built basic housing. Those who could afford it built basic three bedroom homes. Then they gradually bought the "whitegoods" to go in them. Even more gradually they made improvements. There would be a shed for the car, the lawn mower and the gardening tools. The garden would be developed slowly. People planted fruit trees and a vegetable patch. It was hard work but they did this as they paid off their mortgage. 

Now people want to move into a house that has all the "essential whitegoods". They want state of the art airconditioning and a landscaped low maintenance garden they can sit on their "patio" and stare at. There will be two cars parked under the carport and much more. All this costs far more. Our standard of living has risen.

But it might be that it has risen too far. Friends of mine recently got rid of the second car. It was tempting to keep it because it was very convenient but the children are now in high school - old enough to walk to school alone. They will be able to repay their mortgage earlier this way and deemed that to be more important. 

The government really needs to get rid of "the second car" too. It might be nice to have but we really don't need it. All those "allowances" and the "leave" for this or that or something else is something for which we have to pay. It isn't "free" in the way the government is trying to suggest.