In this case, theres almost certainly room for government policy on taxes and fees to discourage lifestyle borrowing, but its going to take a brave government to do it (the electorate wont like it, and theyll inevitably be accused of nanny-statism).

It might be easier to concentrate people’s thinking about what they borrow for by phasing out income tax exemptions of the “GET SUPER FILTHY RUB-IT-IN-PEOPLE’S-FACES-AT-YOUR-HIGHSCHOOL-REUNION RICH IN FIFTY FOUR AND A HALF MINUTES THRU NEGATIVE GEARING, STARTING WITH ONLY $2.75 AND SOME GUM!” variety.

The rise in unemployment from a given reduction in GDP is now less than it was in 1983 or 1991, and the increasing prevalence of part time work is one of the reasons (along with slower labour force growth).

And if this was what was likely to happen, it mightn’t be an issue. But realistically it’s not – employers by and large like having full-time workers, and will keep the ones they can most readily determine are still helping their companies remain profitably, and fire the others. Perhaps this something that can influenced by government policy, but of course the French have recently been effectively forced to do the opposite, and raise the length of the working week. Still, it might be possible with tax incentives to encourage employers to keep more employees with fewer working hours rather than keep fewer full-time employees.

Further, I would think as long as so many households have so much household debt, no-growth is problematic as the necessity to pay back those debts with interest actually equates to a gradual drop in living standards. In this case, there’s almost certainly room for government policy on taxes and fees to discourage “lifestyle borrowing”, but it’s going to take a brave government to do it (the electorate won’t like it, and they’ll inevitably be accused of nanny-statism).

Except that “no growth” almost always means “more unemployment”. And while “no growth” might not sound so bad to those of us already living comfortable existences, there are still a lot of a people in Australia who have good reason to desire better living standards, and many of them are the ones most likely end up unemployed if economic growth stalls. Given that we’ve yet to figure how to translate “no/low growth” into “everyone maintaining decent living standards” then the “crisis atmosphere” is not completely unjustified, even though I agree it should have no bearing on the urgency of addressing long-term environmental concerns.

What I find most interesting is that the merest hint of the nation being only just as rich next year as this year (no growth) creates a national crisis atmosphere paling the climate debate. Our attachment to material wealth is truly astounding.

Were going much earlier, faster and harder than last time. And were unapologetic about one off giveaways to families wholl spend most of it quickly.

Who are ‘we’?

The PM is telling me that it’s a good time to buy a home and that I should get onto the ladder.

But to be honest, I’m worried that once I climb the ladder and slip the mortgage noose around my neck a trap door will spring open and house prices will collapse.

Of course John Edwards assures me that “By the middle of 2007 there was no Australian housing boom to puncture” but I’m not willing to bet everything I own on Edwards being right. I’m inclined to wait and see.

Every time I see an advertisement for a property investment seminar or hear someone say that property prices double every 10 years I get nervous. The market seems to be crawling with speculators (sorry … that’s impolite, I meant to say ‘investors’) who are using equity in their family home to buy second and third properties.

With so much debt backed by house values, what happens if unemployment rises and property values start to fall?

But its not too late for them to dig themselves out of this particular hole. A recession is a convincing reason to say “all bets are off”, so the unwise election commitment shouldn’t be much problem. Extreme fiscal rectitude was only ever the conventional wisdom of the policy elites anyway, who are precisely the groups who can be persuaded of the need for a U-turn. And I can’t see the average punter looking much past the bribes that a big deficit enables.