Luck on way out in Australia as costs bite

Australia used to be called the lucky country, but for many the luck has started to run out if the Labor government's first federal budget is anything to go by.

Treasurer Jim Chalmers delivered on Oct 25 Labor's first budget since its election win earlier this year, and it painted a grim picture of what the future holds for many Australians.

Chalmers, the minister in the most senior economic role, said Australia is confronting the prospect of a third global downturn in a decade and a half.

While many commentators tried to put a positive spin on Australia's economic problems, blaming external factors such as the weakening global economy and the conflict in Ukraine, they could not hide the fact that the future for the "lucky country" looks bleak.

For the average Australian, the budget signaled higher living costs — with inflation projected to reach 7.75 percent by December, unemployment expected to increase despite thousands of job vacancies around the country, and energy costs forecast to rise 56 percent by the end of next year.

At the same time, real wages will not start to move until 2024 — but again, there is no certainty.

The big announcement from the treasurer was that the government, along with the states and territories, plans to build a million homes from 2024. No details were released.

Skyrocketing prices

That is a noble ambition, but Australia is hard-pressed to find the tradespeople to finish the homes that are being built today, not to mention the skyrocketing increases in the cost of materials.

Labor's first budget under the leadership of Prime Minister Anthony Albanese did not include any short-term plans to bring down rental prices or to provide relief for tenants struggling with the cost of living.

Matt Grudnoff, a senior economist and director of the Australia Institute's economics program, told China Daily: "How is it that in Australia, one of the richest countries in the world, we have a housing crisis where hundreds of thousands of renters can't afford a roof over their head?

"To figure out why rents are soaring, we need to look at the broader political problem: we have spent about two decades trying to screw up the housing market and we have, catastrophically, succeeded."

The Australian housing market is broken, Grudnoff said. "For too many low- and middle-income earners, the Great Australian Dream of owning a home is now just a fantasy."

Australian Council of Social Service CEO Cassandra Goldie said: "We remain deeply concerned for people who have the least and are in chronic financial distress — people who are unemployed, single parents, people with disabilities, students and people on temporary visas." There is not enough in this budget to help them right now, she told China Daily.

"People on the lowest incomes are facing multiple and unrelenting crises right now — extreme weather events, rising rents, food and fuel costs, and the prospect of more losing their jobs means that government must deliver on lifting incomes and social and affordable housing."