Other public policy
The changing geography of housing
The national story is about a housing shortage and associated unaffordability, but a report by CoreLogic – Five years on from Covid-19: how the housing market has changed – reveals not only how monetary policy has influenced the housing market, but also how those changes have a regional dimension. There is some sign of what statisticians call a “regression to the mean”, as prices in some regions – Melbourne and Sydney – that were once seen as overpriced, are easing. At the same time prices in other regions that were comparatively affordable – the smaller capitals and selected non-metropolitan regions – are rising.
The CoreLogic report is rich in data about how house values have risen between 2020 and 2025, but it provides only nominal price information. That is, there is no adjustment for inflation. Because housing transactions are of a capital nature, it’s not meaningful to use the CPI as a deflator: the CPI is an indicator of the prices of consumer goods and services. But the main issue in housing is affordability, and a more reasonable indicator is the rise in nominal wages (full-time adult workers’ ordinary time earnings) over that period, which rose 18.9 percent.
When that is applied to CoreLogic’s data on price movements, we see that there have been very strong rises in Brisbane, Adelaide and Perth, with little movement in other capitals – in fact a significant fall in apartment prices in Melbourne.
As for the rest of Australia, which CoreLogic calls the “regions”, house prices have risen strongly, but that doesn’t mean the housing market in Oodnadatta or Galore is booming. CoreLogic lists 27 non-metropolitan locations, mainly in Queensland and South Australia, where prices have risen up to 65 percent in nominal terms.
Drawing on additional CoreLogic data – Charts show how Australia's housing market has changed since COVID – the ABC’s Ahmed Yussuf shows that while immediately after the pandemic prices in non-metropolitan regions rose in all states, in the states where capital city prices have tended to stabilize there has been no further rise in non-metropolitan regions. This lends support to the idea that the main driver of movements out of the big cities has been the price of housing in those big cities, rather than any yearning to head out to the bush, or improved opportunities to work at a distance.
Another change, over a longer term, has been the increasing size of our houses. In the 1950s our houses were about 100 square meters. They are now around 236 square meters, even though household size has fallen.
This phenomenon of “space creep” is described in a Conversation contribution by Bhavna Middha and Nicola Willand of RMIT University: Australian houses are getting larger. For a more sustainable future, our houses can’t be the space for everything. They trace the growth in house sizes, and the offsetting trend for some Australians to take up living in apartments and to adopt urban lifestyles similar to those experienced by people living in European and Asian cities.
Childcare – can we all think about this calmly?
The Four Corners revelations on childcare were confronting. Adele Ferguson is a highly-skilled investigative journalist, who can rightly claim credit for bringing to our attention many cases of corruption and maladministration that would otherwise have passed unnoticed.
You can watch the full one-hour program on childcare from the ABC’s iview link to Four Corners, or read a less emotive account, without the cinematic clichés, by Ferguson and her colleagues: Tens of thousands of children attend childcare centres that fail national standards. They also have a post specifically about food served at childcare centres.
Writing in The Conversation, Gabrielle Meagher of Macquarie University and Marianne Fenech of the University of Sydney summarize the Four Corners session, provide background to the sector’s problems, and outline the government’s childcare policies: Amid claims of abuse, neglect and poor standards, what is going wrong with childcare in Australia?
A strong theme in the program is the inability, or perhaps even reluctance, of state government regulatory authorities to enforce quality standards on operators. Inspections are too infrequent, and the childcare establishments are given advance notice of inspections.
One immediate concern raised on the program is that there has still been no government action on recommendations made by the Productivity Commission in 2024. These recommendations included the establishment of a dedicated independent body to strengthen oversight in the sector, a review of national standards, and more transparency in the sector’s operations.
In a separate post Ferguson reports that the Greens, Allan Fels, and others are calling for a royal commissioninto the sector. The Prime Minister, however, is not enthusiastic about calling a royal commission. (Commissions of inquiry are best called after an election, not before one). Albanese’s response to the calls was “You do not need a royal commission to show that what was shown on TV last night was wrong”.
Four Corners has a particular style: it sets out to expose, rather than to analyse. There are many accounts of bad practices, and some rather large numbers about the growth in the number of incidents of neglect and sexual assault. These should never be tolerated – Caroline Whitehouse of La Trobe University has a Conversation contribution about sexual assault on children: it shouldn’t happen and when it does happen it should be handled far better.
But those numbers need some context. How does the growth in incidents relate to the growth in use of childcare? The program has some figures on injuries, but with 1.5 million children in childcare there will inevitability be injuries: how do these figures compare with injuries children incur at home?
There are well-qualified people on the public payroll who can do this analysis: they might find there is a need for a wider inquiry, but governments shouldn’t jump to calling a commission. The “royal” commission process is slow: there may be some things that can be done almost straight away.
The program also provides strong suggestions that problems revealed in the childcare sector are sector-specific manifestations of much wider problems. One is the proliferation of “colleges”, operating as migration scams, offering almost valueless qualifications. Another is the poor performance of government agencies in overseeing regulated industries – a problem found in aged care and NDIS. This has to do with an understaffed public service, and an administrative culture that puts too few resources into on-the-ground inspections.
The wider problem -- privatization
Perhaps the biggest issue revealed in the program, to which Gabrielle Meagher refers, is whether for-profit corporations should be involved in providing human services, including health care, education, aged care and childcare.
This is not to suggest that there should be no role for the private sector in these activities: providers can have a corporate structure and a policy that their return on investment will be adequate to sustain the business and to provide a reasonable return to those who have funded it.
That business model may come across as a rather old-fashioned, and it is. It is the theory of the firm taught by Chester Barnard, Adolf Berle, Gardner Means, and Kawakami Hajime, pioneers of business studies in the 1930s, whose theories were taught in business schools up to the 1960s and 1970s. That is before business schools became boot camps for those seeking a short cut to seven-figure salaries, and before economics schools were infected with the neoliberal idea that profit, rather than being a requirement for a corporation’s survival, is the sole purpose of a corporation.
Ferguson’s display of luxurious houses owned by investors in childcare, and reports of centres being guided by weekly objectives of profit-maximizing, showed that at least for some businesses involved in childcare, profit maximization is their corporate objective. The problem seems to relate less to governments’ failure to conduct inspections, and more to their failure to conduct due diligence on the character of those bidding for the business. With $14 billion of Commonwealth funding, supplemented by state government funding, this is a sector bound to attract unscrupulous operators enticed by an opportunity to drink from the public trough.
If we are to have an inquiry it should be about the way governments, particularly Labor governments who used to be vigilant about corporate greed, have allowed businesses with profit-maximizing objectives to become involved in providing human services.
Perhaps our governments fail to understand that the public has turned off privatization. The latest Essential poll finds Australians are less than enamoured by private companies. We think private companies are good at innovation, but they’re not good at providing solutions to real world problems. They’re good at creating wealth, but poor at distributing wealth, and they don’t provide secure jobs. It’s clear from Ferguson’s investigation that some don’t even manage to pay their employees.
Re-imagining the $5 note
Some people living where the internet is unreliable are still using cash, and there will always be enthusiastic numismatists who do the public a service in a form of voluntary taxation by taking currency out of circulation.
The Reserve Bank has quietly released its theme for the new $5 banknote.
It will be “Connection to country”. The ABC’s Tessa Flemming, reporting on the RBA’s decision, notes that the RBA has stuck to its 2023 decision not to replace the image of the Queen of England with an image of the King of England – a decision that prompted outrage from Peter Dutton who has never quite come to grips with the fact that Australia is an independent country.