Tables like the ones below take my breath away when I see them for the first time–because the story they tell is worse than any I would have dared make up. As I noted in the interview with Kerry O’Brien on the 7.30 Report, real wages have increased since 1990, and since Australia’s last election in late 2004. However, mortgage debt has increased by far more.
My apologies in advance that the data here is shown in links to Excel files, rather than as a native table. I’m using an old version of WordPress, and its importation of tables is flaky; once I update, hopefully I’ll be able to post a table directly into the blog, but for now the fastest way to get the data up is via a link to an Excel File. So here we go:
The punch line in the data is that real wages have increased substantially, but not by anywhere near as much as has debt. Real wages have risen 25.6% since 1990, and 4.7% since the 2004 election. Real mortgage debt perÂ Australian has risen 526% since 1990, and 18.3% since the last election. Given the increase in interest rates since 2004, the real interest repayment burden rose by 35.1% between the 2004 election and the start of 2007–and it was up by 45.7% before the rate rise this week.
Given the rate rise, the real interest burden on the economy has increased by 50% since the 2004 election–and much of that burden is falling on the western suburbs of Sydney and Melbourne. It’s no wonder that the slogan “you’ve never had it so good” isn’t really resonating with the entire Australian electorate.
For parts of it, that is undoubtedly true: Western AustraliaÂ and Queensland are booming, those whose make their living fromÂ credit are doing very well, and those in the Eastern Suburbs are still enjoying rising property values. But for those in NSW, Victoria, South Australia and Tasmania, working for a wage, borrowing rather than lending, and living in the Western SuburbsÂ (or Adelaide’s North and South, I believe) and regional areas, rising debt has more than countered rising real wages.
I’ll add more data once I’ve installed an updated version of WordPress!