Let’s start with a pleasant old couple in an established suburb of Adelaide. They own a five-bedroom house with a huge garden. All the kids have grown up.
It is clearly time to move. Not a great distance, just round the corner to a neat unit with a manageable garden.
In a remote way, it is in the national interest for the them to move. In the new unit, they might call less on social services. They will have a less burdensome life. Moreover, their spacious suburban house will become available to a younger family that would otherwise face the prospect of moving to a new outer suburb. The building of that outer suburb will cost oodles of public money in stretched sewerage pipes and electricity lines and the like. Here followeth the usual litany about the urban sprawl.
That litany can be chanted further. An urban sprawl means Australia is spending lots of money inefficiently on housing. (Let’s leave aside for the moment that “”efficient housing” is an appalling notion. It suggests the aim of human existence on the planet is to cram as many people in as small a space as possible.) That money extravagantly squandered on housing would be better spent on industry to make us more internationally competitive in these grim times of level playing fields (though I cannot think of a more level playing field than suburban Elizabeth or Salisbury).
The chain of this argument will lead to some splendid ironies. At first you might ask, iIf a couple of old biddies in Adelaide want to move house, is it really a question of international competitiveness, micro-economic reform, level-playing fields and all the rest of it? Why can’t they just get on with it in peace.
Well, the Price Surveillance Authority issued a report this week which shows why they can’t. Real estate agents are charging through the nose. So much so, the authority argues, that the Biddies are going to think twice about moving. When stamp duty and lawyers are added to it, the Biddies will spend eight per cent of the value of their house on ephemeral farnarkling. That may, of course, be passed on to the buyer. Even so, the buyer is then spending a great whack on ephemeral farnakling rather than bricks and mortar.
The authority is to receive further submissions and conduct hearings tomorrow and Friday. However, the thrust of its interim report is that agents charge too much, the maximum fees set by real-state institutes and state governments are rarely discounted, state licensing laws are too restrictive and it is too hard to get into the industry. All these add to fees charged.
Agents will no doubt dispute some of this, but that is not germane here.
My point rather is to expose the irony of the Coalition and other economic rationalists calling for the abolition of the Prices Surveillance Authority. They argue it is a socialist and bureaucratic impediment to allowing business to get on with making a profit. Like all government bodies it is treated with suspicion. Yet, here it is exposing two greater anathemas: anti-competitive practices and an impediment to international competitiveness.
The irony, confusion and inconsistency goes further. The attack on the great Canberra bureaucracy (and it is always framed in that metonymic way) is coming from two directions. On one hand, the Coalition says it is wasteful, isolated and extravagant and should be decentralised to Parramatta. Moreover, the Commonwealth should be stripped to a few heads of power and the rest of the functions bundled out to the states. On the other hand, the bleeding-heart sociologists like Dr Michael Pusey say the Canberra bureaucracy has been hijacked by rabid rationalists who care nothing for people.
Both of these groups will have trouble with the Price Surveillance Authority’s report on estate agents. As part of the bureaucracy the authority itself is a bugbear of both sides. Yet, here it is caring for people and social fabric and whether the Biddies can move into a neat unit. And here it is exposing the anti-competitive nature of the real-state industry.
Further it exposes the state governments as one of the main causes of that anti-competitive conduct.
Dr. John Hewson wants to push functions back to the states. It is not a new idea. Malcolm Fraser attempted to push functions back to the states, though he wasn’t a level-playing-field rationalist. For this argument, let’s call the states’ rights conservatives the Old New Right. And those that add economic rationalism to that formula the New New Right.
They share hatred of the Canberra bureaucracy, but otherwise have a fundamental inconsistency.
A former Chief Justice, Sir Harry Gibbs, (for this argument, part of the Old New Right) summed up the position last week at a meeting of the Samuel Griffith Society. The society embraces an anti-centrist philosophy. Sir Harry said: “”Nothing should be done by the Commonwealth that could be equally well done by the individual states themselves.”
The theory is that the Commonwealth would be left with defence, a strictly defined foreign affairs power, immigration, intellectual property, weights and measures and precious little else.
However, if Sir Harry’s words are taken literally, his supposed states’ rights proposition is in fact the most centrist doctrine ever posited in Australia.
He says nothing should be done by the Commonwealth that could be equally well done by the states. Well, the states can do virtually nothing in Australia equal or better than the Commonwealth. They make a hash of nearly everything they touch.
They can’t even get weights and measures right: look at the fiasco over daylight saving. Instead of having rational (dare I say economically rational) time zones based on national requirements, we have artificial zones.
We have idiotic differences in vehicle registration and traffic laws. Licence suspensions are rarely enforced interstate. This economic irrationalism is supported by the economic rationalists on the ground of states’ rights.
We have defence-service kids and others suffering from different education systems as they move about the country. Employers can’t get a national standard on literacy and numeracy, and every time one is suggested a commentator suggests this is the evil Canberra bureaucracy imposing socialism on the whole nation.
And now we have a real-estate industry, as the dreaded Canberra bureaucracy has so pertinently pointed out, protected by state governments preventing socially and economically desirable mobility of the population.
The meddlesome states are the fundamental inconsistency between the Old New Right and the New New Right. Sometimes if you scratch New New Righters deep enough they will recognise the inefficiencies and incompetencies of the states, but if they are public figures, they will keep the faith publicly.
And that is largely what it comes down to _ faith.
This week’s report on something as mundane as real-estate shows an intermingling of social, economic, legal and political factors that belie the simplistic solutions of those the yearn for a less complex time. Say, for the New New Right about 1950 and for the Old New Right 1899.