Author: Shane W. Miller

“Nobody wants to work anymore” is a headline that legacy media cycles through about once every 6 months. All across the country, senior managers complain to their HR departments. Your elderly grandparents will probably say it around the dinner table this Christmas. We’re all familiar with the saying. We’ve heard it time and time again but where is the idea that young people don’t want to work coming from?

Is it a lack of work ethic? Hardly, Millennials work more hours per week than the previous 3 generations before them. For most, the 38-hour work week is dead with many pulling hours north of 45 per week. Is it their participation in the labour force? Nearly half of Gen Z that are currently in the workforce have taken a second job to make ends meet. Nearly forty per cent of Millennials have done the same. If anything, they work more hours and more jobs.

So why do people keep saying that nobody wants to work anymore? More accurately put, and essentially what people mean, is that there is a widespread lack of loyalty to employers. The national average for job life is roughly 3.3 years. This means that on average, Aussies will have 3 or so jobs within a decade. This is a stark contrast to 40 years ago when job mobility was far lower. In Australia, the idea of having one single job for life is dead. The data shows it died with the generation who entered the workforce in the 1990’s. 

Loyalty to the employer has been on the decline ever since. People talk about this decline as if they are mourning its loss. As if it is somehow a bad thing to be disloyal to your job. 

Let’s be realistic. In 1970, many employers were small Mum and Dad operations. In modern times, those shops are few and far between. Most employers are huge multinational companies where the CEO is completely unaware you even work there, yet for some reason they deserve your loyalty?

In the past, if you worked hard and made yourself invaluable to your employer you would be rewarded. Now, people are retiring later and later meaning those tope tier jobs aren’t being vacated as quickly. This has created little upward momentum for younger workers to receive promotions as the older generations hold their well paying jobs for longer. Workers looking to climb the corporate ladder are only met with a traffic jam.

What’s even more disheartening for young workers is facing a daily nine-to-five routine, commuting for up to an hour each way, all for a pay check that falls short. From late 2010 until mid early 2021 wage growth was shrinking each year. In fact for almost a decade in our country, wage growth failed to keep pace with basic inflation. 

The reality is, even with a slew of statistics, if you started working in the last ten years your pay check probably doesn’t cover all your expenses. Why would employees have any loyalty after giving up 40+ hours of their week, not to mention travel time, for a wage that falls short of covering their bills. Again, to put that into perspective from 1988 until 2001 wage growth increased year on year. 

Are you going to be loyal after giving up most of your waking hours each week to a wage that will barely let you feed your children? I highly doubt it. If something better comes along, you would jump at the chance for better pay and conditions.

On top of this, younger workers are being pushed to the outer suburbs. In 2002 workers averaged only a total of 3 hours spent commuting to work each week. In 2017, both Melbourne and Sydney workers reported over an hour commute to work, per day. That’s considerably more of a commute time when compared to 2002. What’s more is 2017 is half a decade ago. No doubt that time has blown out further. This makes things harder for workers, as they now have to travel much longer for jobs that provide a significantly worse lifestyle.

The decline in job loyalty is not a reflection of laziness or lack of work ethic. Instead it is a response to changing dynamics. The landscape of work has shifted dramatically from the days of lifelong employment with a single company. Nowadays, multinational corporations dominate, and the connection between employees and employers feels increasingly distant. Younger generations face challenges, from limited promotion opportunities due to the prolonged careers of older generations to the struggle of making ends meet despite working longer hours and multiple jobs. The once-promised upward mobility and rewards for hard work seem elusive in the current job market. With stagnant wage growth and increased commuting times, it’s no wonder that loyalty to employers has waned.

Perhaps it’s time for a shift in perspective—a recognition of the evolving workforce landscape and a collective effort to address the factors that contribute to this apparent lack of loyalty.

Australia used to be the home of free healthcare for all. Once an international bragging right of our country is now turning into a lie. If you are a regular Australian visiting the GP in 2023, you will have to pay. We can no longer say that we have free healthcare in Australia. Medicare is breaking. 

Sure, if you find yourself in the depths of poverty or are in your twilight years the government may still cover you through social security. For the rest of the country, you will likely be paying at least $50 dollars for a general doctor’s visit. This issue I am sure is not lost on you with nearly one in five Australians skipping or avoiding the doctors due to the cost. That is 20% of Australians that are in pain because they have to pay. How is that for free healthcare? 

So what happened to Australia’s medicare? Like it or not your GP is running a business. They are not government employees. That doctor you visit when you have a cold is actually a businessman. They have revenue and they have costs. They may have rent, utility bills and administrative costs. Since 1984 Australians could hand over their medicare card at the end of their visit to the doctor and after the receptionist recorded some details you were off. Nothing to pay. No stress about how much it was going to cost. 

For the “consumer” or the sick patient rather, that was the end of the process. Behind the scenes the doctors surgery would send off a bill to Medicare for all the patients they had seen that week. Medicare would give the doctors X amound of dollars per patient. I am sure that I don’t need to tell you that over time costs go up. This includes the cost of running a doctor’s surgery. This has been particularly true in the past 12 months or so with decade high inflation. 

Over the past ten years, gradually the costs have creeped upwards for doctors. Despite these increased costs, from 2012 until 2020 increases in the federal funding for medicare were decreasing rather than increasing each year. Over almost a decade, although doctors costs were rising, our tax dollars were being fed into the medicare system less and less. 

Government spending into our beloved Medicare program was faltering at a time when it needed to be reinforced. Many people cite Australia’s population growth as the reason for Medicare’s decline. Often spruiking about how our population is too large to uphold a completely free healthcare system. They’ll then usually go on to blame immigration.

It is actually our distribution of our population demographic, rather than its size that is our major issue. I’ll keep it simple. Our grandparents (The silent generation) had roughly three to four children. In the 1950s and 60s, the average Australian family was two parents and four children. Those children grew up and only had one to two children on average. The number of children that Australian families had on average halved in a generation. 

Why does this have any effect on medicare? It’s a simple answer but not an obvious one. When the baby boomers were working, the Medicare system worked well. There were roughly two working people for one elderly person. Of course the older you get, the more likely you will need regular medical help. Now those baby boomers who did the heavy lifting for medicare are retiring and they’ve left less people younger than them working to hold the system up. As the baby boomers age, they will need more medical care. We are experiencing the very start of this. The issue is that for every elderly person that needs their medical appointments paid for, there are less workers to tax than the previous generation. We would have to tax each worker an unsustainable amount to pay for medicare to cover it all.

I once heard someone say that Australia’s medicare system is a bit of a pyramid scheme. They weren’t far off. In previous generations, there were enough workers on the base to hold the elderly’s medical needs up. Now, the pyramid has flipped upside down. There aren’t enough workers as a base in order to hold up so many elderly people and all their needs.

This is the exact reason superannuation was introduced to Australia. Everyone knew that the age pension was going to become far too expensive to fund once the baby boomer generation entered retirement. We would have had to tax the younger generations far too high to pay for that much social security. So, we introduced Superannuation. Where people are forced to save for their own retirement in order to take pressure off the age pension. It’s bewildering how we saw the age pension problem coming but not that medicare would suffer from the same issue. 

Right now, our Medicare system is shifting as a result of our aging population. Perhaps the simplest way to understand this is to compare the two time periods. The population that makes up the over 65 age bracket has doubled since 1980. There are now twice as many old people that the medicare system has to fund. 

The issue is twice as bad as you first might think though. Why does it matter? Won’t it clear out the doctors surgeries leaving space for people who only really need to see the doctor? A few legacy media columnists have been trying to convince the public that this is the way forward. That these changes are ultimately for the best. This line of thinking is going to cost our hospitals double. 

Whilst trips to the doctors may cost you, the emergency room is still free. People with small issues who avoid a visit to the GP due to the cost will ultimately show up to our emergency rooms. When small medical issues get left untreated, they turn into much larger and far more painful issues. So the number of people in the emergency room grows.

On top of this, a visit to the GP has become a luxury that many families cannot afford. Some charities have estimated that nearly 50% of Australian households live paycheck to paycheck over a 5 year cycling period. If within 5 years, nearly half of our households will struggle to pay their current bills, how will they find an extra hundred dollars to visit the doctor that week? The simple answer is they won’t. Now adults might be able to put up with a cold for a week or two but families and children can’t. This means that families who are struggling to pay their bills already will have no choice but to show up to the emergency room with their children for basic issues that a GP could tend to. So the number of people in the emergency room grows.

It’s crucial to remember that this systemic issue has been quietly creeping up on our cherished Medicare system for a long time. Rather than the government bolstering funding for Medicare, it has in fact, been steadily diminishing its support. Ultimately failing to get ahead of the problem now will cost us more as a society later. Australia no longer has free medical care for all. 

Owning a home was the Australian dream for as long as we’ve been a country. For the current generation of younger Australians, that dream is feeling more and more unattainable. Housing prices are now 12 times the median income in Melbourne and a whopping 17 times more than the median income in Sydney.

To put that into perspective in the mid 1970s houses were 6.1 times the median income in Sydney and only 5.5 times the median income in Melbourne. On top of the fact that the dream of home ownership for the younger generation has all but gone, there is a rental crisis. The rental crisis is two fold but is largely a symptom of the home ownership problem Australia currently has. 

Anyone who has recently been in the hunt for a rental will tell you prices in capital cities defy logic. The data backs that up too! If you are in Sydney, the median weekly rent will take up a crazy 45 percent of your income. It all seems like a house of cards that simply will not topple over.

So how did we get to this? What went so wrong? In Australia each and every generation has left the next generation better off up until now. For the first time ever, the baby boomers will hand the country over to the next generations in a worse state than when they inherited it. Truth be told although you might have known the numbers, you’re probably already acutely aware of the housing issue in our country. 

Many things have been put to blame for the extreme inequality forming in our housing market. Supply, population growth and millennials frivolously spending have been the scapegoats for many politicians. Recent interest rate rises have only exacerbated the issue. 

The truth is that numbers don’t lie and the numbers show that Australia’s housing issue started in about 2001. That is where income and property prices start to really diverge from one another in a meaningful way. 

So what happened that caused such a great shift in market dynamics? The Ralph reforms were a series of changes to tax in Australia. They caused a lot of changes to how businesses and individuals operated however one of the biggest changes was effectively halving the tax on capital gains. 

This one change completely changed housing in Australia for one reason. It made housing the major investment option in the country. To put it simply it was yet another tax break for property investment. The introduction of negative gearing in 1985 had already drastically derisked housing as an investment option by allowing losses on housing investments tax deductible. The Ralph reforms came along and added a lot of fuel to the flame.

Investors must choose how they will invest their money. Smart investors will pick scenarios that are favorable to them. The Ralph reforms tipped the scale drastically towards property. No where else in our economy will you be given tax breaks if you win. On top of that, you will receive any money you lost in the shortfall between the rent you charge and your investment property loan back when you do your tax return. 

What’s more is that negative gearing accidentally benefits the upper class more than the middle or lower class in Australia. Those in the middle don’t have the cash to bleed throughout the year until they are given it back at tax time. Only existing property owners and the upper class can afford to bleed heavily and wait till tax time to receive it all back. 

A common argument against changes to negative gearing is that investors would have to sell off their investment properties. Ultimately lowering prices for property across the board and decreasing available rentals. These criticisms fail to see that this is exactly the point of making the changes in the first place. As investors would sell their properties, more first home owners would be able to buy that new available supply of homes. It should be our ultimate goal to reduce the amount of people renting and increase home ownership rates.

So why hasn’t this been addressed in any meaningful way by policy makers? No doubt that has worsened in the past 5 years. Changes would undoubtedly be unpopular with current property investors. Although baby boomers only make up 25 per cent of our population, they hold over half of our country’s wealth. Most of this wealth is ini property. Given the voting power boomers have and millennials consistently failing to show up to the polls in any meaningful way, it’s no wonder politicians have largely ignored the issue. Whoever makes a change to the status quo would have to be willing to piss off the largest voting group in Australia. 

Despite how unpopular major changes to negative gearing and CGT would be, there are other solutions. Changes to the way zoning laws work would be a big step in the right direction. This is particularly true on the eastern seaboard of Australia. Legislation originally designed to protect farmland now stands in the way of much needed new suburbs. Melbourne’s outer suburbs are full of patchwork suburbs where development seems to stop for kilometers before starting again for some reason. That reason would be the current zoning laws. It simply takes too long to rezone areas for proper use. It simply takes to long for the current system to rezone much needed land for development. Although likely the most effective change, it would be a massive undertaking as it is the foundation our states are built on. 

Productive changes can be made without having to rip apart the entire framework of the property industry too! Housing affordability is better in regional areas however there is little to no work. The closer you get into a capital city the more unaffordable a house becomes for the average Australian. This follows a pretty simple logic. Unfortunately Australia’s structure of one major capital city per state needs a desperate rethink. Each capital city is bursting at capacity and current infrastructure can’t keep up.

Other countries with similar geography and space to us have three to four major cities per state. Australia is not stuck with small spaces like Europe is, yet our public investment acts like we are trapped by our geography. Government investment into regional cities, including tax breaks for businesses who choose to have offices in regional cities would relieve the demand for housing in capital cities. 

Young people (the ones most affected by high cost of housing) struggle to make the move regionally. There is no work. They will either have to take a drastic pay cut, leave careers they’ve worked their whole life for, or commute hours upon hours a day. 

The idea is simple, each major capital city is essentially a monopoly in their respective state. For Victoria, Melbourne is a monopoly. For New South Wales, Sydney is the monopoly. If young people want to work, earn a good living they have to demand housing in that city. Instead, imagine if young people could demand housing across multiple cities in the state without having to make major lifestyle concessions. The only way of this occurring is if public investment shifts to focus on more than one major city per state. 

The current policy of investing heavily into one major city is not working. Red tape and bureaucracy means we can’t build infrastructure at the pace we need. It is a proverbial hamster running on an endless wheel. Instead, some of that money should be developing regional cities.

Of course, the longer an issue like this continues the more pain people experience.With that pain comes more fringe ideas on how the problem should be solved. It’s easy to over intellectualize the issue but at the end of the day, these are real people who need real places to live. Some have called for a more Progressive tax that penalizes people who own multiple properties on a sliding scale. Meaning that you would incur more tax as you acquired more property. Essentially discouraging investors from commoditising housing. 

Along with this suggestion, some have called for the government to release more land for first home buyers. This is largely a more extreme solution to changes to zoning laws. Close to a quarter of Australia’s land is still “Crown Land”, essentially meaning government owned. Some of this land is used for important things, like military facilities and infrastructure. Some of it however, is not used for anything at all. Some people have called for this land to be released to the public for sale to help increase supply of available property.

In order for this to have any real effect on the current issue it must be for new homeowners rather than current investors. The risk is that well established portfolio owners will just gobble up more land at cheap prices. So it would need to be limited to one per person, only for those who have no property of their own. People who push for this solution cite previous government programs. The most recent being when return soldiers could get farmland in Australia for what essentially was nothing. No doubt an extreme measure to solve our housing crisis that probably fails to account for a few things. Even if the government did sell off crown land cheaply to new home buyers, much of crown land is remote so there would be no infrastructure. Hardly livable, definitely not developable into a home for most.

There are plenty of solutions to solving our housing crisis. Some would make more of a difference than others. Regardless of efficacy, there are plenty of options on the table for policy makers to make real change. So when is change likely? 

If I’m honest, probably not very soon. Almost all of the solutions, no matter how simple, are politically unpopular. Taking into account that almost all policy makers are a part of the generation that benefits from a housing shortage, rather than the ones that suffer from it only confirms that nothing is likely to change tomorrow.

Even when we remove generational differences, policy makers will be hesitant for change. This is because at best estimates, real estate makes up around half of the wealth in Australia. Any change in this status quo is unlikely because the decision to make changes weighs heavy on the country. Who wants to be responsible for changes for half the country’s wealth? Probably not many people putting up their hands for that one.

For now, most politicians agree that something must be done. They have decided that building social (commission) housing is the best bang for their buck. Is cramming millennials into low quality high rise flats in mass a good solution? Probably not but time will tell.