No cost-of-living crisis for the rich
Some people are sailing through life at the moment.
The Southern Ocean Lodge on South Australia’s Kangaroo Island is taking bookings for its grand reopening, after the luxury resort burned down in the 2020 bushfires. There’s already a waiting list for rooms, which cost up to $18,000 per night.
No housing crisis for those people.
Luxury industries are virtually recession-proof because the people at the top make working people pay whenever there is an economic problem. And “luxury” doesn’t mean merely “expensive”, something only the affluent middle classes can afford. It means being so rich that someone might make a television series about your brat kids competing for inheritance.
It means things like $10,000-an-hour rides on a Bombardier private jet. “People who used to fly first class began to realise that they can fly their entire family or management on one flight and avoid contamination as we were going through the pandemic”, CEO Eric Martel told the Australian Financial Review’s Lucas Baird in November 2022, explaining his optimism for growth in the private jet market.
Every flight is enough for someone’s house deposit.
“The interest of Australians for luxury goods has really increased—and is increasing—really fast”, Cyrille Vigneron, CEO of upmarket watch branch Cartier, told the Financial Review in April. Demand for Cartier products is growing faster in Australia than any other country.
The company’s lower priced watches will set you back around $5,000; the Australian website doesn’t bother showing prices above $78,500.
It's a different world from ours, where the nightly news regularly features journalists telling viewers which supermarkets have discounted vegetables this week.
More than 60 percent of respondents to a recent Essential poll said that they find it “a bit difficult” or are “really struggling” to afford housing expenses, childcare, insurance, utilities, school education, petrol, groceries and food.
That means living is “a bit difficult” or “a real struggle” for most Australian workers.
Alison Manners lost her home in Brisbane’s 2022 floods. Ten months on, she recounted to the Guardian: “Go into your kitchen right now and imagine scraping every single shelf into the bin. Then imagine going out to buy all that stuff again … You really notice how much prices have gone up when you have to replace your whole life”.
Sixty-year-old support worker Beth was one of more than 750 respondents to an ABC call-out for stories about the cost-of-living crisis last year. “There’s no going for coffee anymore”, she said. “That used to be our luxury on a Saturday morning. My daughter and I would go have a coffee, a muffin, a Pepsi. Not anymore—that’s nearly $20.”
The people shopping for Cartier watches or staying at the Southern Ocean Lodge spend the equivalent of what would help Alison live a little without struggling and could shout Beth morning tea for years. The Labor government’s priority, however, is to give the wealthy tax cuts.
Even those who do the actual work of building new houses and apartments could now be finding it tough to keep a roof over their heads. A May Anglicare report found that a single construction worker on the minimum on-site Award rate would need to spend 63 percent of their income to pay the average apartment rent.
A full-time early childhood educator earning $1,059 a week would struggle to send their own kids to day care. An Australian Competition and Consumer Commission report published in July estimates that the average out-of-pocket cost at a childcare centre is nearly $50 per child, per day.
As thousands of Australian workers forego heating to save on bills this winter, the uber-rich can lounge in luxurious accommodation with ocean vistas and look at their Cartier watches. Some of them will have caused the cost-of-living crisis, as they profit from charging tenants higher rents and through the companies they own benefitting from the rising cost of services. Our pain funds their pleasure.
