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Canberra Climbing the International Cost of Living Ladder

By 13 June 2012 22

The 2012 Mercer Worldwide Cost of Living Survey was released today, backing up what a lot of Canberrans probably already suspected.

Our fine city climbed 11 places up the ranking, taking it from 34th to 23rd most expensive in the world, ahead of somewhat larger cities such as London and New York, but still behind the likes of Sydney, Melbourne and Perth.

Of course it’s worth keeping in mind that most international cost of living surveys are designed to determine the cost of living for expatriate employees, and are not terribly relevant for gauging the costs incurred by locals.

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22 Responses to Canberra Climbing the International Cost of Living Ladder
#1
Dilandach9:18 am, 13 Jun 12

Public service needs to be culled a bout 10K – 20K. Clear up the rental market, curb stomp the house prices and free up some child care places.

#2
VYBerlinaV8_is_back9:23 am, 13 Jun 12

Dilandach said :

Public service needs to be culled a bout 10K – 20K. Clear up the rental market, curb stomp the house prices and free up some child care places.

And put 10-20k people out of a job. Wonderful.

#3
rosscoact9:27 am, 13 Jun 12

I’m amazed that people who rely on the public service for their livelihood, and yes that would be pretty much everyone in the ACT, directly or indirectly, love to see mass redundancies.

I wonder if the people of Adelaide or Geelong feel the same about the car industry, or country towns about their abattoirs or railways, or Queensland or WA about the mining industry?

#4
johnboy9:34 am, 13 Jun 12

well a cutback would do wonders for diversifying the ACT economy, and for those not knee deep in investment property a decline in house prices would be a good thing.

#5
VYBerlinaV8_is_back9:40 am, 13 Jun 12

johnboy said :

well a cutback would do wonders for diversifying the ACT economy, and for those not knee deep in investment property a decline in house prices would be a good thing.

Diversification is already underway (although moving this process along would be good). There’s not enough property available for there to be a genuine crash, so any property price declines will, on average, be fairly gently and orderly.

It will still be pretty tough for many of those people who lose their jobs, however.

#6
dtc9:48 am, 13 Jun 12

Of course, if we translate Australian prices into USD at, say, 70c USD = $1 AUD, then suddenly we are amongst the cheapest places in the world. Or go back to 2000 when it was 50c USD = $1AUD (or 33p = $1AUD) and no Australian could afford to go overseas and we marvelled at how expensive Europe was and how people rushed to jobs there to earn the big bucks.

Prices havent increased that much relative to the rest of the world. Look at our inflation figures and think about how many things (ie everything we import) is now much cheaper

What has happened is that Australia has done quite well despite the GFC and, as a result, the AUD is now worth more in comparison to other places. So a car that cost $20k in 2002 still costs $20k, but in 2002 that was the equivalent to $10k USD.

A friend of mine who works placing overseas executives says that Australia is now the preferred destination for many Europeans (Irish and Spanish in particular), because a reasonable wage here (say $100k) is much more than they can earn in their home countries.

Yes, housing is fairly expensive regardless and so are some other things here and there. But if you want cheap housing, prices are down 30%+ in Spain and there is 25% unemployment, so you can probably drive a good bargain.

#7
Rollersk8r9:55 am, 13 Jun 12

johnboy said :

well a cutback would do wonders for diversifying the ACT economy, and for those not knee deep in investment property a decline in house prices would be a good thing.

So by diversifiying the economy you mean you’re hoping people leave Canberra and take their money with them?? Sure to stimulate business…

But back on topic – amazing the number of my ex-Canberra friends who saw this and did the old “Ha ha, Canberra is crap, everywhere else in the world is awesome”. Wow, the grass really is greener…

#8
PantsMan10:11 am, 13 Jun 12

More tax and spend initiatives are called for to give free money to people like refugees and “families” (ie people who’ve made decsions they cannot afford) at the expense of everyone else, me thinks.

F*^&k this country is crap.

#9
FioBla10:18 am, 13 Jun 12

First comment: public service. Is the public service associated with a high cost of living? Because comments like this one seem to suggest so:

http://the-riotact.com/the-ever-expanding-act-ps/69976/quote-comment-398449/#comment

PantsMan said :

lol!

Hong Kong has 166,960 public servants (Dec 2012 figures) for 7,003,700 people (2009 figures). That’s 2.3%; and they have state AND federal responsiblities too!

I suppose that’s why they are an internationally competitive economy with low taxes where everthing works.

But there’s HK and Singapore above us in the list. So is Sydney. And Melbourne, and Beijing, and Perth.

Quite sure Canberra is one of the few “Western” cities closer to the top of the list without light rail of sorts (not saying that Canberra needs it).

#10
NFI10:35 am, 13 Jun 12

PantsMan said :

More tax and spend initiatives are called for to give free money to people like refugees and “families” (ie people who’ve made decsions they cannot afford) at the expense of everyone else, me thinks.

F*^&k this country is crap.

Feel free to emigrate to a better country.

#11
watto2312:05 pm, 13 Jun 12

The problem is we voted our governments in backwards. The libs used the boom to hand back tax cuts and cash, which made us all greedy and now labor are spending money we don’t have cause we handed it all back. We should have had labor in for the boom, and we’d have infrastructure fixed and libs in for now when we need to be saving.

That said not many complained when cash was handed out in the boom. Myself included, but I realise now it was probably not the right thing to do. Kind of like winning lotto and wasting all the money.

#12
Ex Warrior12:29 pm, 13 Jun 12

johnboy said :

well a cutback would do wonders for diversifying the ACT economy, and for those not knee deep in investment property a decline in house prices would be a good thing.

terrific for the recent buyers!!!

#13
Ex Warrior12:32 pm, 13 Jun 12

watto23 said :

The problem is we voted our governments in backwards. The libs used the boom to hand back tax cuts and cash, which made us all greedy and now labor are spending money we don’t have cause we handed it all back. We should have had labor in for the boom, and we’d have infrastructure fixed and libs in for now when we need to be saving.

That said not many complained when cash was handed out in the boom. Myself included, but I realise now it was probably not the right thing to do. Kind of like winning lotto and wasting all the money.

I received my hand out from Labour but agree with point Libs could have improved infrastructure when the going was good…or not sold off assets.
Still cannot believe the mess we are in after what I consider remarkable leadership from Howard and Costello.
More to the topic can we start a ACT Gov rant page?

#14
Jim Jones1:27 pm, 13 Jun 12

Ex Warrior said :

watto23 said :

The problem is we voted our governments in backwards. The libs used the boom to hand back tax cuts and cash, which made us all greedy and now labor are spending money we don’t have cause we handed it all back. We should have had labor in for the boom, and we’d have infrastructure fixed and libs in for now when we need to be saving.

That said not many complained when cash was handed out in the boom. Myself included, but I realise now it was probably not the right thing to do. Kind of like winning lotto and wasting all the money.

I received my hand out from Labour but agree with point Libs could have improved infrastructure when the going was good…or not sold off assets.
Still cannot believe the mess we are in after what I consider remarkable leadership from Howard and Costello.
More to the topic can we start a ACT Gov rant page?

Um … what mess. Our economy is in completely awesome shape – we got through the GFC with aplomb and are the envy of damn near every single OECD country.

The Libs under Howard and Costello were insanely profligate with the initial proceeds of the mining boom, using most of it to fund electoral bribes, which created a ravening appetite for middle-class welfare that the current government is continuing to feed.

To be fair, there’s no reason to believe that Labor wouldn’t have done exactly the same thing.

This is what happens when political imperatives are placed above sound economic management.

The differences in economic policy between the two major parties are rhetorical rather than practical (i.e. they like to pretend that they differ, they don’t).

#15
dtc2:19 pm, 13 Jun 12

Ex Warrior said :

I received my hand out from Labour but agree with point Libs could have improved infrastructure when the going was good…or not sold off assets.
Still cannot believe the mess we are in after what I consider remarkable leadership from Howard and Costello.
More to the topic can we start a ACT Gov rant page?

A lot of treasury people will tell you that if the Libs hadnt pushed through their tax cuts or increased middle class welfare, the govt would have saved so much money that it could conservatively invest that money and the income alone would be sufficient to replace the GST.

Or significantly lower tax rates.

In any event, had the Libs been tough for about 10 years, it could have resulted in Australia having a firm financial foundation for pretty much perpetuity. There was that much money sloshing around.

#16
rosscoact4:01 pm, 13 Jun 12

johnboy said :

well a cutback would do wonders for diversifying the ACT economy, and for those not knee deep in investment property a decline in house prices would be a good thing.

I’m not sure that it would JB. Sure, it would create more consultants but don’t many people just leave the ACT when they are made redundant rather than setting up businesses and working in the private sector? After all Canberra goes into a localised recession and they seem to be suggesting that there are still jobs in the west and north.

As far as property prices goes, I’m all in favour of the schadenfreude investment philosophy but after you buy the house that the desperates sell for whatever they can get for it, you do have to wait for a while until price equilibrium takes effect and you can gouge the people trying to get into the market.

#17
arescarti425:14 pm, 13 Jun 12

Jim Jones said :

Um … what mess. Our economy is in completely awesome shape – we got through the GFC with aplomb and are the envy of damn near every single OECD country.

Wow. Someone has been drinking Swanny’s Kool-Aid right out of the Jug.

rosscoact said :

As far as property prices goes, I’m all in favour of the schadenfreude investment philosophy but after you buy the house that the desperates sell for whatever they can get for it, you do have to wait for a while until price equilibrium takes effect and you can gouge the people trying to get into the market.

Or maybe they’d use the opportunity to buy a house because it is, you know, somewhere to live, instead of assuming that its only value is as some sort of miracle get rich quick scheme.

#18
Valleyboy7:52 pm, 13 Jun 12

johnboy said :

Sure, it would create more consultants but don’t many people just leave the ACT when they are made redundant rather than setting up businesses and working in the private sector?

Exactly. Most of the workforce here are probably still people who’ve moved here from somewhere else — for the job. Take away their job, and therefore take away their primary reason for being here, and many will simply decide to return “home”, or to move to somewhere where above-zero winter mornings are guaranteed. The ACT has a lower unemployment rate because we thus tend to export unemployment back to the rest of the country.

#19
johnboy10:19 pm, 13 Jun 12

Johnboy didn’t say that!

#20
VYBerlinaV8_is_back9:29 am, 14 Jun 12

Jim Jones said :

Ex Warrior said :

watto23 said :

The problem is we voted our governments in backwards. The libs used the boom to hand back tax cuts and cash, which made us all greedy and now labor are spending money we don’t have cause we handed it all back. We should have had labor in for the boom, and we’d have infrastructure fixed and libs in for now when we need to be saving.

That said not many complained when cash was handed out in the boom. Myself included, but I realise now it was probably not the right thing to do. Kind of like winning lotto and wasting all the money.

I received my hand out from Labour but agree with point Libs could have improved infrastructure when the going was good…or not sold off assets.
Still cannot believe the mess we are in after what I consider remarkable leadership from Howard and Costello.
More to the topic can we start a ACT Gov rant page?

Um … what mess. Our economy is in completely awesome shape – we got through the GFC with aplomb and are the envy of damn near every single OECD country.

The Libs under Howard and Costello were insanely profligate with the initial proceeds of the mining boom, using most of it to fund electoral bribes, which created a ravening appetite for middle-class welfare that the current government is continuing to feed.

To be fair, there’s no reason to believe that Labor wouldn’t have done exactly the same thing.

This is what happens when political imperatives are placed above sound economic management.

The differences in economic policy between the two major parties are rhetorical rather than practical (i.e. they like to pretend that they differ, they don’t).

Best post you’ve ever written.

#21
A_Cog4:07 pm, 14 Jun 12

Many of you are off the mark completely, and are falling for all the trash journalism which says things are tough in Canberra (and Australia generally). Read my first post to look at the numbers: “A tale of two cities” http://the-riotact.com/a-tale-of-two-cities-canberra-vs-sydney/73816

The numbers are solid. Average Canberrans earn higher wages, get more super, buy cheaper properties, and own comparatively larger properties. Implicit in the data is that we have better health (saving us more money too). After a lifetime working, a Canberran public servant is $530K better off than a private sector Sydney slave, just in superannuation. Canberra rocks.

As for the housing shortage, that’s got nothing to do with public servants or refugees or any group other than developers constricting supplies to drive up prices. Infill would solve this, and the ACT Planning Strategy is doing just that.

The Riot ACT usually has comments from informed, intelligent people. Apparently not today.

#22
A_Cog4:38 pm, 14 Jun 12

I should have also pointed out that the Mercer survey is a table of rankings. Places are relative. So just because Canberra rose from 34 in 2011 to 23 in 2012 does not mean it got more expensive in Canberra. It just means that in 2012, other cities are now relatively cheaper than they were in 2011 compared to Canberra. To make this point with a sledgehammer: if ten cities had been destroyed in an earthquake, Canberra would jump up ten spots. Does this mean Canberra got more expensive?

Given that the survey ranks cities in Angola, Char, Brazil, Russia, China, Gabon, Sudan and Venezuela as more expensive than Canberra, it does not mean that the cost of living for citizens is more expensive in those second world and third world cities. Does anyone seriously think living in Libreville (Gabon) is pricier than Canberra? The Mercer rankings is because of how expensive it costs an expatriate worker in a dangerous country to rent a fortress, have twelve bodyguards, and get clean water flown in. Kudos to OP for making the oblique mention about the Mercer survey being for expats.

But judging form the posts, it’s disappointing to see people knee-jerk reacting to the OP and ranting on about the ALP, refugees, public servants, and indeed any other demon du jour (except property developers who really are satan spawn).

I stand by my post: Canberra is great.

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