Do you feel lucky?

If you’ve travelled, you’ve probably realized that Australia can be expensive.

Cars cost a motza. Food isn’t cheap. And real estate prices just plain hurt. It’s enough to strain our cherished notions of the lucky country.

The Centre for Independent Studies (CIS) has recently taken up the cause with a report on why many of our prices are too high, why the government is to blame, and what the government should do about it.

First the caveat: the CIS is a pro-business organisation. Like many of its ilk, the CIS is quick to blame the government for our woes, but not so eager to praise it when things go well.

With that in mind, let’s proceed. The CIS finds that Sydney is the sixth most expensive city in the world – more expensive than New York, Rome or London. Further, Australian house prices have climbed from three times the median household income in the 1980s to nine times the household income in Sydney.

But we all know Sydney is expensive. What about the rest of the country?

The CIS takes aim at bananas, of which imports are banned for quarantine reasons. It says the ban contributes to the $13.98/kg price as of April, 2011. Whoa there! Cyclone Yasi had a bit to do with that. As an aside, the report mentions that bananas were $2.30/kg before the cyclone, only marginally more than America’s $2.16/kg.

Books and cars are also in the firing line. The report says the Copyright Act 1969 results in books that cost two to three times the price of overseas equivalents, while failing to drive sales to Australian authors. No disagreement from me: cheap books means more readers, and last time I put a coin in the Common Sense Machine, it said the more literate a population the better.

Similarly, the CIS suggests scrapping the remaining import duties on cars, abolishing the luxury car tax and allowing the private importation of certain used vehicles.

All in all, some good suggestions. Most of us, after all, find it hard to make ends meet.

But if we’re trying to gauge whether Australians really have it worse, we need to consider the other side of the ledger. Comparing median household income is a good place to start. In 2007, the Aussie median was AUD$66,820. Two years later, in 2009, America’s median was a much lower AUD$49,777.

Low-cost public health is another factor. We only spend 8.7% of GDP on healthcare. That compares to 9.8% in the UK, 11.4% in Canada and a whopping 17.4% in America.

I could go on (higher minimum wages, family tax benefits, the ability to study at university without paying upfront fees, etc.).

So are we really worse off than so many other countries? It’s a big and complicated question. For what it’s worth, here’s my gut feeling: sure, we should make some tough decisions in pursuit of lower prices, but it’ll take more than a survey or three to disavow me of the notion that we’re the lucky country.

Andrew Pegler – 6 January 2012