The gun buyback can work, NSW shows us how
The evidence is clear: NSW’s gun laws are working. They offer a clear path forward to other states and territories to reduce the number of guns in their communities; they only need to follow NSW’s lead.
The RBA sits at the centre of the disconnect between economic theory and cost-of-living reality. The RBA is charged with keeping inflation between 2-3%, a task it has largely failed to achieve for over a decade. That failure reflects bigger changes in the global economy, but also in Australia’s housing market.
Mon 31 Aug 2026 12.30 AEST
Photo: AAP Image/Dan Himbrechts
Beyond an acceptance of diversity and the ability that different groups may have to coexist in relative harmony, social cohesion is shaped by both tangible and less tangible factors. These include access to services, participation in community life, trust in institutions, and a feeling of belonging.
The evidence is clear: NSW’s gun laws are working. They offer a clear path forward to other states and territories to reduce the number of guns in their communities; they only need to follow NSW’s lead.
Two million Australians are delaying or skipping an appointment each year, with around half doing so because of the rising cost of seeing a specialist.
One Nation is in damage control over its immigration policy, with leader Pauline Hanson intervening to pour cold water on MP David Farley’s claim that the party’s migration numbers were “not too different” from Labor’s. It comes as human rights advocates implore Prime Minister Anthony Albanese not to revoke work rights from people seeking asylum, arguing it would be “unconscionable” and not the answer to growing political pressure over migration.
As the Reserve Bank of Australia (RBA) contemplates yet another rate rise, it is worth considering how we ended up with an economic system that means a war miles away makes housing more expensive for millions of workers. Forcing workers to pay for inflation is not uniquely Australian, but doing so through housing is particularly Australian.
Our housing system is broken. And it is breaking our macroeconomics and our politics. Australia’s broken housing system is not only driving a cost-of-living crisis, but also creating a broader crisis in economic policy with worrying political consequences. The insecurity of private rental and financial deregulation are driving insecurity across the system. It needs to be fixed.
The RBA sits at the centre of the disconnect between economic theory and cost-of-living reality. The RBA is charged with keeping inflation between 2-3%, a task it has largely failed to achieve for over a decade. That failure reflects bigger changes in the global economy, but also in Australia’s housing market.
Recently, the RBA was particularly worried by the results of a household survey that it saw showing most people misunderstand the RBA’s efforts to fix inflation. While the RBA has been steadily increasing interest rates to help fight inflation, most people see inflation and interest rates rising together.
The RBA’s concerns reflect conventional wisdom. Raising interest rates makes it more expensive to borrow, discouraging business from expanding production and consumers from borrowing and spending. Theory suggests that as spending falls, pressure on prices falls too, reducing inflation. But as Greg Jericho has pointed out, it may be the RBA, not households, who have it wrong.
The difference of views reflects an arcane change to economic data collection. It is apt that a technical change no one has heard of should capture the growing gulf between how experts analyse the world and how ordinary people live it.
In 1998, at the request of the RBA, the Australian Bureau of Statistics changed the way we measure inflation – the Consumer Price Index – to remove the cost of paying a mortgage. They had a logical reason. Raising interest rates increases mortgage costs. That meant raising interest rates directly increased CPI. And because CPI is used to determine interest rates, it created a potentially dangerous feedback loop.
The change was designed to help the public understand the Bank’s actions by making the headline CPI reported in the news the same as the information used by the Bank to set interest rates. However, the changes in measurement moved in the opposite direction to real changes in how people accessed housing, and the gulf between experts and citizens grew.
Of course, Australians have long sought to buy their own home, and for most ordinary workers that meant a mortgage. But until the 1980s, a mortgage didn’t entail the risks it does today. Loans for first home buyers were heavily regulated with fixed rates and caps. It often made it harder to get a loan but meant an increase in official interest rates had little impact on recent home buyers.
Protecting home buyers from rising interest rates is not unique to Australia. In fact, Australia now stands out internationally for the proportion of home loans on variable rates. Even in countries we think of as more ‘free market’ than Australia – like the USA or UK – most home buyers have fixed rates. When interest rates rise in America, where 30-year fixed loans are normal, home buyers barely notice.
The world was already changing in 1998, but the decision to change how CPI was measured made it harder to see what happened next. Deregulating finance wasn’t all bad news – it aided a sustained fall in interest rates. And as finance became cheap, so houses became expensive, driven in part by falling interest rates and easier to access mortgages. If everyone can borrow more, prices at auctions rise.
In the 1980s, most debt was held by businesses. Today, household debt far exceeds business debt. Household debt (overwhelmingly, mortgage debt) is now almost twice as large as business debt and, well over 100% of GDP, is amongst the highest in the world.
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That shift – to households holding large, variable interest rate debt – changes how monetary policy works. It has made the change to how we calculate CPI more consequential, and it has widened the gap between theory and most people’s economic reality.
Of the many ‘channels’ through which interest rates impact the economy, the ‘cash flow’ channel is now the most immediate. Household ‘cash flows’ change as borrowers pay more, and lenders receive more interest.
The net impact is that higher rates reduce household spending – borrowers feel the pain more than lenders feel the benefit (and yes, higher interest rates tend to increase how much older, outright homeowners spend).
Unlike businesses, many of those heavily indebted households are not seeking risk. They are trying to avoid risk. Ordinarily, borrowing over 80% of the value of an investment would be very risky. But in Australia, that is the only way most people can escape the desperate insecurity of the private rental market. This is the tragedy of our broken housing system – people trying to escape one form of insecurity in the private rental market end up facing another in the mortgage market. We need to fix both.
The sheer scale of debt – directly linked to the high price of houses – makes us much more sensitive to relatively small changes in interest rates. You might think that a mortgage rate of 6% shouldn’t be too bad. After all, in the 1980s, mortgage rates hit 17%. What most people don’t realise is that proportionately, the recent rise is bigger than it was back then.
In the early 1980s, mortgage rates were already in the low double digits. When they rose to 17%, they increased people’s interest bill by about 50%. But mortgage rates fell below 3% during COVID. For households that borrowed then, the recent rate rises have potentially doubled their interest bill, just as real wages have flatlined. No wonder workers are reeling from a cost-of-living crisis.
We also know that households respond to higher mortgages by working more – hours and jobs. They look for extra work exactly at the time the RBA is deliberately trying to take paid work away to create ‘slack’ in the labour market.
There are many problems with the way this system works. A tool designed to manage business investment now operates more like a tax – redistributing money from younger, working households with large mortgages to older, wealthier households with savings. Interest rates largely operate by reducing demand, but we know the post-pandemic inflation is driven by supply shocks. It was always a blunt instrument. It is now increasingly contradictory.
Perhaps most importantly, this kind of monetary policy makes political solutions harder. Policies designed to reduce demand and increase unemployment, like high interest rates, have political consequences.
Researchers have shown both ‘austerity’ like this and price spikes for essentials fuel anti-government, populist politics. And it can drive indebted mortgagors and insecure private renters to see their interests as in conflict – when both reflect a housing system that forces younger, less wealthy people to take on risk.
Our world has changed. Geopolitical instability, climate crisis and artificial intelligence make supply shocks much more frequent. To navigate this new world, we need economic tools that manage inflation and protect households.
Dr Ben Spies-Butcher is the Chief Executive Officer of the Centre for Future Work.
