Mixed Messages In A Time Of Confusion

The Sunday Age

Sunday December 7, 2008

Conflicting demands are a sign that our world is in transition.

THIS week, just in time for Christmas, pensioners, carers and low-income earners will get a welcome boost to their income. The one-off payment is part of a $10.4billion stimulus package designed to help the needy and the economy by giving some extra cash to those who have the least and are likely to spend the most. Spend it now and spend it all, is the message from the Government these days, but it was not so long ago that commentators were lamenting our society's failure to save. "Affluenza" was the term coined to describe the consumerism that has become part of our way of life and the dissatisfaction that can accompany it. Still, the growth over the past decade or more has improved the material life of most people and we have become used to a booming economy, low unemployment and spending on credit.

The global financial crisis is threatening this growth and the assumptions behind it. The Rudd Government has responded with the stimulus package while, at the same time, the Reserve Bank has cut interest rates to the lowest level for 40 years. Combined with the drop in petrol prices, this means even more money in the wallet of the average consumer. So far, it appears that this is being spent on reducing debt; the economy grew by less than 0.1 of a percentage point in the September quarter. On a micro level, this prudence would normally be commendable. In uncertain times it makes sense to save what one can.

But this about-face is also contributing to the downturn. The economy is largely a confidence game. One reason it is shrinking is because we have less faith than we once did

in the future.

A reassessment of our credit-card culture has been overdue; easy credit was one of the triggers of the global financial crisis. We have been living beyond our means individually but also collectively and the environmental cost of unfettered growth has been immense. Our incoherent approach to our economic and environmental challenges was clearly illustrated last week in Victoria. On one day the Brumby Government announced it intended to extend Melbourne's urban growth boundary set by its contentious 2030 strategy. The strategy has not been popular with developers - who want to keep subdividing greenacres on the city's fringes - or with residents who object to higher density housing in the low-rise suburbs they love.

Days later, the State of the Environment report by Environmental Sustainability Commissioner Ian McPhail dramatically questioned ever-expanding city boundaries and took a swipe at the "unsustainable" materialism and consumption of us all. So we're supposed to spend, spend, spend for the sake of the economy, yet this consumption is a disaster for the environment and our long-term future? No wonder we're confused.

We are daily reminded of the environmental cost of our way of life, with climate change being the most urgent problem facing us. Before the financial crisis, environmentalists urged us to reconsider our mechanical impulse to spend - because we are bored, because an advertisement urges us to, because our credit card allows it. Now the contradictions are meeting in a confusing tangle.

Down the track we will face the consequences of decisions made today. Environmental and economic crises are coinciding, requiring a coherent response. Our old way of life is under pressure. Old patterns need to be reconsidered by our leaders and us all.

© 2008 The Sunday Age

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