Wednesday, May 19, 2010

Schoolies week in India

This morning I had the opportunity to catch up with a valued colleague and friend Emma LoRusso. One of the things I really value about Emma is her ability to see the way forward and devise the strategies to get there. Over some scrambled eggs and coffee, she helped calibrate and clarify a few thoughts I’ve been having and as a consequence, I want to share with you an idea and passion that I want to pursue.

In 1999, I ventured on my first, short-term missionary trip to India. It changed my world. Having grown up in one of the most privileged countries in the world, I had never seen poverty like what I saw in India. So many people; so little material wealth.

But even more confronting was the slow realization that maybe I was the one who was impoverished. In spite of all my material wealth and good fortune, maybe I was the one who had the greater need.

The defining moment came for me when I shared a meal with an Indian family in a village whose name I could never pronounce. From a woodfire that had been cut into the earthen floor of what would otherwise be the verandah, the mother of the house served a bowl of rice with chicken curry that was so heavily spiced that it made my hands burn. And as I sat on the edge of the bed that doubled as their couch and begin eating with bare hands, it was as if my eyes had suddenly gained their vision for the first time. With the material facade pulled away I could see the world in a new light, and that the essence of living ran much deeper than my material possessions would have me believe.

This epiphany was profound but no amount of words would allow me to convey it to you in all its richness; you must experience it for yourself. Somehow, I must take you there.

And so I want to create a ‘Schoolies week in India’ program that gives you that opportunity. I want to take you out of your comfort zone and show you places and people that will change your world. And I want you to take that experience as a young adult and combine it with your passions so that you can know what to do with your future. This is my passion.

Monday, May 10, 2010

Why Government grants don't work

Having purchased a house around 8 months ago and now having experienced 6 interest rate rises in that time, I find it interesting to hear the ongoing debate about the rising cost of housing in Australia followed by demands for the government to "do something about it!" In typical political fashion, the Australian Government has been throwing money at new home buyers to help them live the Australian dream as well as stimulate the economy throughout this Global Financial Crisis. But I seriously doubt that this has been a useful exercise. In essence I believe it has actually hurt those people that it was intended to help.
For starters, housing affordability is driven by two forces; the first is the size of the deposit and the second is loan serviceability. Throwing money in the form of a one-off grant to first home buyers certainly helps them with their deposit but it does nothing to help with loan serviceability. And to make matters worse, because so many new home buyers have been clambering over the top of each other to get into the market and access their government grants, it has artificially inflated new homes by an amount roughly equal to the grant. In effect, the grant has passed straight through the hands of the borrowers and into the hands of the developer.
Solving the affordability problem is going to take a lot more than new home-buyer grants. The problem has to do with supply and demand. Everyone wants to live in a nice suburb and have access to good services. But that is an infrastructure issue as much as anything else. You can't create more land, all you can do is make better use of the land you have. And that's not something I hear the government doing anything about.
Why do we all feel we have to live close to the major capital cities? - So we can access good employment opportunities and education for our kids. Why do we want good employment opportunities? - So we can afford a nice house that's close to the city. And so the cycle goes.
So in my view, the only way to resolve the housing crisis is to provide incentives for industries to establish themselves in under developed areas of Australia. Rather than hand outs to new home buyers, why not invest in some real infrastructure and designate satellite cities that offer tax breaks to companies to establish there. Why not start building hospitals and schools before people live there rather than waiting until they have to fight for it?
I met a lady the other day who was selling up from her Northern Beaches property in Sydney and moving to the country. With the proceeds of her suburban house sale she was buying a 7-acre allotment with a large house and 'plenty of room for her daughters to own and ride horses'. The family opportunities in the country were so much greater than what could be afforded in the city.
So perhaps a little more lateral thinking around the problem would see us making better use of this land that we have rather than having us all feel like we have to cram into shoe boxes just so we can be close to the big cities.