Gambling Their Future
According to a recent Issues in Society report, gambling turnover by Australians in 1999-2000 was $113 billion, with losses amounting to $13.3 billion—an astonishing $931 per person, an amount that has doubled in the last nine years.
On- and off-course betting is available on horse, harness and greyhound racing. Australians gamble on the results of a variety of sports, including four codes of football. There are lotteries and soccer pools spread over six nights per week, nationally.
But the most pervasive form of gambling in Australia is the 180,000 poker (slot) machines spread over six states and two territories—making up 21 percent of all the gambling machines in the world. Keep in mind that Australia’s total population is about the same as the state of California!
State governments’ budgets have become increasingly dependent on taxes imposed on gambling. According to the study that produced these statistics, “In 1999-2000 state governments reaped $4.39 billion from all forms of gambling, which ate into 3.5 percent of household disposable income.”
Like much of the rest of the Anglo-American countries, since World War ii Australian households have become dependent on credit buying rather than saving for purchases. Poor spending habits mean many people are spending money they don’t have, and throwing away money they have.
This penchant for gambling extends indirectly into many aspects of Australian life, even affecting basic necessities such as housing mortgage finance—the major investment for most people.
The median price for a family home in Australia’s largest city—Sydney—has risen dramatically to aus$350,000 in recent years. Banks and other lending institutions generally will finance up to 95 percent of the purchase price. With interest rates at a 40-year low and in order to lift its flagging fortunes, two years ago the Australian government doubled its “First Home Buyers’ Subsidy” to $14,000. Some lending institutions accepted this as full deposit! Borrowers were not required to save or contribute one solitary cent.
Now that mortgage repayments are increasing in conjunction with rising interest rates, it is only a matter of time before this translates into defaults and repossessions. This will send a boom that has seen purchase prices of ordinary houses near the city exceed aus$1 million into spiraling decline and negative equity. The domino effect will inevitably threaten the viability of lending institutions themselves, send overcommitted borrowers into personal bankruptcy and rapidly increase unemployment.
The government, lending institutions and borrowers will have all lost the gamble! The Australian economy is a bubble about to burst.