Regulations ‘send prices soaring, hitting the poor’

Regulations ‘send prices soaring, hitting the poor’

Daniel Wild’s new report How Regulation and Red Tape Makes Families Poorer, was featured in the Australian on Monday, in a news story Regulations ‘send prices soaring, hitting the poor’  by David Uren.

An analysis by libertarian think tank the Institute of Public Affairs argues that the impact of regulation on the cost of services is highly regressive, hurting low-­income households much more than for those on higher incomes.

Established housing has suffered the biggest cost increase in the past 20 years, registering a 330 per cent rise, compared with an increase in average wages over that period of 90 per cent.

Although housing prices are set by the market, housing costs are strongly influenced by zoning and building regulations, as well as by the Reserve Bank’s interest settings and population growth.

IPA research fellow Daniel Wild cites Reserve Bank findings that annual demand for new housing was stable at between 120,000 and 145,000 new dwellings a year until the mid-2000s. Since then, demand has lifted by 40 per cent, or the equivalent of 50,000 new dwellings a year, mainly as a result of elevated immigration.

The story then says:

The IPA report says that although parents benefit from generous government subsidies, most of these are absorbed by providers.

The average price of electricity has risen by 215 per cent since 1997, but most of that increase has occurred in the past decade when prices have lifted 125 per cent, or six times the rate of wage growth.

The IPA says that while network costs and upgrades, both from private enterprise decisions and government edict, have ­contributed to electricity price ­inflation, it says the biggest factor has been renewable energy policy and barriers to the use of coal.

To read the full story, click here.

Read the media release.

Read the report.

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