Consumption, Debt and the Environment
- At 18 February 2005
- medium Opinion
Speech to a public forum on organised by ACF
BMW Edge Theatre, Federation Square, Melbourne
18 February 2005
One of the more profound changes in Australia over the last decade has been the
extraordinary rise in personal debt. In the last ten years personal debt has increased from
a little over $6,000 per household to over $14,000. Lending for housing rose from around
$22,000 per household to $77,000 per household.
This unprecedented indebtedness is certainly not because we are experiencing hard times
and people have had to borrow to tide them over. Quite the opposite. In financial terms,
Australians have never had it so good. Incomes have been growing rapidly; even those at
the bottom have been keeping up with the average.
So what has induced Australians to go on a massive spending spree?
Rich societies like Australia’s appear to be in the grip of a severe bout of ‘affluenza’, an
epidemic of overconsumption and money-hunger. Here’s one definition:
Af-flu-en-za n. 1. The bloated, sluggish and unfulfilled feeling that results from
efforts to keep up with the Joneses. 2. An epidemic of stress, overwork, waste and
indebtedness caused by dogged pursuit of the American Dream. 3. An
unsustainable addiction to economic growth.
At its heart, affluenza describes a condition in which we are confused about what it takes
to live a fulfilling life. Part of this confusion is a failure to distinguish between what we
want and what we need. But what are our ‘needs’? In the last decade, items that have
been transformed from luxuries to necessities in most Australian homes include plasma
TVs, home air-conditioning, personal computers, second bathrooms, mobile phones and,
increasingly, private health insurance and private schooling for children.
In other words, there has been a relentless ratcheting up of desire, a scaling up of
expectations about what it takes to have a decent standard of living. The desired standard
of living of the typical household is now so far above the actual standard afforded by
incomes that people feel constantly deprived of the ‘good life’.
Hand-in-hand with the growth of credit, shopping has become the national past-time.
Many would not know what to do with their lives if they could not shop. It’s become
addictive. Shopaholism has been called the ‘smiled-upon addiction’. Shopping till you
drop signifies a happy-go-lucky disposition rather than a sad and empty life.
In modern consumer Australia, the gap between our actual self and our ideal self is
widening. We are continually urged to aspire to a better, slimmer, richer, more
sophisticated ideal self. The widening gap between our actual selves and ideal selves is
the source of a constant yearning to be something other than we are, indeed something
other than we can be.
Perhaps this is why the increasing level of materialism that characterises affluent
societies like Australia has been shown to be associated with declining well-being and
more pathological behaviour. The evidence points strongly to the conclusion that the
more materialistic we become the more we try to cope with our insecurities through
consuming and the less contented we are. It also indicates that the more materialistic we
are the poorer are our personal relationships.
We have no trouble recognising that overconsumption of alcohol and excessive gambling
harms the overconsumers themselves, as well as those around them. Yet shopping can
also be driven by obsessive or addictive behaviour. Psychologists have recently identified
a pathological condition known as oniomania or compulsive shopping, defined in the
American Psychiatric Association as an obsessive-compulsive disorder.
Those with oniomania find that their shopping is out of control; they buy more than they
need, often setting out to buy one or two items but coming home with bags full of things
they could not resist purchasing. Oniomaniacs often spend more than they can afford and
rack up large debts on credit cards that build until some crisis occurs. After shopping
binges they are soon visited by feelings of regret. If this sounds like the experience of
almost everyone, then the psychologists have merely identified the more extreme form of
a widespread social condition.
Shopping has become both an expression of the meaningless of consumer society and an
attempted cure for it. Indeed, it has recently been shown that compulsive shopping
disorder can be effectively treated with certain anti-depressant drugs, suggesting that
oniomania is not a psychological disorder in itself but a manifestation of something more
pervasive − entrenched depression and anxiety for which shopping is a form of self-medication, a phenomenon widely recognised through the phrase ‘retail therapy’.
It is widely accepted that people believe that they need more money than they have no
matter how wealthy they happen to be. Most people act as if more money means more
happiness. But when people reach the financial goals they aspire to they do not feel any
happier. Instead of wondering whether the desire for more money is the problem, they
raise their threshold of desire; this is an endless cycle.
In fact, studies have shown that most people would prefer an income of $50,000 where
the average is $40,000 than an income of $70,000 where the average is $100,000. Most
people would rather be poorer as long as others are poorer still.
For the middle classes, rising incomes over the last decades have been accompanied by a
greater increase in the levels of expectation about what is needed to live a decent life.
Since the level of expectation always stays in advance of actual incomes, many people,
who by any historical or international standard are very wealthy, feel themselves to be
doing it tough.
We have measured the extent of this effect – which in Australia might be called the
‘middle-class battler’ syndrome – through a Newspoll survey. Respondents were asked
whether they agreed or disagreed with the following statement:
“You cannot afford to buy everything you really need.”
Sixty two per cent of Australians − nearly two thirds − believe that they cannot afford to
buy everything they really need. When we consider that Australia is one of the world’s
richest countries, and that Australians today have incomes three times higher than in
1950, it is remarkable that such a high proportion feel that their incomes are inadequate.
It is even more remarkable that among the richest 20 per cent of households − the richest
people in one of the world’s richest countries − almost half (46 per cent) say that they
cannot afford to buy everything they really need.
Without any doubt, the primary target of excessive consumption spending in Australia is
the home. They are bigger, with more bedrooms and bathrooms, and they are increasingly
filled with luxurious fittings and appliances. In the mid-1950s the average size of new
houses was around 115 square metres, half the size of today’s new house.
The expanding size of houses has been occurring at a time when the average number of
people in each household is shrinking. In 1970 there was an average of 3.3 people to each
household. By 2000 it had fallen to only 2.6, a 21 per cent decline over the three decades
from 1970. Expressed another way, in 1970 an average new house had 40 square metres
of floor space for each occupant; today each person has 85 square metres. No wonder
house prices have risen so dramatically; we seem to want so much more space.
As a result, many families float around in dwellings with far more space than they can
use. This spare space must still be filled with furnishings, appliances, carpets and
curtains. It must be heated, cooled and cleaned, adding to the resources needed to
maintain the home. In other words, buying a bigger house means embarking on an
extended binge of shopping in order to fill it up, and, as House & Garden magazine
declared last year: “What was once considered extravagance is now considered the
Increasingly, Australians are not satisfied with standard appliances but demand high-quality professional ones. Instead of a standard gas or electric stove, kitchens are adorned
with ovens with six cooking functions, turbo grills, touch controls, triple-glazed doors
and the ability to defrost food before cooking it.
Increasingly, the kitchen in the home is being duplicated by super barbeques promoted as
the ‘kitchen outdoors’. While a barbeque in the 1980s was typically assembled at home
from 150 bricks, a hot plate and a wood storage area, in 1998 the top of the line model
cost $2,000. Today the ‘Turbo Cosmopolitan’ at Barbeques Galore, described as
‘Australia’s most prestigious gourmet outdoor entertainment system’, sells for $4,990.
Made of vitreous enamel, it boasts electronic multi-spark ignition in each of six burners,
deluxe cast iron plates and a dual glass window roasting hood. It can roast, smoke, bake
and grill. However, even the Turbo Cosmopolitan has been superseded by the Grand
Turbo, the main features of which are an infrared rotisserie rear burner and a price tag of
Few people buy the most sophisticated barbeques, but their existence serves to drive up
the level of desire. After looking at the Turbo Cosmopolitan or the Grand Turbo, buyers
are more likely to buy the Cordon Bleu for $1,299, ‘the latest look in barbeques and one
of our top sellers’, instead of paying $200-$300 for a standard gas model. An
advertisement for the Rinnai ‘Monaco Outdoor Kitchen’ (retail price $2,399) declares: ‘I
love the look on the neighbours’ face when I roll out the Rinnai’. Australians today can
spend more on a set of tongs for the barbeque than they spent on the barbeque itself in
There is something unsettling about a $7000 barbeque. The barbie has traditionally
served as the symbol of Australian egalitarianism. It represented the place where
Australians could gather for the simple purpose of cultivating and enjoying their
relationships with family members and friends. Unpretentious, convivial, reflective, in a
quiet way the barbecue was where Australians celebrated their culture. All that is
destroyed when the barbecue becomes an opportunity to outdo the neighbours and other
family members, where the objective is not so much to share a meal cooked before the
gaze of those we are close to but instead to engage in an ostentatious display of worldly
success. Yet these super-barbecues are ‘flying out the doors’ of the retailers.
It’s not just super-barbeques that express this baleful cultural shift. In selling four-wheel
drives marketers play to car buyers’ need for personal safety while at the same time
extolling practical benefits such as luggage capacity, visibility for the driver, and the
ability to take the family away on camping trips, despite the overwhelming evidence that
large four-wheel drives are more dangerous for both their occupants and other road users.
One current TV ad tells us seriously that if you get bitten by a deadly snake in the
outback, only a Toyota Landcruiser will get you to hospital in time. The closest you’ll get
to a snake in Toorak is living next door to a corporate lawyer.
But beneath the macho images, it is unquestionably the inadequacies of those who buy
these monsters that the advertisers are exploiting. US market research into people who
buy large 4WDs shows that they tend to be unusually ‘insecure and vain’:
They are frequently nervous about their marriages and uncomfortable
about parenthood. They often lack confidence in their driving skills.
Above all, they are apt to be self-centered and self-absorbed, with little
interest in their neighbors and communities.
Consumerism reaches ever-higher levels of absurdity, yet most of us are blind to it.
Today we spend more on our pets than on foreign aid. There is a booming market for
dried pig’s ears, a treat for your dog priced at $100 a kilo. Other pet products include
canine nail polish, flotation jackets for dogs so you can take them white-water rafting,
fish food that sinks more slowly than usual to cater for fish that prefer to eat at different
depths, energy treats for turtles, breath-freshener for cats and anti-flatulence tablets for
If we stand back and look, it is surreal. Recently, you may have seen glossy ads for the
Hitachi plasma screen TV which comes with a “remote Power Swivel Stand [that] allows
you to adjust the screen 30º either direction of centre from the comfort of your chair”.
Explain that to me. Is this what civilisation in Australia has come to?
What are the political implications of all this?
Last year the Australian economy grew by $30 billion, yet the tenor of public debate
suggests that the country is in a dire situation. In the public domain we hear endlessly of
funding shortages for hospitals, universities and public transport, and politicians are
forever appealing to that enduring icon of Australian spirit, the ‘battler’. Political rhetoric
and social commentary continues to be one of struggle and deprivation, as if we are still
living in the 19
th century, as if the real problems facing the country arise because we are
not rich enough.
When the Labor Party lost the election in 2004 it declared that, like the conservatives, it
must focus more on growth and the economy. It is as if achieving an economic growth
rate of 4 per cent is a magic potion that will cure our ills. But how rich do we have to be
before we are no longer a nation of battlers? At a growth rate of 3 per cent our GDP will
double in 23 years, and quadruple 23 years after that. Will our problems be solved then,
or will the relentless emphasis on economic growth and higher incomes only make us feel
The vast majority of income growth in Australia over the next two decades will be spent
on consumption goods the craving for which has yet to be created by advertisers. Our
public concerns may be about health and the environment, but our private spending
indicates that most Australians feel that they suffer from a chronic lack of stuff. The
problem is that, after we have renewed our stuff one more time, there is not enough
money left to fund investments in hospitals and schools. Australia does not have a public
health funding crisis; it has a flat-screen TV crisis.
It is hard to avoid the conclusion that political parties have actively fomented
dissatisfaction amongst the middle classes in order to perpetuate the myth of the Aussie
battler, for they can then claim to understand their pain and offer solutions. As a result,
the little Aussie battler has turned into the great Australian whinger.
Nowhere was this better illustrated than in the 2004 Federal election. It wasn’t the
extraordinary public spending spree of the conservative government during the election
campaign that sank the Labor Party but the sustained private consumption binge of the
previous decade. Booming house prices coupled with unprecedented levels of consumer
debt have left most Australians absorbed by their own material circumstances with little
room left for thoughts of building a better society.
And that is where we have got to in Australia after 20 years of creeping affluenza, an era
in which materialism and the attendant self-absorption have invaded the daily
consciousness of most Australians. So the Coalition victory reflected nothing more than
the consequences of the extended spending spree and luxury fever that has gripped
Australia for 15 years. Economic rationalist ideology − with its promotion of market
values of calculation, monetary valuation, self-interest and competitiveness − has
reinforced the preoccupation with self that characterises modern Australia.
But there is cause for hope.
In the last decade we have seen the emergence of a new demographic, the downshifters,
those people who have voluntarily decided to reduce their incomes and win back time to
devote to activities they regard as more worthwhile than making more money. They put
more emphasis on time with their families, and doing something that is fulfilling and
worthwhile. Nearly a quarter of the population has made this shift, and they are by no
means all middle-aged middle class people who have made it and can afford to take the
risk. There are as many with moderate incomes as high incomes and they cover all family
The downshifters are the precursors of a new politics; for here we have a large class of
citizens who consciously reject consumerism and the pre-occupations of the aspirational
voter. While diverse in their reasons for downshifting, they agree that excessive pursuit
of money and materialism comes at a substantial cost to their own lives and those of their
Downshifters therefore reject the hitherto unquestioned assumption of Australian politics
that voters respond first and foremost to the ‘hip-pocket nerve’. These voters might be
called ‘anti-aspirational voters’.
The emergence of a large class of downshifters in Australia challenges the main political
parties to question their most fundamental assumptions about what makes for a better
society. A preoccupation with more growth and higher incomes is no longer enough. The
emergence of the downshifter calls for a redefinition of success; downshifters have
defined successful living for themselves and their families in a way that thumbs its nose
at the promises of consumerism.
And it has the fortuitous by-product of being the only way we can save the environment.
Not far beneath the surface most Australians have a gnawing doubt about the value of a
money-driven life. In our national survey we found that, despite most Australians saying
they can’t afford to buy everything they need, 83 per cent also believe that our society is
“too materialistic, that is too much emphasis on money and not enough on the things that
really matter”. They suspect that the money society is at the root of the decline in values
– the disposable relationships, instant gratification, moral laxity, selfishness, corporate
greed and the loss of civic culture.
It is in showing the link between the money society and the decline in values, and then
painting a picture of a new society that is less selfish and materialistic and more devoted
to the “things that really matter”, that a new politics can be forged.
1 Executive Director of The Australia Institute, Innovations Building, ANU, ACT 0200. Tel: 02 6125 1270