Cracks in the veneer

FEDELE FRANZONI IS on the edge. He lives with his family in Hoppers Crossing, in the outer tract of Melbourne's rapidly expanding western growth corridor. It's a place like many on the fringes of Australia's cities, where hopeful households have flocked in recent years chasing the promise of a better life enriched by the Australian dream of home ownership.

But Fedele Franzoni's dream is souring. Escalating petrol prices and mortgage interest rates have pushed him to take on a second job to keep his family's budget in the black. His edgy neighbours are slashing their spending to make ends meet. Holidays, entertainment, new appliances and health insurance have all been cut. "It's just getting so hard," he told the Herald Sun in May. "They say we live in the lucky country but that's crap when people have to live like this."[i]

Meanwhile, in Sydney's outer north-west, house prices are plummeting. One house in the fringe suburb of St Clair sold for just $260,000 in August 2006, leaving its mortgagee former owners with a capital loss of $190,000 on their 2003 purchase. Such woeful tales are increasingly common in Australia's metropolitan areas. Mortgagee repossessions tripled in Victoria and doubled in New South Wales between 2005 and 2006. By August 2006, real estate agent Ray Dimarco had a growing list of default sales on his books, according to the Sydney Morning Herald. "It's very, very sad," he sighs. "We've had some cases where they've handed the keys over and they're still wiping the kitchen down. They're still proud of their home."[ii]

In the growing suburb of Cashmere on Brisbane's northern fringe, developers hawking new house-and-land packages are resorting to giving free fuel to home buyers to make a sale. The promoters of the Cottage Garden Estate were having trouble selling their new homes and so offered $10,000 worth of free fuel with every house bought in October 2005.[iii] The costs of travel in Brisbane's sprawling northern suburbs are now looming concerns in households' home-buying decisions.

As interest rates and petrol prices rise, the auctioneer's hammer falls on ruined mortgagees in Australian suburbs and Prime Minister John Howard proclaims the virtues of our urban "sprawl". Housing affordability, he claims, demands that the long march of the Australian suburb must continue outwards. It is the price we must proudly bear, he claims, for the standard of living we expect.[iv] Yet among the sprawling landscape of suburban Australia, new cries of pain are being heard.


WHAT IS HAPPENING in Australia's cities? Home ownership is the great aspiration. But the sunny dream is darkening. The cruel winds of rising fuel prices, rising interest rates and stagnant housing prices bring a chill to financially overburdened families. Cracks are showing in the veneer of the Australian dream. There is now great vulnerability in our cities. Why, in the lucky country, must so many live on the edge?

A national conversation is now emerging about the ways we organise our neighbourhoods, suburbs and cities. Ordinary households and policy commentators alike are questioning whether the model of suburbanisation followed in recent decades can be sustained. This debate is long overdue. It must now be had because the model is currently unravelling. We cannot risk our futures by ignoring how our suburban dreams are dependent on cheap fuel and debt. We need to begin rethinking how we build and manage our cities, and change to protect our lifestyles and livelihoods from instability and risk.

The making of Australia's recent suburbs has increasingly relied on household borrowing. Historically low interest rates have produced the apparent miracle of affordable suburban home ownership and its unexpected consequences: the hyper-inflation of housing markets, supersized new housing, over-geared mortgage debts and outward expansion. As well as cheap mortgages, government policies have shaped housing markets through negative gearing, metropolitan plans and stamp duty. We need to appreciate this complexity to comprehend how our suburbs can become more resilient to the painful pattern of boom and bust.

The second critical part of the new suburban conversation is the state of transport in Australian cities. Transport underpins suburban living; it links our homes to all the things we do beyond the front gate. Our transport systems also reflect the choices we have collectively made about how we will travel – whether on foot, by bike, bus, train or car. These choices are important because how we get around has a cost in fuel, vehicles and road space not only for individuals, but also for businesses and governments.

Our ability to travel depends on cheap and available fuels – petrol for cars, diesel for trucks, gas for buses or electricity for trams and trains. Costly fuel disrupts suburban lifestyles and has dramatic impacts on our cities. As fuel prices rise, suburban transport systems face unexpected shocks. Accelerating fuel costs threaten to compound the growing mortgage risk for households who depend heavily on cars to traverse the spreading suburbs.

The condition and prospects of Australian cities – namely, the reliance of our suburbs on private motor cars for transport and on private debt for home purchase – have made our cities immensely vulnerable to oil and credit shocks. There are strong indications that Australian suburbia will be shaken further by rising fuel prices and mounting financial constraints. It is essential that, as a society, we recognise these vulnerabilities and identify their origin so that we can begin the urgent rethinking of the Australian city to avoid these threats.

We should begin this conversation about Australia's suburbs by recognising that their creation has also been one of our greatest national achievements. The provision of high-quality, affordable housing has been the basis for Australia's living standards. But because they are so central to urban life, our suburbs are places of great risk and danger – not just because of their physical form, but because of the inherent social and economic dependencies upon which they are founded.


AUSTRALIA'S CITIES RELY on cheap oil. Residents depend overwhelmingly on cars for transport and access to widely dispersed employment, education and community services. More than 70 per cent of all journeys within Australian cities are by automobile.

Fuel prices have almost doubled over the past two years, driven by geopolitical tensions, weather events and accelerating demand from growing global economies. Last year petrol prices touched near-record highs. The Prime Minister fears the hikes may be permanent. In the background, a spectre looms in the form of "peak oil" – a geological theory which suggests that global oil supplies will soon hit a peak beyond which they will decline forever.

The shocks have been slow in hitting, but households are altering their behaviour to cope with increasing fuel costs. Reports have flooded in of households driving less, cutting back spending on non-essentials or using public transport more. But car-dominated planning means that budding estates like Glenmore Park in Sydney and Caroline Springs in Melbourne lack the good-quality public transport found in central areas. Walking and cycling facilities in Australia's newer suburbs are poor. Retail and other services are widely dispersed throughout the suburban landscape, making access difficult.

The Chivers family of Kellyville on Sydney's north-west edge exemplifies the sense of shock. "It is ludicrous," Chris Chivers told The Daily Telegraph in May 2006, as his family's monthly fuel bill rose by $80. "Living in Kellyville we have no public transport, so it is very limited. Something has to go. We can't just absorb it."[v]Like the Chivers, many in Australia's suburbs are utterly dependent on their cars. So far, there has been little attention on the very suburban impacts of the recent oil shocks. Horror stories of outer suburban households crippled by rising fuel costs have made headlines, yet there has been barely any public debate of how we got to this point. Who allowed the suburbs to get so risky? More importantly, what are we going to do about it? Such huge questions now confront our cities. As a nation, we need to start understanding how we have created oil-vulnerable households and suburbs, and start debating the necessary planning and community steps needed to insure our cities against the rising oil threat.

The second great modern suburban vulnerability is private household debt. Debt is utterly essential to modern suburban life. The past decade has seen huge growth in household housing debts, whether owner occupied or for investment. The proportion of Australian households with mortgages jumped from 29.6 per cent in 1995 to 35.1 per cent in 2004,[vi] and the total value of mortgage debts ballooned. Australia's housing debt in 1996 totalled around $125 billion but by 2006 had reached over $350 billion[vii]. The binge was made possible by historically low, stable interest rates and receding unemployment.

Cheap debt has also boosted purchasing capacity relative to household income. House purchasers have borrowed more and bid higher for their housing. The average first home mortgage rose 132 per cent from $90,000 in 1995 to $209,600 in 2005[viii]. The credit flood created a king tide of house prices that has washed across Australian cities. Median house values grew from $180,000 to $485,000 in Sydney between 1993 and 2003, an increase of 169 per cent. House prices in Melbourne and Brisbane grew 149 percent and 131 per cent respectively over the same period[ix]. Perth boomed later but has overtaken Sydney due to rapid economic growth in Western Australia.

The boom not only primed housing prices, but produced a wonder economy of imagined wealth and aspirations. The amount of housing consumed has soared as low interest credit grew into square metres of floor space. The modesty traditionally shown by Australian home owners vanished. In the past, modest income Australian households bought simple dwellings and added to them over time as wages rose, with renovations and extensions. Now the full house is bought upfront.

Low interest rates loosened the spending reins and cheap credit provided the illusion of instant wealth. Why wait years down the track for the third bathroom, walk in robes or a rumpus room? A little more on the loan upfront adds only a fraction to the weekly payments, so let the rumpus rip was the message. Thus, in New South Wales, the floor area of new homes spread by nearly a third between 1993 and 2003 and by a quarter in Victoria. Cheap debt remodelled the form of Australia's new housing, exemplified in the rise of the so-called "McMansion", reflecting how access to low-cost debt has enabled big borrowing to buy big dreams. Cheap consumer credit made these houses, and also allows aspirational splurging on domestic "bling".

This spending binge probably wouldn't have happened if not for the low cost of credit. Australian households have now amassed a mountain of debt, mostly for housing and the shiny gear inside. Debts must be repaid. The house price boom and its huge debt burdens make any interest rate rise chew deeper into household budgets in far-flung places. The mortgage misery could easily escalate. Outgoing Reserve Bank chair Ian McFarlane last year forecast the end of the cheap credit cycle and predicted that interest rates will soon swing back up to their "normal", higher levels.

Few complained as interest rates fell in the mid-1990s and many celebrated as rapid house price growth brought a glossy veneer of wealth and security. The lonely critics of the property debt party were ignored. But the chorus of mortgage pain has finally stopped the great suburban barbecue. The revelry is ending and our cities are tottering. The hangover leers.

We urgently need a new public debate about the condition of our suburbs because they affect the entire economy. The consumption of debt has grown the economy by creating a legion of new jobs in construction and services. These jobs have also provided work for many mortgage holders, as dog washers, pool cleaners, appliance salespersons and carpet layers. But the suburban debt-consumption economy has also primed inflation, and the Reserve Bank is ratcheting interest rates upwards. As rising interest rates contract millions of suburban household budgets, this web of housing-based employment will also begin to fray. Reports suggest the Sydney construction sector is already in recession. Shrinking finance, construction and retail sectors could cause shivers across the whole Australian economy. Shaky housing choices may yet unsettle work choices.


PAUL KELLY HAS argued that Australia's remarkable political stability since Federation is effectively the result of a "settlement" between capital and labour. The result has been described by historian Frank Castles as the Australian "wage earners' welfare state". Under this pact, industry conceded more of the profits accruing from private ownership of capital to workers and in return retained rightful ownership of private property and enterprise.

The idea of settlement helps us to understand Australian cities, because it evokes not only an agreement completed but also an enduring state of dwelling. Indeed, the Australian settlement was as much about accommodation – ensuring everyone could afford a dwelling – as it was an industrial contract. In a culture that now celebrates home ownership, settlement is the rite that marks a point of personal, social and economic becoming – the last sacrament in the mass ritual of owner-occupation. Settlement defines our national aspiration.

The "Australian accommodation" came literally, throughout the twentieth century, in the form of the progressive delivery of modern housing by expanding the suburban realm. The nineteenth century Australian city had not produced the horrid slums found in other industrial metropolises, but was nonetheless a foul place for many residents. The huddled masses began their flight to new spaces. Under the Australian accommodation, industry provided the wages and finance to make home purchase affordable and governments ensured access to a supply of adequate land upon which good-quality housing could be built.

This model has endured many shifts in political fashion and ideology. The Whitlam government, for example, used state control of land release and infrastructure to plan suburbs. Howard's suburban toolbox includes interest rates and private land developers. While their methods of provision and delivery differ, the two sides of politics are unified in their support for the Australian dream. Every government's attempt to expand suburban home ownership is a version of the aspiration inherent in the Australian accommodation. In challenging and debating our cities, we must appreciate these experiences and the lessons they hold for our suburban future. But dreams are built in material worlds.

Paul Keating once remarked that the "tyranny of distance" that characterises Australia's contrary global geography is almost a national obsession. The Australian accommodation involves an inverted tyranny of distance within our urban land markets. This minor tyranny is found in the trade-offs forced by land prices that are high in the city centre and slope gradually away with increasing distance from the CBD. Central city properties have historically been of highest value because of the close access they provide. In the outer suburbs, land is cheaper but services are sparse and infrastructure is poor.

In the early industrial period, most industrial activity occurred near the city centres and required a workforce that in turn demanded housing. Initially, workers lived within walking and cycling distance of their employment. The competition for land created high residential densities and crowded living conditions. Many rented their housing from slumlords. The tiny terrace cottages of Melbourne's Fitzroy and Sydney's Surry Hills reflect this cramped early-urban period.

Technology broke the tyranny of suburban distance and enabled the Australian accommodation. The advent of the trams and trains in the late nineteenth century sped the outward expansion of Australia's early suburbs by providing access to cheaper land far from the rotting cores. Land speculators encouraged the growth of rail lines and land sales around stations. Governments, many of whose members were implicated in speculative ventures, provided the public capital to support the rail schemes.

In Sydney and Melbourne, new suburban villages with vibrant commercial hubs sprouted around each city's suburban rail stations at places like Malvern and Ashfield. But distance again imposed its tyranny in miniature, limiting the expansion of suburban villages to little further than walking distance from the rail station. Beyond the station, land prices quickly fell away and landscapes remained semi-rural. Only in those areas criss-crossed by tramlines did continuous development prevail.

In the golden weather of the post-World War II economy, Australia's suburbs grew apace. Affordable access to motor vehicles further relaxed the tyranny of distance. At the end of the war, only half of Australian households owned their homes, but with strong government subsidies home ownership grew rapidly, reaching nearly three-quarters over the following thirty years.

The postwar decades marked the advent of the period of the private automobile. This drew patrons away from public transport, and motor vehicles crowding suburban streets came into conflict with the trams. As traffic growth clogged arterial roads, state governments began to dismantle their tramways, replacing them with diesel buses. Sydney's trams ended in 1961 and Brisbane's in 1969. As a result of historical accident, only Melbourne's trams survived.

The early postwar period also coincided with growing national interest in cities and the first real attempts at their large-scale planning. Rapid growth allowed the testing of new planning ideas and models. From the late 1950s, Australia's urban planners embraced the motor car and new models of suburbanisation drawn from an ascendant and newly prosperous America. American road consultants were invited to draw up freeway plans for Australian cities. Melbourne's 1969 road plan sought to superimpose a lattice of intersecting freeways across the city. Similar plans were created in Brisbane, Sydney and Perth, and were implemented over the following decades. Melbourne's South East Freeway opened in 1967; Sydney's first freeway was completed in 1971.

The freeways were a double blow for public transport. Cars draw patrons away from the rail routes, and roads took large amounts of government finance that might otherwise have gone to public transport. Australia's public transport systems have languished ever since. Patronage bottomed out in the late 1980s and has, at best, only matched population growth since then.

The motor car permitted a previously unknown degree of mobile freedom that conquered the tyranny of suburban distance. Suburbanites were no longer tied to the radial tram and rail routes, and could traverse the city. The car became a tool of housing policy by helping to open up new, cheap land for housing. Commerce and industry followed the workers to their new suburban locations, and also became detached from the train and tram systems. Shopping centres drove this process – Melbourne's Chadstone in 1962 was the first to break the link between rail and retail.


THE FREEWAY ERA has created two city types within the Australian metropolis that are marked by differences in design and location. The first "rail city" is the pre-World War II area previously accessed by the tram and train networks. This zone tends to be of higher dwelling and commercial density, often involving mixed uses, and is well served by the remnant public transport with high rates of public transport use, walking and cycling. Eastern Sydney's Randwick and Bondi or Melbourne's Richmond and St Kilda exemplify this. Only 20 per cent of the journeys undertaken by residents of inner Sydney involve private motor vehicles; the rest are by bus, train, bike or foot. [x]

The second city type is the freeway city that grew beyond and between the public transport networks. Doncaster in Melbourne's east, Baulkham Hills in Sydney or Brisbane's North Lakes exemplify them. The differences between the two cities are marked, and are clearly due to the divergent relationships between transport and land use and the lived experience of their populations. Thus, while residents of Sydney's Marrickville, Crows Nest or Woollahra travel on average less than twelve kilometres each day, those in outer western suburbs such as Camden and Penrith cover four times that distance.

Cheap fuel has produced not only car-dependent suburbs but an evolutionary growth in the species of vehicle on which suburban residents depend. Australia's passenger vehicle fleet in 1963 burned 11.4 litres of fuel every hundred kilometres. Despite four decades of technological improvements, occasional oil panics, environmental doubts and the advent of smaller cars, the best the Australian passenger vehicle fleet could achieve by 2005 was 11.7 litres per hundred kilometres[xi]. Australian fuel efficiency is worse now than it was in 1963.

Just as low interest rates make housing consumption more attractive, so increased motive efficiency translates into greater fuel consumption through increased engine size, bulked-up vehicle frames and luxury extras such as air conditioning, electric windows and fancy electronics. These qualitative changes have simply absorbed the efficiency gains while the total fuel cost has effectively remained static.

The two-cities geography of the Australian metropolis is now a brittle fulcrum around which the question of oil vulnerability hinges. Rising fuel prices are likely to have much less impact on the first city type than on the second because residents of this area have access to and use public transport more than their more mobile cousins. Dependence on petrol now poses one of the most significant risks to Australian suburbs. These risks are spread differently depending on local conditions.

The freedom and mobility provided by the automobile are entirely due to the availability of cheap petrol. The decades-long campaign to overcome the tyranny of urban distance in Australia's cities has largely been backed by easy access to cheap oil. Our suburban armies march on their petrol tanks. But nothing lasts forever, and there is a significant and growing body of science and commentary that suggests the age of cheap oil will face major challenges over the foreseeable future. If oil is finite, so is the Australian suburban model.

As if interest rates weren't bad enough, Channel Nine's 60 Minutes recently announced "two of the scariest words in the English language". These weren't the usual bogeys of global terror, bird flu or even climate change. The words formed the bland and innocuous phrase of "peak oil". This unremarkable but consequential term has emerged over the past few decades from being the niche interest of a few petroleum geologists to becoming a major issue for businesses, governments and policy-makers.

Peak oil theory is drawn from the production patterns of individual oil wells. In the early life of an oil field, extraction accelerates quickly – often exponentially. As the pumping increases, the field's pressure subsides and the rate of extraction slows, providing a "peak" moment of maximum flow. Production then declines and output falls away.

The theory is increasingly being proved right. Oil production in the United States "peaked" in 1971. The North Sea oil region peaked in 1999, Australia in 2000. Many observers believe the theory also applies to the entire world's oil reserves. Peak oil has enormous implications for the Australian accommodation and our "oiloholic" cities. Our oil-driven escape from the tyranny of suburban distance may prove illusory in an age of uneasy oil.

Even without the spectre of peak oil haunting the suburban accommodation, new and troubling pressures are already being felt. Global oil prices have risen markedly in the past two years, from just over US$30 per barrel in early 2004, to more than US$70 in mid-2006. Wars have raised global strategic oil concerns. Tensions in Nigeria and Venezuela have also heightened oil anxieties, while malevolent meteorology and shoddy Alaskan pipeline maintenance have also shaken global supply confidence. The future of oil-reliant Australian outer suburbs now depends on the fractal geology and tensions of unstable foreign lands.

Security fears would be only minor worries if the global thirst for oil were not so great. Global demand for oil will likely continue to put pressure on world supplies. The world consumed about eighty-four million barrels of oil in 2005 and this is projected to increase by about two million barrels annually. Where this new supply will be drawn from remains unclear and partly explains the current level of speculation over oil futures. The rising global price of oil has translated directly into rising Australian domestic fuel prices. By mid-2006, the cost of petrol in Australian cities was around $1.30 per litre, close to a doubling of the mid-2004 price. The rising fuel prices have seen much public complaint and consternation as motorists find their wallets thinner and their tanks less brimming than before.

Household budgets have been pressured, especially for those in the outer suburbs where a car is the basis for almost all aspects of social and economic life. Many newspaper articles have described the grim theme of families struggling to accommodate rising fuel costs within debt-burdened household budgets. Formal reports are shedding light on the trade-offs that households are making to cope with rising fuel prices. The Commonwealth Bank Research Unit has reported that Australian petrol consumption is plummeting. Sales of petrol in 2005 plunged 8 per cent compared with 2005 – the steepest fall in twenty years.[xii]

Market research agencies such as ACNielsen and Sensis have revealed that rising petrol costs have had two major effects on households. Families are avoiding driving by making fewer trips, combining journeys and travelling shorter distances. Simultaneously, they are abandoning discretionary spending, with "entertainment and going out" featuring at the top of the list of arrested activities. Holidays and private health insurance have also been cited in reports of changing spending habits due to high petrol prices. Sales of 4WDs crashed in 2006 and resale values are crumpling.

The public transport flame has been rekindled in Australian cities as the costs of motoring end the love affair of recent decades. Most major cities have reported bus and train patronage growing beyond their planners' expectations. In Brisbane, a bus shortage has led to crush loading on many routes and spawned a bitter political fight between the Labor and Liberal councillors over who is to blame for the crowds of irate passengers left stranded at bus stops. Adelaide, Melbourne and Sydney have also reported jumps in patronage. The scramble back to public transport is one way to soothe the petrol sting. But for the many who lack this option, there is little relief from the beating at the bowser.


A CRUCIAL FACTOR that is most overlooked in the public flapping and squawking over fuel price rises is the way that the historical development of Australia's cities is shaping and determining how households experience the impact of rising fuel costs. Where you live in Sydney, Melbourne, Perth, Adelaide or Brisbane can greatly determine the fuel pain you're feeling. As our empirical research shows, those in the post-World War II cities where the car dominates and public transport is weak are at greatest risk from rising fuel costs because these are also the areas where mortgage debts are greatest and incomes most modest.[xiii]

The legacy of public transport investment is now set to create winners and losers from the suburban oil shocks. Perversely, the localities that currently display some of the highest rates of public transport use in Australia are also among the country's wealthiest. Melbourne University academic Chris Cheal has described these areas as "transit rich" because of the high quality of their public transport services[xiv]. The legacy of public investment means that the risks of rising fuel prices for the affluent residents of these areas are largely socialised, backed by history and ongoing public subsidy.

Beyond the historic middle– and inner-city tram, bus and rail lines, Australia's public transport services are typically infrequent and poorly connected. In Melbourne, 85 per cent of the city's households were found by Cheal to be "transit poor", stranded in a suburban desert. Their inevitable resort to private motor vehicles means that the risk of high-cost oil is largely privatised, yet they have limited alternatives should petrol price rises continue.

While public roads comprise a public subsidy that far exceeds that for public transport, the upfront costs of private vehicle travel by road are much greater than for public transport. Yet even the direct public subsidy for mega-roads has been surpassed in recent years as Australian cities have seen the emergence of private tollways. Melbourne's City Link and Sydney's twisted grid of tollways exemplify this phenomenon, but even Brisbane is hurtling headlong down the sinkhole of private tolls with the $3 billion North-South Bypass Tunnel.

Sydney's chaotic toll roads have become highly contentious, with the Cross-City Tunnel sparking major controversy over its parasitic presence among the city's tangle of private and public motorways. Motorists in Sydney now face seven different toll regimes, each creating a bewildering array of potential travel prices and costs. Some reports suggest that households may be paying hundreds of dollars each month simply to access employment and services on Sydney's roads. For many, there is no viable alternative and, as fuel prices grind upwards and mortgage interests escalate, the costs of private mobility may easily become a toll too far for Australia's car-dependent suburban residents.


AUSTRALIA HAS SPENT the last half-century investing heavily in the suburban accommodation. The suburban oil and debt economy is interwoven with and buttressed by entrenched political dynamics and imperatives that seek to sustain the pairing of land, automobile and debt. Land developers, automobile manufacturers and their workers, road user lobbies, construction companies and unions, energy companies, banks and even government agencies all have their fingers in the suburban pie.

This national economic dependence on the production of Australia's suburban realm is a major reason why political leaders have historically celebrated the expansion of Australia's suburbs, even in the face of some of the environmental impacts this brings. Prime Minister John Howard remarked in 2006 that suburban "sprawl" is the price worth paying for the Australian accommodation.

But the geography of the Australian accommodation is also political. Many of the nation's most marginal political electorates fall within areas that exemplify the contemporary vulnerabilities of car dependence and indebtedness. These zones pose a substantial conundrum for political parties. Rising fuel prices are putting oil vulnerable suburbs under significant social and economic anxiety. The volatility in petrol prices could quickly translate into electoral volatility among those observing their private suburban nirvana transformed into an equally private nightmare. George Megalogenis has argued that the debt-boom economy has softened political thinking on housing and cities[xv]. Both sides of politics may soon be scrambling to offer urgent therapies for post-traumatic petroleum syndrome.

Prime Minister John Howard faces the greatest challenge from the new electoral geography of oil and mortgage. Howard has basked in the glow of the overheating housing markets and owes much of his success to his ability to appeal to suburban dwellers. His political strength has been the ability to convince them that he supports their aspirations to personal material wealth and offers the best policies to assist that acquisition. Yet Labor has built strong state governments by providing public services funded by massive stamp duty revenues. Very little of this gain has flowed to the new suburbs where oil and mortgage risk is greatest.

A public conversation must now be held about the sustainability of the contemporary Australian suburban model and its multiple vulnerabilities. What will the consequences be for politicians who have sold their electors a suburban dream whose illusion has become all too painful? The coming months will no doubt see this conversation unfold as the political tradesmen line up to plaster the cracks in our suburban veneer.

[i] Walliker, A., Ife, H. and Cogdon, K. (2006). 'Families feel pinch as bills mount up'. Herald-Sun. Melbourne. 4 May: 5

[ii] Walsh, K. and Singer, M. (2006). 'Left with an empty feeling'. Sydney Morning Herald. Sydney. 10 September: 5

[iii] Courier Mail, Homes Guide, 15 October, 2005.

[iv] 'Howard backs sprawl'. Herald Sun. Melbourne. 31 August, 2006, p. 9

[v] 'Tightening the Mortgage Belt'. Daily Telegraph. Sydney. 6 May, 2006; p.62

[vi] Australian Bureau of Statistics (2005) Australian Social Trends Data Cube, Cat. No. 4102.0.

[vii] Reserve Bank of Australia (2006). Statement on Monetary Policy, 5 May. Canberra, RBA.

[viii] Australian Bureau of Statistics (2005) Australian Social Trends Data Cube, Cat. No. 4102.0.

[ix] Bond, J. (2006) Recent developments in the Australian housing market, Domestic Economy Division, Australian Treasury.

[x] Transport and Population Data Centre (2006) Household Travel Survey at SLA level. (Excel spreadsheet), Department of Planning, NSW.

[xi] Mees, P. (2000) A Very Public Solution. Melbourne, Melbourne University Press; table 2.1, p.61.; Australian Bureau of Statistics (2005) Survey of Motor Vehicle Use, Cat. No. 9208.0, ABS; Table 5,

[xii] Commonwealth Bank Research (2006). Petrol Prices: Learning to live with a higher level of pain. Commonwealth Research Economic Issues. Sydney, Commonwealth Bank of Australia.

[xiii] Dodson, J. and Sipe, S. (2006) Shocking the Suburbs: Urban location, housing debt and oil vulnerability in the Australian city. Research Paper 8. Urban Research Program, Griffith University.

[xiv] Cheal, C. (2003). Transit Rich or Transit Poor: Is public transport policy in Melbourne exacerbating social disadvantage? Faculty of Architecture, Building and Planning. Melbourne, University of Melbourne.

[xv] Megalogenis, G. (2005). Home-blown economy. The Australian. Sydney. 26 March: 28

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