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March 2004   

Interview: Baby Bust
Labor's Wayne Swan argues that the plight of our aging workforce is only one side of our demographic dilemma.

Safety: Dust To Dust
Failure by authorities to police safety in the asbestos removal industry is threatening the lives of members of the public, writes Phil Doyle.

Bad Boss: Shaming in Print
Delegates from print shops around Sydney will publicly shame this month’s Bad Boss nominee with a rally outside his new Alexandria operation next Thursday.

National Focus: Work's Cripplin' Us
Noel Hester reports on a spin doctors' talkfest, workplace pain, stroppy teachers and IWD party time in the national wrap.

International: Bulk Bullies
An extraordinary five month struggle over affordable health care, by nearly 70,000 Californian supermarket workers, has just come to an end, writes Andrew Casey.

History: The Battle for Kelly's Bush
Green Bans saved a piece of bush before they saved much of the Sydney’s built environment, writes Neale Towart

Economics: Aid, Trade And Oil
Tim Anderson reveals Australia’s second betrayal Of East Timor is playing out before our eyes.

Review: The Art Of Work
Workers and westies are being celebrated as the cultural icons they are thanks to two Sydney exhibitions reminding us there is a world of art in the everyday, writes Tara de Boehmler.

Poetry: Sew His Lips Together
Wondering where the next porkie is going to come from? Resident bard David Peetz knows.


The Soapbox
Iraq and Your Mortgage
How high interest rates go will be a key issue in 2004 and if you are looking for a clue, there's no better place to look than the war in Iraq, writes Michael Rafferty.

Hang Onto the Day Job
Show someone else the money, says Phil Doyle.

Westie Wing
Ian West shows why Eveleigh Street’s not so far away from Macquarie Street

Don’t Give Up the Fight
Get Up, Stand Up is the logo of choice on a popular range of subversive condoms. Ken Davis from Union Aid Abroad reports from Zimbabwe’s second city


Be Afraid
Elections are to be held both here and with our controlling shareholder this year and already we are getting the feel for how the incumbents will attempt to cling onto power: fear spiced with loathing.


 Taskforce "Disgraced" in Court

 Students Take $10,000 Trim

 Truckers Lose Way With GPS

 Jockeys Down by Width of Strait

 Treasury Loses Sight of Trees

 Athens Built on Sweat

 Signing Away Safety

 Fallen Formworker Critical

 Stop or You’ll Stay Blind

 Bracks Spin Machine Towels Nurses

 Trade Deal Fuzzy on Content

 Good Will Still Hunting on Rail

 Developer "Monsters" Safety Cop

 Day Off for May Day

 Activists What's On!

 Bring Back Bulk Billing
 Crucifying Refugees
 Saving The Planet
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The Soapbox

Iraq and Your Mortgage

How high interest rates go will be a key issue in 2004 and if you are looking for a clue, there's no better place to look than the war in Iraq, writes Michael Rafferty.


But before we get to Iraq lets look at how we became so hooked on borrowing again.

Already, our debt burden is back to the level of the early 1990Åfs. But then interest rates went to a whopping 17and a half percent.

Many people simply walked out of their homes, as prices crashed creating unbearable interest bills.

But banks both here and overseas found out something quite strange.

Most people continued to meet their mortgage payments even though repayments had doubled and some even owed more than their house was worth.

So when this housing boom began in the late 1990Åfs, banks felt quite a bit more relaxed at lending more on housing. Writing mortgages was even safer than they had thought.

But these days, you donÅft get a house in most cities under three or four hundred thousand dollars, which means borrowing a lot. Even a small increase in interest rates now has a big impact.

So how much more of an interest bill can we take?

At some point interest rates will affect both house prices and new activity. When that happens, people will see their equity vanish and be asked to pay more for it.

And because so much economic activity has been caused by the housing sector, the end of the housing boom could well slow economic activity. This could produce a new recesssion.

Which brings us back to Iraq. Formal fighting has ceased, but the US military is still spending hundreds of millions a week there. This is one factor in the US budget deficit running at about $400 billion a year.

While this has pumped lots of money into to the sluggish US economy, it's placing pressure on global interest rates.

The US is hoping to quickly leave Iraq and hand over to a domestic government.

So the fate of global interest rates hinges partly on whether the US military campaign in Iraq can be wound up quickly.


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