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Loyalty programs may limit competition, and they could be pushing prices up for everyone

<a href="https://theconversation.com/profiles/alexandru-nichifor-1342216">Alexandru Nichifor</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> and <a href="https://theconversation.com/profiles/scott-duke-kominers-1494057">Scott Duke Kominers</a>, <a href="https://theconversation.com/institutions/harvard-university-1306">Harvard University</a> Loyalty programs enable firms to offer significantly lower prices to some of their customers. You’d think this would encourage strong competition. But that isn’t always what actually happens. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4377561">New research</a> shows that paradoxically, by changing the way companies target customers, loyalty programs can sometimes reduce price competition. The research also points to solutions. <h2>A win-win proposition?</h2> Joining a loyalty program is supposed to be a win-win. You – the customer – get to enjoy perks and discounts, while the company gains useful commercial insights and builds brand allegiance. For example, a hotel chain loyalty program might reward travellers for frequent stays, with points redeemable for future bookings, upgrades or other benefits. The hotel chain, in turn, records and analyses how you spend money and encourages you to stay with them again. Such programs are commonplace across many industries – appearing everywhere from travel and accommodation to supermarket or petrol retailing. But they are increasingly coming under scrutiny. In 2019, the Australian Competition and Consumer Commission (ACCC) <a href="https://www.accc.gov.au/about-us/publications/customer-loyalty-schemes-final-report">cautioned</a> consumers about the sheer volume of personal data collected when participating in a loyalty program, and what companies can do with it. Hidden costs – such as having to pay a redemption fee on rewards or losing benefits when points expire – are another way these schemes can harm consumers. But a larger question – how loyalty programs impact consumers overall – remains difficult to settle, because their effect on competitiveness is unclear. As the ACCC’s <a href="https://www.accc.gov.au/about-us/publications/customer-loyalty-schemes-final-report">final report</a> notes, on the one hand: "Loyalty schemes can have pro-competitive effects and intensify competition between rivals leading to competing loyalty discounts and lower prices for consumers." But on the other hand: "Loyalty schemes can also reduce the flexibility of consumers’ buying patterns and responsiveness to competing offers, which may reduce competition." <h2>How a two-speed price system can hurt everyone</h2> A new economic theory research <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4377561">working paper</a>, coauthored by one of us (Kominers), suggests that on competitive grounds alone, loyalty programs can sometimes harm all consumers – both ordinary shoppers and the program’s own members. It’s easy to see how the ordinary shopper can be worse off. Since a firm’s loyalty program enables it to offer discounted prices to its members, the firm can raise the base prices it offers to everyone else. Those not participating in the program pay more than they otherwise would have, and the firm can respond by saying “join our program!” instead of having to lower its price. But sometimes, even the program’s own members can end up worse off. When a given customer’s loyalty status is not visible to a firm’s competitors – as is the case in many loyalty programs today – it’s hard for those competitors to identify them and entice them to switch. The main way to compete for those customers becomes to lower the base price for everyone, but this means missing out on the high base margins achieved through the existence of your own loyalty program – remember, having a loyalty program means you can charge non-members more. It’s often more profitable for firms to just maintain high base prices. This, in turn, reduces overall price competition for loyal customers, so firms can raise prices for them, too. <h2>What’s the solution?</h2> Despite these effects on competition, loyalty programs still offer benefits for consumers and an opportunity for brands to form closer relationships with them. So, how do we preserve these benefits while enabling price competition? The research suggests an answer: making a customer’s loyalty status verifiable, transparent and portable across firms. This would make it possible for firms to tailor offers for their competitors’ loyal customers. This is already happening in the market for retail electricity. While there aren’t loyalty programs there per se, a consumer’s energy consumption profile, which could be used by a competitor to calibrate a personalised offer, is known only to their current electricity supplier. To address this, in 2015, the Victorian government launched a <a href="https://compare.energy.vic.gov.au">program</a> encouraging households to compare energy offers. This process involved first revealing a customer’s energy consumption profile to the market, and then asking retailers to compete via personalised offers. By opening information that might have otherwise been hidden to the broader market, this approach enabled firms to compete for each other’s top customers, in a way that could be emulated for loyalty programs. Such systems in the private sector could build upon “<a href="https://thepointsguy.com/guide/airline-status-matches-challenges/">status match</a>” policies at airlines. These allow direct transfer of loyalty status, but currently rely on a lengthy, individual-level verification process. For example, a design paradigm known as “<a href="https://hbr.org/2022/05/what-is-web3">Web3</a>” – where customer transactions and loyalty statuses are recorded on public, shared blockchain ledgers – offers a way to make loyalty transparent across the market. This would enable an enhanced, decentralised version of status match: a firm could use blockchain records to verifiably identify who its competitors’ loyal customers are, and directly incentivise them to switch. Both startups and established firms have experimented with building such systems. <h2>What next?</h2> New academic research helps us model and better understand when loyalty programs could be weakening supply side competition and undermining consumer welfare. A neat universal solution may prove elusive. But targeted government or industry interventions – centred on increasing the transparency of a customer’s loyalty status and letting them move it between firms – could help level the playing field between firms and consumers.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/220669/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/alexandru-nichifor-1342216">Alexandru Nichifor</a>, Associate Professor, Faculty of Business and Economics, University of Melbourne, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> and <a href="https://theconversation.com/profiles/scott-duke-kominers-1494057">Scott Duke Kominers</a>, Sarofim-Rock Professor of Business Administration, <a href="https://theconversation.com/institutions/harvard-university-1306">Harvard University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/loyalty-programs-may-limit-competition-and-they-could-be-pushing-prices-up-for-everyone-220669">original article</a>.

Money & Banking

Why prices are so high – 8 ways retail pricing algorithms gouge consumers

<a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> The just-released report of the inquiry into <a href="https://pricegouginginquiry.actu.org.au/">price gouging and unfair pricing</a> conducted by Allan Fels for the Australian Council of Trades Unions does more than identify the likely offenders. It finds the biggest are supermarkets, banks, airlines and electricity companies. It’s not enough to know their tricks. Fels wants to give the Australian Competition and Consumer Commission more power to investigate and more power to prohibit mergers. But it helps to know how they try to trick us, and how technology has enabled them to get better at it. After reading the report, I’ve identified eight key maneuvers. <h2>1. Asymmetric price movements</h2> Otherwise known as <a href="https://www.jstor.org/stable/25593733">Rocket and Feather</a>, this is where businesses push up prices quickly when costs rise, but cut them slowly or late after costs fall. It seems to happen for <a href="https://www.sciencedirect.com/science/article/abs/pii/S0140988323002074">petrol</a> and <a href="https://www.sciencedirect.com/science/article/abs/pii/S105905601730240X">mortgage rates</a>, and the Fels inquiry was presented with evidence suggesting it happens in supermarkets. Brendan O’Keeffe from NSW Farmers told the inquiry wholesale lamb prices had been falling for six months before six Woolworths announced a cut in the prices of lamb it was selling as a “<a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Christmas gift</a>”. <h2>2. Punishment for loyal customers</h2> A <a href="https://theconversation.com/simple-fixes-could-help-save-australian-consumers-from-up-to-3-6-billion-in-loyalty-taxes-119978">loyalty tax</a> is what happens when a business imposes higher charges on customers who have been with it for a long time, on the assumption that they won’t move. The Australian Securities and Investments Commission has alleged a big <a href="https://theconversation.com/how-qantas-might-have-done-all-australians-a-favour-by-making-refunds-so-hard-to-get-213346">insurer</a> does it, setting premiums not only on the basis of risk, but also on the basis of what a computer model tells them about the likelihood of each customer tolerating a price hike. The insurer disputes the claim. It’s often done by offering discounts or new products to new customers and leaving existing customers on old or discontinued products. It happens a lot in the <a href="https://www.finder.com.au/utilities-loyalty-costing-australians-billions-2024">electricity industry</a>. The plans look good at first, and then less good as providers bank on customers not making the effort to shop around. Loyalty taxes appear to be less common among mobile phone providers. Australian laws make it easy to switch <a href="https://www.reviews.org/au/mobile/how-to-switch-mobile-carriers-and-keep-your-number/">and keep your number</a>. <h2>3. Loyalty schemes that provide little value</h2> Fels says loyalty schemes can be a “low-cost means of retaining and exploiting consumers by providing them with low-value rewards of dubious benefit”. Their purpose is to lock in (or at least bias) customers to choices already made. Examples include airline frequent flyer points, cafe cards that give you your tenth coffee free, and supermarket points programs. The purpose is to lock in (or at least bias) consumers to products already chosen. The <a href="https://www.accc.gov.au/consumers/advertising-and-promotions/customer-loyalty-schemes">Australian Competition and Consumer Commission</a> has found many require users to spend a lot of money or time to earn enough points for a reward. Others allow points to expire or rules to change without notice or offer rewards that are not worth the effort to redeem. They also enable businesses to collect data on spending habits, preferences, locations, and personal information that can be used to construct customer profiles that allow them to target advertising and offers and high prices to some customers and not others. <h2>4. Drip pricing that hides true costs</h2> The Competition and Consumer Commission describes <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">drip pricing</a> as “when a price is advertised at the beginning of an online purchase, but then extra fees and charges (such as booking and service fees) are gradually added during the purchase process”. The extras can add up quickly and make final bills much higher than expected. Airlines are among the best-known users of the strategy. They often offer initially attractive base fares, but then add charges for baggage, seat selection, in-flight meals and other extras. <h2>5. Confusion pricing</h2> Related to drip pricing is <a href="https://www.x-mol.net/paper/article/1402386414932836352">confusion pricing</a> where a provider offers a range of plans, discounts and fees so complex they are overwhelming. Financial products like insurance have convoluted fee structures, as do electricity providers. Supermarkets do it by bombarding shoppers with “specials” and “sales”. When prices change frequently and without notice, it adds to the confusion. <h2>6. Algorithmic pricing</h2> <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Algorithmic pricing</a> is the practice of using algorithms to set prices automatically taking into account competitor responses, which is something akin to computers talking to each other. When computers get together in this way they can <a href="https://www.x-mol.net/paper/article/1402386414932836352">act as it they are colluding</a> even if the humans involved in running the businesses never talk to each other. It can act even more this way when multiple competitors use the same third-party pricing algorithm, effectively allowing a single company to influence prices. <h2>7. Price discrimination</h2> Price discrimination involves charging different customers different prices for the same product, setting each price in accordance with how much each customer is prepared to pay. Banks do it when they offer better rates to customers likely to leave them, electricity companies do it when they offer better prices for business customers than households, and medical specialists do it when they offer vastly different prices for the same service to consumers with different incomes. It is made easier by digital technology and data collection. While it can make prices lower for some customers, it can make prices much more expensive to customers in a hurry or in urgent need of something. <h2>8. Excuse-flation</h2> <a href="https://www.bloomberg.com/news/articles/2023-03-09/how-excuseflation-is-keeping-prices-and-corporate-profits-high">Excuse-flation</a> is where general inflation provides “cover” for businesses to raise prices without justification, blaming nothing other than general inflation. It means that in times of general high inflation businesses can increase their prices even if their costs haven’t increased by as much. On Thursday Reserve Bank Governor <a href="https://www.afr.com/policy/economy/inflation-is-cover-for-pricing-gouging-rba-boss-says-20240215-p5f58d">Michele Bullock</a> seemed to confirm that she though some firms were doing this saying that when inflation had been brought back to the Bank’s target, it would be "much more difficult, I think, for firms to use high inflation as cover for this sort of putting up their prices." <h2>A political solution is needed</h2> Ultimately, our own vigilance won’t be enough. We will need political help. The government’s recently announced <a href="https://treasury.gov.au/review/competition-review-2023">competition review</a> might be a step in this direction. The legislative changes should police business practices and prioritise fairness. Only then can we create a marketplace where ethics and competition align, ensuring both business prosperity and consumer wellbeing. This isn’t just about economics, it’s about building a fairer, more sustainable Australia.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223310/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, Senior Lecturer in Applied Ethics & CyberSecurity, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-prices-are-so-high-8-ways-retail-pricing-algorithms-gouge-consumers-223310">original article</a>.

Money & Banking

Eye-watering price tag for "remarkable" first class Titanic menu

A first class dinner menu from the Titanic has been found and sold at an auction in England for £84,000 (around $162,000 AUD) on November 11. The water-stained menu was dated April 11, 1912 just three days before the ship hit an iceberg, ultimately meeting it's ill-fated end causing over 1500 deaths. Wealthy passengers at the time were spoiled with choice, with oysters, salmon, beef, squab (baby pigeon), spring lamb among other dishes on the menu, and that's not including dessert. Auctioneers Henry Aldridge & Son said it was unclear how the menu made it off the ship intact, but the slight water damage suggests that it was recovered from the body of a victim. The rare artefact, which is over 111 years old belonged to amateur historian Len Stephenson, from Nova Scotia, Canada, who passed away in 2017. No one knew he had it, including his family, who only discovered it after going through his belongings following his death. “About six months ago his daughter and his son-in-law, Allen, felt the time was right to go through his belongings,” auctioneer Andrew Aldridge said. “As they did they found this menu in an old photo album. “Len was a very well thought-of historian in Nova Scotia which has strong connections with the Titanic. The body recovery ships were from Nova Scotia and so all the victims were taken back there. “Sadly, Len has taken the secret of how he acquired this menu to the grave with him.” Stephenson worked at a post office and would talk to people, collect old pictures and write letters for them, which might be how he got the rare artefact. According to the auctioneer, no other first class dinner menus dated April 11, 1912 have been recovered from the titanic making this “a remarkable survivor from the most famous Ocean liner of all time”. “There are a handful of April 14 menus in existence but you just don’t see menus from April 11. Most of them would have gone down with the ship,” Aldridge said. “Whereas with April 14 menus, passengers would have still had them in their coat and jacket pockets from earlier on that fateful night and still had them when they were taken off the ship," he added. A few other items recovered from the Titanic were also sold, including a Swiss-made pocket watch recovered from passenger Sinai Kantor which fetched £97,000 (around $187,000 AUD). A tartan-patterned deck blanket, which was likely used during the rescue operation also sold for £96,000 (around $185,000). Images: Henry Aldridge & Son of Devizes, Wiltshire

Cruising

Princess Di's black sheep jumper sells for 14 times over asking price

Princess Diana's famous "black sheep" jumper has sold at auction for more than $1.1million. The iconic red and white (and one tiny bit of black, of course!) jumper fetched precisely $1,143,000 at Sotheby's in New York - making it the most expensive piece of clothing owned by the former Princess of Wales to sell at auction, as well as the most expensive jumper to ever be sold at auction. There were a total of 44 bids within the final 15 minutes of a two-week online bidding process for the famous item of clothing - during which the bidding leapt from $190,000 to $1,143,000, which ultimately pushed the sale to a staggering 14 times over the initial asking price of $80,000. The woollen jumper was worn by Lady Di to a polo match in Windsor in June 1981, just one month before she married the then-Prince Charles. Soon after Diana wore the garment, it was returned to Sally Muir and Joanna Osborne, founders of the label Warm & Wonderful because of a tear at the cuff. It was sent back to the designers along with a note from Buckingham Palace, requesting that the jumper be either repaired or replaced. A new jumper was knitted for Diana, with Osborne believing the original garment had been lost after the replacement was sent to the Princess of Wales, which she wore to another polo match in 1983. However, Osborne later discovered the jumper, which had been preserved underneath an old cotton bedspread, while searching her attic looking for an old pattern. She got in touch with Sotheby's auction house which gave the garment an auction estimate of around $80,000 - $120,000. Speaking to The Telegraph UK, Osborne said, "We didn't think we had any of the original sheep jumpers, because at the time, we were so desperate to complete orders that we never owned one ourselves, so I couldn't believe I'd found the original Diana sheep jumper." "It took a while to sink in. And we're so lucky it's not fallen to pieces." Sotheby's said of the now-iconic design, "The Black Sheep sweater is one of the most iconic pieces worn by Princess Diana to ever come to market." "The cultural impact of this moment from the 1980s is exemplified by the head of Rowing Blazers, Jack Carlson, who in 2020, requested to partner with the original designers and license the sheep design to be reproduced for his own fashion line." "Since stumbling upon the sweater ... we have been reliving the fond memories of Princess Diana appearing on the front pages of every newspaper in 1981, wearing our very own sweater. "While we are forever indebted to her for the impact this had on our business, our deepest appreciation lies in the knowledge that she shared a unique connection to the black sheep design. We are thrilled that this cherished sweater has now found a new home, carrying with it the enduring legacy of Princess Diana." Images: Getty

Beauty & Style

Junk fees and drip pricing: the underhanded tactics we hate yet still fall for

<a href="https://theconversation.com/profiles/ralf-steinhauser-1459112">Ralf Steinhauser</a>, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a> You see a fantastic offer, like a hotel room. You decide to book. Then it turns out there is a service fee. Then a cleaning fee. Then a few other extra costs. By the time you pay the final price, it is no longer the fantastic offer you thought. Welcome to the world of drip pricing – the practice of advertising something at an attractive headline price and then, once you’ve committed to the purchase process, hitting you with unavoidable extra fees that are incrementally disclosed, or “dripped”. Drip pricing – a type of “junk fee” – is notorious in event and travel ticketing, and is creeping into other areas, such as movie tickets. My daughter, for example, was surprised to find her ticket to the Barbie movie had a “booking fee”, increasing the cost of her ticket by 13%. It seems like such an annoying trick that you may wonder why sellers do it. The reason is because it works, due to two fundamental cognitive biases: the way we value the present over the future; and the way we hate losses more than we love gains. <h2>Present bias preference: why starting over feels too costly</h2> In the case of booking that hotel room, you could abandon the transaction and look for something cheaper once the extra charges become apparent. But there’s a good chance you won’t, due to the effort and time involved. This is where the trap lies. Resistance to the idea of starting the search all over again is not simply a matter of laziness or indecision. There’s a profound psychological mechanism at play here, called a present-bias preference – that we value things immediately in front of us more than things more distant in the future. In their seminal 1999 paper, <a href="https://doi.org/10.1257/aer.89.1.103">Doing it now or later</a>, economists Mathew Rabin and Ted O'Donoghue define present-biased preference as “the human tendency to grab immediate rewards and to avoid immediate costs”. They give the example of choosing between doing seven hours of unpleasant activity on April 1 or eight hours two weeks later. If asked about this a few months beforehand, most people will choose the earlier option. “But come April 1, given the same choice, most of us are apt to put off work till April 15.” In simple terms, the inconvenience and effort of doing something “right now” often feels disproportionately large. Drip pricing exploits this cognitive bias by getting you to make a decision and commit to the transaction process. When you’re far into a complicated booking process and extra prices get added, starting all over again feels like a burden. Often enough, this means you’ll settle for the higher-priced hotel room. <h2>Loss aversion: buying more expensive tickets</h2> Beyond the challenge of starting over, there’s another subtle force at work when it comes to our spending decisions. Drip pricing doesn’t just capitalise on our desire for immediate rewards; it also plays on our innate fear of losing out. This second psychological phenomenon that drip pricing exploits is known as loss aversion – that we feel more pain from losing something than pleasure from gaining the same thing. The concept of loss aversion was first outlined by economists Daniel Kahneman and Amos Tversky in <a href="https://www.jstor.org/stable/1914185">a 1979 paper</a> that is the third most-cited article in economics. <hr /> <figure class="align-center "><img src="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=497&fit=crop&dpr=1 600w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=497&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=497&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=624&fit=crop&dpr=1 754w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=624&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=624&fit=crop&dpr=3 2262w" alt="A graphic representation of loss aversion. The pain from losing a good or service will be greater than the pleasure from gaining the same good or service." /><figcaption>How economists Daniel Kahneman and Amos Tversky graphically represented loss aversion. The pain from losing a good or service is greater than the pleasure from gaining the same good or service. Daniel Kahneman and Amos Tversky, Prospect Theory: An Analysis of Decision under Risk, Econometrica, Vol. 47, No. 2</figcaption></figure> <hr /> Drip pricing exploits this tendency, by dragging us away from more “rational” choices. Imagine you’re booking tickets for a show. Initially attracted by the observed headline price, you are now presented with different seating categories. Seeing the “VIP” are within your budget, you decide to splurge. But then, during the checkout process, the drip of extra costs begins. You realise you could have opted for lower-category seats and stayed within your budget. But by this stage you’ve already changed your expectation and imagined yourself enjoying the show from those nice seats. Going back and booking cheaper seats will feel like a loss. <h2>Do consumers need protection?</h2> Empirical evidence supports the above theoretical predictions about the impact of drop pricing on consumers. <a href="https://doi.org/10.1002/mar.21426">A 2020 study</a> quantified how much consumers dislike the lack of transparency in drip pricing (based on tracking the reactions of 225 undergraduates using fictional airline and hotel-booking websites). The authors liken the practice to the “taximeter effect” – the discomfort consumers feel watching costs accumulate. But drip pricing’s effectiveness from a seller’s perspective is undeniable. A <a href="https://doi.org/10.1016/j.jebo.2020.04.007">experimental study</a> published in 2020 found drip pricing generates higher profits while lowering the “consumer surplus” (the benefit derived from buying a product or service). A <a href="https://doi.org/10.1287/mksc.2020.1261">2021 analysis</a> of data from StubHub, a US website for reselling tickets, calculated drip pricing increased revenue by 20%. Which is why the tactic remains attractive to businesses despite customers disliking it. Buyers would benefit from a ban of drip pricing. Many countries are taking steps to protect consumers from drip pricing. The UK government, for example, announced a <a href="https://www.theguardian.com/business/2023/aug/21/growth-of-airlines-add-on-fees-sparks-calls-for-price-reforms">review of drip pricing</a> in June, with Prime Minister Rishi Sunak flagging the possibility of measures to curb the practice. The US government is also considering <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/15/president-biden-recognizes-actions-by-private-sector-ticketing-and-travel-companies-to-eliminate-hidden-junk-fees-and-provide-millions-of-customers-with-transparent-pricing/">new regulations</a>, with President Joe Biden denouncing “junk fees” in his <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/">2023 State of the Union address</a>. Proposed changes include requiring airlines and online booking services to disclose the full ticket price upfront, inclusive of baggage and other fees. The effectiveness of measures, however, is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4430453">still being debated</a>. In the meantime, your principal protection is making a more informed decision, by understanding why the tactic works. Bargains may attract you, but you can learn to not fall for hidden costs and align your choices with your budget and values.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/211117/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/ralf-steinhauser-1459112">Ralf Steinhauser</a>, Senior Research Fellow, <a href="https://theconversation.com/institutions/australian-national-university-877">Australian National University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/junk-fees-and-drip-pricing-the-underhanded-tactics-we-hate-yet-still-fall-for-211117">original article</a>.

Money & Banking

The top 11 situations to always haggle for a lower price

Mortgage rates Buying a new home is probably the biggest purchase you will make over the course of your life, so every last penny you can save is worth it. “Borrowers should shop their business around to many banks/lenders to see what rates are available,” says mortgage broker Ade Labinjo. “Then use the rates obtained to pit the banks against each other for the purpose of either matching or driving down the rates they were quoted.” Labinjo says that by getting at least one extra quote rate, the average borrower could save up to $1,500. Never settle for the initial quote rate that the bank offers you – haggle for a better price because chances are, they’re not giving you their absolute best offer upfront. Flea markets, farmers markets, garage sales At flea markets, farmers markets, and garage sales the sellers typically set their own price. If you know how to haggle, this is a great opportunity to get a really good deal. Also, see if buying in bulk or large quantities can get you a price reduction. Hotel rooms Hotels want their rooms filled, so it never hurts to haggle with the people at the front desk for a better price or room upgrades. “Hotels have to pay a commission to booking websites, and pass on some of that as a benefit to the user,” says Saurabh Jindal, founder of Talk Travel. If you find that the price is the same on the booking website and the hotel’s website, ask the hotel for a room with a better view or more amenities. “Hotels have rooms allocated to various booking platforms and may give you a better option which has not yet been sold.” Memberships Memberships always come along with extra fees. It might be a renewal fee, startup fee, or a maintenance fee if it’s your gym membership. Ask if they can waive some of the fees or threaten to cancel and go somewhere else. They want to keep making money off of you and might just give you a discount. Lease renewal If you’re considering re-signing your lease, know that it is most likely more expensive for the landlord to prepare your apartment for a new tenant than to lease to you for another year. If you’ve had a good relationship with your landlord, try to negotiate in a deal before you re-sign. If the landlord is going to increase your rent, ask if you can increase it by less or not at all. If you consistently pay rent on time, are a respectful neighbour, and take good care of your apartment they may keep your rent from increasing. It’s important to remember who your lease is with though, says Julie Ramhold, Consumer Expert at DealNews.com. If your apartment is owned by a management company, they probably won’t offer any wiggle room. But, if you’re renting from a single landlord or owner, try negotiating for a lower price. Online selling platforms People who post items for sale online are typically moving or looking to get rid of unwanted items. Use that to your advantage and ask for a lower price – the worst they can say is no. You could also offer to come and pick it up quickly if they give you a better deal. Internet and phone bill As annoying as your internet and phone provider may be, they don’t want to lose you as a customer. “If you’re signing up or looking to renew, sometimes you can get a lower rate by telling a rep what the competitor is offering and saying it works better with your budget,” says Ramhold. A lot of cable companies give you a promotional price for your first year, make sure to call right before the price goes up for your second year. The competitors will most likely offer better prices for new customers and that can work in your advantage and possibly get you a better deal with your current provider. Insurance rates Just like internet providers, insurance companies don’t want you to switch to a different provider. “Use your customer loyalty to your advantage and try to talk to the right person on the phone,” says Kelan Kline a personal finance expert and co-founder of The Savvy Couple. “Tell them the service you are receiving is not good enough for the price.” They might offer you a discount to keep you. Home services If you’re renovating your kitchen or getting some landscaping done, make sure to shop around and get a few different quotes first. Use those quotes to negotiate with the contractor you want to work with. Also, you may be able to haggle for a better price if you offer to pay upfront in cash or schedule a contractor during the winter months when business is typically slower. Jewellery “You should know that the markup on diamond jewellery is anywhere from 50 to 200 per cent and more,” says Chhavi Agarwal, a personal finance expert. There is always room for haggling. Agarwal suggests politely making a counteroffer. You’d be surprised the changes they are willing to make to the bill. If they refuse to come down in price, try to haggle the labour charges. Returned items Never miss an opportunity to haggle for a better price on items that have been returned to stores. Stores will typically mark returned items that have been slightly used or have a ding with a price reduction, but it doesn’t hurt to ask for more off. They know that items that have already been opened aren’t as appealing to customers and they want to get them sold. Image credits: Getty Images This article originally appeared on <a href="https://www.readersdigest.co.nz/food-home-garden/money/11-times-you-should-always-haggle-for-a-better-price?pages=1" target="_blank" rel="noopener">Reader's Digest</a>.

Money & Banking

Private island on sale for a price cheaper than most homes

A private island is up for grabs in Queensland, for a price that is cheaper than an average home in most Australian cities. Poole Island, situated in the Whitsundays, comes with two homes that were built in the 1800s and 1980s, and has an asking price of just under $1 million. This comes after a contract fell through when a would-be buyer couldn’t be contacted, so the 20ha island is back on the market. “I can confirm that we have not been able to contact the purchaser,” Private Islands Online Australia’s Richard Vanhoff told 7NEWS.com.au. “We have tried ourselves, and we are also going on advice from the purchaser’s solicitor, who has also not been able to contact him.” The island is now accepting offers over $995,000. Other features of the island include a handmade rock swimming pool and a 215m runway to cater for small aircraft or a helicopter that flies in from Airlie Beach or Bowen. According to the listing, the pool itself is equipped with a new windmill pump that continuously pumps water into the pool so there’s “no need for chemicals or cleaning as the crystal clear water is in abundance”. The island also has a slipway for any boat owners or those who love to fish, and a stone shed where you can store various machinery including tractors and slashers. Images: Private Islands Online Australia

Real Estate

Artist puts the lid on rubbish rental prices

In the age of soaring interest rates and a global housing crisis, one young man in the United Kingdom had a wheelie good idea for getting a roof over his head. His solution? Skipping the queues, and moving into a bin. British artist and architect Harrison Marshall was down in the dumpsters when he decided to seize the opportunity, to both raise awareness about those being forced from their homes due to extortionate rent prices in London - and give himself somewhere to stay in the process - by converting an old skip into a tiny home. The Skip House boasts a whole range of features that one might not expect to find in a place so small - 25 square metres, in fact - with the likes of insulted timber framing, a barrel roof capable of fitting a bed, a kitchen hob - the whole set up including a sink, a stove, and a tiny fridge - as well as a wardrobe. And although it took a month since Marshall moved himself in, the skip was eventually connected to the grid, allowing him to warm his tiny property. The home doesn’t have its own flushing toilet or even a shower, but it doesn’t phase Marshall, who makes use of such amenities at work or at the gym. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/reel/Co22dZwoxaQ/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/reel/Co22dZwoxaQ/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by SKIP House (@theskiphouse)</a> </div> </blockquote> “With the cost of living at an all time high, and no end in sight, this project is about living for less,” Marshall said of the project on the Skip House’s Instagram, “in one of the most expensive cities in the world, London. “People across the country are changing the way they live to compensate for the rising cost of basic necessities,” he continued. “Living in a skip isn’t the solution, but rather an exploration and a statement.” As Marshall, who now pays approximately $90 a week in rent, told Southwark News, “it seems crazy that people work in the city and can’t afford to live here. Or [that] people who have lived here their whole lives can’t afford to stay here, so they’re having to move out.” He explained that constructing the tiny home was “the only way” for him to continue to live there, and that he hoped to spark a conversation around housing, particularly when it came to unused urban wasteland spots, and how more creative solutions had to be out there. “It also gave quite a good juxtaposition between what you don’t typically think of as a house and almost the polar opposite of that, which is a bin or dumpster,” Marshall told Business Insider, “and how actually that could be turned into something which is relatively cosy and homely.” And as for what his neighbours think about his unusual housing venture, he told Southwark News that he had between 20 and 25 of them show up to his skip-warming, “they’re all super supportive. “People have even seen me doing stuff in the garden and gone to get their tools and come to help out and people around have filled up my hot water bottle.” Images: Instagram

Get two for the price of one with top ways to have fun and keep active

Physical activity is a key factor in a person’s health at any age, and experts have long preached the physical benefits of keeping fit. However, as good things often come in pairs, it’s always important to note that while exercise can mean excellent things physically - from preventing certain health conditions such as diabetes and cardiovascular diseases to benefiting mental health - it comes with the additional bonus of introducing people to like-minded souls. This socialisation is especially important towards tackling boredom and the loneliness that comes along with isolation. As life goes on, it may become harder to take part in the activities of youth - sports, for example, are not so kind to older joints. This by no means limits what someone can and cannot try out, with plenty of options still available for those who dream of keeping active and having some fun along the way. <ul> <li dir="ltr">Community centres </li> </ul> Community/leisure centres and senior clubs feature a whole host of activities on their calendars, and a quick Google search will reveal the closest ones on offer. With many covering everything from sports to hiking, dancing, art classes, and new learning opportunities, these can prove a great way to gain a new skill and make some new friends in the process. <ul> <li dir="ltr">New hobbies</li> </ul> On a similar note, picking up a new hobby can introduce you to a whole host of people with the same interests, especially if you find a group or community page to share your newfound enthusiasm. You’ll pick up new tips and tricks faster, and with your new social circle, may even find a second or third hobby to dabble in. A local walking group could even introduce you to new spots in your area that you’d never even heard of - or perhaps even a post-trek coffee shop to enjoy a well-deserved pastry. And, of course, bowling never goes amiss, nor a little competitive spirit when it comes to forging new bonds and a drive to improve. <ul> <li dir="ltr">Gardening </li> </ul> Not only does gardening provide fresh air and exercise, but if you play your cards right (or water your crops right) you could find yourself with a garden that’s the envy of the whole neighbourhood, or one that’s fully self-sufficient to save you a few dollars on your next trip to the supermarket. Weeding, watering, mowing, and planting are just some of the productive tasks to leave you feeling proud of your hard work that also have the added benefit of counting towards your exercise goal for the day - you probably just won’t realise it at the time. <ul> <li dir="ltr">Play</li> </ul> Grandchildren and pets provide the perfect opportunity for some free and entertaining physical activity, even if sometimes they might move a little too quickly for comfort. From pushing the youngest in strollers, to taking a dog on a leisurely walk around the block, there are ample opportunities to enjoy the outdoors and get some steps in the process. And if all else fails, a game of hide-and-seek in the backyard or living room can’t steer you wrong. Images: Getty

Body

Coastal property prices and climate risks are both soaring. We must pull our heads out of the sand

Australians’ <a href="https://www.nfsa.gov.au/collection/curated/australians-beach">well-documented</a> affinity with the sun, surf and sand continues to fuel <a href="https://www.smh.com.au/property/news/stunning-holiday-hotspots-where-house-prices-have-doubled-in-five-years-20221109-p5bwuk.html">coastal property market growth</a>. This growth defies rising interest rates and growing evidence of the <a href="https://www.theguardian.com/australia-news/2020/jul/23/against-the-tide-storm-battered-wamberal-residents-cling-to-beachfront-homes">impacts of climate change</a> on people living in vulnerable coastal locations. People in these areas are finding it harder to insure their properties against these risks. Insurers view the Australian market as sensitive to climate risks, as climate change impacts can trigger large insurance payouts. They are <a href="https://www.theguardian.com/australia-news/2022/nov/12/australians-facing-prohibitive-insurance-premiums-after-climate-related-disasters">pricing their products accordingly</a>. Clearly, there is a vast disconnect between the coastal property market and climate change impacts such as increasingly severe storms, tidal surges, coastal erosion and flooding. There is no shortage of <a href="https://www.smh.com.au/business/banking-and-finance/32-billion-of-cba-mortgages-exposed-to-extreme-weather-risks-climate-analysis-finds-20220819-p5bb5p.html">reports</a>, <a href="https://www.climatecouncil.org.au/resources/australian-homes-uninsurable-2030-climate-risk-map/">studies</a> and <a href="https://www.abc.net.au/news/2022-11-18/gold-coast-council-additional-88-000-properties-at-flood-risk/101664596">analyses</a> confirming the climate risks we are already living with. Yet another alarming <a href="https://www.csiro.au/en/research/environmental-impacts/climate-change/State-of-the-Climate">State of the Climate</a> report was released last week. We keep talking about reaching global net-zero emissions. But this “<a href="https://www.youtube.com/watch?v=ZwD1kG4PI0w">blah blah blah</a>” masks the fact that climate impacts are already with us. Even if we make deeper, faster cuts to emissions, as we must, our world is now warmer. Australians will <a href="https://www.science.org.au/supporting-science/science-policy-and-analysis/reports-and-publications/risks-australia-three-degrees-c-warmer-world">feel the effects of that warming</a>. We ultimately cannot afford the price of business as usual, as embodied by so many coastal developments. <figure><iframe src="https://www.youtube.com/embed/ZwD1kG4PI0w?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe><figcaption>Greta Thunberg denounces the ‘blah, blah, blah’ from world leaders in response to the climate emergency.</figcaption></figure> Risks are worrying banks and insurers In Australia, the disasters and the environmental collapse we are experiencing will get worse. While a range of businesses see this as opening up <a href="https://www.accc.gov.au/media-release/accc-internet-sweeps-target-greenwashing-fake-online-reviews">new market and product frontiers</a>, the fact is climate change is creating a fundamentally uncertain, unstable and difficult world. Banks have a <a href="https://law-store.wolterskluwer.com/s/product/banking-on-climate-change-how-finance-actors-regulatory-regimes/01t0f00000J3aMk">central role</a> in addressing climate risks. They are <a href="https://theconversation.com/how-can-your-bank-help-reduce-climate-change-risks-to-your-home-60049">exposed to climate risk</a> through residential lending on properties that are vulnerable to climate impacts and now <a href="https://www.theguardian.com/australia-news/2022/nov/26/australias-unraveling-climate-risk-leaving-more-homes-uninsurable-against-flooding-expert-warns">face insurance pressures</a>. One in 25 Australian homes are <a href="https://www.climatecouncil.org.au/resources/australian-homes-uninsurable-2030-climate-risk-map/">projected to be uninsurable by 2030</a>. The Australian government risks bearing the large costs of supporting the underinsured or uninsured – otherwise known as <a href="https://www.pc.gov.au/inquiries/completed/disaster-funding/report">being “the insurer of last resort”</a>. This costly legacy shows why planning decisions made now must take account of climate change impacts, and <a href="https://link.springer.com/article/10.1007/s40641-020-00161-z">not just in the wake of disasters</a>. The rapidly escalating impacts and risks across sectors demand that we undertake mitigation and adaptation at the same time, urgently and on a large scale. This means reducing emissions to negative levels – not just reaching net zero and transitioning our energy sector, but also actively removing greenhouse gases from the atmosphere. We must also respond to climate change risks already locked into the system. We have to make substantial changes in how we think about, treat, price and act on these risks. <blockquote class="twitter-tweet"> Australia’s ‘unraveling’ climate risk leaving more homes uninsurable against flooding, expert warns <a href="https://t.co/cLj1SKei72">https://t.co/cLj1SKei72</a> — Guardian Australia (@GuardianAus) <a href="https://twitter.com/GuardianAus/status/1596294943529893888?ref_src=twsrc%5Etfw">November 26, 2022</a></blockquote> As the climate shifts, so must our coastal dream The consequences of a warming climate, including reaching and crossing tipping points in the Earth’s weather systems, are <a href="https://www.science.org/doi/10.1126/science.abn7950#core-collateral-purchase-access">occurring sooner than anticipated</a>. The required behavioural, institutional and structural changes are vast and challenging. People are often attached to places based on <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/abs/10.1111/tran.12368">historical knowledge</a> of them. These lived experiences, while important, inform a worldview based on an understanding of our environment before the <a href="https://link.springer.com/chapter/10.1007/978-981-19-2428-6_2">rapid onset</a> of climate change. This can skew our climate risk responses, but compounding climate impacts are outpacing our ability to adapt as we might have in the past. Institutional signalling, such as <a href="https://www.smh.com.au/business/the-economy/property-values-are-at-risk-in-climate-change-hot-spots-rba-warns-20210917-p58skt.html">warnings by the Reserve Bank</a>, support greater public awareness of climate impacts and risks. When buying a property, people need to consider these factors more seriously than, say, having an extra bathroom. Obligatory disclosure of regional climate change impacts could inform buyers’ decision-making. The data and models used would have to be clear on the validity and limitations of their scenarios. <blockquote class="twitter-tweet"> A great presentation from <a href="https://twitter.com/Tayanah?ref_src=twsrc%5Etfw">@Tayanah</a> at the <a href="https://twitter.com/hashtag/C2C2021?src=hash&ref_src=twsrc%5Etfw">#C2C2021</a> about the legal status of property rights in Australia enabling (or otherwise...) managed retreat as a <a href="https://twitter.com/hashtag/climateadaptation?src=hash&ref_src=twsrc%5Etfw">#climateadaptation</a> solution. Once again we find the climate projections are ahead of our legal preced…<a href="https://t.co/XgDVV5O0Gj">https://t.co/XgDVV5O0Gj</a> — Anthony Boxshall (@ScienceN2Action) <a href="https://twitter.com/ScienceN2Action/status/1420173588217303044?ref_src=twsrc%5Etfw">July 28, 2021</a></blockquote> Nature-based and equitable solutions In recent years there has been an increasing focus on nature-based solutions. This approach uses natural systems and tools for tackling societal issues such as the enormous and complex risks posed by climate change. Indeed, many Indigenous peoples, communities and ways of knowing <a href="https://www.facetsjournal.com/doi/full/10.1139/facets-2019-0058">have long recognised</a> the fundamental role of nature in making good and safe lives possible for people. Nature-based solutions provide a suite of valuable tools for remedying issues we’re already facing on coasts. <a href="https://www.sciencedirect.com/science/article/abs/pii/S0964569121000399">For example</a>, in many contexts, building hard seawalls is often a temporary solution, which instils a false sense of security. Planting soft barriers such as mangroves and dense, deep-rooting vegetation can provide a more enduring solution. It also restores fish habitat, purifies water and eases floods. Acknowledging the well-being of people and nature as interconnected has important implications for decisions about relocating people from high-risk areas. Effective planned retreat strategies must not only get people out of harm’s way, but account for where they will move and how precious ecosystems will be protected as demand for land supply shifts. Nature-based solutions must be built into retreat policies too. As the Australian Academy of Science’s <a href="https://www.science.org.au/news-and-events/events/launch-national-strategy-just-adaptation">Strategy for Just Adaptation</a> explains, effective adaptation also embeds equity and justice in the process. <a href="https://link.springer.com/article/10.1007/s10584-019-02535-1">Research</a> on historic retreat strategies has shown that a failure to properly consider and respect people’s choices, resources and histories can further entrench inequities. Giving people moving to a new home as much choice as possible helps them work through an emotional and <a href="https://www.sciencedirect.com/science/article/abs/pii/S0964569116301119">highly political process</a>. We all need to find the courage to have difficult conversations, to seek information to make prudent choices, and to do all we can to respond to the growing climate risks that confront us. As climate activist Greta Thunburg <a href="https://www.youtube.com/watch?v=ZwD1kG4PI0w">says</a>: <blockquote> “Hope is not passive. Hope is not blah blah blah. Hope is telling the truth. Hope is taking action. And hope always comes from the people.” </blockquote> Acting on this kind of hope can put us on an altogether different and more positive path.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/195357/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Writen by Tayanah O'Donnell and Eleanor Robson. Republished with permission from <a href="https://theconversation.com/coastal-property-prices-and-climate-risks-are-both-soaring-we-must-pull-our-heads-out-of-the-sand-195357" target="_blank" rel="noopener">The Conversation</a>. Image: Getty Images

Real Estate

Cheaper gas and electricity are within our grasp

Virtually every country in the world is facing a crisis in energy costs, yet while other countries can’t do much about it, Australia can. Australia could get its east coast gas producers to supply the domestic gas market for less than A$10 a gigajoule. Earlier this year, prices were more than $40 a gigajoule, and now sit at $25-30 a gigajoule. Tuesday’s budget factored in retail electricity price rises of <a href="https://images.theconversation.com/files/492030/original/file-20221027-18797-tg4woh.JPG">more than 50%</a> over two years. The increases in retail gas prices exceeded 40%. Outlining the budget on Tuesday, Treasurer Jim Chalmers said any responsible government facing these kinds of price hikes needed to “consider a <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/transcripts/joint-press-conference-main-committee-room-parliament-house">broader suite of regulatory interventions</a>” than in the past. Chalmers had “more work to do” and would work with the states. Here is the key step I think should be taken. To restrain electricity prices, cut gas prices The quickest way to get electricity prices down is to significantly lower the cost of gas. Gas generators come online after cheaper forms of generation have already been pressed into service, and so help set the final price charged. Getting gas prices below $10 a gigajoule would also help households that are facing crippling gas bills, as well as industries that rely on sensibly priced energy for their existence including Australia’s glass, paper and fertiliser industries. Once those industries close, they are unlikely to return. Here’s what’s been done so far. The Turnbull, Morrison and recently the Albanese governments have each reached agreements with the three liquid natural gas producers operating out of Gladstone in Queensland that together control around 90% of east coast reserves. ‘Sufficient supply’ isn’t affordable supply The agreements require the supply of sufficient gas to meet the needs of east coast gas consumers. For a while they worked to reduce then-high domestic prices to sensible levels, because international prices were low. But now international prices have climbed to multiples of usual levels, agreements to supply without specific reference to prices are no longer enough. An agreement to supply “sufficient” quantities of gas at $25-40 per gigajoule is an agreement to not supply much. After industries close, supply will be “sufficient” for the remaining users who can afford it, but it won’t be what we want. We need to get the east coast liquefied natural gas (LNG) producers to supply sufficient gas to the east coast at prices below $10 a gigajoule. They would continue to make a profit at those prices, albeit much less than otherwise. As it happens, the Commonwealth has the power to get such commitments, because it has the power to stop exports. That power gives it complete leverage. We need to be clear on two points. First, there is no suggestion here that the LNG producers’ long-term contracts are at risk. Asian buyers need not be concerned. All three LNG projects were underwritten by long-term contracts at fixed prices. What we are talking about is the gas the three producers have available beyond their need to service these long contracts. This gas can either be exported to the spot, or short-term, market at very high prices or sold domestically. They should be told they can only export gas to the currently lucrative international spot market if they sell sufficient gas domestically to get prices clearly below $10 a gigajoule. Other exporters reserve gas Second, what I am suggesting is akin to what all other gas exporting countries do. Australia has by far the highest domestic gas prices of any gas exporting country. No other country would tolerate its gas being exported while its domestic market is paying the same high prices as international customers. The gas companies need to come to the party, either to earn their “licence to operate” or to avoid the threat of export controls. If they know the threat of export controls is real, I believe they will do what’s necessary without the need to actually control exports. A final point: there can be no argument about “<a href="https://sersolutions.com.au/what-is-sovereign-risk-and-how-does-it-affect-australia/">sovereign risk</a>”, the idea that foreign companies will no longer do business with Australia if it changes the rules. The long-term gas exporting contracts would remain intact. Australia would simply be aligning itself with all other gas exporting nations – and, by the way, with <a href="https://www.wa.gov.au/government/publications/wa-domestic-gas-policy">Western Australia</a>, which has long looked after its residents and businesses by reserving gas to ensure reasonable domestic prices.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/193388/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Writen by Rod Sims. Republished with permission from <a href="https://theconversation.com/cheaper-gas-and-electricity-are-within-our-grasp-heres-what-to-do-193388" target="_blank" rel="noopener">The Conversation</a>. Image: Getty Images

Money & Banking

Child stars: The power and the price of cuteness

Anyone who was paying attention to North American pop culture in the late 1990s and early 2000s will remember that it was a moment fascinated with childhood. The most mainstream entertainment revolved around idealized images of predominantly white children and young teens. From the appealing cast of the <a href="https://people.com/movies/harry-potter-where-is-the-cast-now/">Harry Potter</a> franchise to fresh faced <a href="https://www.youtube.com/watch?v=C-u5WLJ9Yk4">pop</a> <a href="https://www.youtube.com/watch?v=5NPBIwQyPWE">princesses</a>, and child characters in shows for <a href="https://www.youtube.com/watch?v=n_TO9E3ugLM">young</a> and <a href="https://www.youtube.com/watch?v=ZtKqQNpFJCo">old</a>, idealized images of childhood were everywhere. Many of those who performed the roles are now mature enough to <a href="https://www.pbs.org/wnet/amanpour-and-company/video/actress-mara-wilson-on-how-hollywood-treat-child-stars/">make sense of having been children growing up in the public eye</a>. It shouldn’t shock us that many of them had uncomfortable and even traumatic experiences. Adding to the intense drama of recent events in <a href="https://www.bbc.com/news/world-us-canada-53494405">Britney Spears’s life</a>, memoirs by <a href="https://www.penguinrandomhouse.com/books/688129/run-towards-the-danger-by-sarah-polley/">Sarah Polley</a>and <a href="https://www.simonandschuster.com/books/Im-Glad-My-Mom-Died/Jennette-McCurdy/9781982185824">Jennette McCurdy </a> force us to confront why we love to see child stars, and what our appetite for cute white kids says about us. <h2>The costs of stardom</h2> The phenomenon of childhood stardom is hardly a new one. Scholar <a href="https://www.routledge.com/The-Cultural-Significance-of-the-Child-Star/OConnor/p/book/9780415542678">Jane O'Connor suggests</a> that Jesus was the first child star; an apparently old soul in a tiny body whose ability to <a href="https://www.biblegateway.com/passage/?search=Luke%202%3A41-52&version=NIV">dazzle adults</a> at a young age was a sign of things to come. In the 1700s, <a href="https://www.smithsonianmag.com/arts-culture/maria-anna-mozart-the-familys-first-prodigy-1259016/">Mozart and his sister Maria Anna</a> spent much of their childhood on tour, performing adorableness and brilliance for audiences across Europe. With the development of 20th century recording technology, child performers could be preserved on film and in sound, so that their charm is available to us forever. The first real child star in Hollywood was <a href="https://www.imdb.com/name/nm0001067/">Jackie Coogan</a>, who starred in Charlie Chaplin’s 1921 silent film masterpiece <a href="https://www.youtube.com/watch?v=0wg7QjQztlk">The Kid</a>. That performance launched a career that would make him an international star before he was 10. When he reached adulthood, however, he found that his mother and step-father had spent all of his earnings, and worse, that there was no law preventing them from having done so. Coogan sued, but he was only able to regain a fraction of his earnings. California enacted <a href="https://www.sagaftra.org/membership-benefits/young-performers/coogan-law">Coogan’s Law</a> in 1939 to protect the financial interests of children working in film. Many child stars since Coogan have been the <a href="https://www.complex.com/pop-culture/child-stars-family-financial-issues">primary breadwinners</a> for their households, in a tricky inversion of family hierarchy. At the dramatic climax of The Kid, five-year-old Jackie <a href="https://silentmoviesera.tumblr.com/post/101061341741/chaplinfortheages-filmiclife-the-kid">performed despair</a> with a conviction that transformed expectations for what a child actor could do. But how could such a young child access such profound emotion on command? His father had coached him for the scene by threatening to <a href="https://www.indiebound.org/book/9780810859111">leave him at a workhouse if he did not do well</a>. In an age and place where many <a href="https://www.npr.org/sections/money/2012/08/16/158925367/child-labor-in-america-1920">children worked dangerous jobs</a> and had lost fathers in the Great War, the danger of poverty and abandonment was vivid, even to a small boy. Coogan’s heart-rending performance has provided emotional catharsis to millions of viewers over the last century — the price was his own distress and fear. <h2>Working children and the inner child</h2> The ability to cry on cue remains “<a href="https://www.simonandschuster.com/books/Im-Glad-My-Mom-Died/Jennette-McCurdy/9781982185824">the skill you want in child acting</a>,” according to Jennette McCurdy, who played a leading role in the Nickelodeon TV show iCarly. For most audiences, the magic of child performers is the way they compel us to access our own feelings and reconnect with our inner child. The sound of a child’s voice singing a familiar song is powerful because it evokes the future and the past simultaneously. We remember our own childhoods and we can also imagine that the music and stories we love will go on into a new generation. The child’s performance can provoke moments of poignancy that help us retain — or regain — our sense of humanity. Historian Carolyn Steedman <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674839786">argues</a> that our cultural notion of “the self” came to take the form of a vulnerable child beginning in the 19th century. During that time, the use of children in <a href="https://www.historic-uk.com/CultureUK/History-Boy-Chimney-Sweep/#:%7E:text=The%20chimney%20sweep%2C%20or%20climbing,the%20job%20by%20their%20parents.">dangerous</a> labour conditions juxtaposed uncomfortably with new ways of considering children as fragile and precious. Child stars in entertainment work in better conditions than chimney sweeps, of course. Still, it is essential to recognize child stars as labourers, whose bright eyes, dimpled cheeks and sweet voices are the tools of their trade. <a href="https://press.princeton.edu/books/hardcover/9780691181813/the-power-of-cute">Our appetite for the power of cute</a> shows no signs of waning, so it’s important to confront the cost of child stars. Must real children do this work for us? Are there ways for children to experience the excitement of performing without the dangers of stardom? Recent strategies for child actors indicate a positive shift. Australian animated show Bluey <a href="https://www.bountyparents.com.au/news-views/bluey-voice-cast/">protects the identities of its child actors</a> to allow them privacy alongside fame. This seems a healthy approach, but we won’t know for sure until those actors — and their child audiences — grow up and tell us. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/child-stars-the-power-and-the-price-of-cuteness-189444" target="_blank" rel="noopener">The Conversation</a>.

Music

Hugh Jackman snaps up penthouse for eye-watering price

Hugh Jackman has snapped up a show stopping penthouse in New York City’s Chelsea neighbourhood, just two months after listing a deluxe triplex in Manhattan. The Greatest Showman star bought the four-bedroom condo for $US 21.12 million ($NZD 33.03 million) after it was initially <a href="https://www.realtor.com/realestateandhomes-detail/100-11th-Ave-Ph-A_New-York_NY_10011_M91893-97530" target="_blank" rel="noopener">listed</a> late last year for $US 25 million ($NZD 39.1 million), according to the <a href="https://www.wsj.com/articles/hugh-jackman-buys-new-york-city-penthouse-for-21-125-million-11659973523" target="_blank" rel="noopener">Wall Street Journal</a>. The 434-square-metre apartment boasts city and river views through 14 floor-to-ceiling windows, a stainless steel kitchen with a glass breakfast bar, and space for a music room, with a piano already set-up. Each of the bedrooms, tucked away at one end of the apartment, include stunning views, with the main bedroom featuring three exposures with views stretching from the Hudson River to the Empire State Building. When it comes to outdoor spaces, the apartment includes a terrace and loggia on the main floor, as well as a sprawling roof terrace including an outdoor kitchen, several dining and lounge areas and views of the Hudson River. Housed at the top of a famed building designed by Jean Nouvel, the condo comes with access to an 70-foot lap pool, a fitness centre with a sauna, concierge services and a full-time doorman. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/p/CdGK7zbu4UZ/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/p/CdGK7zbu4UZ/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by @thehughjackman</a> </div> </blockquote> Jackman’s luxe new purchase comes after he and his wife, Debora Lee Furness, listed their home in the West Village neighbourhood for a hefty $US 38.9 million ($NZD 60.83 million). The 1000-square-metre apartment, which featured in a clip of Jackman practising sitting in tails ahead of the Met Gala on his social media in May, has since been taken off the market. Images: @thehughjackman (Instagram) / Realtor.com

Real Estate

Inflation is 2022’s boogeyman. How can we address rising living costs, while helping bring it down?

An entire generation has never experienced life with high inflation. But that is set to change. Countries like Australia, Canada, the United Kingdom and others are <a href="https://www.weforum.org/agenda/2022/06/inflation-stats-usa-and-world/">reporting rising inflation</a>. In New Zealand, inflation has climbed to its <a href="https://www.stuff.co.nz/business/129293267/annual-inflation-hits-73">highest rate in 32 years</a>. Our collective inexperience with the scourge of inflation, and how to solve it, could be a real problem. For those experiencing high inflation for the first time, it is helpful to understand just what economists and politicians are talking about. Inflation is a sustained increase in overall prices. Not everything goes up by the same amount but when people are having to pay more each week, month or year for the same basket of goods and services then that’s inflation. Inflation is harmful in many ways. It works like rust – slowly eating away at the value of your money. Inflation affects all of us. It doesn’t matter what the face value of your money is – what matters is the quantity of goods and services you can buy with it. The real value of money One easy way to understand inflation is to look at what you can buy for the money you have. Suppose at the start of the year your $100 note bought you 20 cups of coffee. However, inflation pushes coffee from $5 to $6 a cup. By the end of the year, your same $100 only buys you 16 cups of coffee. The face value of your money is the same but its real value (in terms of the number of coffees you can buy) has gone down. Your money is worth less now than a year ago. This rise in costs hurts wage earners who have limited opportunity to renegotiate their wages. Inflation also hurts those on fixed incomes such as beneficiaries and superannuitants who only receive periodic adjustments. Rising inflation hurts savers who find the real value of their savings going down if returns on savings don’t keep up with inflation – which they currently aren’t. Inflation can benefit borrowers who have the same debt at the end of the year but the value of that debt is lower in real terms. Providing there is at least some inflation adjustment to their income, borrowers have to sacrifice less to repay their debt. While this sounds good, it’s not. It encourages poor borrowing decisions and discourages savings. <figure class="align-center "><img src="https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474465/original/file-20220718-495-2r9amx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="Young woman looking at a grocery receipt." /><figcaption>Inflation has risen to levels not seen for three decades. Consumers will feel the squeeze as their purchasing power drops. <a class="source" href="https://www.gettyimages.com.au/detail/photo/checking-receipt-royalty-free-image/691853536?adppopup=true">Getty Images</a></figcaption></figure> The all-encompassing impact of inflation In a progressive tax system, inflation hurts salary and wage earners who get pushed into higher tax brackets as they receive inflation adjustments to their pay. Inflation can also cause issues at a national level. If one country’s inflation rate is higher than their trading partners then its currency falls in value. In the early 1970s, the NZ dollar was worth almost US$1.50. Our higher inflation rates of the 70s and 80s saw it fall to around US$0.50 by the mid 80s. This drop in value limits what we can buy from overseas – things like life-saving drugs will become more expensive for us if we don’t get inflation down and others do. The causes of inflation can come from good intentions Inflation is too much money chasing too few goods. If central banks push more money into circulation, there is a real risk of inflation. A big increase in demand for goods from, for example, an increase in government spending can also trigger inflation. So can supply chain disruptions that reduce the goods available (meaning the same amount of money chasing fewer goods). Unfortunately, all these triggers are currently in play as countries respond to a series of global crises. The invasion of Ukraine and ongoing COVID-19 supply chain disruptions have reduced the goods available. Governments globally have boosted spending to support their economies. But this latter factor has been put on steroids by central banks being willing to purchase government debt. <figure class="align-center "><img src="https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/474468/original/file-20220718-53534-kfbvw2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" alt="Man with mask pushing supermarket trolly." /><figcaption>Russia’s war in Ukraine and the ongoing COVID-19 pandemic has caused a cost-of-living crisis. <a class="source" href="https://www.gettyimages.com.au/detail/photo/man-wearing-mask-while-shopping-in-supermarket-royalty-free-image/1235145649?adppopup=true">Getty Images</a></figcaption></figure> Unintended consequences The RBNZ bought billions of government bonds to keep interest rates low as part of its <a href="https://www.parliament.nz/en/pb/library-research-papers/research-papers/library-research-brief-large-scale-asset-purchase-lsap-programme">“large scale asset purchases” programme</a>. In New Zealand, the average money growth between 1995 and 2019 was about 8% per year. This accommodates a growing population, a growing economy and a little bit of inflation (a little bit is OK). In the last two years money supply has grown by around 30% per year. Of course it’s easy to look back with the benefit of hindsight. Those who made the decisions at the time don’t have that luxury. The RBNZ is now they are having to wind back their asset purchases and raise interest rates to rein in inflation. Some argue the RBNZ has been <a href="https://www.stuff.co.nz/national/politics/129311096/more-pain-expected-as-inflation-runs-hotter-than-a-government-can-handle">distracted and has dropped the ball on their key job</a> and we are now facing the risk the inflation genie is out of the bottle. Whether that criticism is justified or not, the RBNZ will now have to act decisively to reduce inflation. But getting inflation down is never painless. Households with mortgages will find their weekly budgets squeezed as interest rates rise. Firms will face falling demand from consumers with less to spend. Job growth will dry up – though New Zealand is in the fortunate position of starting with very low unemployment. Regardless, the RBNZ must do the job they got back in 1989 with the passing of the <a href="https://www.rbnz.govt.nz/-/media/29ada25bfa8b4e50922262618fb03e00.ashx?sc_lang=en">Reserve Bank of New Zealand Act</a>. New Zealand’s central bank is the only one that can control monetary conditions; it’s the only one that can get inflation under control. The same could be said for many of the countries facing growing inflation. If central banks don’t take decisive action, we could get a sharp reminder of just how bad inflation can be.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/187154/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/stephen-hickson-1288490">Stephen Hickson</a>, Economics Lecturer and Director Business Taught Masters Programme, <a href="https://theconversation.com/institutions/university-of-canterbury-1004">University of Canterbury</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/inflation-is-2022s-boogeyman-how-can-we-address-rising-living-costs-while-helping-bring-it-down-187154">original article</a>. Image: Getty Images

Money & Banking

Warnie's luxe digs sell for eye-watering price

The luxe $10 million apartment belonging to the late Shane Warne has reportedly been sold. Located in the deluxe Saint Moritz development in St Kilda, in Melbourne's east, the apartment features elements designed by the cricketer, including that No. 23, his Australian cricket shirt number, be embroidered on fittings throughout. According to the <a href="https://www.heraldsun.com.au/entertainment/page-13/shane-warnes-10m-st-moritz-st-kilda-apartment-sold-by-his-family-to-secret-buyer/news-story/59948beb2c3003f773c2f0be0f0e37a3" target="_blank" rel="noopener">Herald Sun</a>, Warne's family arranged for it to be on-sold to a private buyer. The publication reported that a director of clothing brand Cotton On now holds the keys, spending $1 million more than Warne originally did. “Shane was an extraordinary man I cared a lot for and would have loved to have him in the building and his energy,” developer Tim Gurner told the Herald Sun. “We have been working with the family to assist wherever possible in the sale of his home. “As with all purchasers we won’t comment on who they are due to the number of high profile owners in the precinct. “We are planning a campaign very soon however had a number of buyers interested in Saint Moritz who had missed out so it sold very quickly.” The sale comes amid interest in the $540 million complex from high-profile parties, including AFL personality Sam Newman and businessman Antony Catalano. Its features include a gold class private cinema, a 3000-bottle wine cellar, and a book collection curated by the Queen's librarian which will be shared by residents when construction is completed. It has also claimed the title of one of the most expensive apartment sales in Australia, after Catalano snapped up the complex's penthouse for a hefty $30 million recently. Images: Instragram, Saint Moritz

Real Estate

If you’re renting, chances are your home is cold. With power prices soaring, here’s what you can do to keep warm

If you’re feeling the cold this winter, you’re not alone. About a quarter of all Australians have trouble keeping their homes warm enough in winter. That figure is likely to soar this year, due to poor quality housing and the rapidly escalating energy crisis. Renters are particularly at risk, but our research has shown many home owners are in the same boat as well. We’ve collected data over the last few years on how many Australians have cold homes, find it <a href="https://theconversation.com/forget-heatwaves-our-cold-houses-are-much-more-likely-to-kill-us-83030">difficult to stay warm</a>, and can’t afford their heating bills. What counts as cold? The World Health Organization recommends a <a href="https://www.who.int/publications/i/item/WHO-CED-PHE-18.10">minimum home temperature</a> of 18℃ for health and wellbeing. About a fifth of Australian renters, for example, <a href="https://doi.org/10.1038/s41597-022-01136-5">have cold homes</a>. Our <a href="https://able.adelaide.edu.au/housing-research/research/healthy-housing-cre/cold-in-australian-homes#0">current research</a> has shown this applies to home owners as well, with 26% of people across all housing types unable to stay warm at least half of the time during winter. Australia’s energy crisis is likely to see soaring rates of energy poverty, meaning being unable to keep your home warm or cool enough. Here’s why this is such a problem – and what you can do about it. <h2>Cold homes affect our health</h2> If you’re cold at home, you have a higher risk of developing <a href="https://link.springer.com/article/10.1007/s00484-017-1379-0">respiratory problems</a>and <a href="https://journals.lww.com/jhypertension/fulltext/2014/08000/Stronger_association_of_indoor_temperature_than.8.aspx?casa_token=TFv1eApy3hQAAAAA:9tc6eHiZCAk72mWgrmcgSxQT7kLczUDd7XNpXvNvoIFcMF6pJPSGpORK3SI-Veu4oc994saGXCWuJFBCs3pYN4g">high blood pressure</a>. People in the coldest homes face a higher risk of <a href="https://www.sciencedirect.com/science/article/pii/S0013935114003661?casa_token=vWpvR-oc8iMAAAAA:q72pW312N2oWIm1Gf9jpTTGUr3sH8uM_DankOAVzziVRT8_OPPnPjxJzDIC_x5j4Pr7O_Uuq">dying in winter</a>. Cold can have a flow-on impact on our health system, which is already struggling. Australia’s south-east has had the coldest start to winter <a href="https://thenewdaily.com.au/news/national/2022/06/09/cold-winter-weather-australia/">in decades</a>. Melbourne hasn’t been this cold this early since 1949, while Sydney hasn’t seen these temperatures in early June since 1989. <h2>Double trouble: cold weather and the energy crisis</h2> If you’ve been hit by the recent cold snap, chances are you’ll have been reminded how cold your home can get. This is not a surprise given how badly <a href="https://www.sustainability.vic.gov.au/research-data-and-insights/research/energy-efficiency-and-reducing-emissions/household-retrofit-trials">existing homes</a> and <a href="https://theconversation.com/australias-still-building-4-in-every-5-new-houses-to-no-more-than-the-minimum-energy-standard-118820">new housing</a> perform in keeping an even temperature. The cold has made many people doubly worried, because the energy required to heat our leaky, poorly insulated homes is about to get <a href="https://theconversation.com/expect-more-power-price-hikes-a-1970s-style-energy-shock-is-on-the-cards-183911">very expensive</a>. Early results from <a href="https://able.adelaide.edu.au/housing-research/research/healthy-housing-cre/cold-in-australian-homes#0">our survey</a> of over 350 Australians found 25% of people were experiencing shortages of money to the point they will be unable to adequately heat their homes. One third of our respondents said energy was unaffordable. Some reported making trade-offs, such as skimping on food or healthcare to pay energy bills. These people are experiencing energy poverty, where a household is unable to properly heat or cool their home or face significant financial difficulty doing so. While data about energy poverty in Australia is patchy, we know around 180,000 households <a href="https://vcoss.org.au/wp-content/uploads/2018/11/Persistent-Energy-Hardship-FINAL-Web-Single-Page.pdf">in Victoria</a> had persistent bill payment issues as of 2018, and 45,000 households were consistently unable to heat their homes. <h2>Energy price increases hit lower income households hardest</h2> Lower income households are more at risk from the cold. That’s because they’re more likely to live in homes that are in <a href="https://www.tandfonline.com/doi/full/10.1080/10852352.2016.1197714?casa_token=D_2YbBQ9wRkAAAAA%3A5Z_XqM42cmGunbSwhVJ-EaaHrtV4w3nORhDq9ZoaqAMBx700PldV7_9VVPdAWy7mm2hi3KYLOij3">poor condition</a> and hard to heat. One quarter of low income households told us they struggle to stay warm. Insulation may be a key factor, with 25% of our respondents reporting their rental properties did not have insulation. Insulation matters, because heat escapes homes through <a href="https://www.yourhome.gov.au/passive-design/glazing">single-pane windows</a>, or poorly insulated walls and ceilings. As a result, poorly insulated homes <a href="https://environmentvictoria.org.au/resource/10-tips-warm-house/">cost more to heat</a>. This makes life harder for low income renters, given they have little control over insulation or other home modifications. Worse still, heaters that are cheap to buy are often the most <a href="https://www.climatecouncil.org.au/top-tips-improve-home-energy-efficiency/#:%7E:text=Shoot%20for%20the%20stars%3A%20Top%20tips%20to%20improve%20your%20home's%20energy%20efficiency,-26.11.21%20By&text=Compared%20to%20a%206%2Dstar,amount%20of%20electricity%20we%20use.">expensive to run</a>. While an efficient reverse cycle air conditioner would save money and heat the space better over the longer term, it is often difficult for renters to negotiate installation with property managers or landlords – especially given the intense competition for rentals at present in many cities. That can mean renters will suffer in silence, unwilling to ask for something that will make their lives better. <h2>What can renters do?</h2> Low income renters face real threats from energy poverty this year. While we need systemic change to improve the outlook for Australia’s renters, there are low-cost DIY ways to improve how <a href="https://www.yourhome.gov.au/">your house retains heat</a> this winter. The first step: check your current heating appliances are working efficiently. Many people don’t clean the filters on their reverse cycle air conditioners. This makes them less efficient, and can drive up energy bills. Poorly sealed windows and doors make it hard to stay warm. Using <a href="https://home.howstuffworks.com/home-improvement/heating-and-cooling/insulated-curtains.htm">thermal curtains</a>, and keeping them closed makes a big difference. Putting a piece of plywood or even a scarf between the curtain rail and the wall to make a <a href="https://environmentvictoria.org.au/2011/07/05/take-the-chill-out-of-winter-with-diy-pelmets/">DIY pelmet</a> also helps keep the heat in. If you have single glazed windows, consider <a href="https://renew.org.au/renew-magazine/buyers-guides/window-buyers-guide/">window films</a> as a way to improve performance for a fraction of the cost of double glazed windows. <a href="https://blog.csiro.au/draught-proof-house/">Sealing the cracks</a> around windows, under doors and around the wider home is also important. Silicon or expanding foam can be used for gaps and cracks. Draughts under doors can be stopped with door seals or door snakes. Close the doors to your bathroom, laundry and other rooms not in use to keep the heat where you need it most. Hanging a blanket over a doorway can also be a cheap way to seal off a room and concentrate heat. It’s also worth checking what rebates and concessions your state government or council is offering. These might include energy efficiency improvements or extra help with heating costs. If you’re renting, your home must meet <a href="https://www.energy.vic.gov.au/energy-efficiency/minimum-rental-standards">minimum standards</a>, so make sure you check what you are entitled to as these vary by state. Everyone deserves a warm home. Our health and well-being depend on it. Building new, energy efficient homes is only part of the answer. We also have to make our 10.8 million <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings/latest-release#:%7E:text=Total%20value%20of%20dwelling%20stock,-Download&text=Range%3A%206400000%20to%2010400000.&text=End%20of%20interactive%20chart.&text=The%20preliminary%20estimate%20of%20the,in%20the%20December%20quarter%202021.">existing dwellings</a> warmer. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/if-youre-renting-chances-are-your-home-is-cold-with-power-prices-soaring-heres-what-you-can-do-to-keep-warm-184472" target="_blank" rel="noopener">The Conversation</a>.

Home & Garden

Madonna to offload home with a huge price tag

Madonna’s nine-bedroom Los Angeles home has hit the market with an eye-watering price tag of $US 26 million ($NZ 40.2 million). The pop megastar bought the sprawling estate in the Hidden Hills, California, from Canadian singer, The Weeknd, last year, dropping $US 19.3 million ($NZ 29.8 million). Sitting on nearly three acres, the home sits beyond a driveway lined with olive trees and a “storybook bridge” according to the <a href="https://www.thebeverlyhillsestates.com/listing/24220-long-valley-rd-3/" target="_blank" rel="noopener">listing</a>, and boasts a range of upgrades. Interior features include a foyer filled with natural light from two-storey walls of windows, a great room with an indoor-outdoor bar, an outdoor living room, a formal dining room with a fireplace and glass wine cellar, a home theatre and music lounge. Out of the nine bedrooms, seven come with an ensuite, including the primary ensuite which boasts dual closets, a steam shower and a stone bath. Heading outside, the property includes a two-bedroom, two-bathroom guest house with a full kitchen, a barn housing a gym and dance studio, a zero-edge saltwater pool, a spa that can fit over 10 people, and a full-size basketball court, all surrounded by grassy lawns and sunny hillsides. Images: @madonna (Instagram), The Beverly Hills Estates

Real Estate

“Worst food ever”: Man slams inflight sandwich with sky-high price

A man who paid for a sandwich on a plane has called out the airline for the “worst food ever”. Alex was on an easyJet flight from Paris to London Gatwick when he ordered the $9.80 Roasted Vegetable and Hummus Baguette for his trip. The image on the flight’s menu showed a delicious looking seeded baguette, filled with dozens of pieces of zucchini and red capsicums on a thick layer of hummus. He was however shocked when the stewardess served him the sandwich which had only a handful of vegetables in the middle of the bread. Alex shared a video of the sandwich with the caption: “Is this the worst airline food and advertising you’ve ever seen? I then sent the sandwich back, and got me a new one. Is this any better? “A crew member then told me, ‘You know, the food and the picture are not the same. We were given three minutes to eat before landing, and never got our water.” A spokesperson for the airline said they were aware of the footage and were investigating the incident. “We’re aware of this footage and will be looking into this with our in-flight retail supplier as it appears that the item served falls short of the high standards we expect from our in-flight food and drink range for our customers,” they said. “We will be in touch with the customer to apologise for their experience and provide a gesture of goodwill.”

Travel Trouble

5 tips to make your fuel tank last longer while prices are high

The federal government’s announcement of a halved fuel excise is no doubt music to many people’s ears. Following Tuesday night’s budget release, the excise (a government tax included in the purchase price of fuel) was <a href="https://www.smh.com.au/politics/federal/fuel-excise-slashed-to-ease-petrol-prices-for-six-months-20220324-p5a7mp.html">halved</a> from 44.2 cents per litre to 22.1 cents. It should provide some respite from high petrol and diesel prices <a href="https://theconversation.com/how-disrupted-russian-gas-supplies-will-hit-global-and-australian-prices-178023">driven by</a>Russia’s war on Ukraine. However, the cut is only expected to last six months. And Treasurer Josh Frydenberg <a href="https://www.abc.net.au/news/2022-03-29/lowdown-on-when-fuel-excise-cut-will-be-seen-at-bowsers/100949562">has said</a> it will take up to two weeks before fuel prices get cheaper (and potentially longer in regional areas). <h2>The costs</h2> Assuming it costs A$2 per litre for petrol and diesel fuel, and an average fuel consumption of about <a href="https://www.abs.gov.au/statistics/industry/tourism-and-transport/survey-motor-vehicle-use-australia/latest-release">11 litres per 100 kilometres</a> driven – driving a typical fossil-fueled passenger vehicle right now would cost about 20 to 25 cents per kilometre. You’re probably quite happy if you own an electric vehicle. With a <a href="https://mdpi-res.com/d_attachment/sustainability/sustainability-14-03444/article_deploy/sustainability-14-03444-v2.pdf">real-world electricity consumption</a> of 0.15 to 0.21 kWh per kilometre and <a href="https://www.canstarblue.com.au/electricity/electricity-costs-kwh/">electricity costs</a> of about 20 to 30 cents per kWh, your cost of driving per kilometre is about 3 to 6 cents. And if you can charge your vehicle’s battery for free with home solar panels, your cost per kilometre is $0. But for those of us who don’t own an electric vehicle, making the best use of our fuel tanks will be a priority. Here are some ways you can make your vehicle go the extra mile. <h2>1. Use a smaller, lighter car</h2> There are a number of things you can do to reduce your fuel use. The obvious one is to not use your car, but walk or grab your bicycle, if possible. If you do have to drive, try to minimise your total travel distance. One way would be to combine a number of errands into your journey and optimise your route. The specific vehicle you use also matters. As a general rule of thumb, <a href="https://www.transport-e-research.com/_files/ugd/d0bd25_9527cdcb01a84440a53308b3b5624320.pdf?index=true">the larger and heavier your car</a>, the more energy and fuel it will require per kilometre. Choosing a smaller car, rather than a large SUV, will definitely reduce your fuel bill. A large SUV will use almost twice as much fuel per kilometre as a small car. <a href="https://www.sciencedirect.com/science/article/pii/S0360128516300442">Research</a> also suggests that for every 100kg increase in vehicle weight, fuel consumption increases by about 5% to 7% for a medium-sized car. So in addition to driving a smaller car, it’s best to reduce your load and avoid driving around with extra weight. <h2>2. Use eco-driving techniques</h2> The way you drive is important too. Eco-driving involves being conscious of your fuel consumption and taking actions to reduce it. There are various ways to do this. Every time you brake and stop, you have to accelerate again to reach your desired speed. Acceleration uses a lot of energy and fuel, so driving smoothly, anticipating traffic and preventing stops will lead to savings on your fuel bill. What you want to do is flow with the traffic and keep your distance from other vehicles. It also helps to keep an eye further up the road, so you can avoid obstacles and therefore unnecessary braking and acceleration. If you’re in the minority of people who own a manual vehicle, drive in the highest gear possible to reduce engine load and fuel use. And if you’re in an automatic vehicle, use the “eco” setting if you have one. <h2>3. Give your engine and climate a break</h2> Another simple tip is stop unnecessary idling with the engine still engaged. A small car typically uses one litre of fuel per hour while idling, whereas this is close to <a href="https://www.transport-e-research.com/_files/ugd/d0bd25_2485b61095ed48f29bea980a73e74240.pdf?index=true">two litres per hour</a> for a large SUV. Of course, we idle regularly while waiting in traffic and generally can’t do much about that, other than trying to drive outside peak hours when roads are less congested. In other cases, we can change things. For instance, idling when a vehicle is parked will use up fuel unnecessarily. <h2>4. Turn off the AC</h2> Most people may not realise this, but using your air conditioner can use up quite a bit of extra fuel: somewhere between 4% and 8% of total fuel use. Using the fan instead will require less energy than air conditioning. Or even better, wind down the windows for a bit for fresh air when you are driving in the city. <h2>5. Tend to your tires and consider aerodynamics</h2> It also pays to keep your <a href="https://www.racq.com.au/car/greener-motoring/racq-ecodrive-research-study">tires inflated</a>, which can save you between 2% and 4% in fuel use. Also, your car is designed to be aerodynamically efficient. Anything that changes that, including roof racks, bull bars and bike racks, will come with an additional fuel penalty – particularly at higher speeds, such as on the freeway. Image credits: Getty Images This article originally appeared on <a href="https://theconversation.com/5-tips-to-make-your-fuel-tank-last-longer-while-prices-are-high-180134" target="_blank" rel="noopener">The Conversation</a>.

Travel Tips

Derelict home with extortionate asking price causes outrage

A Melbourne home that has just hit the market has caused outrage online over its asking price. The three-bedroom, one-bathroom home is located in Richmond, just 3kms from the Melbourne CBD, and has social media users scratching their heads over the property value price. The home is falling apart, with deep cracks in every wall, floorboards that have been half torn up, and all around disgusting living conditions for any prospective buyer. Due to the derelict state of the property, many are wondering what justified the asking price on this house. The price guide puts the value of the property between $950,000 and $1,045,000. The <a href="https://www.domain.com.au/6-bliss-street-richmond-vic-3121-2017581386">listing</a> received a battering after it was found by TikTok user Jordan van den Berg, who is known for his “S*** Buys of Melbourne” videos. Jordan shows his viewers through each room of the house, while pointing out that the online description of the listing does state that the property is an “architectural challenge” that is “completely unrenovated”. Jordan notes that the exterior of the house “looks like it's just been diagnosed with a severe case of psoriasis”, while saying that the living area looks “both dead and alive at the same time.” Jordan’s review on the million-dollar house was flooded with comments from users questioning the incredible asking price. One person said, “It’s so cooked that I thought that this seems reasonable for $1 million. Like what has Australian real estate done to my concept of value?” Image credits: Domain

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Warnie's luxe digs sell for eye-watering price

If you’re renting, chances are your home is cold. With power prices soaring, here’s what you can do to keep warm

Madonna to offload home with a huge price tag

“Worst food ever”: Man slams inflight sandwich with sky-high price

5 tips to make your fuel tank last longer while prices are high

Derelict home with extortionate asking price causes outrage

News

Shop

Catalogues

Travel

Health

Lifestyle

Finance

Entertainment

Property

Information

Keep up to date

Search

Loyalty programs may limit competition, and they could be pushing prices up for everyone

Why prices are so high – 8 ways retail pricing algorithms gouge consumers

Eye-watering price tag for "remarkable" first class Titanic menu

Princess Di's black sheep jumper sells for 14 times over asking price

Junk fees and drip pricing: the underhanded tactics we hate yet still fall for

The top 11 situations to always haggle for a lower price

Private island on sale for a price cheaper than most homes

Artist puts the lid on rubbish rental prices

Get two for the price of one with top ways to have fun and keep active

Coastal property prices and climate risks are both soaring. We must pull our heads out of the sand

Cheaper gas and electricity are within our grasp

Child stars: The power and the price of cuteness

Hugh Jackman snaps up penthouse for eye-watering price

Inflation is 2022’s boogeyman. How can we address rising living costs, while helping bring it down?

Warnie's luxe digs sell for eye-watering price

If you’re renting, chances are your home is cold. With power prices soaring, here’s what you can do to keep warm

Madonna to offload home with a huge price tag

“Worst food ever”: Man slams inflight sandwich with sky-high price

5 tips to make your fuel tank last longer while prices are high

Derelict home with extortionate asking price causes outrage

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