KEY POINTS:
As Prime Minister Kevin Rudd marked his first 100 days in power yesterday, a stark new picture emerged of a lucky country turning sour for hundreds of thousands of families.
With the Australian dream of a home in the suburbs rapidly slipping beyond the reach of many, the Reserve Bank is today expected to announce yet another rise in interest rates.
The cost of mortgages, rents, petrol and food has also pushed inflation to its highest level in six years, and a major industrial survey has forecast that economic growth will run well below expectations for the next decade.
Rudd marked the 100-day point with a speech in Brisbane candidly warning that Australia was in for a rough time.
In his speech to a business leaders' forum, Rudd listed Labor's economic inheritance: Inflation at a 16-year high, the second-highest interest rates in the developed world, productivity growth at its lowest in 15 years, accelerating federal spending and massive trade deficits.
But voters' patience will rapidly wear thin, a reality Rudd is addressing with a supercharged steamroller of new measures that has picked up pace since he won power last November. At the top of the agenda is the soaring cost of feeding, clothing and housing the population.
A new study commissioned by the Government and released yesterday paints a picture of a national mortgage belt rapidly sinking into crisis. Earlier reports have warned that thousands of families are skipping meals to pay mortgages or the rent.
And the ability of tens of thousands of others to either buy a home or find somewhere to rent is being hammered by inflation, rising interest rates and a drastic shortage of housing.
Rudd cited Real Estate Institute of Australia research indicating that rental vacancy rates have fallen below 3 per cent in every capital city, and rents for three-bedroom houses have climbed 82 per cent since 1996. The aim is to cut rent on such units to A$280 a week from A$350.
An even darker picture emerged from the results of a study by the National Centre for Economic and Social Modelling.
This showed that 1.1 million low- to middle-income households are now spending more than 30 per cent of their pre-tax income on housing costs such as rent and mortgage repayments.
Researchers call this housing stress, and it has increased by 25 per cent - or 220,000 households - since 2004.
"This is a stunning statistic, and it is a disturbing statistic," Rudd said.
Since 2004, the number of low- and middle-income households headed by a person under 29 years old had increased by 55 per cent, and the number of families with children in housing stress had more than doubled.
The number of older Australians in housing stress had also doubled, and among the over-70s the number had soared from about 56,000 to an estimated 112,000.
Australia's present national annual housing deficit of 20,000 is forecast to soar, with NSW alone short of 50,000 homes by 2011, and possibly as many as three times that number across the continent.
Rudd yesterday doubled a national rental affordability scheme to include 100,000 new low-cost rental properties, offering tax incentives to developers in return for properties rented at 20 per cent below the market rate.
State and territory governments have agreed to throw in A$2000 a home through such measures as cut-price land or cheaper stamp duty. The Government will also provide A$30 million to streamline and develop online building approvals to cut costs.