It seems to me you guys are going about it the hard way!
Prevent negative gearing surely is the answer? A man on tele owns 100 houses!! Why because he can borrow on inflated assets.

Denying first home buyers an entrance to the market and inflating prices.

Australians are poor capitalists, relying mostly on what we dig from the ground, understanding only tangible assets, having poor understanding of banking are just some of the problems.
We need to invest more in Australian inventions and ideas, and rely less on capital gains, underpinned by easy borrowing and short term gain. Ask any developer of idea's in Australia ie. alternative power which is now being developed in USA or Germany. The funds were not available in Australia, money was going to housing, gambling and motor cars.
Am I wrong in asserting the O/S debt is private debt not govt debt?
my 2 cents fluff

"Recent predictions have been for a tripling of food prices within 5 years"

Somehow I doubt those predictions. Remember the cost of food itself
is still dirt cheap. Its the cost of value adding that is the problem.

The wheat in a loaf of bread is worth around 28c. Milk around 40c
a litre. Mutton around 1$ a kg, lamb 3$ a kg. The oats in muesli,
again a few cents.

So even if these products doubled in price, their impact on actual
food prices should be minimal, unless of course manufacturers use
the opportunity to massively increase their profits, as they
are known to do.

I remember a radio broadcast, where the milk company stated that
they were putting up milk 5c a litre, to help the"poor farmers"
It turned out in the end, that farmers were paid 0.5c a litre more,
the other 4.5c was going to the manufacturer, a multi national co.

I think it is spot on to refer to the historical development of the debt and money market problem, inlcuding especially the link to the Campbell Report and Howard's role in that as a former Treasurer under Fraser's prime ministerhip. Both were the vehicle back then to establish a trajectory of policy that rejected Keynes style economic managment for neo liberalism. Keating and Costello both have rolled on the bandwagon but let's remember that the private sector banks (foreign and Australian) were driving it along constantly.
In some comments there is a tendency to locate the problem in individual behaviour and this of course pushes towards individual solutions or government policy that is basically opunitive against individuals who make 'wrong' borrowing decisions. There are many problems with this - the most fundamental being that it does not deal with the cause of the problem.
Other comments imply that the problem is 'endemic' to the economic sustem. I think this is the correct approach and that means that solutions must challenge the logic of that system, inlcuding the private ownership of the flow of capital and undemocratic decisionmaking about capital flows and monetary policy.
The housing dimension of the problem is just that - one dimension of a bigger problem.
Stephen, you have not made comment. You should.

Coming in ridiculously late here. I’d only just spotted this article and I’m sorry to see it slide down the chronological list and into obscurity because Steve Keen is the only economist (with a media profile) that is actually worth listening to. Saul Eslake from the ANZ & a couple of others occasionally hit the truth & relevance target but Prof. Keen has identified THE crucial issue and specialised in it.

It's a shame that there’s only one of him because there is a new fad among the lunar right for pushing the idea that foreign & household debt is OK (because it funds “productive” investment) They don’t tell you that most of it has been sunk into a completely non-productive, speculative boom in the price established homes.

For an example of the “debt is good” theory on this website see “A perfect political storm may sink Coalition” (6/11/07).

Having seen the speech by RBA Dep.Gov. Ric Battelino before reading this article I noticed a couple of significant things that weren’t mentioned here.

I am not sure that Battelino is quite as unconcerned as the author thinks he is. Its just that he communicates in the uniquely reticent language of the central banker. On the one hand he says that the rise in household debt “has been overwhelmingly driven by those households that had the greatest capacity to service it” & on the other hand he concludes by saying that: “the household sector is running a highly mismatched balance sheet, with assets consisting mainly of property and equities, and liabilities comprised by debt” and that “it leaves them exposed to economic or financial shocks that cause asset values to fall and/or interest rates to rise”.

Those “shocks” have already occurred in Western Sydney (and elsewhere) where the American pattern of falling property prices, negative equity, and home repossessions has taken hold. Interest rates needless to say, are heading north. The RBA (ever reluctant to raise alarm) leaves the astute and willing observer to draw their own conclusion.

To be continued…