Like the HIA, the Master Builders Australia (MBA) is a curious industry lobby group.
According to its webpage the MBA is “the major Australian building and construction industry association”, whose “primary role is to promote the viewpoints and interests of the building and construction industry”.
Given that it represents those in the building and construction industry, one would have thought that it would wholeheartedly support any policy that encourages more dwelling construction, such as the ALP’s proposed restriction of negative gearing to newly constructed dwellings.
After all, current property tax concessions have clearly failed to boost dwelling construction, given nearly 19 out of 20 property investors purchase existing homes (see next chart).
Given current policy settings have been such an abject failure, and the ALP’s policy would encourage investment in new construction, it is surprising to read today that the MBA has come out strongly against the ALP. From The AFR:
Master Builders of Australia chief executive Wilhelm Harnisch indicated his organisation would fight change. He took aim at Labor’s policy.
“Our concern is that Labor’s policy is a populist response to those who demonise housing and negative gearing as primary cause of our fiscal and social problems. Investing in new private rental housing is not evil,” he said.
“What we are looking for, from both major parties in the lead up to the federal election, are policies that add to economic growth, create jobs and enhances the positive role that housing can play and that will at the same time improve the ability of mums and dads to make their contribution by providing rental housing and at the same time look after their own retirement strategies,” Mr Harnisch said.
Just like the HIA’s opposition, the MBA’s position is nonsensical.
The MBA claims that “investing in new private rental housing is not evil”, and yet lambasts a policy that would do exactly that: create more investment in new private rental housing (rather than existing housing).
The MBA also claims that it is looking for “policies that add to economic growth, create jobs and enhances the positive role that housing can play“, and yet opposes a policy that would directly encourage more residential construction, boosting both construction-related jobs and economic growth.
What the whole fiasco with the HIA and MBA demonstrates is that Australia’s army of home builders – i.e. those not involved in land development – need a new industry group that represents their goals of boosting dwelling construction and jobs.
Because as it stands, both the HIA and MBA are far more concerned with supporting the value of developer land banks than actual home building.
