After it was revealed yesterday that the House of Representatives economics committee inquiry into housing affordability had been killed-off by the Turnbull Government, the chair of the inquiry, Liberal MP John Alexander, has demanded that it be brought back to life and debunked the claim that affordability is only about freeing-up supply. From Peter Martin:
John Alexander is now chairing an inquiry into the potential for value-capture to fund large infrastructure projects such as high-speed rail.
He said the lapsed housing affordability inquiry – which considered 30 hours of evidence from organisations including the Treasury and Reserve Bank without reporting – should be taken over and finalised by his committee, because there was no point in using infrastructure such as fast trains to create new affordable housing if it was snapped up by investors.
“We have been told time and time again that supply is the answer,” he said. “But it’s no good creating cities in the southern highlands and outside of Goulburn and outside of Shepparton if the same game is played … where the investor will have an enormous advantage over the homebuyer and then dominate that market”…
“I feel owner-occupiers ought to be put in front of investors, but at the moment there is no restraint on how many [properties] investors can buy, which means they are dominating the market”…
Mr Alexander, a former professional tennis player, said would-be owner-occupiers competing against negative-gearers were like ordinary tennis players coming up against Roger Federer… “that’s what it’s like for the homebuyer against the investor – it’s stacked against them”.
“The current level of supply is being completely consumed by speculative opportunistic investors who are driving the volatility of the market.”
Malcolm Turnbull and Scott Morrison are completely lost on housing affordability. Both wanted negative gearing to be pared-back, and took a proposal to Cabinet earlier in the year, but were rolled by the conservative wing of the Coalition that backed former prime minister Tony Abbott in the September 2015 leadership spill.
It is also clear as day that Scott Morrison’s housing affordability speech, presented on Monday, was heavily influenced by the Property Council of Australia (PCA), where Scott Morrison served as National Policy and Research Manager over the years 1989-95.
There is simply too much industry capture on the Coalition’s part to ignore. Instead of looking objectively at the facts on negative gearing and the CGT discount, they have time and again resorted to the PCA play-book to defend them.
Accordingly, the Turnbull Government’s policy on housing affordability is half-baked, focusing on only one side of the housing market and only in a timid manner.
