As promised last week, Australia’s real estate treasurer, Scott Morrison, has traveled to London to gain ideas on how to revamp Australia’s existing $1.4 billion National Rental Affordability Scheme (NRAS) in a bid to encourage more private investment in rental accommodation. From The New Daily:
Malcolm Turnbull has seized on housing affordability as one issue that could help drag his government out of the electoral doldrums, according to sources close to the Prime Minister.
Treasurer Scott Morrison is currently in London with a mission to take a lead from Britain in finding ways to open up the housing market to more potential home buyers and help solve the crisis in Australian cities.
Add to that Mr Turnbull’s decision last week to appoint Victorian MP Michael Sukkar as Assistant Minister to the Treasurer with the task of tackling housing affordability, and it becomes clear the government is taking the issue seriously.
Mr Sukkar insists the housing crisis is an “extraordinarily high” priority for the Prime Minister.
That view was reinforced by another government source, who said the Prime Minister wants to be seen to be acting on this issue.
“Malcolm is genuine in wanting to see something done on housing affordability, but it has also become too much of a hot political topic for us not to be seen to be acting in this space,” the source said.
“We need something to help turn the polls around, and if we can make progress with housing, it could be a win-win situation”…
The above sums up this government to a tee: wanting to be seen to be doing something rather than taking concrete action.
Here’s more on Morrison’s taxpayer junket via The SMH:
The Turnbull government appears to be moving toward establishing a government backed-bond vehicle for affordable housing…
Similar to the Clean Energy Finance Corporation, which the former Abbott government wanted to abolish, a housing bond aggregator would give affordable housing providers access to cheaper and longer tenor debt for the construction of new homes…
Mr Morrison is scheduled to meet with a slew of British officials this week including Chancellor of the Exchequer Philip Hammond, who in a landmark speech in November announced the doubling of capital expenditure on housing, including a £2.3 billion housing infrastructure fund…
Housing affordability had become an unacceptable drag on Britain’s productivity and needed to be addressed urgently, Mr Hammond said…
I have a genuine question for Scott Morrison. Why would you seek solutions on housing affordability from politicians located in one of the world’s most expensive housing markets: London?
According to the latest Demographia housing affordability survey, released yesterday, London’s Median Multiple (median house price divided by gross annual median household income) is 8.5, which makes it the 12th most expensive housing market out of the 406 urban markets assessed across nine countries.
Ultimately, there are a whole bunch of policy measures that the Turnbull Government could implement to make housing more affordable for Australians, and these reside on both the demand and supply sides. These include:
- Slashing immigration to sensible and sustainable levels;
- Tax reforms;
- Tighter rules and enforcement on foreign ownership;
- Land-use and planning reforms; and
- Reforming rental tenancy laws to give greater security of tenure.
Unfortunately, the Turnbull Government has ruled-out any demand-side fixes and has effectively pushed supply-side reform onto the states, without providing the states with funding and resources to cope with the population ponzi that it created.
If anything, the Turnbull Government has shown a determination to juice demand even further by priming the immigration pump via allowing 6 year-olds and their guardians visa entry into Australia’s primary schools, as well as freeing-up rules to allow migrants to bring into Australia their elderly parents – both of which will further boost housing demand (other things equal).
In short, the Turnbull Government has zero genuine interest in addressing housing affordability. And Scott Morrison’s latest London junket is merely another smokescreen designed to divert public attention away from the major issues, as well as give the impression that the Coalition cares about housing affordability.
