The Coalition housing affordability phonies

Advertisement

By Leith van Onselen

Prime Minister Malcolm Turnbull moved fast to do-nothing on housing affordability, yet again blaming the states for the lack of supply in yesterday’s National Press Club Address:

Ensuring more Australians can afford to buy a home is a priority. There are no quick fixes or silver bullets.

We need more dwellings, and better transport – road and rail – because distance is measured in minutes not kilometres.

That’s why our initiatives to encourage the States to fix their planning laws and make it easier to get development approvals are so important.

As are our City Deals, a key objective of which is to deliver more dwellings, in absolute numbers and in supply of affordable housing.

Big projects like our Western Sydney Airport will play a big role, as will planning reforms – a lot more to come on housing this year.

No mention of Australia’s perverse tax settings that incentivise speculators, push-up home prices, and crowd-out would-be first home buyers?

No mention of the federal government’s mass immigration program, which has flooded Sydney and Melbourne with new residents, caused much of the imbalance between supply and demand, and crowded-out incumbent residents?

Advertisement

No mention of the bald-faced lying in support of negative gearing.

No mention of the Property Council of Australia Treasurer or a Coalition backbench neck deep in property holdings.

No mention of a housing affordability inquiry with zero recommendations.

Advertisement

Here’s a novel idea, Malcolm. If you want to restore balance to housing supply and demand, how about addressing the perverse tax incentives that are driving up speculative demand, as well as slashing Australia’s immigration intake to sensible and sustainable levels? It’s not rocket science.

And here’s another suggestion: instead of blaming the states for their cumbersome planning processes and lack of infrastructure investment, how about you actually do something about it?

Just last month, Treasurer Scott Morrison hypocritically ruled-out providing incentive payments to the states to encourage them to reform their land-use and planning systems in order to free-up urban land/housing supply.

Advertisement

This comes despite the Harper Competition review identifying Australia’s anti-competitive land-use and planning regime as creating “considerable barriers to effective competition by constraining the supply of urban land”, and recommending that the federal government provide incentive payments to the states to bring about reform.

Given the massive vertical fiscal imbalances present in the federal system, the predictable result to the federal government’s mass immigration program has been for state governments to prevent growth of the urban footprint in an attempt to save on infrastructure costs, simply because they cannot afford to fund this growth without federal financial assistance.

Put simply, if you genuinely care about boosting supply, Malcolm, then you must provide the states with funding to cope with the population growth bestowed on them by your mass immigration program.

Advertisement

While you are at it, instead of giving away tens-of-billions of dollars to foreign owners/shareholders in the form of company tax cuts, how about using that funding to replenish Australia’s depleted infrastructure stock?

Just last weekend, it was revealed that the Coalition Government is falling well short on infrastructure spending, which is threatening growth, jobs and living standards, not to mention making the housing affordability situation worse.

To maintain the throttle on population growth, while at the same time refusing to undertake the necessary associated investment, is a guaranteed recipe for destroying housing affordability and Australian living standards more generally.

Advertisement

The Coalition is a complete phony on housing affordability and Do-nothing Malcolm is the corrupt cop policing it all.

[email protected]

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.