Michael Pascoe has written a good ripost today of the Coalition’s Inquiry into foreign investment in Australian property, arguing that it will be a toothless tiger aimed squarely at appeasing community concerns rather than taking concrete action:
…when wanting to be seen to be doing something about an issue without actually doing anything about the issue, hold an inquiry.
Meanwhile there are serious problems about Australia’s housing affordability that an inquiry won’t go anywhere near. There are the bad tax policies, the inefficient and simply dumb local and state governments, the gormless politicians unwilling to take on the NYMBYs and the low level of public housing investment. But the terms of O’Dwyer’s little sideshow means that big stuff won’t have to be faced…
But it’s hard, that tricky open-ended issue of housing affordability. Opening up the very smelly can of worms might mean the government would be challenged to actually do something, starting with tackling the distortions and disincentives built into the tax system. For starters, hands up what politician want to embrace a broad, no-exceptions land tax? Who wants to reduce NYMBYs’ local power? No hands are visible among those interested in holding or winning government.
Pascoe does not seem to be aware that there is currently also a Senate Inquiry taking place into affordable housing, which will presumably examine tax distortions, supply constraints, and the like. Regardless, it too is likely to be a toothless tiger.
It is nearly 10 years to the day since the Productivity Commission released its first home ownership report. In fact, as argued recently by Cameron Murray, “in the past decade almost every government body, at every level of government, that has any function related to any aspect of housing policy, has conducted similar inquiries. With zero results”.
Moreover, all we have heard so far from Treasurer Joe Hockey and Prime Minister Abbott on housing are ringing endorsements of Australia’s housing quango, which pumps demand and chokes supply. This suggests that housing affordability is unlikely to come into the Government’s focus anytime soon.
