Labor versus the giant Australian Vampire Squid

Anybody that has read Matt Taibbi’s legendary take on Goldman Sachs will remember this:

The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

Over the years I’ve offered my own version of this colourful metaphor in my descriptions of Australia’s “politico-housing complex”:

Australian housing and finance doesn’t have anything to do with economics. It long since ceased being a “market” at all.

Rather, it is a political complex – a quango – that represents the single largest page in the socio-economic contract between the government, the banks and an ageing baby-boomer population.

When the baby-boomer generation first took power and reshaped Australia in the 1980s, the promise was for a new kind of meritocracy.

The old “Australian Settlement” described brilliantly by Paul Kelly in The End of Certainty – a protectionist social contract between unions, industry, government and the people – was swept aside in favour of a neoliberal vision.

The new world demanded an open, more dynamic Australia. An Australia that rewarded entrepreneurial effort and flexibility. A productive Australia.

For a while it worked. Australia dropped its tariffs, deregulated government enterprise, most especially the banks, and after a false start at the end of the eighties, embarked on an historic productivity boom.

But at some point a distortion began to grow at the heart of the new vision. Its dark seed was sown by the original architects of the new world when they back-tracked on the removal of negative-gearing tax policy for housing in the ’80s.

By the late 1990s it had become a cancer eating away at the achievements of the baby-boomer generation and a second wave of bipartisan supporters of the new vision took power only to further deregulate finance and install fabulous capital gains tax privileges on property investment.

As we entered the 2000s, the new vision threatened to dim and the same baby boomers that had convinced us all to embark on their neoliberal journey deployed new, more direct subsidies for houses, in the form of first-home buyer grants that sought to co-opt the baby boomers’ children in the same now rapidly distorting vision.

Through the 2000s, the neoliberal vision became virtually unrecognisable. The dynamic and open Australia mutated into a speculative abomination based almost entirely on houses.

Our precious capital, freed in the ’80s to find the most productive outlets possible became instead the keystone in a system of offshore borrowing and asset inflation.

The final death knell of the new vision surely came in 2003 when the old national good luck arrived in the nick of time.

As the housing quango lay dying in 2003, along came a commodities boom the likes of which nobody had seen in century. The transformation was complete.

The entrepreneurial vision of those pioneering ’80s baby-boomers replaced with happy-jack dirt salesmen and a bloated entitlement state that now had the money to keep its most hideous progeny alive, the great, quivering housing sack hung from its belly.

That’s the history. You will note that it is more clearly defined by a generational and sectoral conflict than it is any traditional political division. One can’t point to either capital or labour, or their notional political representatives, as more responsible for the complex. It was Labor that restored negative gearing, Labor state governments that restricted land supply and introduced state level demand stimulus, it was a Labor government that bailed housing out in 2008. It was the Liberals that cut capital gains tax, introduced demand stimulus measures at the Federal level and gutted prudential regulation such that banks could lend on far higher leverage than was historically the case. Both parties have pursued rabid population growth.

But, that’s no longer the case. As we push towards the Federal election, suddenly we do have a real choice. Driven by solid economics in addressing the post-mining boom adjustment and by concerns for equity in the tax system, the Australian Labor Party has a platform that will deliver a heavy blow to the politico-housing complex by cutting negative gearing, rebalancing housing favourable capital gains taxes and delivering a royal commission into the malfeasance that has permeated the entire value chain of banking services, from interest rate manipulation, to financial planning and insurance scandals, not to mention regulatory observations of lending recklessness.

Yet it won’t come easy. Labor’s policies poke a sharp stick into the fleshy abdomen of the complex and from its compressed meat suddenly has sprung a frenzy of thrashing tentacles in response. Australia’s own vampire squid is loose, seeking purchase on our faces, blood funnel jamming at the collective mouth. At its bulbous head is Prime Minister Malcolm Turnbull, Goldman Sachs alumnus, outrageous liar, and the new champion of Australia’s version of what is good for “Wall St is good for Main St”, from his Facebook page yesterday”:

Kim and Julian Mignacca have used negative gearing to buy property and invest in their family’s future.

Kim is a social worker and Julian is a plumber. They are a young couple with a baby girl and they have invested in real estate in order to get ahead.

They are like thousands of other Australians who negative gear – two thirds of whom have a taxable income of less than $80,000 a year.

Labor wants to eliminate negative gearing on existing residential property, commercial property, shares- in fact on every type of asset except a new dwelling.

This will reduce property values, it will increase rents and it will make it harder for people to get ahead.

And if that’s not bad enough, Labor wants to increase capital gains tax by 50 per cent which will mean less investment right across the board.

Consider for a moment how formidable this many-tentacled complex now is. The Prime Minister is a former banker, Treasurer Scott Morison is former head of research at the Property Council of Australia. We know that the clenching limbs of RBA and Treasury both seek to protect the housing bubble that they blew as an offset to the mining bust they never saw coming. Treasury is headed by another former banker in UBS wealth doyen, John Fraser. Landed and negatively geared back-benchers dominate both parties though especially that of the Government.

Mirroring this in the private sector is the Property Council of Australia as it devises election advertising that will school every property parasite in the country. The big bank unguis has a thickened hide and musculature so broad that it chokes the national narrative, as a corrupt media – dependent upon its own real estate businesses and bank advertising for survival – flagellates between moments of clarity and vomiting great clouds of obfuscating ink in support of its own profits.

Even the law appears to have been vacuumed up the politico-housing complex funnel, as what were sensible new foreign buyer property laws governed by the ATO have suddenly been muffled by the Turnbull Government sucker fastened to its face.

Labor, and the reform needed in the national interest, is wrestling a giant rent-seeking kraken that has rooted proboscises in every crevice of our social democracy.

But all is not lost. As the Labor platform emboldens resistance, the screeching Australian Vampire Squid is drawing the attention of a shocked political centre and polls for the unctuous suckhole are falling fast. Several titans of mainstream media commentary have already condemned it. And over the weekend several more ripped to shreds Prime Minister Turnbull’s latest banking policy constrictor, the fix he’s put in at ASIC. First, Adele Ferguson:

The IOOF whistleblower who was sacked after using the company’s internal whistleblower policy to reveal serious misconduct, is adamant the latest reforms to ASIC and suite of bank promises is no substitute for a royal commission.

The whistleblower, whose identity is well known to IOOF but who requested anonymity for privacy reasons, is “frustrated with ASIC’s obvious lack of motivation”.

He gave the regulator 59,000 documents almost a year ago, after alleging front running by a senior executive, cheating on exams and misrepresentation of outperformance numbers.

He says he has had little contact except for a few emails and a 35-minute meeting, which was organised after he wrote a complaining email to ASIC chairman Greg Medcraft that he had heard nothing from the regulator since reporting the matter.

This is what happens when there’s no transparency with the public, especially for whistleblowers,” he says. “They just get shafted because it’s easier to shaft one person than a billion dollar-plus institution,” he said.

It is why a royal commission is important, “to investigate the problems in an open arena”, the IOOF whistleblower said.

Absolutely right. These whistleblowers have the moral grit that our prime minister lacks. Put them in charge! Second, Alan Kohler tore into ASIC’s Greg Medcraft at The Australian:

The government should have sacked ASIC chairman Greg Medcraft, not extended his term to implement the changes recommended by the “Capability Review”.

That’s not because he has done a bad job, but because he’s not going to reform the organisation. Medcraft and ASIC have rejected the panel’s key recommendations on governance and culture. The government has therefore kept him on in order not toimplement them.

Not only will ASIC’s governance and culture not change — as urgently recommended by the review led by Karen Chester — its budget will be barely increased: it’s $121 million over four years, half of which is to go on capital equipment, which means about $15m extra per year, or less than a 5 per cent increase (plus $6m to Treasury for its trouble).

And that money doesn’t even come from the government. It’s to be funded by the banks — all of them. No wonder the banks are happy and have promised not to pass the cost on to customers: they won’t even notice it.

But you wouldn’t know any of that from Scott Morrison’s media release and press conference on the subject.

The Treasurer’s and Greg Medcraft’s performances this week have been among the most mealy-mouthed, weaselly pieces of spin ever seen in public policy, which is saying something.

It sure is and well said. There is one other that should be sacked: the person responsible for hiring Medcraft in the first instance. Prior to his appointment, the ASIC chief was a founder and CEO of the American Securitisation Forum, the industry peak body and chief lobby for the subprime succubus that leeched the US economy. Medcraft’s former organisation, of which he is an honorary lifetime member, was so central it had a starring role in the movie The Big Short.  ASIC under Mr Medcraft, and the Government’s support for him, is only further evidence that the giant Australian Vampire Squid is tightening its grip.

Matt Taibbi’s metaphor was pointed. He used it to define a parasitic bank that represented an over-weened financial sector in the United States, a bank that no longer allocated capital most efficiently in the economy, instead allocating it most aggressively to itself. Taibbi’s vampire squid fed on the economy rather than boosting it, and prevented the host from fighting back by occupying the positions of power that might inhibit its gorging.

The Australian Vampire Squid is much the same if more diffuse. It’s not one bank or institution, it’s congealed support by regulators, bankers and politicians for a financial system that long since stopped functioning as it should. Some time around the turn of the millennium it’s core function morphed from discerning distributor of capital for entrepreneurs and business into a caustic mortgage gusher that consumes commerce. These days it is so bloated from feasting on economic tissue that Wall St looks positively slim by comparison:

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The forthcoming election is our last chance to voluntarily prise the Australian Vampire Squid from our vital organs before it sucks them dry. After that, as we know, parasites die with the host.

Comments

  1. ceteris paribus

    Prose more purple would crash the spectrum. Today, HnH, you are the Jimmy Hendrix of colour.

      • ErmingtonPlumbingMEMBER

        Is the picture at the tab to this article, suppose to be an Arsehole or an Octopus?

      • Stewie GriffinMEMBER

        Your

        “Australian housing and finance doesn’t have anything to do with economics. It long since ceased being a “market” at all….”

        Remains one of my favourite descriptions of Australia and for where the culpability of our current predicament lies, of all time.

      • @Stewie Yes, we are more a centrally planned, debt-based economy with no hint of a market anywhere in sight when getting right down to it. A market might allow for vested interests to lose every now and again and we can’t have that in Australia.

  2. I am pleased that you now agree with me H & H. Unlike last year when you and your Macrobusiness colleagues did not. That is:

    “Prime Minister Malcolm Turnbull, Goldman Sachs alumnus, outrageous liar, and the new champion of Australia’s version of what is good for “Wall St is good for Main St”

    I have great respect for your commentary and your frequent insights.

    The next step is for you to agree with me that Land Tax is an insidious tax..Look at what is happening in Canberra State now!

      • naturaltrust is attempting to hide the clear fact that the only thing he posts about is his anti land tax agenda.

      • Mav and Lord Dudley: I cannot see anything of substance in your comments to which I can reply. Please resubmit your comments in such a way that they are intelligible to me and relate to my subject matter; and I will be glad to reply

      • Naturaltrust – can you declare any property holdings and land holdings you may have that would mean you have a conflict of interest.

      • Dear aJ,

        All people are free to comment regardless of their income or investment sources. If you have an interest in economics, or earn your income through earning a wage then are you precluded from commenting on economic matters or income tax matters?

        I think not.

        You seem to be attempting ad hominem rather than useful comment.

      • I’m just pointing out (as we all know as it has been raised before), that you have an undeclared vested interest. How is that unreasonable.

  3. Great article. The big picture is surely the usurious nature of fractional reserve banking and also how corporations have evolved into superior beings than people and governments. A royal commission is welcome but until the public know what FRB is and that it should be stopped, the banks will always win and always have enough money to own our government.

  4. Sticking with the ‘parasite’ analogy. In nature the parasite is often attacked by small specialized creatures whose system of becoming aware of the threat and adapting a strategy or co-ordinated attack by an overwhelming number of said organisms.

    The extent to which MB has contributed to our collective defense is one that will receive its due recognition, true believer;s in the value of a fair go for all.

    All power to you Gentleman !

  5. Tiliqua scincoidesMEMBER

    Weird thing is that Julian and Kim are good friends of my brother. They have done very well for themselves and basically have $950k in equity.

    Julian dodged a tonne of tax by taking cash jobs and using the money to make improvements to a place in Penshurst and a unit in Cronulla. They then sold both a few months ago and used the equity to purchase a place in Oatley (area of huge Chinese demand) that he plans to develop into multiple residences.

    That’s not to say they haven’t worked hard. My brother describes Julian as one of the hardest working people he knows.

    If property goes to shit he’s in trouble as he’s all in on the place in Oatley. If not he stands to make even more gains. A few weeks back a very average 3br in Oatley sold for over $1.7… Crazy if you ask me.

    • So tax evasion then eh? Not sure if it’s true or not, but what is true is that Aussies love dodging tax. As one of those who wasn’t in on the game, I’m here to say enjoy the decline!

    • Tiliqua scincoidesMEMBER

      I should say that he allegedly dodged tax. Obviously I’m only relaying something I have been told and do not have first hand knowledge.

    • If he makes a mint on his new residences, he’ll probably reinvest that money into more property. How many people take profits and walk away? This is how people ruin themselves.

      • Indeed. Look at a whole bunch of coal millionaires who rode the cycle all the way and then all the way down.

    • No, they are clearly fictional and you are a paid troll trying to hide that fact. Who’s ever heard of a social worker marrying a plumber?

    • Mining BoganMEMBER

      There must be someone from the ATO who drops in here for a squizz. There’s some easy pickings for ya.

      *waves at the ATO*

      Too bad it wouldn’t make news before the election.

      • @TS People like Julian (and the bigger fish) in the Labor party are why the housing quango has run so far. There is money to be made by the working man in this scheme… in the short term.

      • That’s the problem isn’t it Mining Bogan – they’re not “easy pickings”. It’s the wage and salary earners who repeatedly cop it in the neck because they are the soft targets. I accept there must be a share of small business owners who do the right thing too, and hats off to them.

        Meanwhile, those who evade tax justify it to themselves in numerous ways, all of which ignore the fact that ultimately whether you agree with a shitty tax system or not we all subject to the rules as they stand, and they are doing nothing more than enriching themselves at the expense of others. They are not harder working or harder done by. Just dishonest.

    • Oatley is going to shit because of builders splitting blocks for chinese investors – he will be working hard to make a profit however

  6. So where to now? You’ve got a declining mining sector, a massive housing bubble, and nothing else. No one wants to be the one to burst the bubble; it’ll be a once in a century downturn. I wonder if Turnbull/ScoMo will become desperate enough to tell a half truth: Labor’s reforms could very well trigger a massive painful downturn that will leave the Australian economy in ruins (the unspoken truth is that the Oz economy is already in ruins, it’s just a question of how much further damage will be done before it becomes apparent).

    I’m bloody glad I got my family out of there. If it blows soon, it will be a real mess. If it blows later, an even bigger mess. There’s a LOT of pain in store for somebody.

    • What worries me more than the bubble bursting, is the bubble not bursting!
      If this bubble is somehow sustained the consequences for the broader Aussie economy are indeed dire.
      Imagine the median Sydney house sells for $3M in 10 years time yet median wages remain below $100k. We’re less than 10 years from this absurd situation yet our federal policy is doing everything possible to jam the rudder and ensure we stay the course. Even if we had an optimal policy for productive growth of new industries, there is a lag of at least 3 years to 5 years before businesses will even begin to leverage this optimal policy. Outside of mining Australian businesses (especially our tech businesses) are starting from zero, most Aussie companies dont have any/many international customers, most don’t really understand the global market, they make the right neoliberal noises but when it comes right down to it the managers dont understand global markets. They simply dont comprehend the winner takes all nature of modern high tech business. As I’ve said before there’s typically only room for 3 profitable participants for any global high tech product. ( the first guy makes 80% to 90% of the profits, the second makes about 20% of the profits and the third guy makes 10% or more often just breaks even). Everyone else in the sector looses money! If you aspire to be a player than you need the depth of capital to see you through the period until you displace the existing number 3 player, but more important than that is the understanding of what’s needed to become number 1. It’s not about today’s products it’s about intersecting the product curve 5 years from now with exactly the product that the market needs AND the cost structure and market/support regime to deliver what you’ve promised / dreamt of achieving.

      So policy wise we’re locked and loaded for another 10 years, all I can say is, god help Australia if the recent past is prologue.

      • From my perspective:

        – It blows sooner, then the fallout won’t be as bad (bad, but less so).
        – It blows later, I earn more before getting out of Oz before the collapse.

      • C-Bob….

        Noone has recovered from the GFC … its just been one huge plate spinning effort …. then you have the geopolitical dramas w/ increasing environmental changes…

        Skippy…. blowing things up won’t change any of that… save the people hoping to short it …. pay day – $$$$

      • Ronin8317MEMBER

        I can see that happening with negative interest rate. No need for income when the banks pays you to borrow money!!

      • “Imagine the median Sydney house sells for $3M in 10 years time yet median wages remain below $100k”.

        That’s impossible. At the same rent/income ratio that would imply a median gross rental yield of about 1%…
        There is a disconnect on this topic. People say it is a bubble, then they say first home buyers are going to be permanently priced out, prices will increase 15% p/a forever. No, if it is a bubble it will burst.
        It’s the contradiction at the heart of Turnbull’s message which not one journalist has taken him up on.
        Supposedly current prices reflect expected resale value – the price negatively geared investors (by definition only buying for CG) are expected to pay whenever the current buyer expects to sell. That is a textbook definition of a bubble. So what is Turnbull saying? Yes it’s a bubble but we want to maximize the bust?

      • @Sweeper That’s impossible
        Ahh NO it’s not Impossible, improbable it might be but it’s definitely not impossible.
        But that’s not my point, my point was there’s just no time left for Australia to play this game without the inevitable failure have very sever economic consequences. Truth is Australia was running out of time 12 years ago, and than along came the mining boom to rescue, or impoverish us (depending on your take). I implore you to take a deep dive into Australia’s resurgent export services industry, tell me what you find. Educational services (what a jokelets subtract the cost of permanent residency and see what the numbers really look like), Financial services (lol better named transfer pricing scams/ interest rate scams). There are some genuine export success stories but they are few and far between and even more disturbingly they typically dont leverage Australia’s human capital or our technical skills base. Our population is not becoming more proficient matter of fact in a global sense we’re stuck in reverse gear.
        Only one thing is certain: There will come a time when this tab needs to be paid.

      • CB, I agree. Why WOULDN’T average Sydney prices reach $3M while wages remain under $100K if we keep going along the same trajectory?

        Sweeper: “That’s impossible. At the same rent/income ratio that would imply a median gross rental yield of about 1%…” And that’s what’s happening now, with rental yields in some areas being 2%. With negative gearing and surging prices, what does it matter if the rental yield isn’t there if your property is going up by several hundred Ks per year?

        You say that if it is a bubble it must burst. I would have thought so too, but it’s been kicked down the road for years now, and can be kicked for many more. What you have to remember is that it’s not necessarily first home buyers buying at ridiculous prices, though they can be if parents, having become wealthy from soaring property prices, help them. But it’s mainly the upsizers, wealthy immigrants and local and foreign investors who are pushing these prices to the stratosphere.

        “So what is Turnbull saying? Yes it’s a bubble but we want to maximize the bust?” No, what he’s saying is, “I’ve been told what to say and if I want to stay PM then I’ll continue to say it. I really don’t believe what I’m saying but I’m hoping the scare campaign will work for my benefit.”

      • China Bob,
        I agree that the mining boom bailed the bubble out (or at least Sydney) in 2003 to 2007.
        Sydney house prices were able to flat-line over this period because disposable household income was growing at > 7% p/a.

        “But that’s not my point, my point was there’s just no time left for Australia to play this game without the inevitable failure have very sever economic consequences”.
        I agree with this to. However the severe economic consequences I foresee is a big crash. All bubbles burst, they have to. Because current prices reflect an expectation of future CG’s not supported by a realistic forecast of cash flow. As soon as CG’s fail to materialize, current prices collapse.
        People are contradicting themselves when they say “housing is a bubble, but prices will continue to grow at double digits, leaving first home buyers priced out and the country un-competitive”
        There is only way this ends.

        MD,
        “And that’s what’s happening now, with rental yields in some areas being 2%. With negative gearing and surging prices, what does it matter if the rental yield isn’t there if your property is going up by several hundred Ks per year?”

        It matters because if people are not buying for yield, they are buying expecting the next buyer to buy a lower yield, who expects the next buyer to buy a lower yield and on and on.. this is an unstable situation, which ends when the next buyer doesn’t foresee CG’s, because they can’t be justified by growth in yield.
        Also Lazard says the nationwide *net* rental yield is 2.2% (which is crazy). CB is talking about a situation where the gross yield is 1%. This can’t happen, assuming 100% equity finance, investors are all losing money, assuming the next buyer will be happy to lose even more money. It’s not realistic.

        “You say that if it is a bubble it must burst. I would have thought so too, but it’s been kicked down the road for years now, and can be kicked for many more”.
        No it can’t. Governments cannot control asset prices. They may be able to control consumer prices over brief period if they are willing to accept shortages and gluts (Nixon did it with his incomes policy), but not asset prices. Asset prices are based on expectations. To pin them down the state would have to commit to fixing returns for what 30 years? This isn’t credible or possible. The CB can’t even pin down long-term bond yields. There is no way they can control house prices.

    • Jumping jack flash

      Oh yes, this is exactly my argument LordDudley.

      When economic growth is directly linked to debt growth in the new economy, any changes so debt doesn’t grow will mean we have a recession.
      Any changes to property which means that additional debt can’t be secured against rising property values which are driven up by the additional debt, will mean debt won’t be able to grow, and we’ll have a recession.

      Its the recession we need to have (again) but what a recession it will be!
      Who is going to take responsibility? None of those sweaty lardballs we call leaders is going to do it. Not a one.

  7. The Traveling Wilbur

    Homeo and To-let. A tale of star-crossed lovers, their politically disagreeable relatives and repressive housing policy. Act I, Scene I – Turnbalt and Shortio disagree over taxing Houses in Verona.

    Shortio. Men’s eyes were made to look, and let them gaze; I will not budge for no man’s pleasure, I.

    [Enter Prospective Homeo-owner]

    Turnbalt. Well, peace be with you, Prospective Homeo-owner sir: here comes my man: Shomolock.

    Prospective Homeo-owner. But I’ll be hanged, sir, if he wear your livery Marry, go before to field, he’ll be your follower; Your worship in that sense may call him ‘man.’

    Turnbalt. Shortio, the hate I bear thee can afford No better term than this, — thou art a villain.

    Shortio. Turnbalt, the reason that I have to love thee Doth much excuse the appertaining rage To such a greeting: villain am I none; Therefore farewell; I see thou know’st me not.

    Turnbalt. Boy, this shall not excuse the injuries That thou hast done me; therefore turn and draw up your policy.

    Shortio. I do protest, I never injured thee, But love thee better than thou canst devise, Till thou shalt know the reason of my love: And so, good liberal,—which name I tender As dearly as my own,—be satisfied.

    [Turnbalt releases his no changes policy to taxing Houses in Verona.]

    Shortio. O calm, dishonourable, vile policy submission! Alla stoccata carries it away. 
    [Draws] 
    Turnbalt, you rat-catcher, will you walk?

    Turnbalt. What wouldst thou have with me?

    Shortio. Good king of fat-cats, nothing but one of your nine lives; that I mean to make bold withal, and as you shall use me hereafter, drybeat the rest of the eight. Will you pluck your policy out of his pitcher by the ears? make haste, lest mine be about your ears ere it be out.

    Turnbalt. I am for you.

    [Drawing]

    Prospective Homeo-owner. Gentle Shortio, put thy policy up.

    Shortio. Come, sir, your passado.

    [TURNBALT and SHORTIO fight]

    Prospective Homeo-owner. Draw, Electorio; beat down their weapons. Gentlemen, for shame, forbear this outrage!  Turnbalt, Shortio, the Dock of Mer expressly hath Forbidden actual policy debate in Verona streets: Hold, Turnbalt! good Shortio!

    [TURNBALT under PROSPECTIVE HOMEO-OWNER’S arm stabs SHORTIO, and flies with his followers]

    Shortio. I am hurt. A plague o’ his negatively-geared houses! I am sped. Is he gone, and hath nothing?

    Electorolio. What, art thou hurt?

    Shortio. Ay, ay, a scratch, a scratch; marry, ’tis enough. Where is my page? Go, villain, fetch a media consultant.

    [Exit. Page left.]

    Prospective Homeo-owner. Courage, man; the hurt cannot be much.

    Shortio. No, ’tis not so deep as a well, nor so wide as a church-door; but ’tis enough, ’twill serve: ask for me to-morrow, and you shall find me a pole-axed man. I 
    am peppered, I warrant, for this world. A plague o’ his negatively-geared houses! ‘Zounds, a dog, a rat, a mouse, a cat, to scratch a man to death! a braggart, a rogue, a villain, that fights by the book of frozen arithmetic! Why the devil came you between us? I was bowled-over due to your under arm.

    Prospective Homeo-owner. I thought all for the best.

    Shortio. Help me into some House Electorio, Or I must rent. A plague o’ both your negatively-geared houses! They have made worms’ meat of me: I have it, And soundly too: your houses!

  8. it’s amazing that after so many disappointments MB is thinking again that this time Labor will do something good and visionary.
    So much blind faith in the existing political system that clearly doesn’t function. Even at the very beginning in 80s neoliberalism was embraced not to reward smart and hard working but exactly to achieve what we have now. None in power ever thought that “new Australia” would or should reward anything but the rent seeking of the ruling class. Everything else was just fine marketing campaign.

    Maybe hope was at the bottom of Pandora box because it’s the worst of all evils, the one that prevents people from doing things that may actually change things. With blind hope (like the one from MB) we have no chance of ever getting anything better than the fake democratic system that benefits rich at the expense of poor (this includes those who think of themself as middle class) and at the expense of our environment.

    • I’ll be surprised if Labor doesn’t do something. They’ve hitched their wagon to this.

    • Voting only encourages worthless politicians and those that fund and corrupt them.

      Public discontent leads to settling for less through lesser evil voting rather than bold thinking about how to reform the system to get genuine political competition and better candidates and government.

      Voting gives a stamp of credibility to the political system, as if it was fair, when it is not. Voting says that you still believe that the political system merits your support and involvement.

      http://www.citizensamericaparty.org/breadandcircus.htm

      • That’s the biggest bull. Major parties would love nothing more if people who don’t like them don’t vote at all during the general election. If you don’t for the less evil, the worst will get in.

    • Sick of people stating ALP is just as bad when the opposite is staring them right at their faces. With LNP, not only will they crash the economy at full speed, they would have also gutted public education and health to the bubble as well.

      • And the ALP have for decades happily followed policies that support the politico-housing complex, that favour union rent seekers over a productive economy, that institutionalise high house prices, that support the banks, that support the foreign sale of our national assets (land, corporations, property).

        Rudd was the one that further opened the floodgates for foreign property speculators – primarily to maintain high house prices. Neither LNP or ALP has supported FIRB to prevent foreign sales of established houses.

        The major parties are the same. Can we talk about the NSW Labor right connections with property developers?

      • True, ALP do have some rotten policies, but only LNP is the one party that has these rotten policies PLUS a desire to destroy public education, health and other public good. LNP these days has 99% rotten policies.

      • aj, yes – under Rudd and Gillard, the bubble soared to new heights with policies specifically directed at growing the said bubble. At the same time Shorten was espousing his Big Australia policy – presumably to keep the bubble going and growing.

        But now we are presented with two opposing policies – one that will have some effect on removing distortions and perhaps lowering prices and the other wanting the status quo to remain i.e. keep growing the bubble at the expense of those priced out of home ownership. This time the choice is clear, and I’m saying this from the point of view of a long time LNP voter. No way will Turnbull get my vote this time!

      • Even now, the Labor party won’t actually come out and admit the issue is how unaffordable housing is. We have families loaded up with private debt, we have rich and geared landlords rent seeking off our most vulnerable and young, we have gross inequality in the property market, we have foreign speculators pricing out our own people.

        But not a peep about this… This is a dishonest debate by a party system that makes policy to get elected not policy as a platform for honest improvement.

      • @md
        Not all big Australia policies are created equal. One version is we should build infrastructure to accommodate more people. The other version is we spend no money on infrastructure, and import people to prop up the bubble and supress Australian wages.

  9. “… and they have invested in real estate in order to get ahead.”
    Getting ahead = an OO loses.
    Anyone who “invests to get ahead” is scum.
    This example appears to be near & dear and most apt for MT.

    • That’s what’s wrong with the whole country in one sentence.

      What ever happened to getting ahead through good, honest, hard work?

  10. @ Tiliqua scincoides
    You may want to get onto your brothers friend Julian and let him know that given the strength of feeling on this and many other sites, that someone may just have dial “0800 TAXCHEAT” ( or whatever your anonymous tip of to the ATO line is!). His only chance might be to ‘fess up now to avoid the fines’ that come with any poking about by them in his and Kim’s affairs. That’s the trouble with being in the lime-light; lights get shone…..and we’ve all had a peek at what your allegation is!
    Oh, and someone might want to alert Mal that his example of ‘what it takes’ is a bit suss as well. He wouldn’t want to be caught out on this, would he.

  11. So there we have it. The aussie “battler” – tax dodging their way into the most speculative and illiquid kind of wealth by selling out Australia’s future to foreigners for 30 shekels.

    Announced and paraded on ANZAC day. What a fucking joke.

    As for the thrust of the article; it was Labor who opened the visa floodgates in 2009. The same Labor who had a plurality in the houses and did nothing to push through AML laws for real estate. It was Labor who gave the banks a carte blanche backstop. It was Labor who knifed a sitting PM because he dared to stir the pot.

    Labor are bought and sold just like the Libs. The sham continues.

    • Labor opening the visa flood gate is a complete lie. The dramatic immigration under labor was owning to the PR scam policies of the Howard government. Just look up cake making and hairdressing etc migration at that time. It was Labor who saw the the scary numbers and shut this down.

      The other dog whistle was the number of refugees, which was another tactic by LNP to distract the population from their mass PR visa scams.

      Also, ALP was in the process of shutting down 457 scams left over from LNP under pressure from the unions, before LNP won and ramped that up.

      To attribute the false equivalence between LNP and ALP seems to be a favourite tactic of the unthinking these days. And probably the only palatable way of selling LNP these days.

      • Totally disagree. The labor right were bought and owned by the property lobby, and labor have not touched a thing in this space for decades…pure vested interest.

        It’s called the Laberal Party because it is – this is the first substantive policy difference on the politico-housing lobby (the biggest machine ruining the country) for decades and even this is soft and lazy. The Labor party has bugger all members (a fact they keep nicely hidden) and are as easily bought and sold by the lobby as the others.

        Don’t kid yourself. Labor died as Faulkner faded away…

      • Is not an opinion you can disagree. It’s a fact. Just have a look:
        1. Who created the sham hairdresser and cake making visas.
        2. Plot the number of PRs since the introduction of the visa.
        3. Plot the number of PRs since labor shut it down.

        Also who is to blame if labor has bugger all members? The Australian population. Why do you think it’s so easy to branch stack? It’s because the factions only need to buy off a handful of votes. If more people get involved in grassroot politics, the power brokers in the party wouldn’t have nearly as much influence.

      • They have no members because there is no point. Whatever it once was, Labor is dead, it sold its soul for the property dollar, and the corruption of the NSW right is a slime of rot that runs through the country.

        Look at the extreme nepotism. They are just an election winning machine with clever marketing.

      • aj…

        There are factions in both party’s and just saying dead is not fact, its your opinion.

        Disheveled Marsupial…. you might as well say Sanders is a right wing corporate Dem…

      • “Whatever it once was, Labor is dead, it sold its soul for the property dollar, and the corruption of the NSW right is a slime of rot that runs through the country.

        Look at the extreme nepotism. They are just an election winning machine with clever marketing.”

        No, the nepotism flourishes because there are no one to keep the corrupt operators in check. If there are 1mil active and caring members in each of the major political parties, they would not get away with this level of corruption.

      • Of course it’s an opinion – it’s a ‘term of art’ applied in a political context… The point that is being made is that the policies and ideologies that once characterised the Labor party (and that they still use extensively for marketing purposes) are no longer part of their core make-up.

        The party marketing reflects its actuality in the same way that picture of a fast food burger reflects the slimy greasy mess that is served up.

      • Was Howard that cranked up immigration under the cover of getting tough on refugee “queue jumpers” post Tampa. Labor, much to their discredit, merely kept it going.

        Having said that, it was Labor that implemented much of the Neoliberal economic reforms back in the 80s & 90s that got us here.

      • drsmithyMEMBER

        To attribute the false equivalence between LNP and ALP seems to be a favourite tactic of the unthinking these days. And probably the only palatable way of selling LNP these days.

        While I don’t subscribe to the “they’re as bad as each other” philosophy, I do think Labor is too capture by neoliberals and sundry other maniacs to be a useful political for good, anymore.

        After twenty years of runup, they jumped the shark in the early ’00s when they went chasing the far right vote on asylum seekers.

  12. interested party

    Have a think about this for a theory.

    Life has become a trade within a global hedge fund and we are all muppets.

    There are no more greenfield areas on this planet for the amount of cash in existence to be allocated,….so where does this cash end up? It is…. or should be….. no surprise that Australian RE and other select countries and cities are the focus of some of this cash and for all intents and purposes, I see it as a logical event and one that cannot be stopped. Money talks….. and when the PM of Australia sees everything through the eyes of a hedge fund and counter-parties ( voters??) as muppets then you should not be surprised as well.
    It ain’t stoppin any time soon, not while each and every one of us has a dollar sigh floating above us that only the 1% can see, and we are nothing but financial transfer agents to be managed, exploited, and kept ignorant.

    For my money……. there will be no housing crash…. too much spare cash chasing a home.
    And within the context of above, neg gearing gives Australians the only chance to retain some RE in Australian hands… it’s twisted…. I know.

    • Really? I lost the will to breathe….it is just as well I do it automatically.

      Edit: I have not lost the will to fart though. I will never lose that will. Ever.

  13. We have two choices:
    1. Take all the baby-boomers, stick them on an island somewhere in the south pacific, and free up jobs and housing for the youth of Australia and let the economy boom and get back to normal.
    2. Stagnate like dirty water in a neglected swimming pool.
    Since the baby boomers are holding the power cards at the moment, we all know where this is going… don’t forget your swimmers!