Morrison hoses super/housing fix

Via Domain:

Treasurer Scott Morrison insists the federal government has no proposal to allow first-home buyers to tap their superannuation for a deposit.

…Mr Morrison told parliament the government had no proposal along those lines in its housing affordability package, which will be delivered in the budget.

“The only party that has put that forward in a formal sense to an election is the Labor Party,” he told MPs.

He noted Mr Keating in 1993, as part of his election platform, recognised income and housing were equally required for a secure and comfortable retirement, and Labor would permit part of a deposit on owner-occupier dwellings to be funded from the homebuyer’s superannuation.

Earlier Finance Minister Mathias Cormann refused to buy into pre-budget speculation.

“To the extent there is a housing affordability challenge it is because demand exceeds supply, so obviously we want to boost supply, not boost demand,” he told reporters.

“You can draw your own conclusions there.”

It doesn’t seem terribly praiseworthy to not do a really bad idea but in today’s politics it is. Well done Mr Morrison.

Comments

  1. proofreadersMEMBER

    “To the extent there is a housing affordability challenge …” So, effectively Cormann is doubting there is one?

    ” … it is because demand exceeds supply, so obviously we want to boost supply, not boost demand” Well, that is good news? He doesn’t want to boost the immigration and specufestor ponzis (demand) any further (but keep them at world-beating levels, which position the Feds could quickly cut).

    Rather, it’s all about boosting supply which has a very long (read infinity) lead time (even if we allow in boatloads of tradies on 457s), while you keep the aforementioned ponzis going.

    LOL.

    • He knows there is an issue. This is an admission. Like Byers, he can’t bring himself to utter “the B word”.

      • proofreadersMEMBER

        Byres might vaguely know that there is an issue, but Cormann wishes to remain clueless?

  2. Government is now scared of the bubble. Expect borrowing in SMSFs for housing to be killed also.

  3. Has the rhetoric changed? They are also taking about demand now, something’s got them spooked

    • I think that super-for-housing was a bit of policy kite-flying by way of rumour in order to gauge public perceptions.

      They saw a massive bite-back from all corners and “demand” was frequently identified as why the proposal was stupid. They now know that the electorate will not fall for another demand-boosting measure (as much as they would have loved to release one) and so they are changing course.

      Make no mistake, however, the name of the game is still bubble-maintenance/bubble-management.

      • “gauge public perceptions”
        Not sure this has ever been applied by MT or Scomo
        Public Perceptions are for these incompetents to be locked up for self interest

    • Investment by Chinese firms in offshore properties — which has helped fuel sharp and often contentious home price rises from London to Vancouver — tumbled 84.3 percent in January from a year earlier, the commerce ministry said on Thursday, without giving the amount invested.

      http://www.reuters.com/article/us-china-economy-fdi-idUSKBN15V0DB

      Probably the last and most powerful source of funds from China into foreign real estate was shut off a few days ago.

      It really is over. The Chinese bid was massive, insane and its now just gone. The government, banks, FIRE all know it and are absolutely panicking.

      The plan in Australia genuinely was to just keep it rolling along in a ponzi scheme. This is evidenced by the China rhetoric from a few years ago, that China would keep growing forever – all stopped. Now watch the demand and supply rhetoric change.

      http://www.reuters.com/article/us-china-shadowbanking-fund-idUSKBN16R03P

      • Yawn. These are lies. The foreigners are still buying. A lot. At high prices.

        Please post again when you have real data.

      • No. Chinese money is still flowing.
        After January lending exploded to nearly 4 trillion RMB Chinese money flow indicators are flashing red.
        Offshore housing (including here), HK housing, Macao casino revenues etc etc…

        The Chinese Government has made moving money offshore harder but not completely forbidden it. Those who can are moving hard to get their cash out as the door could really slam shut at some point over the next 6-12 months, most probably after the party conference in August-Sept.

      • @Peachy
        High growth of housing price == Chinese buying? Look at the Australian bank credit growth rate. This one is on us.

    • MediocritasMEMBER

      I’d suggest that it’s this: http://www.zerohedge.com/news/2017-03-19/bank-loan-creation-crashes-fastest-pace-financial-crisis

      Aggregate demand is a function of credit (something mainstream economists don’t seem to understand).

      http://www.debtdeflation.com/blogs/2016/07/05/inequality-debt-and-credit-stagnation/

      This is a big fat red alert….and the Fed RAISED rates into this? I laughed. It’s as if they’re deliberately trying to crash the economy again. It effects us because if the US sneezes then the whole world catches a cold.

  4. It doesn’t seem terribly praiseworthy to not do a really bad idea but in today’s politics it is. Well done Mr Morrison.

    How about they determine policy in cabinet and then the halls of democracy rather than floating them in the Murdoch owned press to gauge reaction.

    Its a disgusting way to govern and requires nothing less than utter scorn and derision – there is no place, for any praise for the worst governance this country has ever had – ever. In all of living memory. It verges on the worst, most inept small failed states of the third world and under no circumstances deserves even patronising praise.

    • MathenomicMEMBER

      You’ll fit in well here with that attitude; the vehemency is perhaps more than we’re used to though.

  5. Accessing super for housing still seems like the most appealing solution because it directly encourages/rewards you for working. Sounds like it will be “rent to buy” now?

    • What ?

      How about limiting negative gearing and capital gains tax. You know – like every other nation on earth.

      • Those are good ideas too.

        But we really need a multi-pronged approach here. Making Super more tangible/productive for FHBs should be a part of that. It’s crazy how much of FHB’s hard-earned money is tied up in super, where it can’t actually help them.

      • FFS Kipron – allowing super for housing will only inflate prices by a multiple if that super deposit.

        The answer to affordable housing is lower prices driven by removal of the demand side drivers: lower immigration, macroprudential rules, removal of tax distortions, fixing up barriers to mobility and curbing foreign investment.

    • Kipron your comments across the board are without thought and analysis, I am not sure if it’s that MB is not publishing enough free posts with full analysis or you are not here to add value. With your argument why not just scrap super and let people take that money home and do what they want.

      There is also enough material on internet to add more thought . Hope it helps – http://mobile.abc.net.au/news/2017-03-16/super-for-housing-deposits-intergenerational-theft/8360890

      • Amit, I’ve been reading MB for years, but I don’t have an economics background so my comments will probably never have the depth that you’re after.

        I’ll admit to being a “freeloader” btw, and apologise for having unpopular viewpoints. But you have to admit that my views do reflect a huge fraction of the voter base. If they didn’t, we wouldn’t be having this conversation. Fyi I don’t like the bubble either, and hope I haven’t contributed too much to it. I work very hard to pay off a (very modest) mortgage, this also means I don’t have spare cash to pay for news subscriptions.

      • I’ll admit to being a “freeloader” btw, and apologise for having unpopular viewpoints. But you have to admit that my views do reflect a huge fraction of the voter base.

        I agree with this except the freeloader part, I dont have any problem with being freeloader and commenting! My frustration is that this simple math is not clear to public that housing affordability is about prices not about your capability to repay at todays interest rates. I get this argument very often and its painful to hear from people in good analytical jobs – seemingly. So super and other fixes are just about paying peter to pay to paul, if Morrison really wants us FHBs to be part of it then let us deduct interest from our tax like investors so I can rape the tax system like reusa too.

  6. It’s the Chinese bid which is going down and they know it. If you were a FHB for last few years then you will know how Chinese bid and population are the backbone of this bubble along with investors. It’s time now to exit this bubble which the Govt is making sure is handed over to FHBs of which there are many(including recent migrants).

    I was recently given a LMI option for a 2m+ loan and the referral for that came from an agent( whose property I was bidding for) he thought I need to up my bid and my current bank hasn’t evaluated my eligibility correctly. I have never received so much airtime from these parasites before.
    Ignore the typos.

    • 2M+ loan?? Would you mind posting roughly what your income is? Not trying to be nosy, I just get scared by the madness of the financial sector. When I took a mortgage 4 years ago NAB offered me around 7x joint (gross) income. I took around 2x

      • They seem to be working based on your capability to pay & not the times of income, which means with lower rates you can take a bigger loan which to me doesn’t make sense for a loan for 30 years not 5. So anyone who can pay 6K & leave 2K for expenditure can get get more than 1m in loan, figure rest out. With LMI I always thought that its for loans worth 1m or less as my bank said, apparently small ADIs are issuing it for any amount – scary.

        additionally I am zero debt too.

  7. I disagree with the anti-super deposit party. Investors have an equity / tax advantage, foreign a cash adv (and corruption risk), but first home buyers have weakness on all fronts. It can only drive up prices so far before FHB are out of the bid any how, but if you chose to buy in regional for example, you’d be fine. Even those with cash / tax advantages have a ceiling – I have seen a few auctions in inner Melb where people just aren’t bidding, the value is not there, even though the cash is ready…….. so no – its not that simple as driving up prices. Fair value is still a factor. The market is cooling, China is clamping down on $$$ leaving and corruption (seen to be)………. A boost to FHB may be what’s needed – but it won’t happen! Thank God Daniel Andrews is all over this – and thank God for States going their own way.
    I’d rather bricks over share spread super any day.

  8. Calling bullshit here: “The only party that has put that forward in a formal sense to an election is the Labor Party,” he told MPs.

    He noted Mr Keating in 1993, as part of his election platform, recognised income and housing were equally required for a secure and comfortable retirement, and Labor would permit part of a deposit on owner-occupier dwellings to be funded from the homebuyer’s superannuation.

    WHAT ABOUT SMSF’s? Commenced in October 1999 and quickly opened to leveraged borrowing under Howard/Costello.

  9. The best solution to this problem is to do nothing.
    Let the problem sort itself out- LET THE MARKET DO ITS THING. No intervention whatsoever.
    When the correction comes- leave it alone.
    This mess has been created by intervention. No more please.