Scott Morrison has continued the charade today that Australia’s housing woes are all about a ‘lack of supply’, all but ruling-out reforms to the demand-side. From The Canberra Times:
Treasurer Scott Morrison has hit back at suggestions the government should tighten tax breaks for investors to improve housing affordability in Australia, arguing increased supply is the best way to manage the problem…
Speaking to ABC radio on Wednesday morning, Mr Morrison said: “The big issue driving the mismatch in house prices around the country are supply and demand”, before taking aim at the Labor Party’s negative gearing and capital gains tax policies.
“You’ve got one set of circumstances in Perth, and for that matter South Australia or Tasmania, negative gearing and capital gains tax concessions exist there as well, and property prices in Perth are going the other way, or have been,” he said.
“In the eastern states you’ve got a very different response, even on the east coast you’ve got a different market in Queensland to Sydney and Melbourne. The idea that you should be focusing solely on broad tax policies that impact every market, and will impact it differently, you’ve got to be very careful about this.”
Righto, so because negative gearing and the capital gains tax (CGT) discount exists in Perth, and prices are falling there, they don’t have anything to do with housing affordability? Nice strawman. Pity the ABS’ housing finance data shows clearly that investor demand is turbo-charged in Sydney and Melbourne, thus reform would have the greatest impact in these markets:
What about mass immigration? As shown in the next chart, population growth is turbo-charged in Melbourne and Sydney – where prices are ballooning – but has crashed in Perth – where prices are falling:
Surely then, reducing Australia’s immigration intake – which flows primarily into Sydney and Melbourne – is an excellent way to curb house prices and relieve the pressures on infrastructure?
No. According to Morrison, you can forget about demand-side pressures like excessive immigration, tax lurks, or excessive foreign demand. It’s all about supply. And supply, conveniently, is the responsibility of the cash-starved states, who are unable to cope with the mass immigration policies of the federal government!
What a pathetic excuse for a Treasurer we have. Instead of taking responsibility for the housing crisis – which has been caused primarily by daft federal government policy – Morrison continues to obfuscate and shift the blame.
