Yet again, ABC refuses to discuss population ponzi

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By Leith van Onselen

I noted on Tuesday how the ABC has recently displayed shocking bias in the immigration debate.

In late March, ABC’s The Link aired a shockingly biased segment whereby presenter Stan Grant tried to bully Dick Smith on immigration, aggressively dismissing Smith’s arguments and replacing them with a whole bunch of myths and faulty logic in support of a ‘Big Australia’.

ABC Lateline then aired a half-hour segment on housing affordability, which failed to even mention mass immigration’s key role in driving up housing demand and prices in Sydney and Melbourne, despite me cutting a monologue on this exact issue for Lateline, which the ABC left on the cutting room flaw.

Earlier this month, ABC The Drum aired a shockingly biased segment spruiking benefits from immigration without acknowledging the various costs for the incumbent population, including for housing.

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And over the weekend, the ABC badly misrepresented comments from former CBA CEO, Ralph Norris, who claimed that Australia’s housing woes were being caused by excessive demand from rapid population growth (immigration).

On Monday night, we got another dose of the ABC’s bias when Q&A refused to acknowledge or discuss the population ponzi following a reader’s question. Below is the transcript (video at 14.29):

Housing Ponzi:

QUESTION
A reversal of the two-speed economy now sees residential construction in the eastern states driving the nation’s prosperity. But some have likened the current housing boom in Sydney and Melbourne to a population Ponzi scheme, and housing affordability is a major problem. How long does the panel think that housing and population growth can continue to make up for mining and manufacturing? And is it time for a rethink of the generous tax concessions offered by negative gearing?

TONY JONES
I’ll start with Penny Wong, because that is a specific policy of the Labor Party.

PENNY WONG
Well, I mean, we have a view, and I think, you know, a fair few people have backed it in, frankly, that you don’t have a serious housing affordability policy unless you tackle negative gearing and capital gains tax. We have some of the most generous tax incentives in the world for investors. We have a very small proportion of new owners…of housing being bought by first-home buyers. We’ve got very large numbers of proportion of investors in the market. Something’s got to give, and if we don’t tackle the tax incentives, which really don’t level… which skew the playing field towards investors, then you really don’t have a housing affordability policy. And the extraordinary thing is that we saw the Treasurer today giving a speech on housing affordability where the single biggest area which he needs to address was off the table for political reasons, not for policy reasons.

TONY JONES
You mean negative gearing?

PENNY WONG
Negative gearing, yes. Because they want to be able to belt us about it rather than actually have a sensible discussion about the policy.

TONY JONES
Just a very brief one. The Australian ran up the flag pole the idea that Morrison, the Treasurer, would talk in that speech about the idea of super funds for first-home buyers being able to be raided to pay for housing, or at least to give a deposit.

PENNY WONG
Well, this is the idea that Malcolm Turnbull himself has described as a thoroughly bad idea, and I agree with him, because if you’re saying to people, “Raid your retirement savings,” which is what it is, to purchase a house, it seems to me pretty bad economic policy.

TONY JONES
OK. Mitch Fifield?

MITCH FIFIELD
Thanks, Tony. Thanks, David. Negative gearing, ultimately, is a way of getting a tax deduction for an expense incurred in earning income. That’s what negative gearing is.

TONY JONES
If you already own a house, to be precise.

MITCH FIFIELD
Yeah, but that is…that’s part of our system of taxation. What we have great difficulty with is Labor presenting negative gearing as though it somehow magically solves the housing shortage and housing affordability. It wouldn’t. It’s something that people have made investment decisions based upon, so you don’t want to go changing these things lightly. Overwhelmingly, the single greatest contributor to the housing affordability issue is land supply, is a lack of land in the right places, is zoning restrictions that make it difficult to develop, is red tape that makes it difficult for housing estates. And also, importantly, having infrastructure, like transport in the right places. That’s… Those things together probably make the greatest contribution.

TONY JONES
Mitch, I’ll come back to you. I will come back to you.

MITCH FIFIELD
One point….

TONY JONES
I will come back to you, but make your quick point.

MITCH FIFIELD
Just a quick point. Ultimately, this is a shared endeavour between federal, state and local governments, which is why the Treasurer has indicated that, in the Budget, we will have measures where the Commonwealth can make a contribution to doing something about this issue.

PENNY WONG
Two very quick points. One, Mitch talks about retrospectivity. Our policy was no retrospectivity, so existing assets would be continued to be treated the same. What we wanted to do was restrict negative gearing to new housing to try and pull on supply. But the second point, the Government never answers – why should somebody buying their seventh house have a better…have more tax incentives than someone buying their first?

(APPLAUSE)

TONY JONES
I’ll let you respond to this question, you obviously want to, and then I’ll go to…

NIKKI GEMMELL
I just feel like this is one of the great political tragedies, housing affordability, of this generation. As a mother of four kids, I just despair that my children will ever be able to live in the same city as me. But then what I’m also noticing around me, in terms of my peers in their 40s, 50s, 60s, there a lot of people around me who are still renting, who have never been able to make that leap into the great Australian dream of owning their own plot or block, whatever it is. And I just think that’s so sad. We’re facing worlds of retrenchment, of jobs that aren’t secure anymore, of situations where pension funds… You know, we don’t have the super to pay into our pension funds. I just feel like this is a huge ticking time bomb and we don’t only need to talk about the younger generation, it’s the older generation as well, heading into their pension years and still renting.

TONY JONES
I’ll come to you, I will, I just want to… The Great Britain has had a similar experience.

NIKKI GEMMELL
The Great Britain.

BILLY BRAGG
Yeah. We do, we do have.

TONY JONES
The Great Britain, or Great Britain. I mean, the massive price inflation of housing in London has forced a huge number of people out of the city.

BILLY BRAGG
It’s right across the country, really. I think the average house price now is over eight times more than the median disposable income for the average family, average median income. And this has had a considerable knock-on effect. One of the reasons why is because people who no longer can make any money on savings, or rely on a pension, are buying houses to rent to people. I don’t know if they’re the second homes you’re talking about. Are they being bought to rent out or are they being bought to live in?

TONY JONES
Mostly by investors to rent.

BILLY BRAGG
Yeah. We call it buy-to-rent. It’s the same sort of thing. And obviously, as a renter, you do get certain tax breaks and the people that you’re…renting the houses out don’t have a great deal of protection. This has become a very big issue. And as you said, we also have the situation where many of our key workers – our teachers, our firefighters, our nurses – are having to live outside of the cities where they’re working. It’s a considerable problem. 50% of the land that gets permission to be built on isn’t built on. The amount of affordable housing that’s built on there is dwindling all the time because of the huge profits to be made in selling up-market houses. It’s a real situation. We should be building more houses. And at the moment, the local councils are not allowed to build houses. Now the Government wants housing associations – and they’re the people that replaced the councils for building affordable housing – they’re going to compel housing associations to sell their houses on the free market. It’s ridiculous.

TONY JONES
OK, Mitch Fifield, should this not be treated as a national emergency, and would you not get credit if you did that? A government often said to have little vision, a government going down in the polls, could actually make a huge…well, impact, by doing something like that, but it never happens.

MITCH FIFIELD
Well, to the contrary, the Treasurer and the Prime Minister have indicated that housing affordability is high priority for the Government. That’s why we’re going to have a plan in the Budget. And we’ve got to look at all elements because housing availability isn’t just about home ownership, it’s about rental affordability, it’s about social housing, it’s about homelessness. You need to have a comprehensive package that addresses all of those elements, but you also need the cooperation of the state governments and local governments. As I said before, it’s a shared endeavour of all levels of government, and it’s something that we’re going to have a lot more to say about in the Budget.

TONY JONES
OK, it’s time to move along.

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As you can see, not one panelist even mentioned the central part of the question pertaining to Melbourne and Sydney housing being a “population Ponzi scheme”, nor whether it is sustainable. Nor did Tony Jones do his usual thing and bring guests back onto the key point of the question.

Hopelessly biased ABC.

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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.