Dick Smith launches housing “fair go” campaign

By Leith van Onselen

Aussie entrepreneur and icon, Dick Smith, yesterday launched his new website, Dick Smith Fair Go, with a series of advertisements in Australia’s major newspapers (example below):

The Dick Smith Fair Go website was launched with an e-book entitled: “The Aussie housing affordability crisis: an honest debate” (which I provided input into), which can be downloaded for free.

Below are a few key extracts summarising the key causes of Australia’s housing crisis:

Supply and demand:

The government, the banks, and many economists peddle the disingenuous misdirection that it’s just a lack of supply that’s to blame. It usually sounds something like this:

“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. … Those things together probably make the greatest contribution.” Mitch Fifield – Q&A

When the role of demand does occasionally get an airing, like the time I stirred the pot by pointing out that Pauline Hanson’s One Nation was the only political party to have a policy on Australia’s population growth, many of the Twitterati breathlessly babble that “Immigrants can’t all be on welfare and competing with Australian first-home buyers at the same time!”.

It’s true that immigrants are often unfairly scapegoated for many of society’s problems, and that should always be called out for what it is…

Just like anything else, land and house prices depend on both supply and demand – and Australia’s housing supply clearly has difficulty keeping up with our break-neck population growth.

This is not surprising considering housing supply adjusts slowly to increased demand (with the many steps and constraints involved in building new housing stock) while we have the equivalent of five wide-bodied jet-loads of immigrants coming in every week.

But many economists, and politicians like Mitch Fifield, talk as if the ‘supply’ of land for housing was the only thing that we could change, whereas the demand caused by immigration-fuelled rapid population growth was beyond our control.

If anything, the reverse is closer to the truth. After all, in suburbs close to jobs and opportunities, the availability of land in which to build new stock is very limited. Increased demand from more and more people trapped inside a limited ring of desirable inner suburbs sends prices sky high…

There are those who look at our vast land area and imagine it could be filled with people. But Australia’s geography should be seen in terms of a thin coastal strip, that requires careful management and planning, bordering a vast arid interior of salty, sandy soils – a relatively low carrying capacity.

So if we want to avoid that future, and generations of battery-kids, then we need to look at our immigration-fuelled population explosion…

Capital gains tax and negative gearing

After population growth, the next big driver of unaffordable housing comes from the workings of the capital gains tax (CGT) combined with negative gearing…

The way that the CGT 50% discount and negative gearing interact causes the most problems for housing affordability…

Turbo-charged bank lending:

After the stock market collapse in 1987, when business took a hit and slowed down, Australian banks shifted their focus to lending for property investments.

This was turbo-charged after the Global Financial Crisis of 2007–2008 when interest rates were driven to historic lows in an attempt to spur ‘economic growth’ by making it very cheap for people to borrow money for investment.

The more money the banks pumped in, the higher real estate prices rose to meet the increased spending power of buyers. The higher the prices, the higher the loans. This is a business model that some would call a ‘Ponzi scheme’ – which are illegal in Australia. Aided and abetted by negative gearing and the 50% discount on the capital gains tax, it was very profitable for everyone who could get in on the action…

Overseas investment and speculation:

Another factor that is having a major effect on the price of housing is the influx of capital from overseas investors…

Government has passed token legislation in an attempt to restrain its effect, but there are always ways of circumnavigating these laws… survey data consistently shows that foreign buyers account for a significant share of established home sales…

It is also possible that many of the purchases are funded by ‘black money’; that is, corrupt money from countries whose governments are attempting to crack down on corruption.

Indeed, the global anti-money laundering regulator (the Paris-based Financial Action Taskforce) found that Australian homes are a haven for laundered funds, particularly from China.

It’s almost as if Australia would prefer to cooperate as a launderer of corruption than deal with the negative effects on young first-home buyers.

And below are some of the policy solutions offered in the report:

Stabilise the Population:

One way to make a big difference to the housing affordability crisis is to admit that both supply and demand factors are at play.

With more than half of Australia’s break-neck population growth coming from immigration, our government needs to look at what it can do about overheated demand.

The prudent path forward is to plan for the population to peak and stabilise at the highest level that our continent can sustain at the standard of living that we’ve achieved in Australia today.

How do we do this?

With our current net immigration numbers (arrivals minus departures) of around 200,000 each year, the Productivity Commission estimates that Australia’s population will increase from around 24.5 million currently to around 40 million by 2060.

By comparison, under zero net immigration (where we admit the same number of immigrants into Australia as we have people leaving the country) of about 70,000 new immigrants each year, Australia’s population would peak at 27 million by 2060.

So our current 200,000 net immigration intake would add some 13 million people over these years, while our natural increase would add just 2.5 million.

A lower population growth rate and a stabilised population under zero net overseas migration would reduce the demand for housing and give supply a chance to catch up.

It would also reduce the pressure on our national infrastructure and help Australia’s economy stay within the ecological limits to growth on the arid continent we call home.

To illustrate, consider Sydney in the chart below, where State Government projections have the city’s population growing by 1.53 million fewer people over the next 20 years with zero net overseas migration.

That’s the equivalent of nearly four Canberras that would not need to be built across Sydney, along with all the extra people competing for housing and choking-up Sydney’s roads and public transport.

Capital Gains Tax:

First, removing or reducing the 50% discount on capital gains made from investing in housing would help to reduce the incentive for investors to pile money into property and encourage them to channel their money into more productive, job-creating ventures.
If we bring housing prices down by reducing immigration and increasing supply, investors wouldn’t be seeing much in the way of capital gains anyway, which will also reduce their incentive to invest in housing.

Negative Gearing:

Second, negative gearing rules should be reformed so that investment interest expenses on property can only be deducted against taxable income from other investments earned in that year.24 This reform would reduce house prices by making residential property less attractive to the investors, and further encourage them to channel their money into other, more productive assets, like job-creating businesses.

A Broad-based Land Tax:

It would also make sense to apply a broad-based land tax (preferably in place of stamp duties) in Australia.
Such a reform would encourage a more efficient use of the housing stock and improve labour mobility, penalise land banking and vagrancy (increasing effective land supply in the process), and help to make infrastructure investments self-funding for governments, since any land value uplift brought about through increased infrastructure investment would be partly captured by the government via increased land tax receipts…

Increased taxation on overseas investors:

Let’s increase the tax on foreigners who want to buy Australian property.

In Victoria, the foreign tax is currently 7% of the value of the purchase. In New South Wales it’s 4%, and in Queensland its 3%. The remaining states and territories currently have no foreign tax at all.

The last thing that we want is more young Australians being outbid at auctions for inner-city apartments by overseas investors looking for somewhere safe to park their wealth away from their own government – especially if they’re going to leave them empty.

Using a tax to hit the profitability of foreigners investing in the Australian property market would make some of them look elsewhere and give Australians looking to buy their first home a chance to take their place.

Implement anti money laundering rules on residential property

In 2008, the Australian Government was supposed to implement anti-money laundering (AML) rules for real estate gatekeepers, such as real estate agents, accountants and lawyers. This legislation has been sitting in limbo for nearly a decade, despite explicit warnings from the global AML regulator (the Parisbased Financial Action Taskforce), AUSTRAC, and Transparency International that Australian property is a potential haven for laundered funds.

Bringing Australia’s real estate gatekeepers into the AML net would meet Australia’s global commitments as well as dampen foreign demand for Australian property.

Go read the full report and checkout the website here.


  1. Is there an argument for what Singapore does? ie, put a massive tax on the 2nd house that you own.

    You can own one house, but if you buy a 2nd house (greedy, greedy) – pay a heap of tax on it.

    • Maaaate, cool your jets! this is straya! All good looking people who go out and purchase a second home here get tax breaks!!

    • Or exclude LVT on your own home that you live in. Are there any good articles on Singapore situation?

      • Not sure about good articles. But consider the point of such a tax.

        I am not sure how you would verify where a person sleeps each night. I know a guy who claimed the first home sellers grant but never slept in that first home.

    • That would be outrageous against the ordinary mum and dad investors just trying to get ahead. Why do you hate children?

      • No idea if your post is sarcasm.

        They can get “ahead” – they can fly first class and have a 4K television at home. But do not buy more than 1 house.

      • But when it does happen, it’s happy happy joy joy! Or so I’m told…. 🤔

        I was also told about half a viagra in the morning, so one doesn’t pee in one’s slippers… 😁

      • migtronixMEMBER

        “happy happy joy joy!” OK thanks Stimpy, next time I want to time travel to 1994 I’ll hit you up

  2. HadronCollision

    From a marketing perspective, it might have been useful to put the ebook behind an optin.

    I mean, that would be a hell of a useful marketing database for a new party, or else for getting the vote/etc out.

    • From a marketing perspective, this entire thing is shite. Awesome to see this group emerge but it needs a few less boffins and a few more people who can actually speak to the masses (who don’t read bar charts let alone ebooks full of them)

  3. SAP and Dick Smith have a lot in common he should be penetrating errr promoting that party more then ON

    • Dick Smith should bankroll SAP like Mr Aaron Banks funded UKIP.

      Imagine what $2 million would do for SAP.

      Clive Palmer could have been the Donald Trump of AUS by ranting against mass low-wage immigration.

      Is Dick going to take his money to the grave?

      • Dick stood up for Pauline for a while which was a mistake, he seems to have realized. Now lets hope he goes hard for SAP, they are a much better fit, though their performance has been a bit limp.

      • Dick is very philanthropic. He did support SAP at the 2013 election, donating a modest sum. He also endorsed me as a candidate, which is the first time he has endorsed any party or candidate.

    • I was so glad to find the group which even made me click ‘donate’ for the group.
      It will be great if Mr. Smith do things together with Sustainable Australia Party.

  4. Jumping jack flash

    These are good solutions but there are some serious problems with these solutions:

    1) will they address affordability, ie will they actually make house prices fall?
    2) if they do make house prices fall, won’t this kill our banks?
    3) if they do make house prices fall, won’t everyone who owns a house they don’t want to fall in price start yelling loudly?
    4) limiting immigration is limiting debt demand which limits the economy. Have they thought through the consequences of this?

    Therefore I suggest that these solutions, while excellent, will be quickly ignored.

    The only real solution to keep everyone happy is to build (subsidised) undesirable and affordable houses (I mean “houses” in the loosest possible sense, more likely tents) far away from the existing houses that hold all the debt against them that powers our economy.

    Desert slums that are devoid of any services unless you pay for them ad hoc.
    No (paved) roads
    No garbage pickup.
    No sewage.
    No water.
    No electricity.
    No schools
    No work.
    No shopping.
    No internet, except via costly satellite.
    No mobile phone reception, except via ultra-expensive satellite phone.

    Travel hundreds of kilometers to the nearest place where these services are zoned to be. On toll roads.

    Only then will these special, affordable houses not rise in price, and therefore never become unaffordable.
    Affordability problem solved!
    And no fancy taxes, no limits to immigration, no economic hobbling, no effect on existing debt, no impact on existing house prices, required.

    • You only need one or two things to change and the system collapse , slow immi or IR rise or end NG or AML. The more we keep informing the herd the more it starts to sink in. Boomers at work just don’t get it that their kids at uni won’t be able to buy a house or get the well paying jobs like they have. But I keep banging the drum. They only believe mainstream media and watch all that mainstream bullshit (very stubborn blinkers). So the more Dick and others get airtime the better.

    • Ronin8317MEMBER

      The argument is places which is close to school, have water, have sewerage, etc will become affordable if we simply just remove all the incentive and stop increasing our population.

  5. No mention of record low interest rates? That is the real problem for those who cannot currently afford a home.

    • Record low interest rates are what allows people to borrow and spend more. I’d like to see them go up 3% and watch what happens. But that seems a long way off right now.

    • migtronixMEMBER

      Anti-semitic jibes aren’t welcome here – as Jake (not about the British Constitution)

    • I think Dick just wants to be Australian. Sydneys just a mob of thieving bogans and treasonous lefties who have no business calling themselves Aussies no matter how much they can talk strine or how much the love the Australian Broadcasting Corporation.

      • They take pride in being not much more than a dick, gen y takes pride in the opposite. Perfect combo. Bunch of manginas that’s why they like their manicured beards so much, so they look more like vaginas.

        That is freudian as hell. I wish I ran the news I’d publish that.

  6. Thanks Mr. Smith…. Great work! But I don’t think the federal government will do anything about because they are the ones who benefit from this mess..

  7. TailorTrashMEMBER

    Looks like Dick has spotted it’s all going to custard …………( have to be English or old Australian to get that …….and never if you watch Masterchef or MKR)

    Jokes aside ….well done Mr Smith …….it’s nice to see someone who did well in Straya by building a business and employing people speak out against this
    new “wealth creation ” model …….its a pity our great leader could not step up to the plate on this ……and Shortman won’t either when he gets in …….

      • TailorTrashMEMBER

        ……. have not seen it in MKR in a ” deconstructed ” form yet …..but sooner or later no doubt …………a new take on retro deserts ….with a large helping of wankery ……….
        I know I know ! ………….so old so cynical ……………