The New Daily’s Rob Burgess loves reporting on housing. He hiked up Kosciusko with Steve Keen. He also loves quoting the Grattan Institute.
What, then, are we to make of his failure to comment on yesterday’s excellent Grattan Report into housing affordability? Today Mr Burgess prefers throwaway lines on Chris Bowen to the excellent new analysis. Why?
As we know, Burgess is pretty confused about the drivers of the housing bubble. He consistently muddles visas with migration numbers and has previously branded Dick Smith and MB “racist” for seeking an immigration cut to take pressure of housing demand even though his own analysis is self-evidently contradictory:
However, by approaching the topic with the same oversimplifications contained in his 2010 documentary Dick Smith’s Population Puzzle, Mr Smith is introducing further risk to our vulnerable economy.
That risk comes through stoking the kind of populist fears being spread by Canberra crossbenchers, including Pauline Hanson’s One Nation Party, and independents Cory Bernardi and Bob Katter.
Those politicians, like Mr Smith, link population growth to urban congestion, soaring house prices or the threat of terrorism.
And because their arguments operate at an emotional level, like Mr Smith’s wildly over-the-top ad, they have little to say about the real economics of population growth.
Urban congestion results from poor town planning and inadequate transport infrastructure, soaring house prices are primarily driven by ridiculous tax laws and record-low interest rates, and terrorism has little or nothing to do with immigration rates.
…While immigration is not the main driver of house price inflation – the number of residents per dwelling in Australia has remained virtually unchanged since the housing boom began – a sudden collapse in demand would not gently cool the market. It would crash the market and precipitate a long recession.
Alas for Mr Burgess, if your view is that mass immigration doesn’t drive house price inflation but without it prices collapse then it’s not easy to reconcile yesterday’s Grattan report:
The Commonwealth government can improve housing affordability somewhat – and immediately – by reducing demand. It should reduce the capital gains tax discount to 25 per cent; abolish negative gearing; and include owner-occupied housing in the Age Pension assets test. And unless the states are prepared to reform their planning systems, the Commonwealth should consider tapping the brakes on Australia’s migrant intake.
Time to get on board, Rob. Show the way for Jess Irvine, the Jericho sell-out and Adam Creighton.
