Nine years ago I wrote:
Australian housing doesn’t have anything to do with economics. It long since ceased being a “market” at all.
Rather, it is a political complex – a quango – that represents the single largest page in the socio-economic contract between the government, the Australian financial system and an ageing baby-boomer population.
When the baby-boomer generation first took power and reshaped Australia in the 1980s, the promise was for a new kind of meritocracy. The old “Australian Settlement” described brilliantly by Paul Kelly in the End of Certainty – a protectionist social contract between unions, industry, government and the people – was swept aside in favour of a neo-liberal vision. The new world demanded an open, more dynamic Australia. An Australia that rewarded entrepreneurial effort and flexibility. A productive Australia.
For a while it worked. Australia dropped its tariffs, deregulated government enterprise, most especially the banks, and after a false start at the end of the eighties, embarked on an historic productivity boom.
But at some point a distortion began to grow at the heart of the new vision. It’s dark seed was sown by the original architects of the new world when they back-tracked on the removal of negative gearing tax policy for housing in the 80s.
By the late 1990s it had become a cancer eating away at the achievements of the baby-boomer generation and a second wave of bipartisan supporters of the new vision took power only to further deregulate finance and install fabulous capital gains tax privileges on property investment.
As we entered the 2000s, the new vision threatened to stall and the same baby-boomers that had convinced us all to embark on their neo-liberal journey deployed new, more direct subsidies for houses, in the form of first home buyer grants that sought to co-opt the baby-boomer’s children in the same now rapidly distorting vision.
Through the 2000s, the neo-liberal vision became virtually unrecognisable. The dynamic and open Australia mutated into a speculative abomination based almost entirely on houses. Our precious capital, freed in the 80s to find the most productive outlets possible became instead the key stone in a system of offshore borrowing and asset inflation.
The final death knell of the new vision surely came in 2003 when the old national good luck arrived in the nick of time. As the housing quango lay dying in 2003, along came a commodities boom the likes of which nobody has seen in century. The transformation was complete. The entrepreneurial vision of those pioneering 80s baby-boomers replaced with happy-jack dirt salesmen and a bloated entitlement state that now had the money to keep its most hideous progeny, the great, quivering housing sack that hung from its belly, alive.
In 2008, when the world woke up and the mutated vision was revealed in all its horrible form, the government deployed every available mechanism to keep the thing alive. Unheard of guarantees across the financial system, moral hazards like leaves in the wind, wholesale immigration, massive direct subsidies, huge general stimulus.
This might be forgiveable if it was at least honest and openly declared. But it wasn’t and isn’t. Instead, those that had sat outside the system, hoping for a house or sagely planning to swoop when the bubble burst, are insulted with blandishments about how robust the system is, how they missed out on the “market”. Even though this so called “market” long since ceased to bear any relation to laws of supply and demand.
I feel sympathy to my bones for those that are running the buying strike campaign and those that participate in it. I understand completely where they are coming from. A buyers strike is an entirely appropriate and justifiable response to the Australian politico-housing complex. It is a political act targeted at a political system that lies to their face.
Ever since, we have watched the same politico-housing complex throw successive generations into a property mincer that has now consumed the entire economy.
Which brings me to my point. The evolving new level of real estate bastardisation, irrationality and power in the nation’s capitals is more totalitarian in nature than the exercise of interests over government. It has moved well beyond the simple influence of lobbying or spruiking in the press. The politco-housing complex has evolved into a structure so complete that it is now a world view, a complete, closed-loop ideology, bound up with nationalism, geopolitics and power.
There is an inexorable logic to this. It was obvious to anyone with eyes that the politico-housing complex had become a parasite killing its host. The complex had so distorted the underlying economy, had so corrupted national identity, and had so compromised national security, that it was either going to die or had to evolve.
The first of the great challenges to the politico-housing complex was economic. Over the past two economic cycles, the politico-housing complex has flattened households under a mountain of debt that has killed inflation and monetary policy. Thus the complex has become ever more dependent upon fiscal support for life, both for funding and supporting a gutted underlying economy.
The second great challenge to the politico-housing complex was that its core pillar, mass immigration, was directly undermining Australian living standards. Wages growth has been destroyed. Public services like roads, rail, health, education and law have been crush-loaded and debauched. The Australian backyard is history and the great outdoors itself is gone as shoddy apartments have predominated in dwelling construction. All of this has happened without a vote for it. Indeed, all polls indicate strong resistance to further population growth.
The third great challenge for the politico-housing complex was political. The last election presented a generational threat when Labor sensed the marginalisation of younger voters was a political opportunity.
But, from the verge of extinction, the politico-housing complex suddenly evolved to confront each of these three challenges. The key moment was a Property Council of Australia coup at the last election, with its former head of research, Scott Morrison, appointed PM. That has entrenched the power of a cabal of public and private oligarchs that have taken control of national interest policy in the name of real estate. The first order of business has been to capture fiscal support for the economy and more credit. The coup has been followed up with the co-opting of regulators using classic fascist techniques of show trials and personal favours. Next underway is the cultural war to bring all “business” into line as well. Daily now, business leaders are bashed by marauding ministers of the new ‘fasco-housing complex’.
The second feature of the newly formed fasco-housing complex is to sustain mass immigration no matter the cost to economy, living standards, democracy or security. In classic fascist practice, the deleterious impacts are disguised through the use of relentless mass propaganda, disseminated forcefully by oligarchic aligned media. Its greatest trick is to endlessly debate solutions to the destructive flow of peoples as if that is the answer, while misrepresenting any and all resistance to the flow itself using public shaming, via such tags as “racist”. A terrific example of this is underway today at Nine’s metropolitan newspapers as it conducts a gala event around how to manage population growth. Fresh from running fasco-housing complex fund raisers for Property Council Generalissimo ScoMo, Nine has dedicated days of debate to the topic without once mentioning that we could simply cut the migrant intake. The truth is that there are no solutions to the fallout from overly fast immigration within the Australian system, nor are there intended to be. The debate only serves to provide the illusion of choice as the putsch goes about its daily business of building shoddy apartments for money-laundering Chinese and propagating new generations of ‘fasco-housing complex youth’.
The third leg of the fasco-housing complex is political transformation. Since the election of the Property Council PM, the fasco-housing complex has set about distorting the results in every way possible. The truth is that the Property Council PM only fell over the line thanks to Queenslanders who voted for nationalist fringe parties seeking tighter borders. But that has been completely repackaged as a fulsome embrace of “aspirationalism” – read fasco-housing code for higher house prices – permanently erasing any prospect of future political push back against the complex. Yet behind that lie is the truth that the Queenslanders were right. We do need tighter borders. The political system is reeling from an inundation of cashed-up foreign influences, mostly sponsored by the Communist Party of China and, again, revolving around property. These are now distorting the political system itself to more and more resemble the mobster patronage system of the CCP, the world’s greatest fascistic state, not to mention sailing Australia further into its sphere of influence. Freedom itself may end up being the ultimate casualty of the fasco-housing complex.
Like all fascistic systems, the fasco-housing complex is pre-enlightenment, preferring religious zeal to reason in the formulation of national goals. It uses force to bring objectives to fruition, including ultra-nationalist bullying of conscientious objectors, the use of mass brainwashing propaganda via an effectively nationalised press, and the seamless fusion of public and private elites in a unified oligarchy of nationalist destiny.
That it revolves around realty is a uniquely Australian evil, best left as a banal footnote in the history of such systems.