Labor dumps negative gearing reform

The single most crucial reform in the Australian economy, cutting fiscal support for house price speculation, is now dead. Labor took it to the last two elections but the rise of small target Anthony Albanese has killed it. What does this mean for the future? Domain:

  • Shadow cabinet is expected to dump the policies.
  • Albo supports dumping it.
  • The news will not arrive until after the budget.

This completes the erasure of Bill Shorten’s Labor. Contemporary wisdom is that winning elections is all about not losing them. In the era of diminutive tosspots as leaders and cheap social media outrage, it’s true. And so it comes to pass.

Where does this leave Labor? Probably in a better position to win power. It will cost some youth votes in the cities but, hey, Millennials have hardly lit up the joint agitating for housing affordability. Their obsessions with sexuality and race have bled class warfare dry. If a few vote Green those preferences will flow back to Labor anyway.

Where does it leave the economy? Stuck with the bubble, which will grow. Both political parties now endorse strong housing bubble policy support from mass immigration, to fiscal subsidies, to doing nothing on the supply side. Labor will resist scrapping responsible lending laws but that’s only going to impact at the margin.

This could not come at a worse time. As Australia enters its post-China era, the best way forward is a whole range of “low dollar” policies to lift competitiveness to promote trade diversification and repair to the industrial base. Lower land prices are a key input into that.

Where does it leave political choices? The fake left and fake right all but agree on everything now. There will be no markets only interests. There will be no redress for inequality only rent-seeking. Even on climate change, the two parties are fast converging with proactive policy dead and replaced with symbolic gestures to dying coal regions. The economics of climate change mitigation is now the overwhelming driver. Politics is no more substantive than symbolism for particular identities, for and against.

The only policy of substance that separates the major parties now is China and that’s in part fake too. ScoMo has done nothing to formulate policies that aid Chinese decoupling. That is all coming from Beijing. Albo’s treason over the 14 conditions is symptomatic of the CCP’s capture of his party. But, in reality, Labor will still smack into the wall of public support for ANZUS. The best way I could put it is that at the least the Coalition is a lower risk of making enemies of both China and the US.

With the great convergence of fake politics now complete, expect the empty edifice of culture wars to rise ever higher even as the foundations of real reform crumble.

Most hypocritically, this will take the immediate form of fake left concern over housing affordability.

David Llewellyn-Smith
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Comments

  1. He’s a grifter and just a pied piper for politically disaffected millenials. Low hanging fruit of buzzfeed journalism and hating on boomers is 2015.

    Fk him.

    • “Uni party reveals itself”. +10000
      Neither Lb or Lab can form govt. in their own right Lib 38 % of vote and Lab 32%.
      The LIb Nat COALition is fraying and the Nats are in danger of disappearing, Lab won’t form coalition with the hated Greens so logic dictates the LIBLAB party.

  2. Given that polls have indicated most Australians oppose NG, I suspect that the real reason the ALP lost the last election was the fact that Bill Shorten wasn’t the most popular character.

    • In part sure. I also think the Super concession reform could have been better executed (ie: the late pension guarantee) as it gave the Libs a chance to peddle fear in spades. The China issue was also a curious one. It provided the Libs with some brand strength in national security but, it appears they also do well among Chinese voters now as recent arrivals tend to be pro-liberal. – https://www.theguardian.com/australia-news/2016/jul/09/how-a-chinese-language-social-media-campaign-hurt-labors-election-chances

    • The Traveling Wilbur

      Labor lost the last election by spending two years explaining to the electorate in excruciating detail everything it would do (especially financially) once it was elected. I applauded. Loudly. For nearly two years. Until it became obvious no one will elect an opposition who’s planned anything for two years, in Australia. Right around the time of all the Lib parliament self-inflicted Vale speeches…. that became obvious (in Qld). At least that point in time was funny.

      So this “small target” Albo [email protected] above should be seen as a compliment to one of the astute, in this country at least.

      • 100% agree.

        Labor went to the last election with an array of reasonable policies and the Coalition literally went with none except a tax cut for the top end.

        Our electorate doesn’t reward vision or smarts.

        • Strange Economics

          Studies always show that 90% of the population believe they will be rich, even though only 10% are…
          So tax cuts for the rich are always popular as we’ll be there one day….
          Espececially if you buy 5 investment properties !

        • It doesn’t matter how much sense the policy made, the lead up to the last election showed what real estate agents will do if they run on it again. I was one of many tenants who received a letter from my real estate agent on official letterhead saying my rent would go up if Labor won the election. I was furious but plenty of other people would take it seriously. They have too much reach and apparently no moral floor.

      • I think the Libs were always going to do well in Qld thanks to One nation and United Australia – particularly given the huge injection of $$ by Palmer. There was a strengthening shift in preferences to the LNP from those sources last election and it accounts for a very large slice of the overall swing to the LNP. I would also say the fear campaigns waged against the ALP on super concessions and national security (Which Palmer augmented with his $60 million) tended to appeal to the demographic that is largely suspicious of “city reformers” from the south.

      • I had people who didn’t owns shares tell me they were afraid they were going to lose their franking credits.

        All I could think was “and they let you vote in elections?”

      • They should limit NG dedecutions to $20,000 per person per year. It doesn’t matter whether you own one large property, half share in two large properties, two or more smaller properties, old or new purchase, etc. This could be accomplished in 5 minutes with a simple change to the tax form.

        • If your willing to lose $20K a year through investment in property then to save yourself at most $12K in tax then you are not exactly an astute investor.

          NG by itself isnt the problem, its the Capital Gains Tax deductions that allow losses claimed later to be profitable down the line.

          If I invested $100K into shares and they double in value I pay tax on the $100K profit. But if I do the same in property then I pay tax on $50K. This makes property a much more attractive investment than it should be.

          • PlanetraderMEMBER

            I don’t think that is right – you get the 50% discount for holding 12 months in both I am pretty sure.

          • Yeah, your right. Brainfart on my part. Was thinking about the 12month requirement and didnt equate holding shares long enough…

            Still, The CGT discount combined with NG means there is incentive for you to take losses to reduce your tax burden each year and get it back later when you sell the assets…

          • Yes, you are right. The reduction from 50% to 25% discount was modest and the majority would have accepted it. The original argument for the discount was to counteract the effects of inflation – how “last Century” is that?

          • The beauty is you don’t need to actually lose though, a paper depreciation loss is as good as an actual loss.

    • FUDINTHENUDMEMBER

      The issues are that most folks hate NG without even knowing what it is. The others know what it is and that it fcks their fellow man, but they want it for themselves anyway. Either way, we’re screwed.

    • If that data is correct (I believe it is) then it makes sense to formalize policy and communicate that ALP don’t give a hoot about the majority of Australians.

      When will those Australians learn and respond appropriately? Quite soon I hope.

    • Davey – the same polls that predicted Labor would win? Hahaha.

      Anecdotally on the ground many people wanted to keep NG especially outside the major cities and online opinion bubbles. Or rather it was an issue they didn’t really care about, wanted to keep their jobs, and would rather Labor focus on something else.

      Labor needs to get back to what workers want in their ‘day to day’. Less congestion on roads, lower migration, higher wages, more community infrastructure, and less business infrastructure (e.g toll roads, airports). The good life basically.

  3. The differences between the parties over China were always largely superficial. Perceived differences were mostly about branding, timing and political opportunism. Even Turnbull while Communications minister was at best, skeptical of ASIO warnings over China until he was no longer able to ignore it. It was that sell out Sam Dastyari that gave the libs the opportunity to brand themselves as the better choice on national security. Which they did happily.
    We lost the chance to reform NG and super concessions in the last election for a long time. ScoMo will simply pander to the same FIRE sector interests the libs have usually slept with and once this C19 bizzo is finished, he will open the doors to as many cashed up migrants and cheap foreign workers as he can. Labor will be scared off meaningful reform now for a good while.

    “The best way I could put it is that at the least the Coalition is a lower risk of making enemies of both China and the US.”
    I cannot fathom how you have arrived at this call. The is little evidence to support this.

    ” Most hypocritically, this will take the immediate form of fake left concern over housing affordability.”
    I would say if you get a shot at meaningful, progressive reform by any mainstream party – take it. Ignoring it simply reinforces the same crappy small target political game where nothing meaningful gets done and means you are party to it.

  4. RobotSenseiMEMBER

    Howard said there’d never ever be a GST after Hewson took it to the 1993 election and lost.

    You watch. When the “budget emergency” cries come if Labor win the next election, this will be the first item rushed onto the floor.

  5. The Albo advisors decided to stick Albo in hard-hat and fluorescent vest last week, that’s got to be worth a poll boost.
    I’m sure they will focus group it this week …

  6. Morrison will never have a finer butler than Albanese. Nothing Albo says or does can put Labor in a “better position to win”. Why not face the simple reality, the next election was conceded, the minute Labor elevated him.

    • The Traveling Wilbur

      Shorten is unelectable under all circumstances.
      Albo was electable before Shorten became Leader.
      Albo was electable against Tones.
      Albo might have won, maybe, possibly, against Malcs.
      He has no chance against anything in the current Lib hierarchy. It will be soul destroying for Labor at the next election.
      Let’s hope Scomo doesn’t have an unfortunate accident crossing the street thereafter (it’s all downhill from there – and isn’t that sad).

  7. “Labor must recognise the anger in suburbs and regions over future employment, declining industries, rising inequality, dying towns and hollowed suburbs. These are only legitimate concerns and Labor must provide policy responses to them. He says Labor needs to better articulate the benefits of freer trade, immigration and global engagement

    https://www.theaustralian.com.au/commentary/labor-must-connect-with-anger-in-the-suburbs/news-story/4f93c73a3e4506e5428738e4e86f7d47 ……………Not many fans in the comments

    Bowen’s got this. Everything’s going to be okay. I think he might be an LNP agent.

    https://www.booktopia.com.au/on-charlatans-chris-bowen/book/9780733645235.html

    Labor needs to split into two. Extreme woke inner city $9m Plibersek etal, and the rest. It’s impossible for Labor to win nationally with policies revolving around what ABC staff living in Glebe want.

    • Arthur Schopenhauer

      I think you nailed it there Totes.

      The gig economy policy is to smoke screen Labor’s immigration policy.

      New-liberalism is dead. The Labor Party will be the last to know.

    • The split already happened – Labor and The Greens. The only problem is that they waste too much energy fighting each other instead of focusing on the common enemy.

      • This * 1000

        Look what happened in South Brisbane. Because of Qld’s unicarmel Parliament, the new member for South Brisbane will be ineffectual, yet the Greens fought tooth and nail to get rid of Jacki Trad who would have had an actual voice to power in the government. Converting ALP seats to Greens seats is reorganising deck chairs on the Titanic.

    • Exactly. As long as the main shadow cabinet is from inner Sydney and Melbourne they have nothing in common with the average family worker with kids for example in the outer suburban belt/country town.

    • “After the government measures were announced the market plopped. Prices plunged. The buyers walked. The sellers sued. The courts ruled, awarding our guy almost $500,000 in damages (the difference between the offered price and the eventual resale value, plus costs). Then the buyers declared bankruptcy. Legal chaos ensued. Everybody lost.”

      https://www.greaterfool.ca/

      exactly what I’d do if I was starting out.
      Bid. play, if it doesn’t pan out for me? bankrupt🖕🖕
      debts that can’t be paid won’t be paid

  8. https://alp.org.au/media/2043/alp-campaign-review-2019.pdf

    …”Labor’s research program…The ALP campaign had an extensive research program for the 2019 election, commencing
    in 2016. This program was innovative and adaptive, bringing to the campaign new research techniques and experiences. Quantitative research drew upon field work conducted through robo-polling, live telephone interviews and online surveys. Field work included large sample, multi-wave surveys of a wide range of seats across the country, electorate-level polls and the nightly campaign tracking poll”….

    They base their campaign on polling of 2PP? lol.

    Did a word search for “immigration, population, (free) trade”……none

    Labor’s got a nail in their head…… https://www.youtube.com/watch?v=yWcEhtg7W3s&ab_channel=AmandaGoreTV

    “Working people experiencing the dislocation caused by new technologies and globalisation could lose faith in Labor if they do not believe Labor is responding to their issues but is focusing on issues not of concern to them, or in some cases, are actively
    against their interests”

    “Labor needs to better articulate the benefits of freer trade, immigration and global engagement”….along with sexuality and race to win the regions. Get Plibersek and Wong to sell it.

    “These are only legitimate concerns”…….Yeah wow, losing your job/business/kids/industry/house//opportunity/vision/future is a….. “legitimate concern”.

    Sell your house and lay bet Labor. They’re going to be annihilated like Australia has never before seen.

      • Boring, but consistently 100% correct. I think I was the only person in Australia betting against Labor. They were never going to win, and as you know, I said so.

        Newspoll that’s failed time after time? 2PP doesn’t mean a thing. It’s entirely irrelevant, and beyond bizarre it’s even considered.

        I’m putting it out there. Labor will never govern Australia again, certainly not while any of the current top twenty prevalent MP’s are still there. Watching and listening to their dialogue, they don’t have the first clue what went wrong, it’s not even possible for them to win, the country doesn’t trust them and can’t hear what they’re saying.

        When you have a review into how you lost, and omit the reasons you lost from discussion, it’s beyond unlikely you’re winning the next election. More behaviour from Labor that erodes trust.

        Let’s face it MB aren’t exactly being honest about it either with any feedback I get being “misogynist, [email protected] and the like. I’m nothing of the kind. I’m just a life long union member, (brown) pleb who understands plebs, and knows they’re not interested in ever giving Labor government again.

        Plebs are nationalists. Labor are globalists. It really is that simple.

        • When you say Labor will never govern again, you need to highlight this very important caveat “certainly not while any of the current top twenty prevalent MP’s are still there.” Otherwise it sounds hyperbolic, which you’re not.

          I agree though, they’ll get wasted in the next election.

        • > When you have a review into how you lost, and omit the reasons you lost from discussion …

          Just pointing out that this is called “begging the question”. The point of the review is to determine the *reasons* the ALP lost. However I agree that leaving out the failure of Big Australia from consideration in the review (as well as the MSM bias) has skewed the results.

      • Arthur Schopenhauer

        Totes is on the money DLS. Labor is full of career politicians, and the children of former state and federal members.

        The polls will be close, and then they will miraculously lose again, ‘cause everyone hates a hypocrite.

        (PS The Federal Libs in Victoria will lose a few leafy suburb seats. A pox on both their houses! 😉)

          • MB is a business website. It should be independent of political parties and the sometimes insane shenanigans that go with them ie Craig Kelly.

        • Display NameMEMBER

          So is the LNP and to a somewhat lesser degree the greens. Independents are the only ones worth voting for. We need to make it prohibitively difficult for vested interests to purchase outcomes. 20 or so independents will make it like hurding cats for all the vested interests and for getting stuff done, but it might minimise further damage.

          • Independents can block LNP in the senate on what matters. Immigration.

            LNP have committed (or are committing to) zero carbon. So what does Labor stand for, what are they good for that’s not demolished with immigration?

            Short of anything else, Independents are by ffffaaaarrr Australia’s best option.

            That’s what anyone with a conscience for what we’re leaving our kids, should be putting their efforts in to.

          • “like hurding cats for all the vested interests and for getting stuff done”
            This is exactly what it would be like, so likely a continuation of the status quo with no changes. RB cutting IR’s, QE, all the good stuff just continuing on. It won’t result in significant change, if that is what you are after.
            I also suspect an independent is more easily bought than you think they would be.

            Edit: totes, I’m pretty sure they don’t need new legislation to continue immigration, so not a lot to be blocking there.

          • “I also suspect an independent is more easily bought than you think they would be”

            They’ve been voted for, to do one thing. They’re human, they’ll rort no doubt, but they’ll have immigration cut or they’re out.

            “I’m pretty sure they don’t need new legislation to continue immigration, so not a lot to be blocking there”

            Splitting hairs there aren’t you? Block all supply until immigration is severely reduced. You keep looking for holes where there are no holes. Why?

            It’s pretty obvious to anyone watching Labor are a dead party, they’re not winning any time soon. It’s time to start looking for ways to control LNP. Let’s hear your idea.

          • “They’ve been voted for, to do one thing. They’re human, they’ll rort no doubt, but they’ll have immigration cut or they’re out.
            Splitting hairs there aren’t you? Block all supply until immigration is severely reduced. You keep looking for holes where there are no holes. Why?”
            Because there are holes. THE ONE THING THAT INDEPENDENTS WILL NOT DO IS BLOCK SUPPLY.
            Why? Because double dissolution election and they are out, as you mention above.
            Absolutely guaranteed out if supply has been blocked for any measurable length of time and government services just stopped.

            “It’s time to start looking for ways to control LNP. Let’s hear your idea.”
            You can’t. Not within our system of government. It was very specifically set up that way.

          • You think the biggest grubs in Australia, LNP, are willfully going to a DD where they risk losing their seats?

            “You can’t. Not within our system of government. It was very specifically set up that way.”

            There is nothing wrong with our constitution. It worked until Labor became globalists.

            Either way, it can’t be changed without a referendum that, guess what? Politicians have to agree to.

          • You think the biggest grubs in Australia, LNP, are willfully going to a DD where they risk losing their seats?

            Wow. You work hard every time, but even for you that’s a top-ten, straight-to-the-poolroom, highlight-reel, Missing Of The Point.

          • “You think the biggest grubs in Australia, LNP, are willfully going to a DD where they risk losing their seats?”
            If the population has just been [email protected] over by blocking of supply by independents, and the majors have a minority what do you really think the outcome of an election would be? Who would be given the blame for the situation?
            It would be a LANDSLIDE shift back to the major parties.

          • So Australia puts Independents in there to keep LNP honest, LNP refuse to budge against the will of 80% of Australians, LNP call a DD election, and Australia blames Independents?

            You and smithy live on a different planet.

          • Is that comment in lieu of a valid argument? You and smithy would be the two most twisted logic individuals I’ve ever experienced, but you’re both so self righteous. You can’t justify a thing you say, yet consistently think you’re right, and everyone else is wrong.

            This is the exact behaviour that has gotten Labor in so much political trouble. This is the exact behaviour that has led Greens to pull Labor to a place where they can’t govern.

            Astonishing to watch.

          • So Australia puts Independents in there to keep LNP honest, LNP refuse to budge against the will of 80% of Australians, LNP call a DD election, and Australia blames Independents?

            80% of Australians aren’t going to vote Independent, and especially not to “keep the LNP honest” on the only issue _you_ think is important.

            This is but one of the many broken premises upon which your argument is built.

          • “80% of Australians aren’t going to vote Independent, and especially not to “keep the LNP honest” on the only issue _you_ think is important”

            Whoa there smithy. That’s not what I said.

            Now let’s start again.

            “Missing Of The Point”….Which point am I missing.

            You’re full of it mate. You’ve wrecked the Labor party, and I actually think it’s dawning on you, and you don’t know WTF to do about the horrendous mess you’ve made.

          • “You can’t justify a thing you say, yet consistently think you’re right, and everyone else is wrong.”

            That totes is saying that without any irony at all says all that needs to be said.

            Edit: of course he clearly failed the logic test, if 80% of Australians voted for his independents then they wouldn’t need to block supply in the first place, they could do whatever they wanted…

          • “Edit: of course he clearly failed the logic test, if 80% of Australians voted for his independents”

            But, that’s not what I said.

            The implication was that 80% of Australians are opposed to immigration. Some of us put Independents in there because we can’t vote vote Labor anymore.

          • bjw678

            “The Labor leadership was right to want to avoid an approach, illustrated by Tony Abbott, of breaking pre-election promises. Voters will reject, at the subsequent election, any leader of a party who has comprehensively broken their promises”

            Even Labor understands the electorate are demanding more integrity. Australia would expect Independents put there on a single platform to do their job. i.e. LNP would be the losers under your DD scenario.

          • Which point am I missing.

            That nothing about how our electoral system works, based on its design, practical behaviour and voting patterns, aligns with what you want to happen.

            Also that nowhere near as many people as you think, believe immigration is the problem you do.

            Ermo’s plan of taking over Labor and changing their direction is hopelessly optimistic, but even it’s immeasurably more grounded in reality than your fantasy that a coalition of Independents will force the LNP to reduce immigration.

          • Nah. We’ve seen where Independents have determined policy.

            Here’s Lambie being totally pragmatic and sensible, without adding ideology or party positions into making a decision in everyone’s interests.

            “I can’t let the boats start back up and I can’t let refugees die, whether it’s sinking into the ocean or waiting for a doctor, and I am voting to make sure that neither of these things happen,” Lambie said.

            This is the future of Australia, if we are to choose to save it we need to vote for Independents. Might take a few elections to get there, and maybe remnant Labor MP’s will roll over on immigration and globalisation, but I’m pretty confident that’s where we’re going.

          • “and voting patterns, aligns with what you want to happen”

            BS

            “Also that nowhere near as many people as you think, believe immigration is the problem you do”

            Of course you think that. That’s why you thought Labor were going to win.

            I think it’s much greater than 80% outside of Sydney and Melbourne. All the electorate needs is a guide, a method, to get us out of the bipartisan disaster, and they’ll run towards it.

          • “I think it’s much greater than 80% outside of Sydney and Melbourne.”
            If anything it will be less. Immigration and it’s effects are almost entirely felt in sydney and melbourne.
            Didn’t see much overcrowding, congestion or ethn!c [email protected] while travelling through SA a few years ago.

            ” All the electorate needs is a guide, a method, to get us out of the bipartisan disaster, and they’ll run towards it.”
            You mean something like PH and one [email protected]?

          • “You mean something like PH and one [email protected]?”

            And they ran towards it. Turned out she was more about hurting plebs than cutting immigration (which was never her core platform, but more implied), but she hangs in there by crafting the redneck vote. She’s of little use.

            If you remember the major parties had to pander to her.

            If she were a sensible person with Australia’s future in mind, she’d be running the country. LNP and Labor would be minor parties.

            Australia desperately wants change.

          • LMMAO …. the Democrats of Australia don’t want to win or rule … outright … that would totally mess with the driving economic paradigm … “The Grand Bargain” aka the ***Big Compromise*** … wheeeeee~~~~~

          • If you remember the major parties had to pander to her.

            The Government panders to whoever has the balance of power, which is yet another reason why your ideas won’t work.

          • “The Government panders to whoever has the balance of power, which is yet another reason why your ideas won’t work.”

            No, that’s exactly why my idea would work.

            You had this vision of a woke Australia and it’s disappearing before your eyes. It was never going to happen, but instead, now you get none of your socialist left policies. I would have loved to see your face election night when Labor got creamed. I would have paid good money to see it.

          • Totes BeWoke …

            For all your deductive reasoning [minefield of biases] you seem to completely over look that just like in the U.S. both parties are completely beholden to the same orthodox economics and monetary theory [loanable funds], hence its pretty absurd to speculate about X or Y political party when after pandering to their audiences will invariably vote for the same economics, based on the same ideological monetary theory.

          • No, that’s exactly why my idea would work.

            Your idea is that all the Independents will work together as a single block to hold the balance of power.

            The reality is they won’t.

            The balance of power in your scenario is not all the Independents, it’s the smallest group of them that creates a majority – and probably a different set each time.

          • “Your idea is that all the Independents will work together as a single block to hold the balance of power.”

            Yes. That’d be the agreement.

            The balance of power is the balance of power, if they need you, they need you. It could come down to a single Independent. It’s fallen on both Jackie Lambie and [email protected] in the past. Labor can’t survive much longer supporting LNP on big Australia, and once it becomes apparent to more and more Australians it’ll weaken the party even more. Should Independents stand in the way and Labor steps in to support LNP, how do you think that would look for poor old tired Labor?

            The status quo is not acceptable, and I think most Australians agree. Given a solution, they’ll jump at it.

          • “Yes. That’d be the agreement.”
            An independent is independent. There is no agreement. an agreement to vote as a block is a party.
            The only people an independent will give a sh!t about are the people in their own electorate, and each will be easily bought by pork barrelling in their electorates to ensure re-election.

      • Explain boring? repetitive yes but not boring as its using ALP own words to show how contemptuous of the ordinary Australians they pretend to represent. Pure evil.

  9. Holiday In ScomodiaMEMBER

    Labor are dumb, but slowly getting less dumberer… they are catching up to the Libs in the treachery stakes …Albo-eit at a glacial pace. Currently they are almost caught up to where the Libs were in the 90’s and have a focus group and team of consultants studying the events of the Howard era… reckon scrapping NG reform will be a ‘non core promise’ if they can pick up the next election.

  10. I think the real competition in the ALP is which faction controls the party, not which policies will win an election. Being in opposition must be quite comfortable for the successful candidates and their hangers on. Perhaps things wil go better for them if the dole is brought back to $40 a day in March and SMEs collapse all around Australia.

  11. pfh007.comMEMBER

    Small Target Albo – what a disaster for Australia.

    Negative gearing was always a dumb policy. It is exactly the kind of negative Nancy – politics of envy approach that the public are not interested in but bone headed socialists seem to love.

    The only way to kill the Aussie addiction to chasing asset price bubbles is to stuff the golden goose until it bursts.

    And that means loads more supply until the pips squeak and super sized capital gains become an impossible dream.

    That means

    1. Make a residential vacancy rate of at least 4% a permanent policy target.

    2. New Home subsidy for FHB’s building a new home.

    3. Govt will build and auction new housing to FHB if the residential vacancy rate target is not being met.

    4. No capital gains tax for the first owner of new construction.

    5. Indexed cost base CGT or reduced CGT discount for investment in existing housing stock.

    6. End the private bank monopoly over deposit accounts at the RBA so there is bucket loads of competition for lending.

    Very hard for the Liberals to whinge about policies that involve encouraging new constructions and cutting taxes and increasing competition for banks.

    But don’t expect the ALP to pursue any of the above as “Zero Transmission” Albo is hoping a profile /policy eradication approach works.

    • Any government implementing those policies would be voted out so fast they would leave a cartoon dust cloud behind,
      and,
      “6. End the private bank monopoly over deposit accounts at the RBA so there is bucket loads of competition for lending.”
      Deposits aren’t what is actually lent in fractional reserve banking so the two are not very related, and the reserve bank is clearly happy to provide alternate funding to deposits for capital requirements for the banks.

      • pfh007.comMEMBER

        bjw678,

        “:…Any government implementing those policies would be voted out so fast they would leave a cartoon dust cloud behind..”

        Which policies do you think will be unpopular?

        BJ – You need to explain yourself if you are going to make such sweeping statements as it sounds like you are just unhappy because the policies would be bad for bankers and you seem very concerned about maintaining their existing privileges like a monopoly over deposit accounts.

        We already know that subsidies for FHB’s are VERY popular – don’t you watch the news? New housing is moving like hotcakes.

        Who is going to complain if the govt is building and selling new houses to FHB?

        Who is going to complain if the government targets a vacancy rate to ensure there is always plenty of housing.

        Who is going to complain about zero CGT for new construction.

        The only one that property shills might moan about is a reduction in the existing CGT discount for investment in existing housing but I am more than happy to leave that untouched to avoid giving you something to moan about.

        The bank monopoly?

        Yes we get that you love the bank monopoly over deposit accounts but apart from bank apologists I haven’t meet any member of the public who thinks giving the banks a monopoly over ANYTHING is a good thing.

        “..Deposits aren’t what is actually lent in fractional reserve banking so the two are not very related..”

        As I told you last week, you need to spend some time thinking about the implications of ending the bank monopoly. If you did you would realise that there is NO fractional reserve banking once the monopoly is lost. Without the monopoly – RBA deposits are exactly what is being lent.

        • Any policy that causes existing house prices to fall is poison.
          People want affordable housing and the value of their property to increase, and if you make them pick one, it isn’t affordable housing.
          Their is some serious cognitive dissonance going on there but that is the reality.

          “As I told you last week, you need to spend some time thinking about the implications of ending the bank monopoly. If you did you would realise that there is NO fractional reserve banking once the monopoly is lost. Without the monopoly – RBA deposits are exactly what is being lent.”
          Except what is or isn’t lent is an entirely regulatory thing and can exist in either state in either way. they are not absolutes.

          • “..Any policy that causes existing house prices to fall is poison…”

            That is clearly wrong.

            Morrison is handing out money to FHB’s to build loads of new housing at a time when the borders are shut.

            How does that not put downward pressure on prices? It obviously does but it is still very popular.

            If what you are claiming is correct, Morrison would be handing out grants to FHB’s but would be doing nothing to encourage new construction while the border is shut.

            You assume that the general public believe that lots of new housing will drive down prices. That does not seem to be the case at all UNTIL there actually is an oversupply which drives down prices. There is no sign of any over supply any time soon and zero chance once the borders re-open.

          • Zoning and new house construction numbers are a state thing. FHB grants increase the amount that a FHB can afford to pay to build a house, often by more than the grant is due to leverage effects.
            In a supply constrained market higher capacity to pay leads to higher prices. I’d say current supply is constrained.
            They get to look like they are doing something while pushing prices higher, it’s a win-win.

            Or have house prices started falling and I missed it?

            “1. Make a residential vacancy rate of at least 4% a permanent policy target.
            3. Govt will build and auction new housing to FHB if the residential vacancy rate target is not being met.”

            These are the policy poison, leave those out and all you do is continue to goose prices up.
            Why do you think Jacinda very quickly backpedaled from Government built housing to providing subsidies to existing builders over in NZ?

          • pfh007.comMEMBER

            bjw678,

            “..I’d say current supply is constrained…”

            What?

            Approvals are going gang busters.

            https://www.afr.com/property/commercial/surging-house-approvals-make-for-strong-year-of-home-building-20210107-p56sc3

            As for NZ – who knows what Jacinda is doing. Virtue signalling seems to be her favourite policy action.

            That could explain a failure to do anything useful.

            Subsidies for building new housing are likely to be very effective if they want to build more new housing. Hard to get the subsidy if you don’t build a new house and once built it is part of the market.

            That is the point.

            Get stuff built and it affects the market.

            The ALP negative gearing policy sounded negative for new construction and thus did not have enough encouragement for new construction. Just putting the boot into speculators was not going to win votes.

            Zero CGT for new construction will get new construction booming and the ALP elected.

          • How close are we to that 4% vacancy rate, especially for houses?
            Adding a subsidy to housing that would have been built whether the subsidy existed or not only pushes up prices.
            The question is how does the FHB release new land for building on, which is what is the actual bottleneck to more housing. Not the cost of putting a house on it.
            The fed government acquiring land, building houses and selling them at a potential loss is all that they can do to drive down housing costs at the moment, and they won’t.

      • Master of TP,

        Do you really think that Scott Morrison is not winning votes by being able to point to all the new housing that is underway?

        You are assuming that the ALP would actually state that the aim of those policies is to drive down prices.

        Of course they would not say that because that is not the objective of ANY of the policies.

        The policies are about building, cutting tax and increasing competition.

        Would they eventually cause house prices to soften?

        Maybe – but that is very very different to the negative gearing policy and other policies that were deliberately targeting prices and trying to deter investment..

        It is very hard to argue against policies that are designed to encourage activity that people consider is a good thing like building lots of houses for new families.

        That is why I called the approach killing the golden goose by stuffing it.

        You may understand the implications of too much of a good thing but that is a difficult political argument to make.

        After all – the Liberals have done extremely well pursuing policies that have been burying Australian households in debt.

  12. Hate to have to point out the blindingly obvious but if you ask me DLS is a prisoner of the Productive Paradox.
    It’s one of those infinite growth thingies where our Labour fundamentally derives its value from growth, but what happens if Growth itself has no residual value, well naturally we replace real organic growth with faux growth but since this growth is valueless, naturally the reward for Faux growth is Faux wages. They’d be wages that can’t be traded for anything of real value.
    You don’t need to be a genius to understand that in a faux growth environment, the price of anything, with tangible and enduring value, shoots to the moon. You also don’t need to real smart to understand that this creates an environment where Politicians control growth and naturally want to be rewarded for creating what little growth we have.
    We’ve created an economy that’s a Politicians wet dream, yet we naively expect them to put an end to these shenanigans because in the end it’s simply not good for us. I mean just how blind do you have to be to see that Politicians will never give up their increased power. They’ll pander to the weakest of us and weaken the rest through their pandering. We’re entering the end game for the Productive Paradox where everyone can see the collapse coming and is preparing for this collapse by staking their claim to tangible assets with guaranteed future value.

  13. BarratuesdaiMEMBER

    Before you cast your vote in 8 months time, it’s important to remember what really matters, the decisions you make at the ballot box shape our nations future; ask yourself this simple question …

    Do you prefer your crony capitalism with, or without unisex public toilets?

  14. Good Grief its all about flow of funds and everything set up around it E.g. per se does anyone realize how much flows originate from retirees that are dependent on stock dividends, try pulling the plug on that and see the shock through the system … chortle …

    Look if your going to take something out you have to replace it with something else or cop the short tem economic consequences which will then manifest in the next election cycle … whoooboy … rinse and repeat … then some will ask …. https://www.youtube.com/watch?v=TGofoH9RDEA

  15. David WilsonMEMBER

    I dont often agree with David but I do think we should at least reduce the tax benefits of negative gearing by 50% and the government needs to find a way of forcing local government and state governments into releasing more land for housing and stopping land banking by big companies which forces up land prices to at least double what their real development cost is. Young people need a fair go at getting into home ownership and its a bloody disgrace that all governments have allowed this to happen. Its un Australian and stealing from our younger generation of new home owners the alternative is that they face ever increasing rents for their whole life at the behest of lousy governments that we vote in.
    No we dont need more government expenditure we just need more , much more new land development and to get the rip off state stamp duty on new house purchases, I just paid out nearly $40,000 in transfer fees and duty to move into a unit to retire into, its a disgrace.
    Its also about time we crushed and reversed home prices as the madness of 5-10% value increases is an utter disgrace.

  16. I thought it was finally understood around here that land prices were not the critical driver of RE prices, but availability of credit, speculation, international and in some cases intrastate capital flows and more so the demand for REMBS – drives all the aforementioned.

    At the end of the day is just the model that was imported from Orange county decades ago.

  17. Labor only needs one policy “We aren’t the LNP”

    Thats four words, so it might be too long for many voters.

    Then if/when they get in, they can bring in all the policies they like. The normal political spin is to do the unpopular things in the first 6 months, ignore the time in the middle and then have a big cash splash just before the next election.

    Simple

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