Morrison drops inflation nuclear bomb

If you want to understand just how biased the Australian MSM is these days then look no further than the last week of political coverage.

All of last week we heard uncritically of how inflationary would be a simple pay rise matching inflation for low income workers. That is, not even a real pay rise, just one that stopped award-wage workers from getting poorer. All week the MSM was a willing accomplice to Morrison’s Government gaslighting on the issue.

Yet, today, the MSM is cock-a-whoop at the prospect of a re-elected Morrison Government dropping an inflation nuclear bomb via giving first home buyers access to super for mortgage deposits:

This is despite the policy providing rocket fuel stimulus to an already overheated economy via two channels.

First, it will directly and instantly inflate house prices and unleash another wealth effect to drive consumption already overheated from pandemic support.

Second, it will drive another instant spike in housing construction and associated costs.

Housing is by far the largest component of the Australian CPI and inflation in the segment is already red hot. In prices, in rents, and, most assuredly, in construction materials and tradie wages:

In fact, if you take out the uncontrollable factors of oil (transport) and floods (food), housing inflation is just about all that there is to worry about in the CPI!

I can think of no better way than Morrison’s proposal to guarantee that this inflation goes wild and, in the process, embeds an inflation problem into the economy that does include broad-based wage claims.

This will therefore ensure that interest rate rises are equally hot. And, given the $50k deposit plus leverage will be instantly capitalised into prices, the RBA will unceremoniously crash the lot with equally steep interest rate hikes.

Why is an MSM so hostile to low-income wage rises on the basis that it will spike interest rates so keen on such house price inflation that will be far worse for the same reasons?

The answer for the Murdoch press is simple. It is the Coalition press release service and owner of Fairfax turned Nine is not much better given it is now run by Peter Costello and is the owner of Domain, its only growing asset.

It’s called the politico-housing complex. It has no care for the national interest nor your own.

Just like Scott Morrison.

Houses and Holes


  1. Grand Funk RailroadMEMBER

    It’s sort of like a reverse ‘Children of the Corn Scenario’ only more of a ‘Boomers of the House’ situation

    Malachai Morrison is the leader of the boomers and they will sacrifice anything they can. They need to sacrifice children to keep their house prices.

    Even when we think he is gone we can be sure that a knife will suddenly embed itself in someone’s back or neck just as they are relaxing and starting to feel alive. Anyone walking into a house should prepare for a body to drop through the ceiling, and for minor scratches to become gangrenous for years to come.

  2. Diogenes the CynicMEMBER

    Only a few more days before the Turd Morrison and LNP gangstas are flushed. Scomo has done so much damage in so little time.

  3. Interesting that it’s often just one evil individual who can create so much havoc in any society.

    • The avalanche is nearly always fully loaded, nasty as they are in themselves, they are just the right snowflake at the right time to set it off. Sorry but we deserve SM as a society and if the majority votes him back in, I will be unsurprised.

  4. ErmingtonPlumbingMEMBER

    “cock-a-whoop“ is not a turn of phrase one often hears.
    In fact a I’ve never heard or read such an odd phrase.
    Is it a Melbourne thingy?
    Like MBogan saying “wizard” the other day instead of just saying,…Cool?

  5. Has Scomo left it too late with this Super into Housing bribe? Millions have already voted and Scomo may have missed getting a chunk of that vote. Oh dear, how sad.

    • 2 million at least according to Grumpy Guts (Antony) Green

      What’s the voting age population. 18mil?
      *Swampy checks AEC – what a fuggen good guess it is 17,228,900*
      So that’s more than 10%.

      I don’t reckon this’ll swing too many.

    • Jumping jack flash

      A shrewd move, and pretty much required now, but yes, probably announced too late.

      • Any earlier and the Super parasites would have roasted him with an advertising scare campaign.

  6. Eliza Owen was good on RN Breakfast this morning. This will just benefit sellers. The average balance for 25-31 (IIRC) is 25k so that means they will access 10k. Poof that’ll disappear in a puff of smoke.

    The HIA talking head is on drugs – asked by Karvelas if this would further run down the super balance of many young folk who also tapped into super during Covid, he responded blithely – when they sell their house, perhaps after 10 or 15 years, they will take their super and the increase % from the capital gain and put it back in their super?

    Sorry, yafkenwhat?

    No they won’t! It’ll go to their next property.

    What a moron

    • drsmithyMEMBER

      Did you see Keating’s statement she posted on twatter that the average punter can expect to have approx $2m in Super at age 60 ?

      The assumptions behind that must be truly heroic.

    • Its obvious. It will transfer that super balance to sellers. Home buyers will lose not just that initial in super, but any time compounding on the super balance at the time where they are just starting to build up their investment. Without more houses the same amount of people will get the houses, maybe just a different mix depending on super balances that they are willing to lose.

      Literally older sellers eating their younger futures via the housing market.

  7. One trick ponyMEMBER

    The problem is that Labor’s equity scheme is also terrible policy. So either way we are headed for more bad housing policy. Canberra is absolutely captured by the property lobby groups.

    • One gives *all* FHB access to their own money locked in super, so that they can buy their first home and avoid the prospect of retiring at 67 with $500,000 in super and no home.

      The other creates an entirely new bureaucracy to administer a scheme wherein 10,000 people per year can have the privilege of applying to a federal government scheme – and we all know how efficiently those are run – to have the federal government partial ownership in their first home.

      Having half a mil in super makes no sense if you are still renting when you retire.

      • One trick ponyMEMBER

        How about letting house prices come down then? You won’t find any FHBs unhappy with that approach…

        • True. The only people unhappy will be those who already have a mortgage. The number of those vastly outweigh the number of FHB in terms of votes.

          In the lead up to the “election Labor could not lose” Sydney prices dropped by something like 14% as the market priced in changes to negative gearing and capital gains tax. That worked for the incumbent because it was the policy of the then opposition, which looked likely to get in, that caused the fall.

          Any government which presided over an actual housing crash – say 30% or more sustained over more than a year – would find itself unelectable for at least a decade after they lost office.

  8. Jumping jack flash

    “In fact, if you take out the uncontrollable factors of oil (transport) and floods (food), housing inflation is just about all that there is to worry about in the CPI!”

    Not all that surprising either considering that we have 2 trillion outstanding debt dollars – each one of them requiring interest to be paid every second it exists – and they were all spent on houses.

    Also if you consider that most banks’ loan books are 60% mortgages, or more probably. All that debt is parked in houses, causing massive, massive inflation.

    Even the RBA admitted not that long ago that with all the low interest rates and rampant debt creation they were befuddled as to why wages weren’t rising, and rightly so! The reason for that of course is the debt was being siphoned into houses, and there it stayed, more or less.

    But curiously now, when wages suddenly are catching up to the past decade of debt inflation on the back of systematic interest rate cuts, mostly thanks to the “COVID” stimulus – which in my opinion was crafted for exactly this purpose – they all lose their minds, and up go the interest rates!

    Its like they forget exactly what kind of economy they’ve created over the past decade and a half.

    • drsmithyMEMBER

      Housing Trust, Carbon Farms, Manufacturing Renaissance Bank, High Speed Rail: the Greens policy suite reads like a Lonely Planet Guide to a utopian science fiction future. Job Guarantees for Coal workers. A tax on billionaires and corporate super profits. In Australia this is basically banks, miners and property interests, but holistic tax reform it is not.

      LOL. They hate the Greens so much but know they have so little criticism of substance to offer (in no small part because the four parties scored higher have largely identical policies) it’s almost embarrassing to read.

      Meanwhile, the policy base that’s pilloried as “utopian science fiction future” would have sounded fairly mundane to a Labor voter half a century ago.

  9. JoeJackMEMBER

    Yesterday, I was looking at a printed copy of “The Weekend Australian “ while in a waiting room.
    First time I have done so for a long long time.
    In no less than 6 different articles they referred to the teal independent candidates as stooges for the ALP.
    It was a useful reminder why I haven’t bothered reading “The Australian” for many years.

    • Not buying it is the only way to go. However, if no one bought it I suspect it would still need to be printed and distributed for free.

      • JoeJackMEMBER

        If I had my time in the waiting room again, I think that I would just stare into space rather than read that propaganda for free.

    • Chris Mitchell is saying today that if LNP lose then the solution is to move further Right.

  10. We need a law that says all politcal parties press releases can only be released to a centralised press agency so that all press organisations get an equal go and, most importantly, stops this “exclusive” releases that force the press to tow the party line. Current system Is harming democracy!
    (should probably also cover associated organisations each side uses eg IPA)

  11. Leroy Huggins

    A bit more to it I think, you have to consider the overall circumstances. If a policy that is mildly inflationary to house prices, is applied in a situation where there is danger of a house price crash, and at the very least a large correction, it is very much different to the policy being applied at a time where prices are rising uncontrollably.

    So a couple of interest rate rises, and perhaps some reform to buyer scrutiny (on liar loans, limits to loan to income ratios etc), and the inflationary boost via FHBs getting to tap their Super, and you probably save house prices from a crash, which could/would be even more devastating, including for employment. Fair enough in the medium to long-term such a policy would have to be looked at for its sustainability, but in the immediate future it seems to be more price supportive than inflationary.

    Apply stimulus as we fall and take it away as we rise. Our system has largely been doing the opposite, and is that really better?


      So if house prices are dropping, and that’s our framework, then this policy is the equivalent of allowing current bagholders, to offload their tanking assets to new bagholders.

      This sounds like classic ponzinomics to me.