“Housing Crisis? What Housing Crisis?”: The Government’s Latest Message To Young People
Everything's fine in the housing market according to the Coalition.
Before Joe Hockey pulled the plug on his political career and ditched Australia for his permanent gap year in the US, he set up an inquiry looking into home ownership across the country.
The inquiry was established in April last year, but because it was interrupted by the federal election (Eurgh, democracy!) it only got around to issuing its final report today. The point of the inquiry was to look into current home ownership rates across Australia, analyse the impact property investors were having on the market, weigh up the benefits or otherwise of tax policies like negative gearing and look at “opportunities for reform.”
So what recommendations did the inquiry make?
None. Zip. Zero.
After nearly two years of receiving submissions and holding hearings, the inquiry has decided everything is working fine and there’s no need to change anything.
“Government policy is best focused on seeking to increase the level of stock in those markets that are undersupplied at present,” said David Coleman, the Liberal MP who chaired the inquiry.
So after the whole inquiry process the government has decided to stick to its current policy of focusing exclusively on housing supply, something that seems unlikely to resolve affordability issues on its own.
The inquiry did highlight that housing ownership rates in Australia were falling – from 71 percent in 1994 to 67 percent in 2011. It also noted that most of the people buying property in Sydney were investors taking advantage of generous tax concessions.
The weirdest bit of the inquiry’s report is when it acknowledges that house prices in Melbourne and Sydney are “inflated” but there’s nothing to worry about because this “does not affect the majority of Australians.” So our two biggest cities are experiencing a housing bubble, but apparently that doesn’t impact most Australians? Citation need, House of Representatives Economics Committee.
Labor and the Greens, unsurprisingly, are calling bullshit on the government’s lack of recommendations.
In a dissenting report Labor pointed out that housing ownership rates have fallen from “60 percent to 48 percent for young people aged 25-34”. Labor also called for negative gearing to be wound back.
The Greens took their frustration with the government’s inquiry to the next level by titling their formal dissenting report “Young people are getting screwed”. Edgy.
The party’s treasury spokesperson, Adam Bandt, said “In 1990 an average house was six times a young person’s income, but by 2013 it had risen to 12 times their annual average pay.”
“Reading the government’s report is like being transported into a parallel universe. The government refuses to admit there’s a problem, let alone take any steps to make housing more affordable,” he said.
It’s pretty infuriating that the government is just burying its head in the sand, ignoring all the evidence and advice from experts and refusing to even acknowledge there’s a problem with the housing market, let alone fixing it. Then again, what’s new?