After being clobbered in the Dunkley by-election for delivering hysterical exaggerations amid an absence of policy and the non-appearance of senior Coalition figures at critical times, the Coalition is now turning to policy.
But if the thought bubbles popping out of the primordial sludge are any guide, especially on energy and housing, please spare us.
I would prefer hysteria, misinformation and scare campaigns to bad policy any day. The former can be ignored and fade away the later can damage the country for decades and have done so, especially with housing and energy.
The Coalition named Andrew Bragg as shadow assistant minister for housing last week. He has often called for first-home-buyers to be able to access their superannuation for housing deposits.
Going in to the last election the Coalition had a policy of allowing withdrawals of up to $50,000. “It’s their money,” they argued.
No, it’s not. Superannuation accounts are really partly trust accounts. Money going in is taxed at 15 percent and subsequent earnings are taxed at 15 percent. That rate is usually much lower than the person’s marginal tax rate (usually more than 30 per cent), so there is a large government contribution which under existing rules is held until retirement. That is the condition of the tax break.
In effect, the Coalition’s 2022 policy, which looks like being renewed, would transfer large amounts of government money into the housing sector.
It is the same folly that the Howard-Costello Government fell into by announcing in 2000 a $7000 first-home-buyer’s grant. People flocked to it for fear of missing out.
If you pour money, especially government money, into the housing market, prices go up. And so they did.
The Howard-Costello Government also halved the capital gains tax, enticing investors to flock to the housing market abetted by negative gearing. It drove up demand and prices. That Government also unleased massive population growth by increasing immigration from about 70,000 a year to more than 200,000 and by giving mothers $10,000 cash to have a baby.
“One for Mum, one for Dad and one for the country,” Treasurer Peter Costello said in 2002.
They also trashed deals with the states that helped fund social housing.
In short, John Howard and Peter Costello are the Founding Fathers of Australia’s housing crisis.
To deal with the housing crisis you have to deal with the three major causes: high population growth; tax breaks for housing investors; and the demise of social housing.
The housing crisis will not be solved until immigration is cut to less than 70,000 (enough to counter-act the fall in fertility and to provide some limited very high-skilled migration); until the tax breaks are wound back; and until governments build and manage a rental and purchase housing stock of between 10 and 15 per cent of the total.
Of course there will be a rental crisis if the bulk of the rental market is run by inefficient, incompetent, individual housing investors who are in it for a tax-effective return, not for the provision of housing.
Labor’s policy is no better. It will give government money to 10,000 home-buyers a year for four years in return for equity in the home. It is trivial compared to population growth which maxed at 500,000 last year but is still at more than 300,000. Worse, it adds money to fuel the fire and in effect means that the Federal Government is now joining Australia’s housing Ponzi scheme, instead of ending it.
Unless a government party tackles all three, particularly population, it can only expect ever-increasing strains on infrastructure leading to a failure to meet reasonable voter demands which will eventually overwhelm it – and see it thrown from office.
Now to energy. Don’t be fooled, but be surprised. Labor did not introduce a ban on nuclear power stations in Australia. Rather the Australian Radiation Protection and Nuclear Safety Act came into force in the last days of 1998 when John Howard was Prime Minister.
Howard was recovering from a near-death political experience. Like George W Bush and Donald Trump after him, he had squeaked back into power after losing the popular (two-party preferred) vote but winning just enough seats in the House of Representatives.
The Howard Government quite reasonably wanted a new nuclear reactor at Lucas Heights to better produce nuclear-medicine items. Labor was against it, so the Coalition did a deal with the Greens in the Senate to get the reactor in return for a ban on nuclear power generation – 26 years later the ban is still in force.
The Coalition now wants the ban lifted so it can build nuclear-power stations on sites where coal-fired power stations are closing.
Labor should lift the ban immediately. It is just a bogey, blame target, and distraction. The real ban is not legislative but economic. Nuclear is the most expensive means of generating power. The private sector around the world will not go near it without massive government subsidies. And small nuclear plants are an untested furphy.
So, why is the free-enterprise Coalition promoting government-owned or government subsidised nuclear? Answer: to delay the replacement of coal and gas by renewables for a long as possible so the fossil industries (which donate large amounts of money to political parties, especially the Coalition) can make as much profit as possible before new technology and climate demands make them obsolete or socially unacceptable.
Any Year 12 student of economics and English comprehension could read the material in a couple of days and tell you nuclear is not a goer. Yet, the Coalition pushes on with its irrational, obsessive opposition to saner, cheaper, planet-saving renewable energy – any madcap scheme or misinformation against solar, wind, batteries, and electric vehicles, even to push hypocritical environmental concerns about bucolic sensitivities over wind farms and fears about a “ute tax”.
We do not need policies that pass pub tests. We need policies that pass Economics 101 and Sustainability 101 and the leadership to persuade and educate voters that they are better for the country. All else is followership. Followership of the demands of fossil-industry donors and the misinformation pedlars in the right-wing media.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 12 March 2024.
An immigration intake of 70,000 is still 1077 per day.
How many new houses?
How many new school rooms?
How many new cars electric or not?
Net immigration should be zero – same number out as the number going in.
Slots should be auctioned – if indeed there is a huge demand for delivery bike riders, then Uber can pay.
When I die, and I’ve had no children deliberately (destroyed 2 marriages for my belief), then religious fanatics and breeders can bid for my licence, my licence to procreate.
Homo sapiens is the plague species.
Why should Labor lift the nuclear ban law? Any time the Coalition speaks up against it, Labor could just point at it, and remind them who brought the law in. Instead, Labor should spend their time and energy on positive laws, to reduce population growth and to provide more housing.
Opposition housing spokesman Michael Sukkar saying the Coalition is determined to help all young Australians who aspire to own a home.
The aspiration is being disrupted by government tax incentives to housing investors EG negative gearing and 50% discount on capital gains tax bidding up the price.
In the September 2013 qtr the weighted average median transfer price of Australian dwellings was $457,634, in Sept 2023 qtr $707,293 a 54.6% inflated increase. Over 10 yrs the Wage Price Index increased 28.5%; the CPI increased 30.1%; the number of dwellings increased 19.8%; the population increased 15.2%; the land and dwellings portion of growth in household wealth was $5,700.7 billion of total net increase $8,151.3 billion (superannuation portion of wealth growth $1,707.2 bil). September 2013 qtr Australian total scheduled repayments of mortgages 7.9% of total household disposable income and interest 5.6%. In the September 2023 qtr scheduled mortgage repayments 9.7% of household disposable income and interest 6.1%.
The inflationary increase in the transfer purchase price of established dwellings is only benefiting those with more than 1 dwelling who can sell their spare dwellings for the hyper inflated Capital gained price. Most of us with just the family home will see it”s value increasing, but if we relocate we will have to pay the same value for the shelter we are relocating to, so no actual increase in wealth for living purposes. Our politicians are in that class that can reduce their taxable income in the 45% + 2% Medicare bracket from negative gearing. Michael Sukkar’s Statement of Interests in August 2022 declared he owned his family dwelling + 1 residential dwelling in Canberra + 1 additional Melbourne dwelling, all of which were mortgaged. Andrew Bragg only has his family dwelling in Sydney.