Welcome to my regular Friday song/tune day, ladies and gentlemen, where I pick a piece of music that reflects my mood or the times, to share with you.
Housing policy is on my mind this week. The two main political parties vying to form the next national government of Australia have made their pitch to voters. One has offered to bend the superannuation rules so that first home buyers can access their retirement savings to help raise a deposit for their first home. The other is offering a government/purchaser shared equity scheme. Those are interesting ideas, both with their pros and cons, but as some commentators have asked, where are the additional houses needed to offset inflationary pressures? Hence, some have said that supply, not demand, is the main issue.
In a perfectly competitive market, supply and demand are apparently equal at the optimum price point. That’s capitalism, right? That optimum price is far too high for low to middle income earners. Correct me if I am wrong, but aren’t rising property prices and higher interest rates meant to benefit investors under Australia’s current taxation rules? Is this the real aim of the election commitments? Australia has the most generous housing investment incentives in the Western world. The current promises seem likely to increase residential property prices further and if the price of residential property goes up, so do rents. It is a zero sum game.
Lack of supply is, of course, someone else’s problem. For example, the cost of land is enormous. Land releases are normally the jurisdiction of state and local governments. Once a metropolitan problem, land prices have skyrocketed across many parts of Australia. Some have suggested that local governments should be forced to release more land for development and that red tape be cut (a familiar refrain). Deregulation could encompass, for example, lifting height and density restrictions, and doing away with community consultation on development proposals, etc. Some jurisdictions require developers to fully or part fund public infrastructure in the new suburbs adding to the price of house and land packages. I am equally as frustrated by simplistic land supply arguments as I am with demand side house price pump priming.
Meanwhile, good luck getting a qualified trades person, especially in this day and age of house burning or flooding climate catastrophe. Then there is the shortage of building materials also driving up costs and slowing construction. Both of the major parties are keen on boosting trade apprenticeships to help overcome labour shortages. Great, but I wonder if they realise there is a shortage of qualified trade teachers in the vocational education sector?
Many important sectors of our economy rely on temporary workers from overseas to fill skilled and unskllled jobs, including in bustling tourism towns in the regions. Even a tent is hot property in the peak tourism season. Are these workers going to want to come here if they can’t secure a roof over their heads? Last time I travelled up the coast of eastern Australia, I met fruit pickers who lived in their cars. It is a trend that has caught on. If low paid care workers can’t afford to rent or buy, we surely cannot be surprised that they are leaving that sector in droves. Our community suffers as a result.
From my perspective, the availability of affordable housing for all is an important indicator of good economic management and a good business-friendly policy, while its lack is a constraint on economic growth. How large must the ranks of the economically vulnerable, housing-insecure grow before housing affordability is genuinely addressed by Australian governments? Maybe nothing of substance will happen until affected businesses – and I don’t include property developers in this group – demand action. The voice of businesses, of commerce, seems to have more impact than the pleas of the vulnerable. If voters care about which political party can manage the Australian economy best, they should care about what’s on offer to improve housing affordability. Sadly, the answer appears to be not much. We are now in the land of pure imagination.
Tomorrow, Australia elects its next national government. Is writing this a good use of my time? Probably not. I’m just a quietish Australian. If you get a kick from champagne and (un)reality TV, this whole fruitless exercise should be a real turn-off. That’s okay.
So, back to the Friday song. Today, I’ve chosen a clip of Josh Groban singing Pure Imagination. I am particularly fond of this verse.
With a spin
The world of my creation.
What we’ll see
[Songwriters – Anthony Newley / Leslie Bricusse]
Sounds like the election campaign to me.
For those reading because they are interested in my True Love’s adventures in hospital, rest assured that he is still with us. He’ll be in hospital for at least a week. For the moment, there is pain but hopefully in a few weeks, he won’t be so crook in the guts (Aussie technical term).
Take care, everyone. Stay safe and be your most compassionate self.