Former Prime Minister Tony Abbott was thrashed from all sides for proposing that Australia cut its annual migration intake from 180,000 to 110,000.
And his suggestion that high migration levels have pushed up already sky-high home prices was widely derided. And almost gleefully reported on by the mainstream press.
Steve Ciobo, for example, said:
‘I think it’s a great shame that we often see immigration, and in particular immigrants having the finger pointed at them on issues, like, for example, escalating house prices or depressed wage growth.’
Great shame it may be. But a new report from the Grattan Institute is warning of a potential housing disaster due to the record high home prices.
And according to CEO John Daley, much of the blowout has been caused by home building falling behind population growth. While not calling for a cut in immigration, The Age quotes him as saying:
‘It’s all very well running a strong migration program. But if you don’t build enough dwellings to back that up, the price of housing goes up.’
Tony Abbott one. Proponents of excessive, poorly planned growth zero.
Treasurer Scott Morrison has also pounced on the new report into housing affordability, saying it concedes that abolishing negative gearing and halving the capital gains tax discount is nothing but a ‘tax grab’.
The Grattan Institute think tank has slammed governments over the past two decades for creating a housing mess by taking easy options rather than addressing the real problem of supply.
It warns housing affordability is getting worse with young, low-income families the hardest hit in trying to buy home.
And those lucky enough to get a mortgage are finding it harder to pay it off given loans are larger and wage growth is low.
‘It’s bad, it’s getting worse,’ the institute’s chief executive Mr Daley told AAP summing up the outlook for housing if nothing is done.
The report released on Sunday says boosting housing supply would have the biggest impact on affordability, even if it would take time. It also cited cutting immigration as a last resort.
It says the states need to allow more housing to be built in both inner and middle-ring suburbs while replacing stamp duties with general property taxes.
It believes the Commonwealth can help with financial incentives for these reforms.
Mr Daley said limiting negative gearing and reducing capital gains tax will help in the short term but won’t help nearly as much as getting housing supply right. He stated:
‘If you got rid of capital gains tax and negative gearing you might have some money to bribe the states with’.
Mr Morrison said the institute gives the game away when it admits that abolishing negative gearing and halving the capital gains discount are primarily about raising taxes, not housing affordability. He told AAP:
‘Labor also seek to dress up their blatant tax grabs as being about housing affordability. It’s just another con’.
He makes no apology for doing the exact opposite by giving a tax cut to first home buyers saving for a deposit through its super saver scheme.
But Mr Daley says you don’t increase supply by giving people more money. Instead, he stated:
‘You increase supply by freeing up planning’.
The Australian Tribune with AAP