(as published in the AFR, 4th February 2022) [$]
During his National Press Club talk this week, Prime Minister Scott Morrison has acknowledged that it is “even harder” to buy a home than when he did so.
Indeed, an examination of the ratio between house price increases and wages growth suggests that it is now approximately twice as hard for Australians to buy a home than it was when the Coalition came to office almost a decade ago. Morrison went on to say: “We can’t manage what happens to house prices, but we can help people to get into homes …”
However, Morrison’s HomeBuilder grants and similar schemes have served to further inflate the housing market and even those people who have been helped are saddled with unnecessarily huge mortgages.
Moreover, it is blatantly untrue and a derogation of his responsibilities for Morrison to suggest that the federal government is powerless over house prices. Just as his government has acted to suppress wages growth, it has also pursued fiscal policies promoting unproductive land price inflation. This has entrenched economic privileges and stifled production and co-operation.
Big national reforms and removal of taxes on labour and capital are urgently needed to free our economy. Collecting the rent of land as the sole source for public revenue would deliver affordable land for housing and industry and create secure, well-paid jobs. The federal government truly does have the power to fix housing affordability and to help build an inclusive, co-operative society where individual gains necessarily result in benefits for all citizens.
Ronald E Johnson, Charnwood, ACT
Photo by Miguel Á. Padriñán from Pexels
