Labor populism under Bill Shorten and Sally McManus, if they deliver on their promises, will make the economy inflexible and weak.
Labor's problem is this. If abolishing negative gearing is to improve housing affordability it has to decrease prices. But if it decreases prices it decreases the savings of all home owners.
We the undersigned call on all political parties and candidates contesting this state election to commit to run campaigns which address the key issues for Queensland’s future.
Recent political debate on housing affordability has been conducted in a fact-free vacuum. Home owners receive more from the tax system than investors.
The inability of Labor’s Treasury Spokesman, Chris Bowen, to explain how Labor’s new housing “affordability” policies could decrease house prices shows it is not about affordability at all.
If the aim of federal government policies is to increase affordability without decreasing house prices, then there is only one solution – allowing potential purchasers access to all their savings, including superannuation.
The analysis by the majority is fundamentally sound, and avoids the mistake of thinking that housing affordability can be fixed by introducing more Commonwealth Government regulation and tax. But it misses the real problem for first home buyers, which is the deposit gap.
Abolishing negative gearing is sold as a solution to housing affordability, but if it does nothing to reduce the price of houses, then it does nothing to solve affordability. Yet proponents of negative gearing continually tell us it will not affect house prices at all.
Queensland Housing Minister Mick de Brenni's determination to return welfare housing to its Soviet-style past provides the latest natural experiment into what public policy approaches work best.
The Productivity Commission noted in 2015 that the most frequent use of superannuation lump sums was to fund housing, including paying down mortgages and renovations.