We Show Australia How to Tackle Housing Dilemmas

“While the debate about house prices is stuck in a holding pattern in Australia (with governments too scared to do anything too radical for fear of upsetting homeowners, and regulators averse to dealing with a problem that’s political in origin), the Kiwis just get on with it,” Crikey’s business and media commentator Glenn Dyer and political editor Bernard Keane write.

“The fact that it’s left to the financial regulators to do some hand-wringing about house price risks again illustrates the lack of political will to tackle housing in Australia. Macro-prudential tools have their place – especially when backed by a government-central bank agreement, as in New Zealand. But they’re only for treating the symptoms of the problem, not its structural causes. The Ardern government isn’t just relying on the RBNZ – it moved to abolish negative gearing (which enables investors to compete with owner-occupiers with taxpayer subsidies), treating the symptoms and the disease at the same time.

“Here we still have buffoons peddling the idea of inflating housing demand still further by throwing superannuation into the mix, and calls for the RBA to be in charge of house prices. It’s a political failure of will that will cost new homebuyers for decades to come.”

Original article by Glenn Dyer and Bernard Keane, Crikey, June 17, 2021.