How Labor Can Win Easily (8)

Work out — before Sunday — a way to make housing more affordable. It could go like this.

Build some inner-city flats and, choosing by lottery the co-buyers, sell a half-equity in each of them, the other half being government-owned. Buy up Deceased Estates and do the same thing. Pass a law that in two cities, Melbourne and Sydney, reduces rents for two years by thirty percent, and see how it goes.

The half-equity the government owns is capital. When the other half-owner sells and moves on, or dies, the government gets half of what it sells for.

Even if the new dwellings thus acquired number only ten thousand in the first two years, and the net money spent only two billion (costing each taxpayer 1.70 a week), the vivid intention will win a million votes.


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  1. How Labor Can Win Easily?

    Talk policy.

    • Doug Cameron was down here in Melbourne this morning, this
      from his facebook page,

      “I called in to Radio National’s Life Matters program this morning - which was discussing housing affordability - after being very surprised to hear the presenter say that both major parties had been silent on the issue through this election campaign.

      Tackling housing affordability is a key priority for the Rudd Labor Government - it might surprise some in the media, but we’re out in the community highlighting what we have done and talking about our plans each and every day.

      Our government has invested $31 billion to tackle housing affordability and homelessness - real programs delivering real results, including 50,000 new more affordable rental homes around Australia.”

      It sort of touches on everything from your plea for policy to the other issues below, housing, ABC and the media.

  2. “Former prime minister Bob Hawke has joined the growing number of Labor figures labelling coverage of the election campaign by News Corp newspapers as biased.”

    Why haven’t Hawke, Carr, Shorten and ABC’s Media Watch not talked about this bias earlier? Why is ABC so biased?

    • People often confuse “Bias” with hearing ideas they disagree with. As part of its charter to serve all Australians, the ABC includes Labor voices, which may not be welcome in much of the News Corp newspapers. However, your implication that ABC reporting of the election, equates with that of the Sydney Telegraph, defies reason.
      Whatever it faults, I have yet to see ABC News calling for a coalition victory, caricaturing political leadership,pumping up damaging gossip as news and photo shopping fake images.
      Media watch has been detailing such bad reporting for many years. You should watch it more often yourself, Helvi.

      • I watch it every Monday night; for months now ABC commentators (Sims et others) have been calling Abbs our next PM. You should leave the commercial stations and watch more of SBS and ABC, Alan Knight.

      • The thing that bugs me most about the ABC is the fact that they use NewsPoll everywhere as their reference to ‘polls’. sometimes even with the logo in the background as was the case a few days ago when I saw some chap giving quite a good background of years gone by. I have written to the ABC by their online feedback, asking why and suggesting that its not that brilliant to associate themselves with an organisation that is perceived to have some sort of campaign going when if they wanted accuracy they have a perfectly good source in Morgans which has no axe to grind and has an extremely good record of accuracy. Although my questions have been acknowledged and passed to the appropriate area for reply,no other response forthcoming at this moment.

    • This ones aimed at Brisbane as the only Newspaper is a Murdoch so no alternate reading.

  3. Put these ideas into public arena PLUS call for urgent housing affordabilty workshops for each capital city to come up with policies that would work for them.

  4. Half-equities is potentially a good idea.

    The real solution for the housing affordability crisis has to be more public housing probably funded in part by the abolition of negative gearing (except for genuine new stock) and abolishing eventually Commonwealth Rent Assistance (CRA) The CRA is necessary as a stop gap but is at heart an inflationary subsidy to landlords.

    But to put this on the agenda one has to have people talking about housing policy and the amazing pr job the housing association NGOs have pulled needs to be countered.

    An architects prize, we could call it the Roark Award, should be offered for the best cheap mass housing, there could be low medium and high density dvisions. Some effort could be made to get people talking about issues of architecture and town planning.

    People love architects. Wilbur of Mr Ed fame was an architect. Ted Moseby of How I Met Your Mother is an architect. “Dad” in Hey Dad was an architect, bad example that last one maybe. Anyway the point remains.

    I saw Cath Bowtell, ALPs hopeful in Melbourne, at a meeting on Monday night, with Adam Bandt and various minor candidates. “If you want to send the Labor Party a message ring my office” Cath snarled. The point of course is that no message is heeded unless its a Yournotelected-O-Gram. Often not even then. The ALP’s sense of entitlement towards the votes of left and working class people is always amazing. And it is of course what is killing the ALP.

    • Australians love architects, you must be joking..? Maybe they do like architects, but not good architecture?
      There’s a book by Robin Boyd “Australian Ugliness”, it’s still valid today; go to France and find man made beauty, go to Oz suburbs and witness the lack of architecture and good design..

  5. How is Bob’s suggested investment attractive in any way. You will not need to draw co-investors by lottery. No-one will want to be in the lottery. Why would you invest as 50% owner when you will have to bear a 30% reduction in your return compared to investing fully in the same market with 100% return? This is exactly the reason governments do not get involved in the private rental market which is different from public housing. Another problem is it ties up a massive amount of govt capital. Why do you think the govt sells off Defense Housing? To release capital whilst guaranteeing market rental rates even when properties are not occupied.

    • It is attractive because it halves the price of ten thousand houses. Are you an idiot?

      Why do you think a young couple would be repelled by a Marrickville flat now valued at six hundred thousand that costs them three hundred thousand, and, in interest payments, two hundred and ten not four hundred and twenty a week?

  6. Investing in the private property market is more than just the initial capital outlay, there are ongoing costs and liabilities. If the return on investment (rental plus any tax credit for new property) is less than annual costs (ie negative gearing) then the difference has to be made up by the owner(s). If the property is not new build it cannot be depreciated so the tax benefit is removed making the top-up difference greater. At sale does the Govt also pay CGT?
    Sorry Bob but this idea would not be a winner.

  7. Using Bob’s example of a $400,000 property an average market rental return in Melb is about $350 per week. If you reduce that rental by 30% then it’s $245 per week or $12,740 per annum. That’s a yield of 3.2% on your investment. The stock market is returning a yield of 7% and normal property investment around 4.5%. To make this an attractive investment you would need to add major tax benefits that aren’t currently there.

  8. Bob, I know it doesn’t have much appeal among your baby boomer, investment property owning, bank shareholding readers, but if you want to make property more affordable, then make it a bit riskier for the people who are buying existing housing stock but don’t actually need them to live in.

    To wit ..

    Phase out negative gearing on existing housing stock, ensure that it is only applicable to new builds, and that the tax benefit on a new building expires after 20 years.

    Phase in Increased capital gains tax on residential property investments (existing stock) held for less than 7 years. Reduce capital gains tax for investment properties held for longer than 10 years.

    Enforce (via APRA’s prudential requirements) Loan to Value ratios of no more than 80% for our banks. APRA also to enforce limits on the value of investment property lending as a proportion of a banks’ loan books. Make wholesale funding for banks harder (i.e. take away their ability to sell covered bonds).

    Foreign Investment Review Board to enforce restrictions against purchases of residential property by non-residents.

    Government opens up as many parcels of crown/Council owned land as possible.

    Now, this may precipitate a small-ish crash in our economy over the short-term, blow a crater in the earnings of banks, developers, the construction industry, the real estate and associated sectors (e.g. newspapers), depress the share-market, and take a sizeable chunk out of the wealth of half a million property investors, but by god will it start to make the purchase price of properties more affordable for those who are trying to buy a home. If they can get a loan. And pay the higher interest rates.

    But it is, as Kevin Rudd would say - “on that issue I’ll just say this. Number one is that there are no easy answers, number two is that no-one wants more affordable housing than me, and number three is that, vis a vis the specific, uh, the kind of holistic policy framework that governments are concerned with achieving as it relates to the ability of Australians to enter the housing market in a way that is, one - both equitable and affordable, and two - that does not precipitate the kind of, uh, unintended consequences of alienating those with an important and deeply, uh, embedded stake in the current policy framework, is not an easy issue.

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