Federal, state, local government. Hard, sometimes thankless, jobs.
The vast majority of politicians genuinely pursue their heartfelt version of ‘the greater good’ or the ‘least harm’ across complex issues.
Our elected representatives only have a limited amount of political capital, dependent on who they are, where the electoral cycle is, and luck. We also have a national tax system loaded with inefficiency which doubles the challenge.
This is why planning reform rarely gets done. That is why so many politicians sign off on taxes that drive up the price of new homes and of renting while talking about their commitment to housing affordability.
That is why you wouldn’t think there was a national housing accord on the way.
As I wrote yesterday in the AFR:
“Self-evidently, we have failed to do enough planning for sustainable densification around transport and job opportunities in our cities since the turn of the century.
In its recent paper, the NSW Productivity Commission collates analysis, from the Reserve Bank among others, showing a 10 per cent increase in national supply reduces the cost of housing by 25 per cent…We should have had incentivised national housing targets twenty years ago…”
The reform formula should be a move to broad based federal and state taxes, more green and brownfields land supply and planning systems that don’t immediately add to the cost of new houses and apartments.
And yet in Victoria two weeks ago, alongside commendable long-dated tax reform, yet more direct and immediate taxes were levied on housing investors. These taxes are no Robin Hood move.
As the clever folks at Longview point out, before factoring in new taxes on housing investment, some fifty per cent of investors would be better off putting their money into their superannuation over investment properties. And all investors will be passing these tax hikes onto renters.
Last week the Queensland Public Works Minister tabled a report on ‘developer licensing’. It was bulging with aimless red tape that will directly make new homes more expensive. Queensland just doesn’t need solutions in search of a problem driving up the cost of new homes.
At the federal level, recent welcome build-to-rent housing reforms will be cancelled out if the Treasurer and Assistant Minister to the Treasurer can’t get their house in order on thin capitalisation rules.
Imagine ushering in a whole new asset class that could provide 150,000 homes only to cancel access to the plain vanilla third party debt commonly required for that same construction of homes at scale via our globally trusted real estate investment framework. Urgent rethink required.
Three different governments, one month of moves that could solidly undermine housing affordability across the country.
We will work with the relevant parliaments to help blunt some of this damage, but the fact is we will need to push even harder than usual in the next twelve months to make true reform stick.
It’s an honour
Congratulations to all Honours List recipients following the Monday King’s Birthday holiday across much of the country. In particular, a warm Property Council acknowledgement to those who have contributed to our organisation and our industry including The Hon Lord Mayor Sally Capp AO who, among many other achievements, is a former Executive Director of the Property Council of Australia.