Prices of Australian real estate are going crazy again. Shane Wright (SMH 26 June) demonstrates the massive conflict of interest of our political masters overseeing this endless summer of property booms. Only 15% of the population owns a rental property, against 57% of Federal cabinet and shadow cabinet members, comprising 46 MPs.
In a year primary residences for the luckiest among them have jumped up almost 50% in value, and 40% of them live in suburbs or towns with median house prices over $1m. Scotty’s suburb has hit $2.6m. Capital gains tax exemption makes them even happier places to live.
The major political parties also continue to preside over a tax rort called ‘negative gearing’, which effectively means the taxpayer is financing the property investor. Voting punters may remember that Labor played with the idea of nixing the deduction, but lost heart and a subsequent election. Since then, the subject has gone completely off the Lib/Lab policy agendas: omertà on the gravy train on which they’re all passengers.
Professor Hal Pawson of UNSW researched housing prices and recommends a Royal Commission, which sounds like a good suggestion. But the good professor and I part company when he expects politicians to put aside self-interest while considering housing policy.
“They do have skin in the game,” he said. “It might be difficult when it comes to tax policy around investment properties given just how many politicians own rentals, but I still think most will make decisions for the right reasons,” he said. Oh really!
That’s my definition of wishful thinking. To clumsily misquote Paul Keating, the leading horse in the race of a politician’s mindset is always self-interest, by definition, whether it’s holding onto power by any ruse, or making easy money on investment properties.
I know bagging politicians is an ingrained reflex, but what a happy coincidence that their venal personal interests are served by ignoring the widening disparity of property wealth and unaffordable housing, which is now out of control in the not-so-lucky country. Go girl!