As the federal election draws near, the pressing moral issue of housing and cost of living appears to sit comfortably outside the major parties’ carefully targeted election messages.
Why are artificially high home prices and housing crisis not an issue to worry about among the ranks of aspiring federal members and senators?
Yes, there are announcements about smoke-screen first-home buyer programs which are rather designed to mislead the voters rather than actually helping them.
These programs supported by both major parties at best offers a trap to trick first home buyers and single parent families into buying at artificial prices with a deposit of as little as two per cent. They still have to spend the rest of their lives to pay interest and principal of up to 98 per cent of the purchase price.
How are other pressing issues solved, such as fuel prices? The government quickly solved it, didn’t it? Well, because they themselves were affected. They need fuel too. It is an issue to worry.
Are the politicians whether government or opposition affected by the housing affordability? No, Australia’s political elite are among the country’s most enthusiastic real estate investors.
The publicly available data suggest a sizeable majority of federal politicians have a vested interest in maintaining high housing prices, particularly since most have mortgages over their own investments.
Vested interests carefully craft all these programs not to hurt their pockets.
Most federal politicians leverage strategies such as companies, trusts, self-managed super funds, spouses and other complex investment vehicles to hold properties to benefit from generous tax deductions and advantages for property investment.
This simply means ordinary taxpayers and prospective first home buyers are double-disadvantaged due to both the escalating pressure on housing affordability we are facing now, and low tax paid by the highest income earners to the tax coffers.
The root cause as widely known is that investment property has major tax advantages which makes it pretty exciting for the top income earners such as politicians to buy up a large number of properties to minimize the actual tax they pay. This is called “negative gearing” – that has been blamed for frenetic property speculation over the past decade.
There have been potential suggestions to tackle this thorny issue (eg. restrict investment loans to new builds only, reform negative gearing etc). Would you develop a program that will hurt your and your family’s interests?
The result is rather tragicomic that the world’s most sparsely populated nation has one of, if not the most expensive housing and land on the planet. Yes, artificially inflated and expensive. Most Australians are forced to spend the best part of their life to pay the banks, rent forever, or live an undeserving life of homelessness and indignity.
Here we go again. Another election of little choice.