There’s no doubt many renters are in a world of pain right now.

CoreLogic data shows asking rents jumped 8.3 per cent last year, after a 9.5 per cent jump the year before, and 9.6 per cent the year before that.

According to a survey by financial comparison website Finder, nearly two-thirds of renters say housing costs are causing financial stress.

But, as painful as the increase in rents has been, it’s still only just ahead of the increase in home values over those same three years from 2020-2023.

Go back further and there’s no contest. For all but three of the past 11 years housing prices have grown faster than rents. Usually much faster.

In fact, 2023 was the first time in the past decade where rent rises outpaced capital gains on housing without home values falling.

The reason the recent, unusually large, surge in rents has gathered such attention is that there are a lot more losers than winners.

Even though most Australian landlords own just one investment property, there are still plenty with two or more.

Ipso facto, there are many more renters than landlords.

The rise in home values is very different. At the moment, there are many more home owners than those trying to buy a home — although this is inexorably changing as home ownership rates dive among all but the oldest age groups.

A bit over two-thirds of Australians see their wealth increase because of rising home values — at least on paper.

What’s the problem?

Aside from the obvious one, that home ownership is becoming increasingly out of reach for the third of Australians who aren’t already there, there’s another huge problem with prices surging far above rents.

It’s indicative of a massive misallocation of capital … a waste of money.

When professionals make an investment, they look at the return (or yield) and compare it to the risk they’re taking.

The average gross rental yield on residential property nationally was 3.7 per cent in December, according to CoreLogic.

That means the average Australian property investor who purchased a place in December 2023 is initially making a return of 3.7 per cent per annum — and that’s before any expenses, like interest costs, management fees and repairs.

In Sydney, it was just 3 per cent.

According to the most recent RBA/APRA data for November, the average variable interest rate on new property investment loans was 6.5 per cent.

In what financial universe is it a good investment to borrow a massive sum of money to receive a return that’s half what you’ll pay in interest? ‘Strayan property, apparently. She’ll be right, mate. No worries.

Of course, through negative gearing, you can write off the losses against other income to reduce your tax bill. But you’ll still be making losses.

And if rents kept growing at 8.3 per cent per annum for the next five years, then by the end of 2028 your rental yield would have risen from 3.7 to 5.5 per cent — although you literally could have got a higher yield over that period from a bank term deposit.

(Also, if that was to happen, your mortgage interest rate would probably be 10 per cent-plus as the RBA battled to get inflation down, of which rents are a major component).

So, in the end, basically what you’re betting on as an Australian landlord is capital gains, which will be taxed at half the rate of any income you actually work for.

Australia’s property Ponzi

Any investment that’s primarily reliant on capital gain rather than future income generation for its return shares at least one thing in common with a Ponzi scheme.

Both rely on the next investors to pay out the profits of the earlier ones.

In the case of real estate that means a new generation of buyers willing — and able — to stump up more cash to pay a higher price than the previous ones.

That worked a treat while interest rates were falling, boosting borrowing capacity for any given income level. It’s much more challenging as rates rise.

Although, with property prices having recovered their 2022 falls nationally, and hitting fresh record highs in Brisbane, Adelaide and Perth, it seems like Australians are up for the challenge.

At the moment, about 35 per cent of home loans, by value, are going to property investors.

But they also help drive property prices more broadly. Those who want to buy a home to live in have to outbid not only other owner-occupiers but also investors to secure one.

So the Australian obsession with investing in low-yielding residential property, encouraged by a tax system that subsidises this behaviour, pushes even those who simply want a place of their own to live in to sink more cash into housing.

As a result, Australians have $10.3 trillion of their wealth tied up in housing, more than three times the value of stocks on the ASX and even dwarfing the $3.5 trillion of superannuation savings.

According to CoreLogic, housing represents 56.7 per cent of household wealth.

That’s a lot of money that could be invested in new businesses and technology to spur economic growth, or used to buy stakes in foreign firms (or even a bigger share of Australia’s own mining and energy sector) to boost the national current account balance.

Instead, we tie up the majority of our wealth in the value we put on land we’ve already occupied, and now buy and sell from each other to the tune of more than $400 billion each year.

It’s great for the banks that lend the money, the real estate agents and state governments who take their cut from the transactions, those who already own a lot of land and can earn more from simply sitting on it than they would by developing it. But at what cost to Australia?

The biggest cliché of popular personal finance books is to avoid putting all your eggs in one basket.

But, as a nation, that’s exactly what we’ve done with housing and, even without a major property crash in recent history, we’re already a lot poorer for it.

This article was originally published on ABC

The post Rents highlight Australia’s economic Achilles heel, but it’s not what you might think first appeared on NMH.

When I recently caught up with an old Labor friend from university, our discussion turned to why some Millennials and Gen Zs apparently show less interest than previous generations to work extra hard to advance their careers.

My friend offered an insightful answer. Homes have become unaffordable for many people aged in their 20s and 30s, so what’s the point in slaving away at the office and dedicating extra hours if it won’t allow you to scrape together a home deposit?

The obvious fix is fast-tracking supply, supply and more supply of homes in inner and middle-ring neighbourhoods close to good jobs and existing infrastructure. Fairfax

Our housing availability and affordability problem is likely having perverse effects on work incentives, intergenerational mobility, entrepreneurship, fertility and family formation.

It is arguably the No.1 combined economic and social issue facing the nation.

The obvious fix is fast-tracking supply, supply and more supply of homes in inner and middle-ring neighbourhoods close to good jobs and existing infrastructure – as NSW is pledging to do.

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Nationally, new house approvals have fallen to their lowest level in nearly 12 years, the Australian Bureau of Statistics said on Monday.

The Albanese government has dangled $3 billion to states to streamline the building of 1.2 million homes over five years. But the current building slump, exacerbated by red tape for zoning and planning, high interest rates and expensive building costs, suggests governments will fail.

Australians need a more serious effort from the Commonwealth, states and local governments to enable the construction of more homes.

There are too many pretend policies that fail to deal with the magnitude of the problem.

The Greens have a whacky idea to establish a government property developer.

The Albanese government’s Housing Australia Future Fund for social and affordable housing and shared equity scheme for 10,000 annual low-deposit buyers are a drop in the ocean compared with what the private sector needs to deliver.

Peter Dutton launched a populist attack on the sensible idea to rezone inner-city defence land for housing. The Liberals want to allow first home buyers to tap superannuation for housing, which will push up prices unless there is a massive increase in housing supply.

Negative gearing and capital gains tax in the firing line

The Greens have a whacky idea to establish a government property developer and want to crack down on negative gearing and the 50 per cent capital gains tax (CGT) discount.

It’s not surprising Australians leverage into property and punt on capital gains. Australia has relies heavily on personal income tax with the top 47 per cent rate kicking in at an internationally modest threshold of $180,000.

Punishing wage-earning taxpayers entices them to turn to the property market to reduce their income tax bill and bet on capital appreciation.

Do the Greens realise their opposition to the stage three income tax cuts makes negative gearing more attractive?

Tax should be part of the conversation about housing. But it is not a panacea.

The zero-tax on the principal place of residence and exclusion of the family home from the asset test for the government age pension are putting upward pressure on home prices by encouraging over capitalisation. But they are considered politically untouchable.

Replacing stamp duty – such as with land tax or a higher GST – on property purchases would remove a barrier to moving. It would enable a better allocation of large and small homes between growing families and empty nesters, and also improve labour mobility by making it easier to move closer to jobs.

Centre for Independent Studies chief economist Peter Tulip says a range of research by left and right-wing institutions estimates that negative gearing and the CGT discount add only about 1 per cent to 4 per cent to house prices.

Investors, like businesses, are entitled to claim a deduction for interest and other expenses incurred to provide housing. It is a basic principle of tax policy and law.

Nevertheless, the 50 per cent CGT discount is worthwhile scrutinising because of its interaction with negative gearing.

The only reason running an investment property at an annual loss can make financial sense is future capital gains, a strategy made more attractive by the discount.

Investors can defer CGT paid on home sales to when the time is right, such as retirement when they have minimal other taxable income and face lower marginal tax rates.

During their younger and higher earning years when their marginal tax rates are high, they claim mortgage interest deductions against wages.

The 50 per cent discount on nominal capital gains replaced the inflation-indexed taxation of real capital gains from September 1999 under the Howard government.

The concession was introduced on all investable assets such as shares – not just houses – held longer than 12 months. It was in response to the Ralph review of business taxation and was intended to motivate entrepreneurship and risk-taking by small business.

Instead, it triggered a surge in mum and dad property investors. Existing housing is a relatively unproductive asset, so arguably it doesn’t deserve as large a CGT discount.

Yet, even if the 50 per cent CGT discount was made less generous, there would need to be some sort of concession to ensure only inflation-adjusted real gains are taxed (like pre-1999), or a smaller CGT discount is applied to nominal gains (Labor proposed a 25 per cent discount at the 2019 election).

Tilting the tax system away from investors might slightly increase homeownership rates as owner-occupiers replace some would-be investors.

But fewer tax incentives for investors would not boost housing supply and, if anything, could reduce the building of homes and put some modest upward pressure on rents.

If governments want more homes built, they first need to reduce the size of their massive infrastructure pipeline, particularly “Victoria’s big build”, which is poaching tradies and cement trucks and inflating construction material costs for home builders.

Financial incentives for councils

Instead of the Albanese government paying financial incentives to states, a better approach may be to offer some of the payments directly to councils to achieve home-building targets.

It is often councils that control the planning and zoning red tape stalling the construction of houses and apartments.

Tied Commonwealth grants to councils could be paid if home-building completion targets are achieved. Councils could be required to pass the money to residents, either through cheaper rates and/or investment in community infrastructure.

The NIMBY resistance could be less potent if incumbent homeowners permitting higher density homes in their neighbourhoods saw a direct financial benefit on their rates bills.

Moreover, residents worried about losing sunlight and more cars on their streets often don’t realise they financially benefit from upzoning to allow more medium and high density homes.

The value of their land increases because of the opportunity to develop multiple homes on it. But the price of each smaller home is cheaper for buyers than a single-home on a block.

It is perhaps one of the very few economic “free lunches” available.

The NSW Minns Labor government is making the right political noises on supply and density.

If it succeeds in crashing through NIMBYism, it would be a big economic and social reform rivalling some of the feats of the Hawke-Keating Labor government.

One of the blockages Labor will need to overcome in the NSW planning system is the overly bureaucratic Sydney Water and Ausgrid, which delay developments approvals and subdivisions for many months.

New Zealand offers a way forward

New Zealand’s experience shows when housing supply and density are significantly boosted, prices and rents become relatively cheaper.

A radical move to liberalise zoning laws in Auckland helped fuel a building boom that has spared the region from the big increase in house prices and rents across the rest of the country.

Since 2016, rents have increased 10 per cent to 20 per cent in Auckland, compared with about 40 per cent in Wellington. House prices are about 20 per cent higher, compared with the 70 per cent lift that occurred outside Auckland.

If governments can emulate the Kiwis, more Australians will have a hope of affording to own or rent a home.

John Kehoe is Economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com

The post The Housing Crisis Won’t Be Fixed By Pretend Policies first appeared on NMH.

An ABC journalist has called out the “casual racism” he experiences on the job in a new video filmed while working.

A video has exposed the “casual racism” an Australian reporter, Nabil Al-Nashar, experiences as he does his job.

The journalist, who works for the ABC, was reporting on an alleged hit-and-run in Sydney’s South West when he paused to let a man walk past.

The man briefly stopped, looked at the camera, and then made a comment about immigration.

“Because of increased immigration – thanks very much,” he said and then kept walking.

Al-Nashar shook his head in reaction to the comment.

“Great. Immigrants are always the problem. Even when it’s a hit-and-run,” he joked to the camera.

ABC journalist Nabil Al-Nashar shared the video on X. Picture:X/@NabilAlNashar

He looked frustrated as the moment played out in front of cameras. Picture:X/@NabilAlNashar

He posted the video on X and said it was just a “small sample of the casual racism I sometimes cop as an Arab Australian journalist”.

“Notice how polite I was to him before he declared immigrants are the root of all problems,” he wrote. “I was covering a hit and run by the way…but I guess the culprit is always ‘immigrants’.”

The post has been viewed more than 200,000 times and many were quick to throw their support behind the journalist.

Someone wrote that it was a “shame” that so much of this behaviour still exists, while another said seeing the footage made their “blood boil”. Many also commended the journalist on handling the situation professionally.

This isn’t the first time the ABC journalist has spoken out about the racism he has experienced while working.

The tweet has been seen more than 200,000 times. Picture:X/@NabilAlNashar

He was just doing his job. Picture:X/@NabilAlNashar

In December 2022, Al-Nashar revealed on X that a police officer made a racist comment to him while he was reporting on a murder case in Sydney’s Parramatta.

He wrote online that while he was alongside a cameraman, a police officer approached him and asked if he was doing any “suspicious activity.”

Al-Nashar said that he was just covering the murder case, and the officer then asked for him and the cameraman to move to the footpath because they were standing on private property.

Al-Nashar said they immediately followed his instructions, but the police officer hung around and asked what news outlet he worked for.

When he replied that he worked for the national broadcaster, he claimed the officer started “giggling” and allegedly said: “Are you sure you’re not with … Al Jazeera?”

The reporter snapped back and said: “No, what makes you say that?”

The officer allegedly started looking the reporter “up and down” while laughing, before replying: “You’re all casual on the bottom, business up top”.

Al Nashar asked for clarification, questioning whether that was “something AJ journalists are known for”, before the officer walked away from the situation while continuing to laugh.

In the same thread, Al Nashar confirmed that he had made a formal complaint to NSW Police regarding the incident.

“You’d think he had bigger fish to fry … idk maybe … catch and on the loose murder suspect connected to the killing of a 31-year-old woman just this Sunday. Nah big man got racist jokes … because I look Arab,” he wrote.

The post Journalist Nabil Al-Nashar shares clip of ‘casual racism’ first appeared on NMH.

Almost a quarter of Australia’s renting households were earning a household income of $140,000 and above by 2021. Only 8 per cent of renting households earned that high an income in 1996.

That has led to lower-income earners being pushed into housing stress and facing a shortage of rental properties they could afford, a new study shows.

The situation now is expected to be much worse, as the researchers used census data from 2021 – before rents rose to record highs and vacancy rates hit record lows – to produce the Australian Housing and Urban Research Institute report.

Meanwhile, the number of low-income earners (those earning $39,000 or less each year) looking for a rental in 2021 remained steady, but just 13 per cent of Australia’s rental stock was considered affordable for them, with a rent of around $266 per week.

In 1996, they could afford almost 60 per cent of the rental stock being offered.

Study author and Swinburne University of Technology researcher in urban and regional planning Margaret Reynolds said having higher income earners in the rental market had made it much more difficult for people on very low incomes, meaning some were forced to stay at home with family or friends.

“People are staying at home longer and paying rent to their family because they can’t afford to live out of home,” Reynolds said. “It’s definitely a continuing problem for those on a lower income.”

Those living out of home were increasingly paying rents that were considered unaffordable – more than 30 per cent of their incomes.

Eighty-two per cent of low-income earners were paying unaffordable rents in 2021 across Australia, while 90 per cent were paying them in capital cities.

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In 2021, there was a shortage of 348,000 affordable and available homes for lease, the study showed, with the biggest shortfall in Sydney, where an extra 72,200 properties were needed.

Melbourne followed closely with a shortage of 71,600 properties, while Brisbane (-37,200) and Perth (-20,500) also fell short for people on the lowest incomes.

In the regions, the Gold Coast had a 12,200 affordable-rental property shortfall, Newcastle lacked 8,800 and Geelong 3,500.

The study, which looked at historic census data, had only taken into account the market as it had been during COVID-19 before record low vacancy rates first hit in 2022.

Experts say the problem for renters would be even more dire now.

“Unfortunately, the situation has not improved for lower income renters since the census was taken,” Reynolds said. “In 2022 rents began to increase substantially, leading to what many have termed a ‘rent crisis,’ as migration and mobility returned to pre-COVID levels placing additional demand pressure on the private rental market.”

Lead economist with Impact Economics and Policy, Dr Angela Jackson, called the figures “shocking.”

“I think overall these figures are pretty worrying,” Jackson said. “It would be so much worse now.

“It just shows a very broken housing system,” she said. “If you’re on a higher income, unless you have the bank of mum and dad to help you buy a property you will be in the rental market longer and that drives up rents and availability falls.”

Vacancy rates were relatively high across the country in 2021, as international borders remained closed. But rental vacancies have fallen close to, record lows across the capital cities, pushing up rents and making it difficult for tenants no matter their income.

Jackson said there was no easy fix for the rental market, with more than one solution needed to make rentals affordable and available for tenants.

That included building more affordable housing that could be rented out and making tax reforms and government policy changes at a state and federal level.

“Often people want one solution, but for this, there just isn’t one,” Jackson said.

The post ‘Very broken housing system’: More high-income earners stuck in rent trap first appeared on NMH.

Coles and Woolworths say they’re looking out for you – they are the fresh food people or the home of everyday low prices.

But this narrative has fractured over the last year as shoppers, workers and farmers feel the squeeze of the powerful duopoly.

Four Corners has spoken to insiders, experts, and the supermarket CEOs themselves to find out just how they operate.

Here’s what you need to know about how they keep prices high and competitors out.

Market concentration

Our supermarket sector is one of the least competitive in the world.

Coles and Woolworths control 65 per cent of the grocery market. Aldi has just 10 per cent.

On average, for every $10 Australians pay for groceries, $6.50 of that is spent at the big two.

The UK has five major players vying for a cut of that $10. The US has multiple supermarket chains.

Last year Woolworths’ costs of doing business were flat but its profit margin from selling groceries grew from 5.3 to 6 per cent. That’s an extra $318 million in profits in one year alone.

Coles saw a small increase in costs, pushing its profit margin down slightly to 4.8 per cent.

Specials

Supermarket aisles are littered with signs boasting “Special”, “Low” or “Locked” prices.

What you might not know is that often grocery suppliers and brands are expected to fund these promotions.

That means suppliers will often set their recommended retail price at a higher level, knowing they have to offer deep discounts for much of the year.

An item that a supplier can afford to sell for $15 for some of the year, might initially be listed at $30 just so it can later be promoted as 50 per cent off.

There are other costs for suppliers wanting to do business with the big two, including in-house advertising and promotions.

A full-page ad in Woolworths’s Fresh Magazine costs $30,000. A spot on Coles radio is worth $28,000.

They even charge suppliers a fee if stock is damaged while being sold on their shelves.

All these extra costs demanded by the supermarkets flow into higher grocery prices at the check-out.

Price matching

The big two compete for customers, but there’s often little difference in prices.

Julian Hilliard’s worked in retail for 38 years, including as a buyer or category manager for Coles and Woolworths. The buying decisions he made would affect stock and prices in stores across the country.

He says when he worked for Woolworths, if Coles put up a price, they would quickly follow.

“They’re more or less identical in many respects.”

“I would probably say that if you did five shops in Woolworths and five shops in Coles … you’d be a few cents difference maybe depending on the specials.”

Rod Sims, who headed the consumer watchdog ACCC for 11 years, says the lack of competition means shoppers are losing out.

“All the economic evidence in supermarkets, or similar sectors all around the world, say that when you get this much concentration, you’re going to get higher prices.”

Price negotiations

Insiders accuse the “big two” of exploiting their market power to pressure suppliers and increase their profits.

Leaked emails show how Coles dealt with one multinational supplier who wanted to increase prices on its products.

While Coles initially expressed concern about the impact on customers, when the supplier made a one-off payment of $25,000 the retailer agreed to the price increase.

A source, who works for the multinational supplier, says Coles then passed on the full price rise to customers.

Coles chief executive Leah Weckert says that does not amount to price gouging.

“We have a team of people whose job it is to look to validate cost, price increases and we take that job very seriously.”

Meanwhile, an industry insider says Woolworths began a campaign 18 months ago to increase its profit margins – asking to “share” in any price increases it granted to its suppliers.

It worked by the supermarket directly requesting some of the price increase back from suppliers in the form of a rebate.

That meant consumers ended up paying more, and suppliers did not get the full price increase, but Woolworths significantly increased its profit margins.

Woolworths CEO Brad Banducci says the company does not employ the tactic. He says Woolworths is “very keen to make sure we don’t pass on anything more to our customers than is required”.

Phantom brands

Coles and Woolworths use their market power to push their own homebrand products.

Because shoppers often have no idea, these are known as “phantom brands”.

In a Coles-owned bottle shop, like First Choice or Vintage Cellars, there are about 260 homebrand wines on the shelves.

Take this bottle of Two Churches shiraz, sold in Coles’ Vintage Cellars …

Online, and through the image on the bottle, the wine has been promoted as a tale from the Barossa Valley – telling the story of two Lutheran priests with rival churches bonding over the quality of the region’s grapes.

There’s no Coles logo anywhere on the bottle, but look closely and the address in small print on the back is Hawthorn East in Melbourne — Coles’ corporate headquarters.

“I think they’re sort of misleading the consumer to a certain degree on putting this on the shelf as a branded product,” fifth-generation Barossa grape grower Adrian Hoffmann says.

“It sounds like a Barossa story, but you can’t be guaranteed it’s Barossa fruit, unfortunately.”

After questions from Four Corners, references to the Barossa were removed from Coles’ websites promoting the wine.

Coles CEO Leah Weckert says she wasn’t familiar with Two Churches but that the company is “very comfortable” that its approach to branding “is one that resonates with customers”.

Raising ‘locked’ prices

One recent example shows how the promise of some supermarket promotions isn’t always kept.

Coles announced last year it had “locked” prices on a range of items.

But consumer group Choice found the retailer had then raised these prices earlier than it promised.

Coles conceded there were 20 “locked” items where prices were raised, including Corn Flakes, barbecue briquettes, dishwashing tablets, and thickened cream.

Choice campaigns director Rosie Thomas says Coles has started refunding people who shopped online or have Flybuys accounts.

“But there will still be a large number of consumers who bought these products in store. Unless they show up with receipts, they’re not going to get refunds,” she says.

Despite having misled consumers Coles was not fined or sanctioned.

Coles CEO Leah Weckert says the company’s worked on its processes to ensure it doesn’t happen again.

“We have refunded substantially more than what the benefit was to Coles from the increase in price,” Ms Weckert says.

Landbanking

One of the key tactics the big two use to fight off competitors is through controlling land.

They scour the country and buy up sites years before they even get approvals to build.

If they get the green light, it’s a new shopping complex. If not, they’ve at least kept their rivals out.

German supermarket giant Kaufland abandoned plans to enter the Australian market in 2020.

Media reports said a lack of suitable sites was one factor.

In one growing community west of Brisbane, Woolworths has bought more than 6 hectares of land over 11 years. But an actual supermarket is still years away.

Woolworths CEO Brad Banducci says it’s not about keeping out competitors.

“It’ll be … we need a store in a new area and so you’ll buy some land and wait for the community to start moving into the area.”

Dark stores

Your last grocery delivery or click-and-collect order may have come from a dark store.

These look like normal supermarkets, with aisles, a deli, and a bakery, but instead of customers, there are dozens of staff filling orders.

But conditions aren’t always like a normal supermarket.

On a recent stifling day, temperatures inside this Sydney dark store hit 34 degrees Celsius.

“Every summer there’s people who feel dizzy, every summer there’s people whose sweat’s just dripping off them and they want to sit down, but you get a 15-minute break in a five-hour shift,” Ana Robertson, who works at this dark store, says.

Workers gathering items for online orders are timed, and there are targets set.

“There is an industry-standard of a pick rate of about 180 items per hour. Our warehouse, particularly during busy periods, will push you to go above and beyond that, which might be 210, 220 [items per hour],” Ana says.

She says in the past, the names of pickers who were falling behind were displayed in red for staff to see.

Coles CEO Leah Weckert says “team member safety is absolutely crucial”.

Coles said in a statement it’s put in place a number of measures to help employees on hot days, including providing them with chilled neckties.

Squeezing farmers

Fruit and vegetables are crucial for getting shoppers through the front door at Coles and Woolworths.

Jeremy Griffith, who sits on the horticulture council at the National Farmers Federation, says when it comes to negotiating prices, the big two hold all the cards.

“The retailers are acutely aware of this issue and they can leverage it, they can exploit it … offering very super, super low prices to the growers knowing full well that at the end of the day, the grower has almost no choice but to accept.”

Third-generation cherry farmer Michael Cunial was one of those growers. He’s now getting out of the industry.

“We’re at the mercy of them. We’re price takers. So the profit just isn’t there anymore,” he says.

“There’s a huge, huge imbalance. Supermarkets are making these multi-billion-dollar profits and growers are losing money.”

Coles CEO Leah Weckert says farmers do have other options, like selling to independent grocers, the food service market or the export market.

“We work closely with our suppliers because we know our suppliers have to be successful for us to be successful,” she says.

Will anything change?

Politicians from all sides are now talking about taking on the supermarket duopoly.

Multiple inquiries and reviews have been called into the sector, including:

A Greens-led senate inquiry into price gouging

A 12-month ACCC inquiry into pricing

The Food and Grocery Code of Conduct, a voluntary code between suppliers and retailers, is being reviewed

Queensland’s parliament is holding its own inquiry into grocery prices

Some are clear about what needs to change.

Former ACCC boss Rod Sims says Australia needs tougher merger laws.

That would allow the watchdog to curtail Coles and Woolworth’s ability to gobble up rivals, buy land and move into other industries.

“I think there’s no doubt … if you want consumers to pay less for goods in supermarkets, change the merger laws,” he says.

The Greens, who are chairing the upcoming Senate inquiry into supermarket prices, are exploring more radical change, including breaking up Coles and Woolworths.

“The acid test on the Prime Minister is not going to be what reviews or what processes he’s prepared to put in place. It’ll be what action he’s prepared to take,” inquiry chair and Greens Senator Nick McKim says.

Want to know more about how Coles and Woolworths operate? Check out Four Corners’ full investigation into the duopoly on ABC iview.

The post The tactics Coles and Woolworths use to maintain their power over Australia’s grocery market first appeared on NMH.

First published in the MRC’s Watercooler newsletter.

The biggest political issue of the first half of 2024 looks set to be a debate around income tax cuts and broken promises.

Tax reform is complicated. The Government is likely relying on this veil of complexity as a way to shield itself from scrutiny over its broken promise. So I’ll attempt to explain what has happened in plain English.

CONTEXT – OUR INCOME TAX SYSTEM

One of the ways to compare our tax system to other countries is to work out the ratio of our total taxes to the size of our economy. That measure leads some to conclude that Australia is not a particularly high taxing country. The total amount of taxes imposed in Australia represents around 28% of our GDP compared to an average of 33% across the developed world.  

However, this is not a complete picture. If we just look at taxes on personal income we find Australia comes close to leading the world. This means Australian governments have a greater reliance on taxing our income than most other nations. 

Across the developed world, income tax represents 8% of GDP on average. In Australia, income tax represents over 11% of our GDP and there are only a handful of countries with a greater reliance on income tax.

This overreliance on income tax is bad news according to independent experts at the Parliamentary Budget Office: 

‘An over-reliance on any one form of taxation usually means higher rates for that tax, reducing its efficiency. It can also leave government revenues vulnerable to changes in the composition of the economy over time, such as a reduction in the ratio of working age people to the total population associated with demographic change.’

Our income tax system is particularly burdensome at the top end. Our top tax bracket of 45% is one of the highest in the world. There are around 118 countries across the world with a lower headline rate of income tax than Australia (as our analysis shows). This top tax rate of 45% is currently paid by Australian workers earning over $180,000 AUD. In the United States, the top tax rate is only 37% and imposed on workers earning over a mammoth $578,126 USD.

Our income tax system is outdated. Incomes have risen in Australia and workers have been shifted into higher tax brackets at a faster rate than governments have been prepared to lower the tax rates. This means that the average tax rate paid by Australian workers looks set to hit a historic high of 27 per cent in the next decade.

Reform to lower every one of our tax rates is long overdue. The current round of tax reform which we are debating is not new. It was first announced in 2018 and legislated long ago. Before this, we have to go back to the Howard Government to find the last time there were any serious changes to our income tax system announced.

STAGE 3 TAX CUTS

One of the most important aspects to this current debate is the fact that the tax reform package announced in 2018 came in three stages. Stages 1 and 2 benefitted low and middle income earners. While stage 3 seeks to modernise the tax burden for middle and high income earners.

In breaking its promise to deliver the Stage 3 tax cuts in full, Labor has tinkered with several aspects of the rates and thresholds proposed. Most notably, everyone earning over $150,000 now stands to be worse off based on this broken promise. 

Using the resources of the independent Parliamentary Budget office I’ve calculated how many workers stand to be worse off. As the table below demonstrates, in 10 years’ time, over four million working Australians will be worse off. A large proportion of those will be single income families on incomes of between $150k-$200k.

As the above table demonstrates, bracket creep makes these tax reforms less generous with every year that passes. That’s why we have found that the number of Australians in the top tax bracket has doubled in the 16 years since it was introduced. 

COST OF THE BROKEN PROMISE

In defending its broken promise, the Labor Government has pointed to the number of low and middle income Australians who will be better off. What they fail to mention is that these workers are also aspirational and will overwhelmingly shift to higher incomes if they continue in the workforce.

Even taking into account population growth and a greater number of taxpayers, the number of low income workers earning between $50k-$75k looks set to decline over the next decade. While the number of workers earning between $150k-$200k is set to grow by over one million (as our analysis in the table below demonstrates).

As a result of Labor’s changes, some voters will get a modest tax cut that they were never promised. While some voters will lose a tax cut that they were promised. A pollster told me last week that the emotional reaction of someone who loses something they were promised is far stronger than someone who gains a new reward. So this decision may end up hurting Labor electorally.

This is compounded by the fact that many low income voters place greater emphasis on the government honouring their promises even though this decision may have benefitted them financially. And if lower income voters actually look into these changes they will realise that they take away some of the incentive for them to earn more in the future. 

Peter Dutton has called out this broken promise as a ‘lie’ and he is correct in that characterisation. After all, Albanese indicated there would not be any changes on 100 occasions including less than a week before breaking the promise.

Prime Ministers are not immune to the rules of human nature and we know that one lie often leads to more lies as they seek to cover their tracks. Worse still, breaking one election promise calls into question the integrity of other key election promises. We have already seen Albanese’s colleagues testing the waters and encouraging him to break promises over other taxes such as negative gearing and capital gains. 

Let’s hope this decision does not open the floodgates to more broken promises where a party who came to government with a small target strategy feels empowered to take on the big targets they ruled out before the election. 

The post The Skinny On Tax Cuts first appeared on NMH.

You don’t need to fly to California to see a stunning Redwood Forest. Take a drive east of Warburton, within Yarra Ranges National Park, and explore a serene forest filled with colossal redwood trees. The first trees in this area are now over 90 years old, and some stretch as high as 55 metres.

After major upgrades to Cement Creek Road Bridge, you can once again drive to the Redwood Forest carpark. Escape the summer heat and take a stroll in the dappled light of this enchanting forest. As this forest can get quite busy, consider visiting in the middle of the week, or early in the morning, to truly take it all in.

Redwood Forest in Yarra Ranges National Park

Vehicle access to the forest was previously delayed by flooding in 2022. Before the bridge was restored, the only way to see the Redwood Forest was to walk or ride your bike on a 16km round trip via the O’Shannassy Aqueduct Trail.

The first Californian Redwoods were planted in Yarra Ranges National Park as part of a hydrology experiment in the 1930s. These trees can live for over 2000 years, and stretch up to 115 metres, making them the tallest trees in the world. While the trees in the Cement Creek Redwood Forest aren’t so old, they’re still a sight to behold. There’s almost 1500 evergreen trees for you to admire.

Perfect for visiting all year round, you’ll find tranquil walking trails under the forest canopy. If you follow Cement Creek to where it meets the Yarra River, you’ll also find lush native vegetation like Eucalypt trees and ferns. As you meander through the forest in spring, listen out for the chirps of fairy wrens and yellow robins. In summer, you’ll also find native orchids, Monarch Butterflies and Grey Headed Flying Foxes.

You’re welcome to relax on the lawn with a picnic, however, please note that there aren’t any actual picnic tables or shelters available. Remember to take your rubbish with you out of respect for these dreamy woodlands. There are also no toilets on site, and dogs aren’t permitted to come along.

While you’re in the area, check out other incredible sites like Rainforest Gallery and Mount Donna Buang.

If you’re keen for more, you could also drive out to a delightful redwood forest that’s nestled in the Otways.

The post Take A Stroll Through A Majestic Redwood Forest That’s 90 Minutes Away From Melbourne first appeared on NMH.

A national campaign to fix Australia’s housing crisis is urging the federal government to scrap tax concessions for property investors and fund more social dwellings.

The call follows Everybody’s Home’s Written Off report showing housing affordability has crashed due to private market subsidies taking precedence over directly building accommodation.

It argues investor tax breaks over the next decade could build more than half a million social homes, and have outstripped spending on social housing by at least five times.

Further highlighting the disparity, the report says the government spent about $164 per person on public and community housing in 1982. By 2022, the number had shrunk to $61.

“Amid a major cost-of-living crisis, the federal government is spending record amounts on housing to line the pockets of investors,” campaign spokeswoman Maiy Azize said.

“That has made renting and buying homes more expensive than ever.

“Tax handouts for investors will be a quarter of a trillion dollar mistake if the government doesn’t change tack.”

Research by property data group CoreLogic reveals rents increased 8.3 percent in 2023, outstripping an 8.1 percent rise in house prices and eclipsing a four percent rise in wages.

The federal government has promised to reinvigorate the sluggish home-building sector, pledging to deliver 1.2 million new dwellings over five years.

A major piece in the housing puzzle was set in place last week, with applications opening for the government’s Housing Australia Future Fund.

Housing Minister Julie Collins said the fund, along with the National Housing Accord, would deliver 40,000 social and affordable rentals in its first five years.

Over the longer term, Written Off argues Australia should aim for a target of at least 10 percent of all housing stock to be social housing.– AAP

The post ‘Investor handouts’ making housing crisis worse: report first appeared on NMH.

There are two things the prime minister needs to get into his head about tax. One is that saying he won’t make any further changes no longer works. The other is that negative gearing doesn’t do much to get people into homes.

Anthony Albanese seemed to have taken the first point on board when he spoke to The Insiders on Sunday.

Rather than promising flat-out not to change the rules around negative gearing, he merely said he was supportive of the current rules, we have not considered changes to them.

But he was less careful when it came to the virtues of negative gearing. He said there was a whole lot of analysis that says they encourage investment in housing, the key when it comes to housing is housing supply.

His official advisers in the treasury don’t think negative gearing does much to increase the supply of housing – or, if they do, they omitted it from the six-page briefing note headed “negative gearing”, prepared to help the treasurer answer questions about it in parliament.

Our rules reward bad management

Negative gearing is a particularly Australian tax benefit, which – unlike in other countries – benefits dud landlords: those who can’t make money by renting out properties.

If they lose money (by paying out more in interest, maintenance and other expenses than they are receiving in rent) we let them offset that loss, not only against income from other investments, but also against income from their wage or salary.

It means they can cut their wage for tax purposes, cutting the tax they pay on it. And at the same time, they can hang on to a property they can later sell for a profit, which will be taxed at only half the normal rate, thanks to Australia’s 50% discount on capital gains.

It isn’t allowed in the United Kingdom or the United States. There, if you are a landlord who can’t make money, you can offset your losses against profits from other investments – but not against your wage.

In Canada you can offset rental losses against wages, but there must have been an “an intention to make a profit”. That would probably rule out most Australian negative gearers.

Most gearers don’t build homes

In Australia, an astounding one million of us negatively gear – more than one in nine taxpayers. In 2020-21 they claimed losses amounting to $8.7 billion – 3.5% of the income tax collected – meaning if they didn’t do it (if they didn’t claim for what seem to be deliberate losses) the rest of us could pay less tax.

What Albanese said on the weekend was half right. Negative gearing encourages investment. Most months, more than one in three new home loans is for an investment property.

But most of those loans don’t increase supply – the thing Albanese says matters.

That’s because the overwhelming bulk of investor home loans go to “investors” planning to buy existing homes – to bid against and likely beat would-be owner-occupiers.

In December 2023, only 23% of the loans to investors was used to build a home or buy a newly-built home. In November only 19%.

Most investor home loans are used to buy existing homes

Share of loans used to buy existing dwellings vs share used to construct new dwellings or buy newly-built dwellings

As a means of getting more homes built, negative gearing leaks like a sieve. As a means of ensuring Australians continue to rent, rather than buy, it’s effective.

In the 20 or so years since the headline rate of capital gains tax was halved, supercharging negative gearing, the proportion of Australian households renting has climbed from 26% to 30%. If those extra renters become owners, an extra 400,000 Australians would be in homes they could call their own.

How to get better value from gearing

The really bizarre thing is that Albanese has it in his power to ensure negative gearing does exactly what he said it did – supercharge the building of houses.

All he would need to do is what Labor promised to do in 2016 and again in 2019. In those elections, Bill Shorten went to voters promising to limit the use of negative gearing to newly-built homes.

As Shorten put it, taxpayers would continue to be able to deduct net rental losses against their wage income, providing the losses come from newly constructed housing.

The sieve would no longer leak. Every dollar of tax lost to a negative gearer would help build a home.

What would have happened if Shorten had got his way: if Australia both focused the use of negative gearing and cut the capital gains discount as he had proposed?

Modelling just published in Australian Economic Papers finds the share of households who own their home rather than renting it would have climbed 4.7%.

That’s security worth having, especially if it is accompanied by more homes.

An idea whose time is coming?

Australia’s Treasury has begun publishing estimates of the cost of the present unfocused system of negative gearing. Its latest, released last week, puts the cost at $2.7 billion per year, to which should probably be added a chunk of the $19 billion per year lost as a result of the capital gains concession.

The estimates are new. Until Jim Chalmers became treasurer, his department didn’t publish estimates of the cost of rental deductions.

Chalmers is far from the first treasurer to be curious about what the concession does. Scott Morrison expressed concern about the “excesses” of negative gearing.

And Morrison’s predecessor, Joe Hockey, said on leaving parliament that negative gearing should be skewed towards new housing, so “there is an incentive to add to the housing stock rather than an incentive to speculate on existing property”.

Albanese is normally cautious. But as he is showing us right with his rejigged Stage 3 tax cuts, there are times when he is not.

If he really wants to throw everything he has got at building more homes, he knows what to do.

Re published from THE CONVERSATION February 7, 2023

The post How Albanese could tweak negative gearing to save money and build more new homes first appeared on NMH.

It’s the crisis everyone wants to talk about that politicians avoid addressing, and property owners profit from. It’s a crisis that has been decades in the making and will take decades to fix.

Without saying so, Alan Kohler recognises that the main obstacle is indeed the political will. “It won’t be enough simply to restore the amount of housing construction to what it was before the pandemic, as the federal government is now aspiring to do.” In the scheme of things, the pandemic was merely a blip in the long-term trend.

We don’t need another inquiry or a royal commission; there’s a room full of inquiries, reports and submissions.

Alan Kohler has been writing and talking about the economy for a long time. He is well respected and has a knack for explaining complexities in terms we can all understand. He also knows how to employ a bit of nostalgia to tug on the reader’s heartstrings. The introduction of his 86-page essay takes us back to his own parents, who bought a piece of land in South Oakleigh outside Melbourne for £1000 in 1951. The house cost them another £1250, all up roughly $121,000 in 2024 dollars. He describes how “Dad built the house himself, including making the bricks, working on weekends and at night, and Mum and Dad lived in a garage.”

The important point he makes is that the cost of the house would have been approximately 3.5 times their median income. And that ratio hadn’t changed all that much when Alan and his wife bought their first house in 1981 for around $40,000 ($215,000 in 2024 dollars). The ratio stayed steady for another 20 years.

Fast forward to August 2023, “the median Australian house price was $732,886, which was 7.4 times annualised average weekly earnings.”

From 3.5 times the median income to 7.4, that’s the housing crisis in a nutshell. And it all started changing at the beginning of the millennium.

House prices and wages (full-time weekly earnings, index: 1970 = 100). Source: Business Insider.

Winners and losers

There are winners and losers in every crisis. The winners are property owners and real estate developers, as well as State Governments who benefit from more stamp duty as property prices rise. The losers are the Federal Treasury deprived of CGT tax dollars and “those born after 1983 – the millennials who were just becoming adults when they grew into their generational label in 2000 at the same time house prices started taking off.”

Kohler goes into significant detail exploring the realities of housing affordability, and how it impacts in different ways on people depending on our income and where we have chosen to live – or cannot afford to live. The latter point is important, as one of the consequences of reduced affordability for middle-income city dwellers is that they have to move further and further away from the CBD if they want to trade up without paying more for their housing.

“…to get a three-bedroom family home now, if that couple who bought 35 Foch Street, Box Hill South in 2012 are still earning 2.6 times average weekly earnings, they would need to be looking another 10 kilometres away from the CBD, in Bayswater, Lalor or Tarneit.”

In short, Alan contends that:

Australian homes have simply become too expensive for society to work normally.

It has become a vicious circle, higher house prices lead to declining home ownership, forcing more people to rent, while not enough properties are built for the rental market, forcing rents up due to lack of supply. “In many suburbs, rents have risen so much that it’s becoming more expensive to rent.”

How (and when) did it go so wrong?

The housing crisis is an issue of supply not meeting demand, leading to higher prices.

One of the most fascinating chapters in the Essay is the historical context. Although the crisis is happening now, Alan goes into detail about how “the treatment of land in Australia’s first century created the conditions and attitudes that led to the housing crisis of its third century.”

He highlights three primary issues that got us to this point.

The lack of public housing

“Between 1947 and 1961, the housing stock in Australia increased by 50 per cent, about 10 per cent more than the increase in population.” About a quarter of that was built by the Government through programs such as the Commonwealth–State Housing Agreements (CSHA). But it also led to an overemphasis on the virtues of home ownership, it “had been elevated to an almost religious status.” By 1971, 40% of the houses built under the CSHA had been sold into private ownership.

By the time Malcolm Fraser was elected in 1975, the idea of public housing had been dismissed as a “form of welfare for the neediest.” By 1982, the CSHA built just over 7,000 houses. Since then, public housing has been more of a subject of campaign speeches and broken promises than actual action. Hawke promised 145,000 in 1983, and Albanese 1.2 million over five years in 2023 – aspirational targets not backed up by substantive policies to achieve them – more on that later.

Australia is not unique in this regard, of course, but many other countries have taken a very different approach over the post-war years and with great success. Austria is one such example.

Australia’s crowded sprawl

Despite our vast lands, Australia has one of the most concentrated populations in the world. Kohler highlights that “if you include all cities, not just capitals, 91.9 per cent of Australians are urbanites, so less than a tenth live in the bush.” It was 70% in 1950, and the global average is 62.8%, according to data produced by the World Resources Institute.

There are, of course, good reasons for that, including the fact that much of those lands are deserts or too dry for sustainable community establishments. Add to that the enormous distances between places, which makes transport costly, and “if you don’t live in a city, you have a long trip to get to a doctor or a decent supermarket.”

Good intentions to decentralise have been around for over a century, but “most of it was political lip service.”

This extreme centralisation has, however, led to congestion and less housing being built where people want it. Compounding this issue is the severe lack of public transport infrastructure, probably one of the major long-term policy failures of post-war governments – both on federal and state levels.

What no government, state or federal, has ever done, is properly invest in fast railway services from regional centres to the cities.

Kohler is not here talking about the numerous plans for very fast inter-city trains, plans yet to be executed, but “just reasonably fast, reliable trains that could get from Newcastle to Sydney, or Bendigo to Melbourne, in less than an hour.”

He also discusses at some length the issues of our reliance on car transportation in cities that “were not fully developed before the car arrived.” This passage struck me as particularly poignant:

Demographer Simon Kuestenmacher tells me that the urban sprawl in Australia is the reason there is little to no medium-density housing, and is entirely due to affordable cars arriving before the cities were fully developed, so that families, including the immigrants from crowded Europe and the United Kingdom, were able to build on large blocks, four or five to an acre. “And once you do that,” says Kuestenmacher, “how do you add medium density?”

The lack of state and local government planning

Here, Kohler goes into detail about the various (failed) attempts at making state and local governments accountable for long-term planning ow how much to build, where to build and how to build. He is particularly scathing about zoning regulations.

He refers to a 2018 report by Reserve Bank economists Ross Kendall and Peter Tulip in which they calculated the impact of zoning on house prices. The report was widely publicised at the time, and although the analysis is not for the faint-hearted, the key finding of the report was quite straightforward:

…without zoning, and the restriction on land supply that results from it, houses would be an average of 36.8 per cent cheaper in those four cities.

The four cities being Perth, Brisbane, Melbourne and Sydney.

In Kohler’s view, the lack of uniform and consistent urban planning and zoning resulted in “any attempts to address housing need through the planning system only happened as a result of piecemeal, local initiatives.”

“The result has been that Australian cities have turned into sort of ‘reverse donuts’ – high-rise apartments in and around the CBD and then low-rise (single dwellings) as far as the eye can see, with a few exceptions.”

Anyone who has ever had to go through an urban planning process will get a good chuckle out of Kohler’s depiction of how it works – or rather, doesn’t.

It is important to note that Kohler’s criticism of councils is about planning, not approvals. The latter is often touted as the root cause of the problem, frequently cited by federal politicians. In a recent article in The New Daily, fellow economics writer par-excellence Michael Pascoe makes short shrift of this particular furphy, pointing out that approval numbers (or timeliness) are not the problem and that there are generally more approved projects in the system than there are actual projects under construction. Kohler concurs but also highlights how developers are apt to “sit on” approvals as prices rise to maximise profits.

In an earlier review of the essay in Crikey, occasional MWM contributor Cameron Murray refers to another aspect of the council planning conundrum. He points out that the ‘cartel’ of bankers and developers is “broadly in support of removing council regulations, which apparently make homes cheaper,” making the point that if the cartel wanted prices to be higher they’d “support more council regulations, not fewer.”

Counterpoint from Koukoulas

We sought comments from economist and commentator, Stephen Koukoulas, who offered a different take on rental prices in particular:

In terms of the rental market, there is no evidence that dwelling rents are particularly unaffordable. To be sure, rents in the last two years have risen quickly, and rental vacancy rates in most capital cities are presently very low, but over any length of time, rents have risen at a pace below that of wages, which points to a sustained long-run improvement in rental affordability.

Over the past 5 years, for example, dwelling rent has risen 9.8 per cent, while the wage price index has risen 13.6 per cent. Over 10 years, rents are up 17.0 per cent, with wages up 27.5 per cent. Over 25 years, rents are up 104 per cent, while wages are up 114.4 per cent.

Koukoulas also offered nuance around how the reduction in the homeownership ratio has come about, saying that “over that time frame [it] is potentially linked to social issues including more divorces, later cohabitation as young folk undertake more study, education and training. Not [just] the price of dwellings.”

He is less concerned about house prices than Kohler, suggesting that the problem “might not be all that big and [the fix] might not work at all if it is non-financial reasons that have impacted on homeownership rates.”

Housing demand and negative gearing

Lack of supply is a long-term problem to solve, but the Gordian Knot of housing affordability is changing the root cause of spiralling demand that makes housing such an attractive investment. As Kohler points out in his introduction, the demand for housing started taking off in earnest after the Howard Government’s reduction of the capital gains tax (CGT) by 50% in 1999.

This was further fuelled by the (resumption) of first home buyer grants and consecutive interest rate cuts between 2001 and 2003, which, together with the ‘Dotcom Bubble’ sharemarket crash of the year 2000, meant that “investors rushed from shares to property, funded by cheap debt.”

Then came a tripling of net migration between 2003 and 2009. Nothing wrong with immigration, but it was never matched with any forward planning to meet the added demand for housing.

As population increased, housing construction stayed the same, and didn’t increase until the late 2010s.

However, the combination of negative gearing (where property owners can deduct the interest paid on loans from rents earned) and the reduction of the CGT was the real rocket fuel of house values and rental costs.

Established house price index and CPI. Source: Department of Parliamentary Services.

This was, of course, also reflected in the debt- and price-to-income ratios, the latter increasing from 1:1 in 1986 to 5:1 by 2009.

Kohler also points out that the Reserve Bank’s enduring obsession with an inflation target of 2 to 3% has been “disastrous because of the way it distorted decision-making and house prices, and absurd because an inflation rate of 1 to 2 per cent, as it was after the GFC, is not dangerous in the way an inflation rate of 5 to 6 per cent can be.”

Rising house prices and rents are great for those who own houses and investment properties, but not so good for those wanting to buy their first home or rent in places where demand outstrips supply. Removing negative gearing and increasing the CGT may well reduce valuations and rents but won’t increase demand, and could amount to political suicide for the Government that dared even to suggest it.

That’s the impossible knot to disentangle.

Solutions

As a result of the aforementioned RBA analysis of zoning’s effect on housing prices, a report titled The Australian Dream: Inquiry into Housing Affordability and Supply in Australia, was published by the Parliamentary Standing Committee on Tax and Revenue in 2022. It focused on the supply issues, with dissent from the Labor members of the committee who wanted the focus to be on demand. As always, tribalism does not often lead to sensible consensus or solutions.

Anthony Albanese’s Labor Government is continuing to focus on demand, or rather aspirations of demand, by setting a target of 1.2 million new dwellings in five years. It’s the States who have to make that happen, though, with an offer of $15,000 paid per block of land built on, paid by the Federal Government, capped at $3B, or 200,000 new houses, leaving a 1 million shortfall between aspirations and reality,

There is also an “issues paper” on housing in the works by the Department of Social Services, indicating that “the government is coming at it as a welfare issue rather than an economic one.”

And let’s not forget the HAFF.

This article was originally published Michael West Media on 17th January 2024

The post The Housing Crisis We Didn’t Have To Have, And How To Fix It first appeared on NMH.