Sunday, June 19, 2022

Rent crisis: 87,000 properties ‘empty’, water’s on, no-one’s home

Only a minority of these homes will be actually unused but some will be -- particularly homes owned by people living overseas. Some owners are so wary of the unrecoverable damage that tenants can and do sometimes inflict that they regard protecting their investment as a higher priority than renting it out for income.

And given the extremely pro-tenant laws, who could be blamed for not wanting to tangle with tenants? Landlord protection laws would put most of the properties into the rental market but there is no prospect of such laws emerging. Government meddling in the market is once again producing perverse behaviour. Legislation designed to help tenants in fact hurts them. At the very least, it pushes up their costs

I in fact have a rental property that I do not rent out even though it is little used. I prefer to keep it available for occasional use by family rather than bother with tenants and all the "protections" that come with them. I am not even allowed to bar pets these days. Awful of me but if you smell what some pets do to carpet you will understand. I have been a landlord. I know.

If tenants want more choice of housing, they should be telling governments to back off -- which is exactly the opposite of what is proposed below. The proposals below would undoubtedly take even more housing out of the rental market. You can only push people so far. And guess what? Landlords are people too!

Despite the worst rental crisis on record, about 87,000 ‘empty’ homes are not being put to work prompting calls for penalties against owners who don’t rent them out.

Shock analysis of the latest housing data released by the Australian Bureau of Statistics shows around 87,000 Qld residential properties that aren’t the main home of their owners were not being rented out, a figure which stretches out to 577,000 nationally.

An ABS spokeswoman said “the data includes properties used for other purposes, such as holiday homes, second residences, dwellings occupied rent-free by family members etc”.

Veteran property expert Michael Matusik said new tax measures were necessary to incentivise or penalise owners to release the homes for rent given how tight the market was.

“Around 29 per cent of investment properties are not rented out. They are sitting there vacant.,” he said.

Exclusive data from Qld’s biggest water provider, Urban Utilities, revealed 19,500 homes across lower SEQ had their water connection on, but noone seemed to be home for months.

Spokeswoman Michelle Cull said the firm provided water and sewage for around 590,000 residential properties in Brisbane, Ipswich, Somerset, Scenic Rim and Lockyer Valley – with new data finding about 3.3 per cent had low or no water consumption over a three-month period.

“According to our water usage data, around 19,500 properties in our service region had a water usage of between zero and two kilolitres during the last quarter of 2021 (October to December),” Ms Cull said.

“Properties may have no or low water usage for a range of reasons including the use of water tanks instead of town water supply, residents could be away from home, or the property could be vacant or uninhabitable.”

Unitywater executive manager customer and community Katherine Gee said their numbers showed 2,104 houses that used 1,000 litres or less water over a 90 day period – of which 96 were in Noosa, 1,020 on the Sunshine Coast and 988 in Moreton Bay.

“It is important to note that it cannot be categorically stated that these properties are ‘vacant’. We operate in a desirable region and some of these properties may be holiday homes or homes that are occupied for only parts of the year,” she said.

Mackay Regional Council confirmed it too had zero/low consumption segments “however, this is not a definite indication that the property is vacant” given “the property owner may be away for an extended period, it could be a holiday home or estate or the owner may have another water source (rainwater/bore)”.

The figures for ‘empty’ apartments are harder to get given “there are a significant number of residential units/complexes that feed off a single meter and it will depend if each unit/complex are separate parcels of land (lot and plan),” a Mackay spokeswoman said.

The rental crisis spurred Brisbane Mayor Adrian Schrinner to open the floodgates over under-utilised rental properties, announcing “significantly higher rates” for landlords who “turned homes into mini hotels”.

“If owners have these properties in the market for a short term, that is their choice, but what they’ll be facing now is a 50 per cent increase in their rates. We’re excluding (those that rent out) individual rooms. This is about people who rent out the whole house.”

The city saw house rent surge 22 per cent in the past year to $610 a week, with units up 11.2 per cent to $430 a week, latest SQM Research data found. It put Brisbane’s vacancy rate at 0.7 per cent – its tightest level in history – with listings almost halving in one year (-46 per cent) to 2,200.

There are now calls for the Qld Government to step up, with Strata Community Association Qld president Kristi Kinast repeating calls for legislation to allow bodies corporate to ban short-term letting.

“This is currently impossible for 99 per cent of Queensland’s strata communities,” she said. “SCA Qld believes this is a good policy that will help alleviate rental shortages and discourage short-term letting in strata schemes that were not intended for that purpose.”

The Federal Government’s whip has been a vacancy fee penalty – enforced against international buyers who leave their real estate investments empty.

Australian Taxation Office figures show it collected $2.3m in penalties in 2021, $3.7m in 2019/20 and $1.8m in its first year of collection (2018/19).

Prosper Australia director of advocacy Karl Fitzgerald said foreign investors were not solely to blame for empty or under-utilised homes, with “speculative vacancies” by Australian investors curbing supply and pushing prices higher.

He said governments needed to reduce incentives for short-term profiteering from housing.

“Higher land taxes, more effective vacancy taxes and even curbing interest-only loans could all help. Switching away from stamp duties and towards land taxes – the ultimate vacancy tax – is a vital step forward.”

The best form of vacancy tax locally, Mr Fitzgerald said, would be to replace stamp duty with a land tax set at a significant rate of about 1.5 per cent of site values.

He said the ATO should also consider denying depreciation as a tax write-off if a property owner did not put it up for rent at a competitive rate. “Further investigation is needed of an incremental land tax for sites that refuse to be put to work.”


A welfare explosion

It is one of life’s sad realities that, as soon as there is an attempt to improve the population’s welfare, unscrupulous individuals take advantage of the best of intentions.

Our welfare system could be said to discourage work and self-reliance, it also tests the ability to pay for it.

Over the years, we have seen solo parent support encourage more pregnancies for financial gain, without financial input from fathers. The unemployment benefit was established as temporary support for those out of work, for some it has become a permanent and sometimes multi-generational way of life; while jobs in agriculture and hospitality are unfilled, we have an unemployment rate which, although temporarily improved, is high by OECD comparison.

Accident Compensation is another scheme that has become blighted by ‘permanent invalids’, who seem capable of mowing the lawn whilst incapable of work. The cost of aged care continues to rise, whilst their children expect the government to pay the bills – and complain when they consider care to be substandard. Welfare demands are still higher in the Aboriginal population, with average benefits at $40,000 per capita, compared with $20,000 for non-Aboriginals.

The cost of these good intentions has risen rapidly, from $160 billion in 2017, to currently $200 billion, with an increasing proportion funded by the federal government.

The latest addition to the welfare bill is the NDIS, a scheme introduced by the Gillard government designed to support those under 65 with significant, permanent disability.

The scheme was initially trialled in 2013, in Tasmania for young adults, in South Australia for children, in Victoria for general groups, and in New South Wales for older adults. It was formally launched in July 2016 and, by year’s end, covered 30,000. West Australia joined in 2020.

The initial cost was estimated at $4 billion for the year 2016-17, with funding provided by an increase of half a per cent in the Medicare levy. It was planned to cover Musculoskeletal conditions, cancer, visual and hearing impairment, and neurological conditions such as stroke, Parkinson’s disease, and spinal cord injury.

In August 2017 mental health disorders, including anxiety, depression, schizophrenia, and autism, became eligible; by November that year, the number of enrolments had increased to 120,000.

At the completion of enrolment, it was estimated that 400,000 would be supported at a cost of $14 billion. By 2019-20, the first full year of operation, the cost had ballooned to $22 billion (1.1 per cent of GDP). By June 2021 there were 463,000 claimants, now 480,000, with an average individual cost increasing to $71,000.

Forward estimates now suggest a spiralling increase to $42 billion by 2024-25 (1.5 per cent of GDP), and $46 by the following year; future figures up to $60 billion have been suggested, with as many as 860,000 supported. The government is rightly concerned as to why this has occurred, and what can be done to control costs.

One aspect of the increase is the increasing inclusion of behavioural disorders, once considered the result of bad parenting, now reclassified into the psychiatric domain as new conditions are invented. Autism is a clear-cut diagnosis, autism spectrum diagnosis in Australia increased from 30,000 cases in 2003, to 60,000 by 2009 and 120,000 by 2012; as diagnostic boundaries expand, the latest estimate is 230,000 cases (approximately 1 per cent of the population), with around half being children.

The same increase has been noted in other countries: in Canada, it expanded from 4 per 10,000 in 2003, to 20 per 10,000 and by 2020 to 1 per cent (100 per 10,000). In the UK, the incidence was 5 per 10,000 in 1990, now increased to 1 per cent of children and 2 per cent of the general population. The estimated incidence in India remains low at 3 per 10,000 (0.03 per cent), and worldwide 60 per 10,000 (0.6 per cent). A recent Japanese study suggests this increase in incidence may be a consequence of exposing children to excess screen time at a young age; the study also revealed that 90 per cent of 1-year-olds were exposed to between 1 and 4 hours daily. The WHO has advised total bans on use in the very young.

Projections are the total number here will continue to rise, to 1.5 per cent, 350,000 cases, as diagnostic criteria are refined and milder degrees are included. With no specific test the diagnosis is subjective and, as milder degrees are added, the autism spectrum becomes a major cost. The proportion claiming NDIS support because of mental or behavioural problems has progressively increased, reaching 66,000 by the end of 2021 and predicted 90,000 by 2030; other, new psychological disorders have the potential to add further to the numbers.

Obsessive-compulsive disorder (OCDC) is now estimated at 3 per cent of the Australian population, around 500,000; attention deficit disorder (ADHD) is now found in 5 per cent, and Asperger’s syndrome has now been reclassified as part of the autism spectrum. The latest behavioural problems to add to the diagnostic alphabet are oppositional defiance disorder (ODD) and conduct disorder (CD).

It seems that bad behaviour, as well as being a problem in the classroom, is becoming a cost to the taxpayer and a source of income for some parents and psychologists.

The latest conditions are not, as yet, included in the NDIS list, but parents of children with ADHD are being encouraged to explore the additional diagnosis of the autism spectrum to qualify for payment. As of June 2019, one-third of those funded by NDIS for psychological disorders had autism spectrum as their primary diagnosis; evidence is accumulating that the explosion in numbers is due to young children having excess screen time exposure, instead of parental input. Care now involves psychology, counselling, and even art and music therapy.

Since the Covid pandemic disability diagnoses have soared with up to one in five now eligible for assistance. Claims relate to ‘social-emotional’ disability (7 per cent), cognitive disability conditions (12 per cent), and physical disability (3 per cent). Since the start of the pandemic, an extra 43,000 children have been added, a 12 per cent increase; the increase in ‘lockdown’ Victoria was even more pronounced at 17 per cent.

Another explanation for the cost blowout is the increasing severity of disability classification, with individual payments increasing by an average 12.5 per cent annually.

After an increase of 23 per cent in 2 years, the federal government has become concerned about spiralling costs: attempts to rein in costs have reduced per capita spending from $71,200 in 2020 to $68,500 in 2021.

The states, (who had historically been responsible for the disabled) had initially been responsible for 50 per cent; their contribution had been limited to a 4 per cent annual increase, meaning the federal proportion is rising to 60 per cent of the total.

Following a revue this year, it wanted to introduce an independent assessment of both diagnosis and severity of both current and future eligibility. This review and subsequent planned legislation, has inevitably produced an outcry from the welfare lobby groups, as well as the left of politics who are always happy to spend other people’s money. A simple (but unlikely) solution would be to revert to the original premise and exclude psychiatric disorders.

Welfare and disability advocates demand yet more support for the NDIS, and even suggest it saves money! Currently, the Australian government spends around 40 per cent of GDP gross domestic product, with around half that amount spent on welfare. The leaders in welfare are the Swedes at around 25 per cent, now overtaken by the French who spend 30 per cent of their GDP on welfare. Not only has the proportion spent on welfare increased, but the total spending is now increasingly supported by borrowing and accumulated debt; this has increased from about 40 per cent of GDP to nearly 100 per cent since the Covid lockdowns.

Future projections of NDIS costs are heading toward $60 billion, with a new Labor government the problem remains the same- how to pay for it. They need to grasp the nettle and assess the worth of this and other welfare schemes – ultimately, we must accept what we can afford, rather than what we want. ?


ABC boss Ita Buttrose criticised by hyphenated lady for using the term ‘Aborigines’ in speech

ABC chair Ita Buttrose has been accused of failing to comply with the broadcaster’s own editorial style guide in a major speech where she referred to First Nations people as “Aborigines”.

Ms Buttrose used the term in Sydney on Friday night as she delivered an annual media lecture in honour of distinguished journalist Andrew Olle, who died in 1995 at age 48.

While speaking about Mr Olle’s work, she said “he’d tell the stories of Aborigines, the mentally ill, the poor and the powerless … stories, at that time, with no assured place on the mainstream media’s agenda”.

Former ABC, SBS and NITV journalist Jennetta Quinn-Bates took offence at use of the term “Aborigines” and she took to Twitter to highlight it was not in-line with the ABC style guide.

“She’s still calling us Aborigines and basically reminding First Nations people we’re lucky for any airtime at all,” Ms Quinn-Bates wrote.

“Message received loud and clear. Sincerest apologies to my former ABC indigenous colleagues.”

After her initial comments, Ms Quinn-Bates posted screenshots of the ABC editorial style guide, which directs staff to “avoid Aborigine outside of quotes”.

Ms Quinn-Bates said while Ms Buttrose could argue it was “only a guide”, she called for “some respect please”.

“You would think one would be familiar with the policies and standards of the organisation they chair,” Ms Quinn-Bates posted.


NSW will need Narrabri gas resources minister in Federal Leftist government says

Resources Minister Madeleine King has warned of a bigger energy crisis in future years if new gas fields like the Narrabri project in northern NSW do not go ahead, declaring that critics of the project should accept the need for gas as part of the transition from coal to renewable energy.

Warning of gas shortfalls that could hurt industry and households, the new federal minister said Narrabri should proceed if it met environmental safeguards and all the gas should flow to the domestic market.

Santos wants to produce the first gas from the controversial project in 2026 and says it could sell the gas “two or three times over” on the domestic market because demand is so strong, but the company must gain state and federal approvals for gas production and a pipeline to Sydney.

The gas field is opposed by the Australian Conservation Foundation, Greenpeace, the Climate Council, the Gomeroi traditional owners and others, while Greens leader Adam Bandt wants federal Labor to halt all new gas and coal projects.

King said she hoped the project would go ahead but understood it had to pass further regulatory checks, including challenges under native title legislation.

“If Narrabri meets all the environmental standards, and by all accounts it does, then it makes sense for it to go ahead,” King said in her first interview with the Herald and The Age since taking office.

“It is an important gas reserve that will help the population of NSW address a future power crisis. It avoids a crisis, is what it does, because it means more gas closer to your systems.”

While the NSW government has backed the Santos plan in principle, the project is subject to independent environmental approvals while the government also examines a separate plan to build an import terminal in Port Kembla to supply gas that has been shipped from Western Australia.

King emphasised that she wanted to “decarbonise” the economy by shifting to renewables but had to deal with household and industry demand “and accept some of the realities of our current energy mix”.

She said demand for gas would fall over time and she wanted Australia to reach net zero emissions by 2050 with Labor policies to shift to renewables and invest in the electricity grid, but she said gas was part of the transition because it would replace dirtier emissions from coal-fired power.

“I understand people’s concerns about there being a lack of determination around meeting net zero emissions and a lack of an energy plan and that has been because of the climate wars in this country in the last 10 or 15 years,” she said.

“I have a lot of sympathy for it and I’m as angry as anyone about the inaction that has allowed the current crisis to be upon us.

“But everyone needs to understand, especially I think in some of the southern states, that right now when you flick on your light switch or have your dishwasher running or turn on your telly, for the most part, that moves a turbine in a coal-fired generator ... you’re using more coal, which is high in emissions.

“While the government is now bringing in an energy plan which will get working on renewables, and that’s our very determined ambition, gas is the transition fuel that is able to bring down emissions in the short term.

“So it’s not a perfect answer. We’d all love to switch straight from coal to renewables. But it’s simply not possible,” she said.

“So I guess for the good people of NSW, they need to consider what they really want. And I imagine they still want to be able to turn on their television and keep their fridge running.

“What is the current means to be able to do it and be on a downward trajectory with emissions? Well, it’s via gas on the way to a proper, solid, reliable transmission system that allows renewables and the storage of renewables to operate into the long term.

“We’ve got a long way to go, actually, because of the lack of investment over the last 10 or 15 years and you can’t switch on investment like we switch on lights.

“And for those people that will get angry at me for what I’ve said, I just want to let them know that I want to clean and decarbonised world as well. And that’s what we’re working towards. It might not be on the same timeline as others. But we are all going through the same goal.”

Santos has promised in the past that all the gas from Narrabri would serve the domestic market if the project gained approval, making this part of its formal submission to the Independent Planning Commission.

“Santos has committed to providing all this gas to the domestic market and agreed to accept a condition to this effect on any petroleum production lease granted for the project under the Petroleum (Onshore) Act 1991,” the company wrote.

Santos chief executive Kevin Gallagher confirmed the pledge in an interview on Sky News on June 8.




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