Tuesday, September 12, 2023

Greens Flex Power to Reach Deal With Labor on Housing Affordability Bill

I am no fan of government spending but I am rather in favour of spending on more "public" (charity) housing. There is a significant minority of tenants who would never be housed otherwise. When given a chance, they fail to pay rent and do extensive damage to the property. That is why landlords insist on references from the previous landlord. So it will be very difficult for such a tenant to get another place to live. "Public" housing is their only chance. Governments can afford such people. Private landlords cannot

The federal government has agreed to spend an additional $1 billion on public and community housing as part of a deal to secure the Greens’ support for the Housing Australia Future Fund (HAFF) Bill.

The funding will be distributed through the National Housing and Investment Finance Corporation.

The move follows a government decision—while under pressure from the Greens—earlier in the year to provide $2 billion to the social housing accelerator fund.

Greens leader Adam Bandt welcomed the decision by the federal government, saying that "pressure works."

“Labor’s HAFF still won’t fix the housing crisis, but the Greens have secured $3 billion dollars for housing right now—not relying on a gamble on the stock market—and we’ve got to a position where it can pass the Senate," he said.

"Labor said there was no more money for housing this year, and we pushed them to find $3 billion."

The bill, which has been stalled for nine months in the Senate, is set to create a $10 billion fund (US$6.7 billion) which the Albanese government argues will solve the lack of social and affordable housing across the country, with the government hoping the legislation will allow the building of 30,000 homes over five years.

Under the proposed legislation, the fund will stay in perpetuity, and each year, the government will use its returns to invest in housing across Australia. However, the return amount that can be withdrawn from the fund is capped at $500 million annually.

The negotiations mean that the federal government has spent six times more than it was willing to spend on an annual basis.

However, the Greens have warned the Labor Party that they have only just begun wielding their influence, signalling that they will use all significant legislation to campaign for the government to freeze rents around Australia.

“Renters are powerful, and the Greens are the party of renters. We have won more money for housing for renters, and rent control is next,” Mr. Bandt said.

“I say this to Labor: if you continue to ignore renters, your political pain has just begun. There are several more significant bills on the immediate horizon where the Greens will use our position in the balance of power to push the government to address soaring rents with a freeze and cap on rents.

“Renters are on the march, and the Greens will be fighting alongside them all the way.”

Meanwhile, the Greens housing and homelessness spokesperson Max Chandler-Mather MP said that the Greens' advocacy had meant that for the first time, Australian "renters have a national voice for the first time because the Greens stood up and fought."

"Our message to renters is your voice and vote is powerful, and the Greens are ready to fight for you and know that we won’t stop until every renter in this country has a safe and affordable place to call home."

Mr. Chandler-Mather argued that it appeared that the Albanese government did not care about the one-third of this country who rents and that housing advocates had caved too soon to the Labor party.

"Labor had the opportunity to freeze and cap rent increases through National Cabinet, and they refused, so from now on, every rent increase is Labor’s fault, and come next election Labor should be prepared to hear from renters loud and clear they are fed up with being treated as second class citizens," he said

“To every housing organisation and crossbench MP who told us to pass the HAFF Bill in its original form, sit up and pay attention. When we stay at the negotiating table, we get outcomes, and $3 billion of additional guaranteed and immediate money is proof that Greens in the balance of power can drag Labor kicking and screaming to taking meaningful action."


Pauline Hanson erupts over push for dreaded new tax

One Nation’s Pauline Hanson has blasted a suggestion that the government should consider inheritance taxes for the rich, declaring the idea “left-wing”.

Incoming Productivity Commission boss Danielle Wood controversially urged the federal government to have a “sensible conversation” about inheritance taxes on Monday, while acknowledging the policy is “political dynamite”.

In an interview with 2GB radio this morning, Senator Hansen dismissed Ms Wood as nothing more than a “Marxist” with socialist policies. “She’s coming up with these ideas that she’s previously backed [such as] slashing defence spending which we need,” Senator Hanson said. “Increasing the GST by 15 per cent, again hurting the Australian people out there because this money goes to the state who actually waste money and we get nothing for it.

“Then she wants to redesign stage three tax cuts, which for all of you people out there working hard, expecting a bit of a tax cut … she wants to take that away from you. And then including the home in the age pensioner’s assets test and then rolling back generous superannuation tax concessions.”

Senator Hanson told 2GB’s Luke Grant that Ms Wood “doesn’t win any awards from me”. “And if Labor rely on her and her economic sense … I wouldn’t have an economist [do] my grocery shopping for me,” she said.

Ms Wood, who will be leaving her role at the Grattan Institute for her new job, has stated that her personal views are longstanding and focuses on concerns that the burden of taxation will continually be on the shoulders of younger workers.

She told news.com.au that her personal views will not be part of the work that she planned to do within her new role, unless it made a referral on tax.

“We know that there is a growing pot of wealth, sitting in the hands of older Australians that will be passed on in coming decades,” she said.

“You would set some kind of threshold for the size of inheritances and only tax above that amount.”

In a recent speech at the Grattan Institute that was first reported by The Australian Financial Review, Ms Wood agreed that the idea was “political dynamite”.

“It’s just a very politically sensitive topic. I think it’s because it’s seen as kind of interfering with a personal transaction, which is sort of given out of love, and I understand the sensitivity of that.”

However, her focus was on the projected burden that younger workers will carry in the future.

“But in a world again, where we need to raise money, we’re otherwise going to be pushing a huge burden on future workers.”

Other calls Ms Wood has made were for retirees to pay a 15 per cent tax on their superannuation earnings, along with a reduction in the 50 per cent capital gains tax discount.

Currently, Australia is one of 16 countries with no inheritance tax after Prime Minister Malcolm Fraser abolished it in 1979.

Other countries with no inheritance tax includes our neighbour New Zealand, Canada, Mexico, Singapore, Norway, Luxembourg, Portugal, Sweden, Israel, Slovakia and Serbia.


‘Mass exodus’: why investors are jumping ship

Australia is losing critical rental stock at a time when it’s needed more than ever due to record migration.

Alarming new polling has revealed almost one in eight investors across the country sold a rental property over the past year, with 73 per cent of the properties selling to owner occupiers.

NSW investors accounted for about 20 per cent of the sales, according to the survey by the Property Investment Professionals of Australia (PIPA).

PIPA noted the sales resulted in hundreds of thousands of properties being “stripped from rental markets”.

It followed a high rate of investor sales over previous years, with earlier PIPA polling showing 16.7 per cent of investors had sold at least one property in the previous two years.

Most of the rental properties are being bought by owner occupiers.

Common reasons investors sold their properties were rising interest rates, governments’ threatening to increase taxes or introduce rent freezes, and the need to clear debt.

PIPA chairman Nicola McDougall described the sales as a “mass exodus of private investors from the market”.

“Clearly, this would explain the undersupply of rental properties available for tenants around the nation,” she said.

Victoria and Queensland had the highest rates of investor sales, which reflected recent proposed rental market reforms, Ms McDougall said.

“Those states are leading the charge with restrictive, unfair and inefficient legislative reforms that adversely impact property investors,” she said.

Victoria and Queensland were considered the least accommodating states for investors by PIPA members, while NSW and WA were considered more accommodating for investors.

A slight improvement in the appeal of NSW reflected how Sydney had weathered the nation’s Reserve-Bank-led market correction.

“It’s had a relatively short period where prices were reducing and that would have enamoured some investors,” Ms McDougall said. “But it’s still a very expensive market and that would limit the number of investors who could purchase there.”

Ms McDougall said it remains clear investors are selling up or avoiding buying due to attacks by governments disguised as reform that make owning a rental difficult.

Investors’ major reasons for selling over the past year were changing tenancy laws (43 per cent), interest rate rises (40 per cent), negative cash flow (23.2 per cent) and offloading an underperforming asset (18 per cent).

Other popular reasons were governments increasing or threatening to increase taxes, duties, and levies (47 per cent) and talk of rental freezes (34.6 per cent).

In a sign of more pressure to come for tenants, the survey found 38 per cent of investors said it’s likely they will sell within the next year.


Too much free stuff

Judith Sloan

I was a big fan of P.J. O’Rourke, who sadly departed this world too soon. Who didn’t love his biting, satirical books and essays, poking fun at the ardent devotees of the trendy zeitgeists of the day?

My absolute favourite O’Rourke quote is this: ‘If you think health care is expensive now, wait until you see what it costs when it’s free.’ The point is that when governments give away free stuff – of course, it’s not really free, just provided free of charge to the users – all sorts of negative consequences follow.

Sadly for us, the vast majority of politicians either don’t understand, or prefer to ignore, this message. They simply can’t wait to offer more free (or excessively subsidised) stuff in order to amass the greatest number of grateful recipients. While there will be various spins put on why free stuff is necessary – helping the disadvantaged, improving the environment, lifting education standards, yada yada – the reality is far too many government spending programs are simply a means of using the power of the government purse to hoover up more votes. And all sides of politics do it.

Before I cover some of the big free stuff, let me first outline one of my current favourites – free fishing rods and other fishing gear to Grade 5 students in Victoria. It will cost $1.5 million out of a $96 million package ‘to improve fishing, boating, piers and aquaculture’. There must be votes among anglers, obviously.

The blurb reads: ‘The Minister for Outdoor Recreation announced 60,000 kits will be made available to grade five primary students in more than 1,900 Victorian schools. The kits will set families up with everything they need to wet a line including a fishing rod and reel, line, tackle box, some tackle and a Kids’ Guide to Fishing that includes information and links to educational resources to learn the basics such as fishing safety, knots and rigs. The kits will help youngsters get active, learn about the aquatic environment and have fun in the great outdoors whether they be down the coast, on Port Phillip Bay or by a river in regional Victoria.’

You probably think that I am making this up, given the extremely parlous state of public finances in Victoria. But, no, this free fishing gear is currently being sent out to primary schools so the kids can nag their parents to take them fishing, even though this will prove highly inconvenient in most cases and most parents will have no expertise or interest in fishing.

By the way, most Victorians don’t live close to the sea or a river.

I’m only guessing here, but perhaps Dan the Man, current premier of Victoria, has fond memories of fishing with his dad and he wants to spread the love using other people’s money. The more likely outcomes are family disputes, a few nasty accidents as fishing hooks end up in the wrong places and all that hardly used fishing gear being left on front lawns to be picked up in the next rubbish collection. At best, some parents might make a few bob by selling it on eBay.

At a bigger level, free stuff is flourishing as an idea in the minds of many political leaders. One of the current popular ones is free kindergarten/pre-school. If you believe the promotional material, all three- and four-year-olds are guaranteed a certain number of hours per week in kinder/preschool with no charge to the parents. But, of course, the parents are perfectly capable of gaming the system to maximise the benefits for them.

In New South Wales, for example, parents of four-year-olds are entitled to three days of free preschool at any one centre. But go to another centre and you can get the other two days for free as well. The net effect is that the centres are full of four-year-olds and there are simply no spots for three-year olds, notwithstanding the commitment the NSW government made.

They’re called supply constraints which is clearly an alien concept to those who are designing and running these programs. Not only are there a limited number of physical centres, but there are also shortages of suitably qualified carers to work there. It’s all very well offering free kinder/preschool but the reality is it will simply not be possible to make good the promise, at least in the short term. In the longer run, it will prove very expensive.

Similar problems have arisen in Victoria where many kindergartens are run by local councils. According to the Age – don’t ask – ‘Knox City Council will stop running all but two of its 28 kindergartens from January 2025, affecting placements for 1100 children aged three and four.’ The combination of rapidly rising costs and inadequate funding by the state government has led to this decision.

Free TAFE courses and even free university courses have also become popular among politicians. The argument is that you just need to identify the skills in need and then lure students into the relevant courses by making them free of charge. Sadly, the evidence is that people don’t actually value highly something that they receive without charge: the completion rates of these free courses are wretchedly low.

And again, there is very little attention given to the supply side. The fact is that the providers of these free courses are often inadequately funded using inappropriate funding formulas. Moreover, the instructors often have weak incentives to provide quality courses because the students aren’t paying anything anyway.

Of course, free stuff can be very popular with the users as long as the stuff is available and deemed to be of acceptable quality. It’s why bulk-billed medical services have tended to be a hit with patients, even for those who clearly have the means to make a financial contribution to consultations.

But here’s the thing: if something is free, there tends to be overuse and runaway government spending. It is also the case that the quality of the service will almost always decline – superficial, single-issue six-minute GP visits, anyone?

Asking everyone to pay, say, the equivalent of a cup of coffee or two is surely not asking too much. In the meantime, politicians need to wake up and realise that providing lots of free stuff is extremely poor public policy.


Also see my other blogs. Main ones below:

http://dissectleft.blogspot.com (DISSECTING LEFTISM -- daily)

http://antigreen.blogspot.com (GREENIE WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://edwatch.blogspot.com (EDUCATION WATCH)

http://snorphty.blogspot.com/ (TONGUE-TIED)

http://jonjayray.com/blogall.html More blogs


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