Page 1642 - Week 06 - Thursday, 23 July 2020
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very upset that the Liberal Party is possibly not doing anything to preserve it, certainly from a federal point of view. I think it is very sad that much of the world’s governments are not protecting our environment.
Mr Coe also said that everybody should have the right to a house on a block. As a matter of practical reality I would have to also point out to Mr Coe that that may or may not be a right everybody should have, but it is certainly not a right that everybody has had historically. Australia has had a lot of people in very poor housing situations.
My last rave on things that Mr Coe said at the beginning is: Mr Coe was quite upset to find that in house and land purchases now the value of the land might be 50 per cent or maybe even slightly more of the price of the house and land. They are not making any more land. Nowhere are they making more land. If you were to purchase a house and land package somewhere else, which I must admit I have been looking at because I am contemplating not retiring here, you would find the situation is probably even more dire than in the ACT.
The federal government has done a few things well during the COVID crisis but HomeBuilder is clearly not one of them. As I suspect we are all aware, HomeBuilder is a $680 million federal government program, which it announced in June, to support jobs in the construction sector during the COVID recession. It has two parts. First, it will provide eligible owner-occupiers with a $25,000 grant to build a new home. Second, it will provide eligible owner-occupiers with a $25,000 grant to substantially renovate an existing home. This is just the wrong policy.
Why? Firstly, the grant for new home buyers. Australia, including the ACT, has a long history of these types of grants. We know from bitter experience that they do not help home buyers at all. Instead, most economists have concluded that they just drive up home prices by the amount of the grant. They are, in fact, a home sellers grant, not a home buyers grant, because that is where the money ends up. That may of course have been the plan behind the HomeBuilder grant.
Then, of course, there is the outrageous McMansion expansion part of the grant which will pay wealthy people to get a massive home extension. Why not throw in two new bathrooms and a high-end kitchen at the same time? I am not joking. Renovations of up to $750,000 are eligible. There are not, I would have thought, that many Canberrans who can afford a $750,000 renovation, but maybe I am wrong about that.
What, however, could we spend the money on instead—particularly taking as a given the federal government’s stated desire to keep the construction sector afloat? In what sorts of places could the money be better be spent? As I have said in this place many times, Australia, and the ACT in particular, has a serious housing affordability problem. Homelessness is much higher than in past decades. Rents have become unaffordable for people on the minimum wage or on federal government benefits. Many people in their 20s and 30s feel priced out of the housing market even if they have a good income. These issues are, by and large, the legacy of the federal government taxation, social assistance and housing policies over the last 25 years.
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