The current housing pain might feel like an acute moment, but it is really the culmination of decades of policy in which every factor has pulled in the direction of making housing unaffordable.
: “Structural changes to the economy are projected to put pressure on the revenue base over the coming decades”. That’s an extremely dull way of saying we have a massive tax problem.
Meanwhile, we seek more workers to fund expanding government spending. That’s hard in an ageing society where an ever smaller proportion of people work and pay tax. Hence, the imperative for us to have more babies, take in migrants or both. Accordingly, the housing crisis is not an adjunct to our tax problem: it’s at the core of it. People who can’t afford housing aren’t likely to rush into having kids.
We’re used to talking about productivity when it comes to workers. Specifically, we hear that wage growth without a corresponding increase in productivity simply leads to inflation, and because Australia has a productivity problem at the moment, real wage growth is unrealistic. Why, then, doesn’t a similar idea apply to property investment? We encourage it, and our politics therefore requires property prices to keep increasing, but we never talk about whether this is productive.
This is not some piercing, new analysis. The whole point is that it’s a basically conventional one. Since the late ’60s, economists have used the concept of “rent-seeking” to capture the economic harm that occurs when people seek to increase their wealth without doing anything to create new wealth for society. They often illustrate this with the extreme example of something like theft, or piracy.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Australia news live: Jim Chalmers to launch intergenerational report; Creative Australia to replace arts funding bodyFollow today’s live news updates
Read more »
‘Sharpening my sword’: One of Hong Kong’s most-wanted can now practise law in AustraliaTed Hui, a Hong Konger who fled to Australia via London in 2021, says he is now waiting for the Chinese Communist Party to fall.
Read more »
When will Australia head to the polls to vote on the Voice?The announcement will be made in Adelaide next Wednesday, highlighting South Australia as a must win state for the Yes campaign.
Read more »
Western Australia lobbies for more skilled migrantsWestern Australia's Premier and opposition leaders are calling on the Commonwealth to backflip on a decision to cut the intake of skilled workers. Builder shortages have prompted Perth to face its worse housing crisis as vacancy rates remain below one per cent.
Read more »
Reality show The Traitors inspired by murderous 17th-century mutinyMaritime horror, after Dutch sailing ship Batavia wrecked off western Australia, set TV show in motion
Read more »
New body formed to make Australia a ‘music powerhouse’The new federal government agency Music Australia opens its door on Thursday with the aim of making Australian a hit-making music capital of the world.
Read more »