Jason Falinski MHR put a piece into our mainstream media this week – about housing affordability. Sometimes we need to think about our political representatives. And whenever they put something into our mainstream media we should ask about the process which has got it there.
Policy priests should tell young Australians the truth about homeownership and supply
Jason Falinski
Liberal Party MP
September 30, 2021 — 5.00am
I have a confession to make. This month, when the House of Representatives Committee on Tax and Revenue convened to hear from Treasury, the Department of Social Services, and the Reserve Bank on housing affordability, their evidence did not have my full attention.
You see that day I was homeschooling, and my daughter was conducting a Food Tech experiment in the kitchen. As the hearing got under way, disaster was unfolding next to me.
Yes, Ladies and gentlemen. Your taxes are currently paying somewhere north of $211250, plus another $32000 in Electorate allowances for a Member of the House of Representatives, plus another $20000 for someone who gets to be on a committee, plus another $20000 in lieu of a private plated car, plus travel allowance, plus the nations finest superannuation scheme, plus phone expenses and home power and internet, and lord only knows how many meals on electoral duties……….for a fellow who:-
- Doesn’t pay attention during the committees he is on
- Doesn’t pay attention during the committees he is on and writes about it in the media
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to, and utilizes an experience which almost all Australians with children have experienced in the last year or so to expiate that.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to, and utilizes an experience which almost all Australians with children have experienced in the last year or so to expiate that, while commenting on the subject of the committee he chairs.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to, and utilizes an experience which almost all Australians with children have experienced in the last year or so to expiate that, while commenting on the subject of the committee he chairs, and ignoring almost every last submission made to that committee.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to, and utilizes an experience which almost all Australians with children have experienced in the last year or so to expiate that, while commenting on the subject of the committee he chairs, and ignoring almost every last submission made to that committee, and is doing all of this from home.
- Doesn’t pay attention during the committees he is on, and writes about it in the media, and chairs the committee he writes about not paying attention to, and then pontificates in the media about the subject matter of the committee he is chairing but not paying attention to, and utilizes an experience which almost all Australians with children have experienced in the last year or so to expiate that, while commenting on the subject of the committee he chairs, and ignoring almost every last submission made to that committee, and is doing all of this from home – writing about the expense of home ownership.
- All of the above.
Fuerzas Armadas Revolucionarias de Colombia………
For the next 30 minutes, I tried to juggle my dual obligations. I quickly came to realise they were the aligned. In both places I was trying to understand what had gone wrong, and how we could get it right for our children.
The way things stand, there is little chance that my daughter or her friends will be able to afford their own home. Low homeownership correlates with increased wealth inequality, worse mental health, greater democratic instability, domestic violence and less economic productivity. So, it is a concern that, despite generous government assistance, homeownership for people under 40 is now lower than it was in 1947.
We can imagine Jason’s moment of epiphany……
His little girl in his white marble kitchen with spotless polished stainless steel benchtops on the centre console over white terrazzo and ebony tiles imported from Spain, within a cocoon of frosted glass shelving from Bohemia …..doesnt get the top right on the Moulinex when blending some strawberries for a brûlée topping.
Little blobs of sugared strawberry end up all over the exterior doors of the Meneghini Arredamenti Refrigerator, the aforementioned frosted shelving, the floor, and somehow make it as far as the Venus Century Espresso Machine……a full eleven unendurable hours before the home help is next rostered on.
Oh, the cruel slings and arrows of outrageous fortune……doesn’t anyone know where the Chux are?
Notwithstanding the possibility that his daughters friends might include some of the most pampered children in Australia, attending some of the most expensive schools known to man and have a concern about housing affordability in a completely different dimension to that known by many or even most other Australians, Jason wonders about their scope for buying a home at some point in their lives………
Their options include
- Ask dad, seeing he is slaughtering $250k clean per annum courtesy of the Australian taxpayer
- Get fresh with someone whose dad, or mum, or maybe both, is also slaughtering $250k clean courtesy of the Australian taxpayer – probably living in circumstances just like them and knowing Sweet FA about housing affordability.
- Get fresh with someone whose dad, or mum, or maybe both, is also slaughtering $250k clean by any means whatsoever – which in Australia means milking government regulation one way or another, milking government contracts one way or another, or fluffing the population Ponzi one way or another – probably living in circumstances just like them and knowing Sweet FA about housing affordability.
- Getting a pad in Paris, the West End or Manhattan.
- Finding a life partner to go downmarket with (who may know something about housing affordability) and buying a fibro shack in Hoxton Park.
- Taking out a mortgage for 15-30 times their income and paying off an abode on years worth of short term contracts, and learning about housing affordability from a debt serfs perspective.
Beyond that moment, Jason has some good points. Low home ownership is directly correlated with a lot of social and health problems, and for sure home ownership rates are taking an absolute kicking. It is also worth noting that the numbers of Australians with a significant mortgage in their retirement is also rising. It all points to people taking on more debt than they can actually service in their working lives to buy a house. This is directly attributable to them experiencing a range of problems, and translates almost directly into a diminished marginal propensity for people to get together and have families.
Jason hasn’t actually said that, but that is where he is heading. Let’s see where he goes next.
There are many stories in the media of houses selling $1 million above market. This is not a well-functioning market; it is a sign that buyers are desperate.
Why has the Australian housing market gone as wrong as the food tech assignment?
Here is a summary of the usual suspects: property speculators (however, the proportion of property investors has been at record lows), net migration (for the last 18 months net migration has been zero), interest rates and the tax system turning housing into a speculative asset.
Some of these are only a problem if you stop people from building more houses.
If we set aside the second sentence of that as another attempt to relate his family experience to that of a large numbers of housing stressed Australians who have major issues getting meat and three vegetables on the table for themselves and their kids each day, and write it off as political representative faux ingratiation of the ‘he’s a great bloke’ kind, we have the start of Jason the public intellect commenting on an issue of national importance.
At this point one finds oneself taking a moment to consider Jason
- Here he is at the Parliament House website Mr Jason Falinski MP
- Here he is at his own website Jason Falinski MP
- And here he is on the Liberal Party website JASON FALINSKI Member for Mackellar
A man with a Bachelor of Agricultural Economics from Sydney, an MBA from AGSM. A solidly built middle aged dude with a couple of chins who likes a laugh, whom the Liberal party still flaunt as a 23 year old (can’t they be honest about anything?). A background as a Managing Director for a company assembling and distributing health related bedroom furniture employing maybe 30 odd people. A period with IAG in strategy and M&A when most of the strategy and M&A would have been overtly political as NRMA Insurance became IAG. A spell in corporate affairs with Credit Union Service Corporation, an organisation which basically provides payment services for the Credit Unions. Lots of Liberal Party apparatchik work. There is nothing much there pointing to any great social or economic intellect development or experience. But the Liberals still have him down as a ‘Self described economics nerd’ who ‘refuses to duck the big issues’ highlighted by his appointment to the chair of a committee from which he writes about not paying attention.
He scouts a few themes, speculators migrants, interest rates and tax – but is seemingly of the view that if they don’t change dynamics straight away (speculators declining and no migrants for 18 months) they can be discounted. One wonders about the comprehensiveness of that ‘self described economics nerd’. You would think and AGSM would leave just a touch more intellectual rigour in their graduates.
And his thought is ‘build more’. OK. What narrative does he bring to the issue of housing affordability?…..
“Think of it this way: government programs help 100 people to buy a bus ticket, but there are only 50 seats on the bus. At this point we have a choice, we can either get another bus, so everyone can get on, or we can tell half the people waiting to rack off because they don’t deserve a seat. Currently, councils and our planning system does just that.”
The old bus queue mindset……Would anyone like to hazard a guess as to when Jason last caught a bus?
Demand is a given in Jason’s fable. Those 100 people are handed down from on high and cannot be questioned or analysed in any way. We just need to double the supply, or we are telling some of them to ‘rack off’. Interestingly he doesn’t go anywhere near the idea, beloved of transport analysts, that making transport easy and cheap – a’la railways and freeways – simply attracts more people to them, and leads to them becoming clogged anyway. But that isn’t an issue for now. Let us go back to Jason.
Five years ago, Sydney was undersupplied by 100,000 houses. The NSW government says 42,000 new homes a year are required to stop the problem getting worse. In 2020, only 29,500 homes were built. This year building approvals fell another 10 per cent. The RBA says that 68 per cent of the cost of a Sydney apartment is due to planning laws.
Only one of 35 local government areas in Sydney is on track to achieve their housing targets. In Brisbane, at the end of December just 5,905 approved lots remained, way below the government’s mandate; and in Melbourne, a $1 million apartment includes $220,000 in taxes.
Jason starts off on an observable tack. Sydney needs 100 thousand houses, or at least 42 thousand per year (again no mention of demand) and is only building 29 thousand s down 10%. All perfectly plausible. Then he throws in a non sequitur…..’The RBA says that 68 per cent of the cost of a Sydney apartment is due to planning laws.’ Complete with link to the RBA paper. So it doesn’t matter if it makes no sense to the rest of the paragraph, right? The RBA said it, so it must be true……
Well Jason, this is what is written in the RBA piece – in the abstract right at the start (which some may suspect is about as far as you got into it).
We estimate that home buyers will pay an average of $873,000 for a new apartment in Sydney though it only costs $519,000 to supply, a gap of $355,000 (68 per cent of costs).
At this point, Jason, the casual reader may well find themselves questioning your comprehension abilities about things you write about. They may even find themselves wondering if the Bachelor of Agricultural Economics, the MBA, and self references to being an ‘economics nerd’ are, like the kotekas worn by highlanders in Papua New Guinea, largely ceremonial or traditional, and serve no functional or intellectual purpose whatsoever.
The next paragraph tees off with another throwaway link to some incomprehensible data to suggest Sydney local governments aren’t meeting ‘housing targets’ as though these are also handed down in stone tablet form from a deity. Then out of nowhere, comes a reference backed by nothing whatsoever, about Brisbane having ‘just’ 5095 lots remaining, which is in some way below a government mandate, and then a Melbourne million dollar apartment – is this about ‘affordable housing’ Jason? Is a million dollar apartment somehow within your framework of affordable? – which includes 220 thousand in taxes.
He may be right, he may be wrong, but how the hell can anyone make any sense of what he is on about or why? Did any editorial value touch this piece? Has the once mighty Fairfax finally made it to becoming a version of ‘New Idea’ or ‘Australasian Post’ which just accepts diatribes without looking at them before publishing?
Some would argue this is not an issue, in my view it is nothing short of intergenerational theft. Funnily enough that is exactly what the NSW government’s Intergenerational Report says.
As someone who co-authored a submission to the Affordable Housing Inquiry Jason chairs submitted on behalf of ‘Australians for Intergenerational Equity’ (Number 60 here) I find myself in complete agreement with Jason right on this paragraph. Australian house prices punish the young and the less well off of all ages, to increase the ‘wealth of the mainly older and mainly better off.
Unfortunately it is a passing ships kind of agreement because Jason is next off into the realm of utter myth.
This is driven by insiders who refuse to countenance the role of supply. All they talk about is reducing demand, by increasing taxes, increasing interest rates, and cutting the HomeBuilder stimulus scheme that offers $25,000 grants for new homes. Oh, and stop eating smashed avocadoes.
Well our first takeaway there is the word ‘insiders’. No mention of who they are, or where they are, or what they do? Do they make decisions as governments Jason? Do they advise governments who do make decisions Jason? Are they Federal Insiders or State insiders? Are they a cabal? No mention of the fact that his party has been in government for 20 of the last 26 years. But a bit like Stalin warning about ‘counter revolutionaries’ or authoritarians everywhere concerned about ‘Fifth Columnists’ Jason has hit upon a vein of traitors deforming Australian housing to punish younger and less wealthy Australians.
Anyone for an auto-da-fé, or a purge? What about some show trials?
Then Jason strolls off into the realms of pure bullshido. Having cast demand as a given which cannot be questioned, he links these ‘insiders’ with the apostasy of wanting to reduce demand.
He suggests they want to increase taxes. Has anyone anywhere suggested raising taxes on housing supply? Even the ALP, when considering removing the negative gearing tax concession, was planning to retain it for investment in new housing. It was just the concession would be removed for housing which had been previously constructed – and would therefore tone down the speculative impulse. Jason does more than 90% of all negative gearing relate to previously constructed housing?
Indeed the RBA, whom Jason likes to refer to, have also laid out a pretty comprehensive position on the removal of negative gearing haven’t they – That’s the second paragraph under the heading ‘Conclusion’ on page 35 for you Jason.
Our model shows that, in equilibrium, repealing negative gearing decreases house prices, increases rents thereby improves a home affordability of Australian households. As a result, the average homeownership rate increases. The responses to the policy reform are different along the dimension of household age and earnings. The rise in homeownership rate after the policy reform is larger for young households who were relatively poor. Elimination of negative gearing helps poor households as lower house prices allow them to consume the bigger amount of housing services. The model also shows that eliminating negative gearing takes young landlords who were rich enough to meet a downpayment requirement for investment properties away from the market.
And if you aren’t comfortable accepting that RBA working paper from 2017 then we could also note you were told precisely the effect of Negative Gearing on the housing market by Luci Ellis just a fortnight ago.
“The bank has always held the view that the combination of negative gearing and concessional capital gains tax and the way we tax or don’t tax older Australians combine to encourage, essentially, speculative investment in property. There are positives and negatives to that. It probably means that, at the margin, rents are lower for some households who rent, but it does add a speculative dynamic to the market that is something that we’re quite concerned about given our financial stability mandate. Certainly there have been not only their statements in speeches and testimony but also many submissions where we’ve made that point. It’s not just the negative gearing or just the capital gains tax; it’s the combination of them. We believe that the tax system is worthy of review, but not one feature in isolation. It requires a holistic review in order to get the right combination of parameters so that the treatment of income-producing assets in the tax system doesn’t have deleterious effects on other elements of the public interest.”
But let’s go back to that paragraph because there are some more juicy morsels of incredulity in it worthy of perusal. Jason accuses these ‘insiders’ of wanting higher interest rates, and of wanting to cut new housing grants.
Well Jason, if you were paying any attention to Luci Ellis when she spoke to your committee she noted that lower interest rates stemming from the RBA overnight rate being dropped to sustain demand in the face of the global Covid related downturn is effectively trumping all the new supply. That amounts to people with access to money find it so easy to get the money, and so nonsensical not to get it, that they get it and just invest in whatever they feel like and they feel like housing speculation because of Negative Gearing and CGT concessions. She then noted in this environment the construction grants do little but add to the profitability of the developers……which the cynical would say is probably the point Jason.
Let’s go back for the last few stanzas of this tripe
It means, and could they just be honest about it, that millions of Australians under 40 should just put up with never owning a home. It is a cruel and dishonest argument made by vested interests. It amounts to victim blaming. Besides providing homes for the next generation, building new homes creates a lot of new jobs.
So these unknowable and unidentifiable ‘insiders’ – who are almost as mysterious as the demand side of the equation for Jason, and who have overpowered a government Jason has been either in or closely connected to for the last thirty years (when he was an advisor to John Hewson) which has been in power for 20 of the last 26 years – are to blame. They are cruel, dishonest, victim blaming, and costing jobs.
One sort of finds oneself wondering at what point any government member acknowledges responsibility for anything
We have the least densely populated continent in the world with plenty of land to build on, and some of the highest wages in the world. It is hardly that difficult for us to create an affordable housing market. Sydney has the third most unaffordable houses in the world, Melbourne sixth, Adelaide 13th and Brisbane 18th.
We can accept that Jason has most of that right. The economist koteka in him hasn’t gone anywhere near suggesting that ‘high wages’ is both a plus and a negative when it comes to housing supply, or gone near the idea that ‘high wages’ might be desirable more broadly to help that housing demand, or even that when it comes to ‘high wages’ Australian politicians do quite nicely thank you very much.
But the cherry on the top of his little girl’s brûlée comes at the denouement…..
I ask you: should we accept the unfair deficit of seats on the housing bus or stand up to the outrageous misuse of power by the high priests of policy who lie to all of us to protect their privileged position?
…so that bus fable is real for Jason and we are on a ‘housing bus’ – and we still have no idea about demand and are not allowed to think about it. But those ‘insiders’ we were told about just a paragraph or two ago, have now become ‘high priests of policy’ and now it appears they ‘lie to us all’ and have a ‘privileged position’ – We need loyalty oaths and a purge, maybe even a confession to be read out in public so the people most affected by Housing unaffordability can sit in their shared rented loungerooms and boo and hiss.
….and this is a member of parliament, and a chair of a committee to look into affordable housing and supply (but no mention of demand), with an economics degree and an MBA, in one of Australia’s once respected mainstream news media pillars.
This incomprehensible drivel lays a fair basis for a
- Royal Commission into Australian Housing Affordability
- Royal Commission into Australian University Education
- Royal Commission into Australia’s Media
And at least a parliamentary inquiry (with a chair who is on the ball) into the mental faculties of Australian political representatives.
….and could we also ask that the Liberal Party use only photographs taken within the last ten years on the pages of their Members in Parliament