Dear NEVILLE,
“Get a good job that pays good money.“
This is Mr Hockey’s bizarre advice to millions of frustrated first home buyers priced out of a skyrocketing housing market.[1] Well, we’ve got some advice for Mr Hockey: why don’t you address one of the root causes of housing affordability – negative gearing.
Negative gearing forces everyday Aussie home buyers to compete with investors armed with generous tax breaks looking to buy their second or third property. It reduces home ownership and locks many out of the housing market, increasing the gap between the haves and have-nots.
Do we want to live in a country where young Australians will never own their own homes?
Fortunately, there are growing calls for sensible reform that would both protect existing investors and open up opportunities for first home buyers – and our politicians are listening. The Greens released a negative gearing policy just this week, and Labor Party insiders say public support for change could see the ALP adopt a position of reform at their National Conference next month.
Click here to ramp up the calls for negative gearing reform so more Australians can afford their first home – without having a six figure salary.
On ABC’s AM program this morning, Mr Hockey said to his critics, “Let’s not play the man, let’s actually deal with the policy“.[2] Right on, Mr Hockey – let’s!
Mr Hockey says the big problem in housing is the shortage of supply. So he should love The Australia Institute‘s policy, funded by GetUp members, that restricts future negative gearing to new housing construction. This would drive investment into new houses, increasing supply and creating more jobs, and a new poll shows it’s the approach most Australians prefer.[3]
And just to ward off any scare campaigns: any reforms to negative gearing would be introduced gradually, grandfathering existing investors and protecting them from sudden policy changes.
There’s consensus among housing experts and economists that negative gearing is one policy area driving unaffordable housing in Australia. Moreover, The Australia Institute has also shown that a massive $4.2B in negative gearing tax breaks per year go to the top 10% of income earners – those who need them least.[4] It’s high time we saw Government leadership to make housing more affordable for all Australians.
Click here to sign the petition calling on our political leaders to reform negative gearing as a real solution to housing unaffordability.
Last week, Prime Minister Abbott said that as a home owner (he has one of those “good” jobs) he hopes house prices will keep rising. But if house prices kept rising for another 40 years the way they have for the past 25, a median-price Melbourne house will cost upwards of $5 million.[5] That’s clearly unsustainable.
The thing about bubbles is that they eventually burst. If we don’t take some heat out of the property market now, we could see a crash that would devastate homeowners and investors alike – with dire implications for the Australian economy.
That’s why there’s growing consensus – from the Chief Economist at Bank of America Merrill Lynch to the Australian Council of Social Services – that negative gearing needs to be looked at.[6, 7] In one fell swoop we could have a fairer budget that saves the bottom line billions and makes housing more affordable, especially for younger Australians trying to buy their first home.
Together, we can help ensure young Australians are able to realise their dreams of one day owning their own home: https://www.getup.org.au/negative-gearing
Thanks for all you do,
Mark, Nat, Evan, Daney and Georgina, for the GetUp team
PS – Treasurer Hockey could get back in touch with reality by seeking out advice from the nurses, teachers, firefighters and police officers saving for a home, while they serve our communities. These are good jobs – arguably the greatest jobs – but jobs that don’t always pay the kind of wages that cover a mortgage in out-of-control property markets. Will you join the calls for real solutions to housing unaffordability such as negative gearing reform? https://www.getup.org.au/negative-gearing
References
[1] ‘Get a good job’: Joe Hockey accused of insenstivity over advice to first home buyers, ABC Online, 9 June 2015.
[2] Joe Hockey defends housing comments, accuses critics of ‘playing the man’, ABC AM, 10 June 2015.
[3] Joe Hockey’s housing clanger is another sign of a government that is out of touch, SMH Online, 9 June 2015.
[4] It’s the Revenue Stupid: Ideas for a Brighter Budget, The Australia Institute, May 2015.
[5] Abbott happy to blow air into housig bubble, The Age, 9 June 2015.
[6] Negative gearing ‘undermines’ the tax system, Sky News, 24 April 2015.
[7] ACOSS launches push to restrict negative gearing, ABC Online, 16 April 2015.
