‘Crocodile tears': Warning over key change
The Australian Prudential Regulation Authority (APRA) announced on Thursday that Higher Education Loan Program (HELP) debts would be excluded from the credit limit for prospective homebuyers from September 30.
Independent economist Saul Eslake told NewsWire that the change's two most obvious effects would be to 'allow some people who'd buy a home anyway to buy a more expensive one and (to) allow some people who wouldn't have been able to buy a home because of their student debt' to do so'. It's now a little easier to buy a home. NewsWire/ Gaye Gerard Credit: News Corp Australia
'The net effect of those two factors will be to increase the demand for housing,' he said.
'The likely result is that it will, along with other things that governments are doing, put further upward pressure on the prices of property.'
Mr Eslake said the change meant some people would be able to enter the housing market more quickly than otherwise but 'it would come at the expense of others'.
'The primary beneficiaries of this change will be those who will already own property will be able to sell it to people at higher prices than otherwise,' he said.
'That's consistent with the 60 years of evidence that we have, going back to the first homeowners grant scheme introduced by the Menzies government in 1964 that tells us that anything that allows Australians to pay more for housing than they'd be able to otherwise results in more expensive housing and a smaller proportion of the population owning it.'
Mr Eslake added it was 'obvious' the money saved on HELP debt cuts would now be going towards a more expensive house. Independent economist Saul Eslake says the government cries 'crocodile tears' for first-home buyers while introducing measures that increase housing prices. Chris Kidd Credit: News Corp Australia
'The reason that governments keep doing these things despite the evidence and despite all of the crocodile tears they routinely share about the difficulties faced by would-be first-home buyers is because they know that there actually aren't very many of them,' Mr Eslake said.
'On average, 110,000 a year, whereas there are 11 million people who own their own home. There are 2¼ million who own at least one investment property. That's an awfully much bigger number of votes for policies that keep house prices going up than there are for policies that might restrain the rate at which house prices keep going up.'
Mr Eslake said the reason the housing crisis continued to worsen was 'because a majority of the population do not want it to be solved and politicians know that'.
'Until enough people my age, either out of an altruistic concern for the ability of their children and grandchildren to be able to do what they did, or perhaps more likely out of being pissed off at having to be the bank of mum and dad, until enough of them really want that to change, it isn't going to change.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
3 hours ago
- Sydney Morning Herald
Albanese can make roundtable work for him, no matter where he sits on it
For those who doubt the effect of these changes, go and ask the populations of our AUKUS partners, Britain and the United States, how their health and retirement systems are going. The motivation behind the Accord was the labour movement's resolve to never repeat the errors that had contributed to the swift downfall of the Whitlam government: chiefly the lack of co-ordination between the unions and the party, and the failure to understand the implications of rampant wage claims made as the economy was suffering a shock from oil prices. In other words, the movement had to learn from its mistakes. In the 80 years since the end of World War II, the Labor Party has been elected to office from opposition only four times. Two of those governments – one headed by Gough Whitlam, the other by Kevin Rudd (twice) and Julia Gillard – went down the chute after just two terms. Both experienced sustained periods of internal chaos and failed to live up to their promise. The Hawke-Keating government is the standout success in the entire history of the ALP. It's still early days for the Albanese government, which is now in what was for the Whitlam and Rudd-Gillard outfits the death zone of a second term, but its early defenestration looks unlikely. A record lower house majority and a slide in the fortunes of the Liberals and the Greens offer the prospect of a sustained incumbency. The Albanese government is writing its own electoral script. The common experience of new governments from the early 1980s was that they were elected with a substantial majority that was reduced at the next election. Under Albanese, it has worked the other way around, with Labor just getting over the line in 2022 and then securing a landslide second time up. Right now, it is governing from an incredibly strong position. How could the government blow it? By not seizing the opportunity it's been given by the 8,553,231 Australians who voted for it. Those voters, who represented 55.2 per cent of the national electorate, want the country's problems fixed by the government. The extent of those problems has been demonstrated by the evolution of the roundtable, which began six months ago as an idea for a forum to find ways to kickstart productivity growth. It was not to be a summit that would produce a binding communique. Instead, it would be looser and smaller, with invitees asked to come with ideas, a spirit of consensus and a sense of shared responsibility. But as the lead-up to the roundtable has proceeded and the ambit proposals from stakeholders have dribbled out, it became more difficult to limit its remit to productivity. Fair enough, too, because the economic challenges are interconnected and go beyond that. Loading Quickly, to the government's discomfort, a focus on tax emerged. In any event, in a period when the care economy – a sector in which productivity is naturally difficult to measure – is big and guaranteed to grow, and artificial intelligence is poised to revolutionise most aspects of work, what will become of the existing concept of productivity? It follows that if a meeting convened by the national government has economic reform in its title, it needs to generate substantial results. The smartest thing the government can do will be to see the roundtable as an opportunity to expand its policy options, regardless of whether the industry groups or any other stakeholders play a spoiler role or not. If it tries to 'manage' the outcome, it will be shooting itself in the foot and letting down the people who gave it power. Chalmers, as a former staffer of Wayne Swan, treasurer in the Rudd and Gillard governments, will recall what happened to the 2010 Henry review of the tax system commissioned by the Rudd government. The review made 138 recommendations, only three of which the government took up. It was a political and policy disaster. And having studied Paul Keating's political career, Chalmers also knows about the ambitious and far-reaching tax changes Keating introduced in the Hawke government's second term. At the 1984 election, Labor pledged to hold a tax summit if re-elected. After the summit in 1985, Keating cut the marginal tax rate from 60 to 49 per cent and introduced a tax on capital gains and fringe benefits, along with a range of other changes to such things as wholesale sales tax and the company tax rate. Several measures, especially the fringe benefits tax, faced serious pushback from vested interests. The government had no direct mandate for those outcomes, but it pushed ahead and got them through. It was rewarded by voters for its courage, winning in 1987, 1990 and 1993. The roundtable could turn out to be a bust, as some critics have predicted, but that shouldn't matter. If it founders on the rock of self-interested pandering or head-in-the-sand behaviour, Albanese should say it was worth a try, thank the participants for coming, and then get on with doing big things anyway. There is an appetite for this in the community, especially among younger voters, who are getting the rough end of the economic pineapple. Loading A report this week found that house prices are 14 times the annual average wage. To let this continue would be unconscionable and a social catastrophe. The prime minister and treasurer are breathing rare air. They will never get a chance like this again. Then again, who's to say they actually share any historically significant, politically risky ideas for the economy? Postscript: What of my massive career-defining national scoop in 1983? Four paragraphs appeared in a late edition on a left-hand page deep inside the paper, with no byline. On the following Monday morning, I got a call from a senior colleague on the chief of staff's desk, a decent bloke: 'Mate, the other papers have got some of the details of this Labor-unions agreement that they're voting on today. Have you seen it?'
The Age
3 hours ago
- The Age
Albanese can make roundtable work for him, no matter where he sits on it
For those who doubt the effect of these changes, go and ask the populations of our AUKUS partners, Britain and the United States, how their health and retirement systems are going. The motivation behind the Accord was the labour movement's resolve to never repeat the errors that had contributed to the swift downfall of the Whitlam government: chiefly the lack of co-ordination between the unions and the party, and the failure to understand the implications of rampant wage claims made as the economy was suffering a shock from oil prices. In other words, the movement had to learn from its mistakes. In the 80 years since the end of World War II, the Labor Party has been elected to office from opposition only four times. Two of those governments – one headed by Gough Whitlam, the other by Kevin Rudd (twice) and Julia Gillard – went down the chute after just two terms. Both experienced sustained periods of internal chaos and failed to live up to their promise. The Hawke-Keating government is the standout success in the entire history of the ALP. It's still early days for the Albanese government, which is now in what was for the Whitlam and Rudd-Gillard outfits the death zone of a second term, but its early defenestration looks unlikely. A record lower house majority and a slide in the fortunes of the Liberals and the Greens offer the prospect of a sustained incumbency. The Albanese government is writing its own electoral script. The common experience of new governments from the early 1980s was that they were elected with a substantial majority that was reduced at the next election. Under Albanese, it has worked the other way around, with Labor just getting over the line in 2022 and then securing a landslide second time up. Right now, it is governing from an incredibly strong position. How could the government blow it? By not seizing the opportunity it's been given by the 8,553,231 Australians who voted for it. Those voters, who represented 55.2 per cent of the national electorate, want the country's problems fixed by the government. The extent of those problems has been demonstrated by the evolution of the roundtable, which began six months ago as an idea for a forum to find ways to kickstart productivity growth. It was not to be a summit that would produce a binding communique. Instead, it would be looser and smaller, with invitees asked to come with ideas, a spirit of consensus and a sense of shared responsibility. But as the lead-up to the roundtable has proceeded and the ambit proposals from stakeholders have dribbled out, it became more difficult to limit its remit to productivity. Fair enough, too, because the economic challenges are interconnected and go beyond that. Loading Quickly, to the government's discomfort, a focus on tax emerged. In any event, in a period when the care economy – a sector in which productivity is naturally difficult to measure – is big and guaranteed to grow, and artificial intelligence is poised to revolutionise most aspects of work, what will become of the existing concept of productivity? It follows that if a meeting convened by the national government has economic reform in its title, it needs to generate substantial results. The smartest thing the government can do will be to see the roundtable as an opportunity to expand its policy options, regardless of whether the industry groups or any other stakeholders play a spoiler role or not. If it tries to 'manage' the outcome, it will be shooting itself in the foot and letting down the people who gave it power. Chalmers, as a former staffer of Wayne Swan, treasurer in the Rudd and Gillard governments, will recall what happened to the 2010 Henry review of the tax system commissioned by the Rudd government. The review made 138 recommendations, only three of which the government took up. It was a political and policy disaster. And having studied Paul Keating's political career, Chalmers also knows about the ambitious and far-reaching tax changes Keating introduced in the Hawke government's second term. At the 1984 election, Labor pledged to hold a tax summit if re-elected. After the summit in 1985, Keating cut the marginal tax rate from 60 to 49 per cent and introduced a tax on capital gains and fringe benefits, along with a range of other changes to such things as wholesale sales tax and the company tax rate. Several measures, especially the fringe benefits tax, faced serious pushback from vested interests. The government had no direct mandate for those outcomes, but it pushed ahead and got them through. It was rewarded by voters for its courage, winning in 1987, 1990 and 1993. The roundtable could turn out to be a bust, as some critics have predicted, but that shouldn't matter. If it founders on the rock of self-interested pandering or head-in-the-sand behaviour, Albanese should say it was worth a try, thank the participants for coming, and then get on with doing big things anyway. There is an appetite for this in the community, especially among younger voters, who are getting the rough end of the economic pineapple. Loading A report this week found that house prices are 14 times the annual average wage. To let this continue would be unconscionable and a social catastrophe. The prime minister and treasurer are breathing rare air. They will never get a chance like this again. Then again, who's to say they actually share any historically significant, politically risky ideas for the economy? Postscript: What of my massive career-defining national scoop in 1983? Four paragraphs appeared in a late edition on a left-hand page deep inside the paper, with no byline. On the following Monday morning, I got a call from a senior colleague on the chief of staff's desk, a decent bloke: 'Mate, the other papers have got some of the details of this Labor-unions agreement that they're voting on today. Have you seen it?'
Sydney Morning Herald
3 hours ago
- Sydney Morning Herald
The NBN is getting its biggest upgrade ever. Most people have no idea
Fairly or not, Australia's NBN has long been the butt of the joke. After years of political football and criticisms that the network is subpar compared with global standards – we rank below the likes of Nicaragua and Venezuela – a high percentage of Australians will finally gain affordable access to world-class broadband speeds. The network is quietly getting its biggest ever speed upgrade in about a month, though not all households will benefit. What's happening? From September 14, NBN is ramping up speed tiers for homes and businesses on fixed-line connections, with many plans set to double or triple in speed at no extra cost to consumers. NBN calls the new speeds a 'monumental leap forward for the NBN network and Australia'. The upgrade is unrelated to a deal announced on Tuesday for Amazon to deliver NBN satellite broadband. To be specific (and slightly technical), 100 megabit download plans are going up to 500, 250 megabit plans are going to 750 and 500 megabit plans are going to 1000, with upload speeds also ramping up. These are big jumps and should mean noticeable improvements... As long as you have the gear to take advantage of them. To compare, when the NBN rollout began in 2011, the average household broadband speed was just 9 megabits per second. By the end of this year more than 10 million homes and businesses will be able to access speeds up to 2000 megabits per second. Who's getting the upgrades? The NBN uses different types of technology depending on where you live. If you're connected to the NBN with fibre to the premise (FTTP) or hybrid fibre coaxial (HFC) technology you can benefit from the upgraded speeds. To check what technology your home is currently on, enter your address into the NBN website. Customers on plans below 100 megabits or connected via fibre to the node (FTTN), fibre to the curb (FTTC), fixed wireless, or satellite technologies won't get the upgrades. Will I need to do anything? The short answer is no, at least for customers who are already on NBN's Home Fast, Home Superfast or Home Ultrafast plans and have a router that's not too old. The upgrades are happening behind the scenes, and no work at your property will be required. Telcos will start automatically increasing the speeds of their plans from mid-September, and most have said they will do so without any extra cost to consumers. If you're not sure what plan you're on you should check: many Australians are on 'Home Standard' plans, which are 50 megabits per second and won't be getting the speed upgrades. You can check with your provider what speed you're on by looking at your bill or your account details on your provider's website.
