This week, the housing affordability crisis was solved when both the Labor and Liberal parties discovered that the key was to give people more money so they can bid a higher price for a home. Phew. Our long national nightmare is over.Cripes. What a joke.Here we are in 2025, and the major political parties continue to say that the way to make homes cheaper is to increase the amount that people will be able to pay to buy a home.It’s not like we lack about 25 years’ worth of evidence that this approach has failed.In 2000, as a way of bribing people to think that they would be better off after the introduction of the GST, John Howard increased the long-running first homeowners’ grant to $7,000. A year later, with an election to win, he doubled it to $14,000.Sign up for the Afternoon Update: Election 2025 email newsletterSince then, it has been the go-to policy by federal and state governments to solve the crisis of housing affordability. Pick your state,pick your grant. In New South Wales, for example, you can get $10,000 for newly built or substantially renovated homes.And that is why no one in Sydney has any problem buying a first home.Am I too cynical?In 1999 Howard also introduced a 50% capital gains tax discount that made investing in housing a speculator’s delight, and he laughed about how no one ever complained to him about the value of their house going up.If the graph does not display, click hereOn Monday, Peter Dutton told reporters that he wanted “to see [house prices] steadily increase”. And when asked on Tuesday if he wanted to see wages rise faster than house prices (the key to improving housing affordability, and something even his shadow housing minister, Michael Sukkar, admits is needed) he dodged the question and instead talked about wanting house values to rise.Nearly 70% of people born in 1947-51 owned a home when they were in their early 30s; now it is less than half.If you are not cynical, you are not paying attention:If the graph does not display, click hereWeirdly, first home buyers make up a pretty high percentage of new home loans:If the graph does not display, click hereBut they are getting older, and the number is falling.Back in June 2007, 30,607 people took out a first-home loan. In December last year, just 29,788 people took out one:If the graph does not display, click hereA smaller share of our population is taking out home loans than in the past:If the graph does not display, click hereNot good.The Liberal party has decided to give a tax break to those few people who are lucky enough to be a first home buyer for the first five years of their loan.Will that help people who previously could not get a loan, get a loan? Nope.Will that help people who could not afford the deposit, get a deposit? Nope.skip past newsletter promotionSign up toAfternoon Update: Election 2025Free daily newsletterOur Australian afternoon update breaks down the key election campaign stories of the day, telling you what’s happening and why it mattersEnter your email addressSign upPrivacy Notice:Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see ourPrivacy Policy. We use Google reCaptcha to protect our website and the GooglePrivacy PolicyandTerms of Serviceapply.after newsletter promotionWill that give a tax break to people rich enough to buy a home – and who are very likely getting help from their parents? Yep.It says it all about the pathetic state of affairs that this idiocy is being put up as a housing policy.At least be honest and just say you want to give high-income earners in their 30s and 40s a tax cut.Add in allowing people to access $50,000 of their super and reducing the lending buffers for home loans and you have a raft of policies geared toward pushing up demand.The Labor party, meanwhile, will allow first home buyers a 5% deposit. And sure, asI noted last month, the deposit hurdle is extremely tough to clear. But this is just a different version of the first home buyer grant. All it will do is help push up house prices.One good thing for first home buyers is that the size of their home loans (and presumably the price of their houses) has not increased as fast as it has for non-first home buyers.If the graph does not display, click hereBut this suggests they are buying fewer houses than in the past and more (cheaper) apartments, and that they are also buying them further away from the CBD.At least the ALP is planning to build more homes – 100,000 over eight years, reserved for first home buyers. It is good to see a government realise that building homes is a good investment. That used to be taken for granted; now it is rare:If the graph does not display, click hereThe aim to build 10,000 to 12,000 more homes a year has been met with scepticism by some –suggesting we don’t have enough people to do it. And yet in the past, building 10,000 public-sector dwellings was common. So, what happened?Well, one thing is we shifted what builders and construction workers were doing.If the graph does not display, click hereBack in the period where housing was much more affordable and more public-sector dwellings were built, about 46% of all construction work was building or renovating homes – now it is just 32%.The big change is how much work is now done on private sector engineering construction – especially mining.We do have a skills shortage in construction – there are roughly only 1.2 unemployed construction workers for every job vacancy in the industry. That’s essentially full employment.It means when governments approve new coal and gas mines or their extensions, they are not “creating jobs”; they are just taking workers away from building homes and getting them to build mines – mines that produce greenhouse gas emissions.We have housing policies that fuel demand and bipartisan policies of mining approval that reduce the supply of workers available to build homes and all the while neither the ALP nor LNP will touch capital gains tax.Excuse my cynicism, but after 25 years of the same policies it is justified.Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
Excuse my cynicism, but after 25 years of the same housing policies, could Australian leaders try something else? | Greg Jericho
TruthLens AI Suggested Headline:
"Critique of Australian Housing Policies: Calls for New Approaches After 25 Years of Ineffectiveness"
The Guardian
5.6
TruthLens AI Summary
The ongoing housing affordability crisis in Australia has prompted both major political parties, the Labor and Liberal parties, to propose solutions that many critics deem ineffective. Their approach, which revolves around increasing financial assistance to homebuyers, has been criticized for failing to address the root causes of the housing crisis. Historically, measures such as the first homeowners' grant, which has been incrementally increased since its inception, have done little to alleviate the issues of affordability. Instead, these policies have merely allowed buyers to bid more aggressively in an already inflated market. For instance, John Howard's introduction of the GST in 2000 was coupled with a doubling of the first homeowners' grant, a pattern that seems to repeat itself every time a political party seeks to win votes rather than genuinely address the housing crisis. The statistics reveal a stark contrast between the past and present, with homeownership rates among younger Australians dropping significantly compared to previous generations, raising concerns about the effectiveness of current policies.
Furthermore, the article highlights the inadequacies of the proposed policies by both parties. The Liberal party's suggestion of tax breaks for first home buyers is criticized for benefiting those already able to purchase homes, rather than helping those in need. Similarly, the Labor party's plan to allow first home buyers to make a smaller deposit does not fundamentally change the dynamics of the housing market, as it risks inflating prices further. The article emphasizes the need for a shift in focus towards increasing the supply of affordable housing, as the current strategies are exacerbating demand without addressing the underlying issues. With labor shortages in the construction sector and a lack of significant investment in public housing, the outlook remains bleak. Both parties have shown reluctance to tackle critical issues such as capital gains tax reform, which could lead to a more balanced housing market. As the author Greg Jericho points out, after 25 years of ineffective policies, a more innovative and comprehensive approach is necessary to genuinely solve the housing crisis in Australia.
TruthLens AI Analysis
The article by Greg Jericho critiques the persistent housing policies in Australia, emphasizing that both major political parties have failed to adopt effective solutions to the ongoing housing affordability crisis. Jericho highlights the irony of increasing financial support for homebuyers without addressing the root causes of the problem.
Critique of Political Solutions
Jericho points out that the approach of increasing grants and subsidies for homebuyers has not yielded positive results over the past 25 years. He references historical policies, such as John Howard's introduction of the first homeowners' grant and the capital gains tax discount, which he argues have instead contributed to the speculation and inflation of housing prices. The article questions the effectiveness of the current political strategy and suggests that merely increasing the amount of money people can spend does not resolve the underlying affordability issues.
Public Sentiment and Cynicism
The tone of the article conveys a deep cynicism toward the political establishment, reflecting a growing frustration among the public regarding the lack of meaningful change in housing policies. Jericho's rhetorical questions and sarcastic remarks serve to amplify this sentiment, suggesting that the public is becoming increasingly disillusioned with politicians who fail to provide real solutions.
Concealed Issues
While the article focuses on housing policy, it may indirectly highlight broader systemic issues, such as income inequality and the impact of economic policies on different demographics. By concentrating on housing, the article may divert attention from other critical economic challenges that require attention.
Manipulative Elements
The article employs a critical tone and uses historical examples to underscore its arguments, which can be seen as a way to manipulate public opinion against the current political parties. The language used evokes a sense of urgency and frustration, aiming to mobilize readers toward demanding better solutions.
Credibility and Reliability
The reliability of the article stems from its grounding in historical data and the author's experience in economic commentary. However, the cynical tone and selective emphasis on negative aspects of policies may skew the perception of ongoing efforts to tackle housing affordability.
Societal Impact
The article has the potential to influence public opinion and political discourse, encouraging citizens to demand more effective housing policies. It may resonate particularly with younger generations and first-time homebuyers who feel marginalized in the current housing market.
Market Implications
This critique of housing policies could have implications for real estate markets and related stocks, particularly if public pressure leads to significant policy changes. Investors may pay attention to housing-related stocks as public sentiment shifts.
Global Context
While the article is primarily focused on Australian housing policies, it reflects a broader global trend of housing unaffordability, which is a pressing issue in many countries. This context is relevant to discussions about economic stability and the socio-economic implications of housing policies worldwide.
AI Influence
There is no clear evidence suggesting the use of AI in the article's writing. However, the structure and presentation of arguments could suggest a systematic approach that some AI models might employ in constructing persuasive narratives. If AI were used, it might have influenced the articulation of the author's critiques, making them more compelling through structured language and rhetorical strategies. The overall analysis indicates that the article serves as a pointed critique of existing housing policies in Australia, aiming to provoke thought and action among readers regarding the inadequacies of political responses to the housing crisis.