2019-05-06
From Bill Franssen, Dunsborough
[Green Issue welcomes feedback from readers, which we would endeavour to publish in future editions]
The Green Issue of December 2018 deals with the housing crisis and four members gave their views. Although agreeing with their vision of affordable housing for all, it doesn’t share their views on how to achieve this, nor their analysis of the causes of why this has not occurred. The writers bar one, are young and therefore more directly affected, which may explain the ‘them and us’ and ‘have and have-nots’ mindset.
A housing crisis can’t be addressed in isolation as aged care and retirement accommodation are all inter-dependent. Then there is the danger of becoming a nanny state where initiative and individual enterprise are snuffed out by taxes. Assertion that renting is heavily skewed in favour of lessors is proved wrong by just reading tenancy form. In a periodic tenancy agreement, the tenant must give 21 days’ notice, whereas the lessor 60 days. In those 60 days the tenants can, and do at times, just stop paying rents, damage the property and disappear without leaving a forwarding address.
Let me now address the so-called unearned capital gains windfall. Arriving in Australia in 1971, the house we purchased cost $13,000. Including allowing for inflation, land taxes, stamp duties, commission, etc. the accumulated expenses up to now would be about $400,000. The difference is not a massive gain/windfall, it merely keeps up with relative prices, cost of living. A salary of $5,000/year in 1971 equates to $80,000/year at present; this is not a windfall. Also, let’s not forget government interference when big building companies run out of work, in no time interest rates are dropped and first home buyers enticed into the housing market by considerable grants, thus distorting the free market. As to the negative gearing as a means of tax deduction on a once only first home seems a reasonable worthwhile incentive for building your first home. Of course, middle and upper class salary earners have used this loophole to their advantage, not desirable but nothing illegal.
Arriving in Perth in 1971, we were financially reasonably well off and through buying and selling our homes a few times, initiative, hard work, we managed to stay ahead of inflation. In 1996 we retired in the South West and settled in our holiday cottage, which we have built ourselves, brick by brick. As the least risky investment to support our retirement we built some units with the intention to pass them on to our children. So far, over the last twenty years, we lived off our investment. In so doing we saved the government hundreds of thousands of dollars in pension payments. At no time did we use negative gearing, our units are our pension funds. In fact, I believe people like us, at 85 years of age, deserve some financial recognition by the government, not another $600/year home owner tax. The Greens will be decimated if they persevere with these proposals and mainstream politics will do the same with our planet, something The Greens can’t allow to happen. Let’s all get sensible and not play the blaming game. Let me give some alternatives, which do require initiatives and perspectives.
ONE: Building cooperatives (big-time) in Holland ‒ these date back to before World War II, they are not for profit making, they build to the requirements of member groups, they build 34,000 houses per year and I believe the government underwrites the mortgages up to 40-50 years, which makes an enormous difference to mortgages repayment. Please check on the internet.
TWO: Machines, technology, robots, and computers have created a few generations of young people who are not needed and for whom there is just no work. I call them the sacrificed generations, we pay them $240/week and hope they do go away quietly, so far so good, however they will only accept this for so long. My proposal is to get these young people on a register, do the same with retired or near retired trades people, the government to provide land and finance and crank-up the show by building and training in the process of building homes and infrastructure on a big scale. Bus them to and from work, treat them well, not boot camp style. Some sort of management, structure will be needed, engineers and architects etc. to be seconded only as needed, from private enterprise/government/army engineers. Keep out the bureaucrats and their culture. Strict financial framework is needed.
The conclusion: You know, during war times, people turn cities into heaps of rubble at enormous cost to humanity and call it victory. When peacetime comes the sheer and ever increasing volume of people inflict warlike parallel damage to our only planet and it’s called progress/economic growth.
[Opinions expressed are those of the author and not official policy of Greens WA]