‘Cruel hoax’: Economist’s brutal response to housing promises

One of Australia’s leading economists has described a “cruel hoax” that Aussies are being subjected to.

One of Australia’s leading economists says it is a “cruel hoax” to tell young people a tax break would help them buy a home.

The Australian Institute executive director Richard Dennis made the comment as he appeared on Monday’s Q&A program.

Full-time teacher Georgia Haysom, 25, had questioned how she would ever be able to afford a home.

“How can young Australians like me hope to own a home when wages haven’t kept up with the cost of living?”

Mr Dennis said as long as house prices were rising faster than wages, people would never be able to catch up.

Q&A panellists included Housing Minister Clare O’Neal and shadow minister Michael Sakkur.

“I’m sorry but it’s a cruel hoax for people to tell you that you know, a tax break here or something or other there is going to help,” he said.

“House prices in Australia have risen so much faster than incomes that a whole generation has been left behind.

“As long as house prices are rising faster than wages, you can’t catch up.”

The question comes after both major parties made big housing policy promises over the weekend.

Peter Dutton has vowed to allow first-time buyers of newly built homes to deduct part of the interest paid on their mortgage from their income taxes if he is elected.

Anthony Albanese announced a five per cent deposit for all first home buyers and a $10 billion pledge to go towards building 100,000 new homes that will be available only to that cohort.

Monday’s ABC program was broadcast from Berwick in Melbourne’s southeast, where a population increase has seen increasing social disadvantage.

Q&A panellist Shadow Housing Minister Michael Sukkar

Shadow Housing Minister Michael Sukkar said the housing crisis was the worst it’s ever been on every symmetric.

“We have gone backwards,” he said.

“We’re not building more homes, we’re building fewer homes, there’s fewer approvals.”

He said the coalition did not believe Australia should have generation “staring down the barrel of the prospect of never owning a home”.

“That would radically transform our society in ways that I don’t think any of us want to accept and that requires really significant changes,” he said.

Former head of treasury Ken Henry said the key ingredients in the cost of living crisis were weak real wages growth, unaffordable housing and high energy costs had been building for a long time.

Former head of Treasury Ken Henry said the key ingredients in the cost of living crisis were weak wages growth, unaffordable housing and high energy costs and they had been building for a long time.

He said to avert an “intergenerational tragedy,” the next Australian government needed to reform the tax system to boost business investment and productivity, put Australia on a carbon abatement trajectory and provide certainty for renewable energy projects.

Warringah MP Zali Steggall said Australia needed to have a difficult conversation around tax reform.

“The intergenerational debt when it comes to carbon emissions is huge,” she said.

“Not only are they struggling under high rents, hard to get into house ownership, they’re also bearing a burden of an ageing population.”

Independent Warringah MP Zali Steggall said Australia needed to have a difficult conversation around tax reform.

Ms Stegall said 3.7 people currently worked for every person aged over 65 that was retired, by 2060 it would be 2.7.

“Our major revenue base is from people’s work and the tax you pay,” she said.

“That generation will have a greater burden through the current tax system to pay for the ageing population and all the services.”

Originally published as ‘Cruel hoax’: Economist’s brutal response to housing promises