In just a few days, Prosper Australia’s proposal that GetUp should campaign for a First Home Buyers Strike has gone from last position in Getup’s suggestion box to first. At 7.15AM this morning, it had 3,113 votes–almost 500 ahead of the next-ranked proposal.
In its essence, this proposal is aimed at removing government interference in the property market which purported to improve home ownership, but which in essence has made it worse by feeding the property price bubble.
There is a related proposal on GetUp’s list–currently sitting at number 9–to abolish negative gearing. This is a sister proposal to the First Home Buyers Strike, and I suggest that people who have voted for the Strike should also vote for this one. I have just done so with the following comment:
I endorse this campaign, which–like the proposed campaign for a First Home Buyers Strike–is an attempt to remove government policies that were supposed to improve home ownership and rental availability, but instead have done the opposite by fuelling a property bubble.
I hope that GetUp can be persuaded to take on both campaigns in a linked way, to get the government to do what no political party has had the guts to do on its own–to remove these damaging social policies–because their removal sparks outrage from influential groups in society.
I am willing to work with GetUp and Prosper to develop a campaign that links these two ideas. Here are some suggestions about what the campaign could entail:
- A petition to Parliament calling for the policy changes listed below; in addition,
- A “First Home Buyers Strikers Pledge” to be signed by potential First Home Buyers who are abstaining from the market until the policies are implemented.
- Policy points:
- Abolition of the First Home Owners Grant (FHOG) for the purchase of existing properties;
- Abolition of Negative Gearing (NG) on existing properties and shares (coupled with grandfathering of existing Negative Gearing);
- Restoring capital gains tax to the same rate as income tax;
- Ban “covered bonds”–which rank bond purchasers ahead of depositors;
- 25% of the funds saved from these two programs over the next 3 years to go to the purchase of new properties to expand the supply of low-income public housing;
- 5% to expand the funding of public housing;
- 25% to construct and administer new homeless shelters; and
- 5% to Swags for Homeless so that people who are still sleeping rough can do so in better comfort.
I am suggesting only the removal of these two schemes from existing property purchases for a couple of reasons. Firstly, the real damage is done by these policies funding the levered bidding war that had driven up existing house prices. They have done little to actually add to the housing stock, but proponents of keeping the programs will argue that, if they are removed, the supply of new housing will collapse.
Aiming for the removal of the policies from existing home purchases eliminates the main damage caused by the policies, while not affecting the one area in which it could be argued that they might be beneficial.
Secondly, there is a strategic thought behind this. If the housing market plunges, you can be sure that the government will intervene at some point to prop it up. If this campaign succeeded in removing the FHOG and NG completely, the government would almost certainly reintroduce both their schemes in their entirety to try to stop house prices falling.
If however the schemes are redesigned so that they provide support only for the construction of new housing, it will be much more difficult to extend them to existing housing. If this were done, it would be blatantly obvious that this is a policy to keep prices up–not to improve affordability, expand the housing stock, or any of the other positive spins that could be put on the scheme if it involved going from its total abolition to its total reintroduction.
I also propose the positive elements of the campaign because they are needed, and the amounts because the campaign can then be seen as fiscally responsible. Yes I know the arguments against this from the MMT point of view; I am thinking however of how this campaign will play out in the “court of public opinion”. A campaign that eliminated expensive government programs that do more harm than good, and directed some of the resulting at areas that are widely acknowledged as needed, and “saved taxpayers money” could get support from all quarters, rather than being supported from the left but attacked from the right.
I’m interested in feedback on these ideas, so please discuss away. And please also cast your votes for the GetUp campaign proposal on abolishing Negative Gearing.