In London, our Treasurer, Scott Morrison made the observation that negative gearing wasn’t responsible for higher house prices because Britain had high house prices too, and they didn’t have Australia’s tax concessions. Now, while I could spend a long time speculating about why that makes about as much sense as smoking doesn’t cause lung cancer because Fred got it and he doesn’t smoke, I think I’d be better to concentrate on the fact that he went on to tell us that if we did what Labor wanted and grandfathered negative gearing for existing properties then real estate values would crash.
Some of you may wonder – as you did in the election campaign – how such a thing could be. I guess we truly are living in a world of “alternative facts”. No, it doesn’t push up prices but they’d suddenly become a lot lower if we abolished it. I vaguely remember some Coalition MP trying to tell us that it would push the prices up for buyers but down for sellers. Huh?
Now it would be presumptuous of me to lecture the Treasurer on matters economic because I’m no expert. I have no qualifications or training. And it’s only in the area of climate change that one can say that one’s opinion derived from a gut instinct is just as good as people who have spent years studying it. So I’m just going to compose a little reading list for Scott which might help more than a trip to the UK, where he can come back and tell us that he learnt that not only were prices high in London, but they were in pounds.
The first thing I’d recommend that Mr Morrison read is Tim Dunlop’s excellent book: “(Why The Future Is) Workless” 
Dunlop places our current predicament in context by examining the history of the work ethic and looks at how robots and apps like Uber are changing the way people work. While our politicians and some of the commenteriat take the view that this is just a temporary blip and when things get back to normal then we can get those lazy bludgers back to work, “Workless” sets out the reasons why this is unlikely to happen. Dunlop further challenges the notion that every time we use a machine to perform a job that a human once did, then another less mundane job is created. It’d certainly be worth Mr Morrison’s time to read it, but failing that, perhaps a few of us should clip out bits and start sending them to our MPs. In light of the recent Centrelink debacle this quote from the book with a question about the extent to which they agree might be good place to start: “The privatised employment agency became an agent of government control while the role of government changed from provision of welfare to one of surveillance.” However, if you feel that your MP is capable of reading more than one line, then this it might be worth seeking his opinion on this:
“In a world where technology is likely to drive either job losses, or at the very least, a rise in precarious employment, the idea that people should have to rely on having a job in order to participate in society in a decent way is an increasingly obscene idea. To maintain our current work ethic –one that equates having a job with human decency and moral rectitude –is not only anachronistic but cruel. In a world where huge swathes of humans are surplus to the requirements of the economy, you either change the means of distribution or you create a world where a substantial part of the population are forced to wallow in squalor and insecurity, while a tiny proportion of people live lives of untold luxury.”
Of course, Scott may not have enough time to read a whole book in between meals on his trip back from London, so perhaps this short article might help him grasp the concept that jobs won’t appear by themselves: How To Make American Robots Great Again!
I was going to recommend that our current Treasurer also read Kevin Kelly’s “The Inevitable: Understanding the 12 Technological Forces That Will Shape Our Future”, but, like the decision not to do any modelling on the USA pulling out of the TPP because it was hypothetical, this book talks about the future and nobody can predict the future. (Even if I had a stab at writing the news stories for February last week!) For example, just look at this excerpt from Kelly’s book:
‘In late 1994, Time magazine explained why the internet would never go mainstream: “It was not designed for doing commerce, and it does not gracefully accommodate new arrivals.” Wow! Newsweek put the doubts more bluntly in a February 1995 headline: “The Internet? Bah!” The article was written by an astrophysicist and network expert, Cliff Stoll, who argued that online shopping and online communities were an unrealistic fantasy that betrayed common sense. “The truth is no online database will replace your newspaper,” he claimed. “Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Internet. Uh, sure.” Stoll captured the prevailing skepticism of a digital world full of “interacting libraries, virtual communities, and electronic commerce” with one word: “baloney.”
‘This dismissive attitude pervaded a meeting I had with the top leaders of ABC in 1989. I was there to make a presentation to the corner-office crowd about this “Internet Stuff.” To their credit, the executives of ABC realized something was happening. ABC was one of the top three mightiest television networks in the world; the internet at that time was a mere mosquito in comparison. But people living on the internet (like me) were saying it could disrupt their business. Still, nothing I could tell them would convince them that the internet was not marginal, not just typing, and, most emphatically, not just teenage boys. But all the sharing, all the free stuff seemed too impossible to business executives. Stephen Weiswasser, a senior VP at ABC, delivered the ultimate put-down: “The Internet will be the CB radio of the ’90s,” he told me, a charge he later repeated to the press. Weiswasser summed up ABC’s argument for ignoring the new medium: “You aren’t going to turn passive consumers into active trollers on the internet.”
‘I was shown the door. But I offered one tip before I left. “Look,” I said. “I happen to know that the address abc.com has not been registered. Go down to your basement, find your most technical computer geek, and have him register abc.com immediately. Don’t even think about it. It will be a good thing to do.” They thanked me vacantly. I checked a week later. The domain was still unregistered.’
See, people can’t predict the future. That’s why the Liberals keep trying to return us to the 1950s. Ok, not all of them. Turnbull does seem to think that by clicking his heels and saying “Innovation…innovation…innovation, there’s no need for the CSIRO”, he and Toto will return to Kansas and discover it was all a horrible dream… Oh wait, that was that old film with Judy Garland in it, not the Coalition’s innovation policy. Easy mistake to make, they’re both a sort of fantasy about a place called Oz.
Anyway it’d be nice to actually have some sort of informed discussion about the nature of work in the coming decades instead of simply asserting that everybody needs to have a job. Perhaps, we should all chip in and buy a copies of “Workless” and “The Inevitable” to send to George Brandis’ library. While we’re at it, we should probably add “Most Likely To Succeed” by Tony Wagner and Ted Dintersmith. At least then, there’d be some books written this century that wasn’t a biography of a Liberal politician.
I recall the UK having a housing system where by if a house, warehouse flats etc sits vacant for more than 6 mths? the housing commission could claim it at gov prices. They would then own it and place needy homeless people in this publuc housing forever with option to purchase.
Since Scott was there on a fact-finding mission about housing affordability, how come he didn’t find out this fact?
Galloping property prices, particularly in London, will be tackled by a restriction on tax relief for landlords who buy properties to rent them out. Landlords can now deduct their costs – including mortgage interest – from their earnings before they pay tax.
As in Australia, wealthier landlords receive tax relief at as much as 45 per cent, which is the top marginal tax rate. But from 2017 this tax relief will be reduced slowly to 20 per cent.
http://www.afr.com/news/policy/tax/negative-gearing-cut-in-uk-budget-raises-questions-here-20150709-gi8f6c#ixzz4X0pBFhzY
I’m guessing that Scott “I once looked at a calculator” Moronson with his astonishing insight will avoid going to countries that have lower house prices because it could lower prices in ‘straya.
Rossleigh, you forget that the LNP live on a higher plane than us mere mortals so why would he deign to even take notice of your good suggestions. The plane in question is the Plane of Oozlum.
Ha! They had one over you at the ABC, Rossleigh: they went for abc.gov, not abc.com
Smarter ‘n they look, aren’t they?
American ABC, Mercurial
Morrison’s answers to the media in London.
Labor.
Labor.
Shorten.
Labor.
Shorten.
Labor.
Labor.
Nothing’s changed for the Liberals in 2017 I see.
These witless, bloody-minded LNP troglodytes and deplorables are wrecking the joint and setting the nation up to fail BIGTIME! How innovative! How agile! How fecking exciting is that!
In the UK new taxes on landlords with investment properties starts to kick in this year :
“Nearly half a million landlords will be forced to pay 40pc tax for the first time from April 2017, when the Government enforces its planned buy-to-let tax raid, according to analysis.
According to the National Association of Landlords, the new harsher tax rules will push the taxable incomes of around a quarter (440,000) of the UK’s 2m landlords who currently pay basic rate tax at 20pc, above the higher-rate tax threshold of £45,000 for 2017/18.”
As Kaye Lee notes, it is unlikely that Scott Morrison will be prepared to discuss this when he reveals the findings of his ‘fact-finding trip’ to the UK just as he refuses to acknowledge the damage that negative gearing and concessions on Capital Gains are causing to our housing market.
http://www.telegraph.co.uk/news/2016/10/18/half-a-million-landlords-will-face-harsher-tax-rules/
You’ve to be sincere in politics -once you to learn to fake that, you’ve got it made! From The Guardian:
‘Rogers, who claims the post was made by a friend who was running his website without his knowledge, hit out at Hanson over the decision to axe him.
“I offered to resign when the issue blew up in the media, but I never expected Pauline or the party officials to accept it,” he told the ABC, adding that Hanson could face a revolt before the next election if she kept sacking people for innocent mistakes.”‘
A lot of interesting content in this article. I would like to make the point that Morrison, Turnbull & Co are totally ignoring the fact that allowing these generous tax breaks to those who can afford to buy a 2nd, 3rd, 4th, 5th (and more) property, they are shortchanging the governments revenue stream. Affecting the budget by estimated 4 billion per year. They brush that aside as chickenfeed, yet relentlessly, and deceptively harrass those unfortunate enough to have required the support of Centrelink benefits at times in the last few years – due sickness or other reason out of their control. The fact that most of the Coalition MPS are benefiting from the current NG tax benefits, means they have a huge conflict of interest and should have to declare that interest and pass the decision making to only those who are not benefitting. Yes I know, pigs might fly.
Sweet comeback Rossleigh. We need a like button on comments Mr Taylor. (The first one)
As well as costing revenue, the property tax concessions are so generous they steer investment away from more productive enterprises that might actually create jobs
“So I’m just going to compose a little reading list for Scott……”
Why? This git has demonstrated, on a near daily basis, that he is near illiterate, and completely innumerate. The only books he would possibly read are ‘picture books’. Like all of the other ‘first graders’ (Year One’s, in the new language).
Alvin Toffler’s ‘Future Shock’, way back in the 70’s, was a mere development of Orwell’s ‘1984’.
“Toffler argued that society is undergoing an enormous structural change, a revolution from an industrial society to a “super-industrial society”. This change overwhelms people. He believed the accelerated rate of technological and social change left people disconnected and suffering from “shattering stress and disorientation”—future shocked. Toffler stated that the majority of social problems are symptoms of future shock. In his discussion of the components of such shock, he popularized the term “information overload.”
The things our ‘leaders’ should be dealing with are things that we, as a society, have known about for decades.
If only our ‘leader’s’ were readers. At the very least, we would save a truckload on the costs of their travel.
mandy vuk, investment properties in Australia have a vacancy rate of somewhere between 12 and 20%, dependant on your news source. Between the posts of Ms Lee and Terry2, there is a viable treatment.
If only someone could draw a picture for this git.
I suspect the only book he and his cohorts will ever try to read is “How to succeed in business, without trying.”. From memory, it had pictures.
Thank you, Mr Brisbane and commenters. Take care
Kyran, I am aware of the high percentage of docile investment properties. There r also a lot of public owned places that remain desolute. Eg nurses quarter cnr punt and commercial in victoria. This used to be public housing but i expect once the block moved in they were asked to leave the premises. Doesn’t make for good profit. Here’s hoping they dont get the gatwick in st kilda.
Rossleigh, Thanks. Hilarious. At least it would be if it wasn’t all so awful.
Morrison just beyond words , the mention of his name brings on utter contempt and revulsion.
He’s a self serving hypocrite.The Libs answer to high house prices is ANYTHING but look at negative gearing.It’s cause so many of them have negative geared properties.They are the self serving lot.
A couple of comments in this thread are still pushing the false (Neoliberal) meme that tax revenue funds Federal government spending.
“MMT says that a sovereign government is never revenue constrained because it is the monopoly issuer of the currency…. Never revenue constrained means that such a government is not financially constrained and can spend whatever it likes without recourse to ‘funding’, unlike a household (a user of the currency), which has to finance all its spending from income earned, prior savings, asset sales and/or borrowing…. Once again, MMT does not consider that the government deficit is restrained in any way by tax revenue or bond sales.”
http://bilbo.economicoutlook.net/blog/?p=34214
I’m surprised he hasn’t reverted to the Joe Hockey solution to managing Sydney mortgages – just get a good job that pays well.
Problem solved.
Quite obvious, really.
Since nobody in his Party argued against it at the time I suppose it’s still official policy.
Why does Morrison think it’s an issue of supply? He’s been told by Grattam Institite, the Reserve Bank & McKell Institute what problem is but he continues to ignore it! They include advise on how to economically manage his way out of the problem too. Instead he wants to increase housing stock in places like Sydney that has 90,000 unoccupied homes or Melbourne that has 85,000. So just how much more unused stock does Scott Morrison think we need?
If economic rationalism, the deterioration of wages, rising living costs and housing and rent price explosions hadn’t caused as much damage as it has to our economy, negative gearing could easily be disposed of. It has become a much more complex and entrenched mechanism. Labor’s “grandfathering” negative gearing strategy is one safer way to ease out of the problem. The aforementioned Institutes have explained this as well as other strategies but Morrison pays no attention to the experts, which typifies the decision making considerations of this government.
Any one got the feeling the jig’s up for the Ruling Rabble?