40 Comments
author

Build to Rent is more defensible, I think, and the Greens' starting position (100 % affordable) is too strong. A negotiated outcome would be good here, but no sign that Albo is interested.

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People don't seem to understand that building 'unaffordable' housing makes the lower quality stock more affordable.

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Sep 17Liked by John Quiggin

I did a bit of modelling of likely outcomes of a double dissolution election, and my estimate is that Labor would have a better than even chance of losing seats in both houses. There are ALP functionaries who can do this sort of calculation, and those ALP functionaries know that there are Greens functionaries who can also do these calculations. I would be surprised if the talk of a double dissolution was anything more than performativity on Labor's part.

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author

Even as performativity it makes no sense. No one likes the idea of a double dissolution (even when, as in 2009, Rudd should have called one) and the possible benefit of getting this trivial bill passed in a joint sitting is negligible. And to repeat it after Antony Green has pointed out the logistical nightmare involved is just dumb.

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Albanese doesn’t have the backbone to call a DD anyway; he’s in serious need of a good neurosurgeon.

The man’s a coward, the Census question debacle is proof of that.

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G'day John, unfortunately you just described the elbow government to a tee as any way it has been a analysed, reflected on, thought about, ruminated over is dumb hence the insignificant thing we are discussing whilst AUKUS especially will further remove what little sovereignty we have and elbow acquiesces obediently. Please be advised the housing situation in this country requires drastic action but the action required is not and never will be considered that is tax reform. Yet that is obvious to all unfortunately.

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Sep 17Liked by John Quiggin

As for the "bloody shirt" of 2009, it should be remembered that in the election following that vote the Greens gained about 500,000 extra votes, four extra Senators and their first House of Representatives seat.

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Help to Buy sounds like a piffling, charity plan. And it's so tokenistic that Crisafulli and the Opposition LNP is trying to tempt the electorate with it in Queensland.

The only solution to more people having affordable housing is for all governments to invest in new, public housing. If people are paying a fair proportion of their income on rent, they may be able to save up to buy their own homes (? - if housing prices don't increase at the current obscene rate) Or they would have secure rentals in well-maintained and properly insulated accommodation, close to public transport and services.

People don't think in the same way as they might have when proposed negative gearing changes were blamed for Shorten losing 'that' election. Negative gearing on investment houses should be abolished. Why should those who have money be subsidised to make money for themselves without contributing anything to society? Similarly, the reduction in capital gains tax only benefits the wealthy.

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Sep 18Liked by John Quiggin

There are interesting similarities between help to buy and public housing. If the govt share was 100%, and they also charged a weekly rent for this contribution, then it would be much the same as the govt buying housing in the market and turning it into public housing. So, if other measures were introduced to boost supply, this policy might not be so bad. It would not increase demand as much as might be thought at first because purchasers would not be expecting to receive all of the capital gain.

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Rental returns are so poor (ignoring capital gains) that if I could get the government to buy me a house, charge me market rent, and (unlike a private landlord) allow me to live there for as long as I wanted, I would jump at the chance.

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Sep 18Liked by John Quiggin

The underlying problem is the price of land that can only be fixed by extensive rezoning to provide sufficient (what the short and medium market wants) capacity. The overlying solution should be dominated by 4 or 5 story apartments have are much cheaper to construct (say 40% less than the high rise proposed in Melbourne). Being cheaper means each unit of labour can construct up to twice the number of units and generally in a better labour market than exists for the high rise buildings. And there is more ... ... ... Sadly this solution is unlikely to be acceptable to any politician. Perhaps we can call it all social housing as a marketing distraction? The end result of any reasonable solution is a large drop in land prices - both absolute and per unit of housing

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author

Can anyone reading this check the Dropbox links to transcripts and see if they work? They are fine for me but a reader has reported problems.

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Works for me.

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If the Greens genuinely don’t support this legislation at all, it’d be better to just vote it down now rather than drag it out & end up either voting it down later or blocking it again from coming to a vote. (Or getting something else they like as an excuse to vote for it, which would be a bit sub-optimal if they actually oppose it).

As for the double dissolution thought bubble, I don’t know if it was originally floated by Albanese or someone in the press gallery who don’t know how double dissolutions work - but either way it’s a brain dead idea. Apart from anything else, it seems to be being totally ignored that the government can call an early normal election anyway - they don’t need to have a double dissolution as an excuse. I’m not saying they should, but if they did want to they don’t need to go through the hassle of a double dissolution (or the very likely worse Senate makeup they’d end up afterwards due to the lower quotas for seats in a full-Senate as opposed to half-Senate election).

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author

I don't think it's bad enough that the Greens should demand a high price for passing it. At this stage, even forcing Albanese into negotiations would be a big win. Any kind of movement on negative gearing would be enough to seal the deal, I think. But if there's no trade-off the bill should be rejected

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I am curious John, do you support the Green’s housing policy/position, including its call for rent control?

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author

As I said in relation to Rent to Buy, I think the Greens' starting position is too extreme on a bunch of issues. If Labor agrees to negotiate, and the Greens refuse to budge, I will be just as critical of them as I am of Albanese now.

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I think that on many issues and with their behaviour that can be viewed as extremists. Any centrist party (of left or right variety) should be wary of negotiating with them

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author

I have no idea what "extremist" means here (other than they are to the left of Labor). Rent control may or may not be a good idea, but it's been implemented by lots of centrist and even rightwing governments, so it's hardly extreme.

I'm also unsure what outcome you fear from negotiation. If they negotiate to pass a piece of legislation, they can't renege after it's passed.

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I have not had the time to reads John’s article yet but will.

My basic assumption is as follows:

The wealthier we are the better position we are in to manage serious disruptions and shocks, including the economic shocks that climate change is likely to deliver. Wealth enables resilience which enables adaptability. Only a small percentage of forgone growth per annum translates into a much poorer society for future generations than otherwise would have been. You are condemning future generations to a harsher, more tenuous life

Secondly, an important part of reducing climate change will be technologies, many of which are yet to exist and many which will require significant upfront investment and capital risk. . This upfront investment requires growth to pay for it (and expected outsized returns for investors)

Thirdly, many of the technological solutions to climate change require an uptick and not a reduction in resource exploitation that many regard as environmentally undesirable. Mining is one of those industries. And funding the shift to sustainable mining of rare earth metals, lithium and other battery metals will be costly. (We might of course leave it up to China, Indonesia and a few African countries with lower environmental standards to mine these, but that would be the even more environmentally problematic.

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In all seriousness I fear giving them the veneer of policy credibility. Their degrowth, anti-capitalism (crypto-antisemite) agenda will be an anchor for years and prevent us from the solving the truly great challenges of our era, especially climate change.

We need more economic growth, not less to drive the development and implementation of technological solutions and also to be able to adapt to what we fail to change.

The Greens are these days green in name only.

The world is moving away the centre in both directions. Politicians are incentivised to appeal to their base and get louder and more extreme in order to get airtime above the cacophony.

And btw do not take this as a support for LNP (or the ALP) It is not. Frankly there is no one worth voting for these days

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author

I really don't recognise the Greens I know in this description. And neither growth nor degrowth are useful ideas https://www.theguardian.com/commentisfree/article/2024/jul/11/australia-economy-inflation-growth-gdp

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Andrew, what’s your understanding of “degrowth”, Bill Mitchell is a proponent of it.

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I have no real objection to what appears in Wikipedia as a starter. https://en.m.wikipedia.org/wiki/Degrowth

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By your response I gather you mean you agree with Wiki’s description. Okay, but from a C&P below what do you find unreasonable with that? Btw, I know very little on economics, but I’ve not read many who don’t say it’s very blunt method of measuring activity.

"Degrowth's main argument is that an infinite expansion of the economy is fundamentally contradictory to the finiteness of material resources on Earth. It argues that economic growth measured by GDP should be abandoned as a policy objective. Policy should instead focus on economic and social metrics such as life expectancy, health, education, housing, and ecologically sustainable work as indicators of both ecosystems and human well-being.[10] Degrowth theorists posit that this would increase human living standards and ecological preservation even as GDP growth slows.[11][12][3]

Degrowth theory is highly critical of free market capitalism, and it highlights the importance of extensive public services, care work, self-organization, commons, relational goods, community, and work sharing.[13][14] Degrowth theory partly orients itself as a critique of green capitalism or as a radical alternative to the market-based, sustainable development goal (SDG) model of addressing ecological overshoot and environmental collaps"

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author

GDP isn't very useful, but it does include health, education and housing. So, to the extent that "degrowth" means "reducing GDP across the baord", it's going in the wrong direction. If it means "expand some bits of GDP and reduce others", It needs a different name.

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"expand some bits of GDP and reduce others" is called "taxing externalities" (If you want a policy to expand/reduce the correct parts!)

Dennis, regrowth itself is a very blunt idea. Some types of growth are very sustainable -- we could all use much more solar/geothermal energy for instance. Everyone eating lots of meat might be less sustainable. And people can figure out how to do things in more sustainable ways, given the right incentives. This is where markets and capitalism come into it, as a way of providing those incentives.

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Hi John,

What do you think of Bill Mitchell’s position on degrowth? How do we get by if we need constant growth, therefore more resource use, increasing pop?

I’m lost as to all the angst over reducing pop, I don’t see how to solve our problems without some sort of reduction. If GDP growth is only from pop inc we’re in trouble, aren’t we?

That’s my last Q.

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And on rent control. Yes many(?) centrists governments have introduced it over the years - mostly with predictable consequence. Ever tried renting an apartment in Stockholm??? At least the populist right can blame the immigrants for that rather than dumb policy

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G'day Andrew,

It seems like unaccounted for migration or arriving people whose length of stay(overstay) seems of no concern to government, due to their effect on wage levels and that services are not provided in advance for the aforementioned and tax benefits are provided for a small part of society that causes great inequality to the younger generation. None of this could be laid at the feet of the Greens who have never held the reins of power besides maybe inner city councils which some could argue has been beneficial to the majority of ratepayers.

Government by it apparent size is difficult to turn even if the desire is apparent, without stimulation by real opposition not the other big party, then all is a club run for it's members not societies members. The Greens are a grass roots organisation that utilises the uprising against the present system and the politically active youth to create support unlike the main two organisations who are witheringly on the vine.

I do wonder how you feel economic growth could be beneficial to the curtailment of climate change as the perpetual growth demanded by the present system for staying still it seems is half the problem the world faces. John's Guardian article suggests so but it is the system that goes into panic with contraction due to its inherent nature.

The Europeans and the Americans are voting for populist candidates who surely are far worse than our Greens for the climate or otherwise though you can beg to differ.

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La Lambie has just been on ABC News Breakfast rabbiting on about how awful the Greens are, urging Albo not to give any ground on this issue and to take the issue to an election.

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Sep 18Liked by John Quiggin

The JLN, unlike Labor, would stand to gain from a double dissolution election.

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The Arrogant Labour Party has to realise by now that it has lost the plot. Their legislation is often half-baked and ineffective. Only in comparison to the total absence of policy aims from the Liberal Party, is the ALP policy aims being made to look good. Close scrutiny exposes the weakness of their policy objectives. To give only 2000 householders any help is a pathetic underachievement; and an insult to those struggling to afford a home. It’s like offering a drowning person a towel; but not having enough for when the flood peaks.

“ Too little too late.” said a LNP frontbencher. It’s not often an LNP spokesperson gets the zinger dead right.

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What can the Federal Government do on the supply side, rather than just subsidising demand?

The local council has just knocked back new student accomodation at UNSW. I doubt that large social housing projects are going to be any more popular, even if there's funding for them.

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author

Local councils have lost the power to veto housing, so a "knock back" isn't final. As regards popularity, NIMBY councils are copping a lot of flak - there's less and less support for the general principle of local veto rights, even if particular proposals are still being debated.

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And there is also a significant labour shortage that only immigration can address in the short term. State government infrastructure projects have sucked up most of the labour needed from the domestic housing sector

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author

It's a big problem, particularly with vanity projects like the Hobart stadium. And AUKUS will make it worse

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I would be really interested to hear what the actual labour shortage is. I’m also going to kick the dog and say I think the "infrastructure projects stole my lunch" isn’t convincing; the trades area for home building is significantly different.

I think it was Alan Kohler in an article a few weeks back claiming apprentices are down by a smidgen more than 50% from 12-14 yrs ago (I think). Add that onto how the apprenticeship & TAFE system have been screwed up over 30 yrs hasn’t helped. We’ve had high levels of immigration since ’96 and we still have these labour shortages. Something ain’t right here!

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author

I’ll be giving a talk about the failure of the apprenticeship system in a little while.

On your other point, Infrastructure Australia lists carpenters, electricians, glaziers and painters among labour shortage areas for large projects. Bear in mind that we need a big shift to apartments, so lots of crane operators, major concreting etc also

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Hi John,

I’m a boilermaker / welder by trade, but didn’t stay in the industry too long after finishing my apprenticeship (1981).

My problem with IA's list of trade shortages is that there’s a big difference between a roofing carpenter and carpenters on high-rise and infrastructure. Carpenters are not just carpenters, if that makes sense. The same with electricians, and I know a few. One working major projects doesn’t accept that domestic electricians have moved in any significant numbers, plus the same comment that they’re different fields, it’s not just cables (yeah, they can move but it isn’t the same). Plasterers and concreters same same, except concreters moving from high rise to infrastructure work.

As to apartments: the guy that started that freelancing site compared the cost of high rise and came to the conclusion that it wasn’t cheaper.

Re the shortages list, once pilots were listed (my area, now retired) and there hasn’t been a shortage, the only shortage were pilots with a particular aircraft endorsement, which is just 4 months ground, sim & line training (flying). Companies wanting pilots with time on type with min training required; you’re A320 rated, nah, we want B737! This is usually the smaller operators.

I’m not saying it hasn’t contributed, but for me this is a forty year + problem.

When I started (my employer was a national oil & gas metal fabricator) and their attitude was to employ apprentices regardless of workload so as to keep a constant supply of trades, they saw it as a duty (funnily enough!). Wembley Tech was very busy, now deceased! RTO which I witnessed back in 2012 and hear 2nd hand is appalling.

Companies these days see training has a cost only and when there’re skilled shortages scream out for immigration to solve their self created shortages.

I run the risk of being accused of racism, but my understanding of Asian trade training is on the job learning for one particular aspect.

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