Second thoughts on the second HAFF
And why "job creation" is often just job diversion
I just put in a submission to the Senate Economics Legislation Committee inquiry into the second version of Labor’s Housing Affordability Future Fund. Submissions are confidential until the Committee publishes them, so I’ll just state my conclusions
1. The HAFF bills should be passed (this as good as it is going to get)
2. Housing shortages are likely to remain a chronic problem for Australia. To the extent that competing investments “create jobs”, these jobs are in reality being diverted from housing construction. Such job diversion is undesirable.
I suppose you’re right that something is better than nothing. The government prefers the HAFF because it appears as an asset and not a liability, but would also owning the homes they built appear as an asset as well? The amount of assets the government owns as a % of GDP is low since so many assets were privatised. I guess at the end of the day the HAFF is at least some sort of return to government intervention in the housing market (at least in terms of people who can’t afford homes). We have too few homes and China appears to have too many!