Useless subsidises bugger up housing market in Australia

Subsidies are evil, they suck cash and they almost never work as intended often distorting the market terribly.

Beware of any politician who thinks subsidies are a solution. Especially for affordable housing.

High-income earners are the overwhelming beneficiaries of government support for housing, a report has found, turning on its head the popular perception that low-income Australians get the greatest subsidies through rent assistance.

”Only 25 per cent of renters get any support from the government,” the cities program director at the Grattan Institute, Jane-Frances Kelly, said. ”They get none of the support that homeowners get. Even landlords get more.”

The report, Renovating Housing Policy, found homeowners received $36 billion a year in government subsidies, landlords about $7 billion and renters less than $3 billion. 

”We are not arguing that renters should get lots of government subsidies, but we were just really struck by the level of support for owners, given that there are so many reasons for these people to own their own houses anyway,” Ms Kelly said. ”It’s hard to see why they need that level of subsidy.”

Home owners enjoy an exemption from capital gains tax, an exemption from the land tax faced by landlords, special treatment in applying the pension assets test and an exemption from tax for what is known as imputed rent.

”If a landlord is renting out a place, the landlord pays tax on that rental income,” she said. ”Homeowners enjoy the same sort of benefit. It’s as if they pay themselves rent. But they are not taxed on it.

”We are certainly not recommending that we start to tax those imputed rents, there are very few countries in the world that do that, but the size of that support should be recognised when it comes to calculating how the government skews the housing market.”

The report found the scale of the support for owners pushed up house prices, making it harder for younger and poorer Australians to get into the market.

”Support for owner-occupied housing used to be roughly even across all income groups,” the report says. ”Now the highest-income owners get government support of roughly $8000 per year, whereas the lowest-income owners get a little over $2000.”

The report found the skewing of support to ownership, rather than renting, forced people to live further away from the centre of cities than they would like and made it hard for them to move because they face stamp duties.


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

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