Albanese today announced another tax break of sorts: a $1,000 instant tax deduction instead of individual tax expenses, which also won’t come into effect until July next year. I mean, it’s kind of like Oprah, isn’t it? Now $1,000 here for you, $1,000 you get a tax cut, you get a tax cut, you get a tax, exactly. Everyone’s getting a tax cut.
Impact of Tax Cuts
But how do you think this is going to— or will this have an impact? Because it’s so confusing. I think, on an objective level, there are definitely economically and energy-wise, you’re exactly right Kell. If they had run with that, I think that the coalition would have had it in the bag. In fact, if Dutton just kept his mouth shut, he probably would have had it in the bag. I’d really love to know who is advising Dutton at this point in time, because they need to be sacked. He or she, whoever it is, doing an absolutely appalling job.
Confusing Election
But yeah, it is one of the most confusing elections I think post the American election. I think a lot of us over here had a little bit of hope that there’d be some momentum swinging back to more conservative type politics. But Dutton’s coming out and paring the same policies that Albanese is. So you kind of feel, as a voter, that whichever way you vote, you’re going to get basically the same thing
Rise of Freedom Parties
And that’s why I think that the freedom parties are really capitalizing on this and rightfully so. That’s why you’re seeing such a big trend pushing towards One Nation, towards Renick, and towards all of these other sorts of freedom parties that are coming up because people want an alternative to what’s currently in power.
Tax Cuts and Their Real Value
Now, these tax cuts, these $1,000 here and there, like I mean, Dutton’s putting out $1,200 for individuals. Like you said, that’s grocery bills for a fortnight for some families. And so, like, you look at more than, I mean, $5 a week is not even a coffee in some parts, right? But again, it’s recurring. It’s the same with— But it’s a coffee a week. I mean, a coffee a week is not a tax, but it’s a lower tax rate. I mean, if you really want to say, no, we should go in and we should raise taxes. If that is new Liberal policy, then I don’t know what the Liberal Party is. But it’s not about taxes here or there because it is just a tiny bit really. It’s not something that’s going to be felt.
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Microtargeted Campaigns
What it comes down to is that, you know, what the parties keep on saying, and you’ll hear this again and again during this campaign, this idea of hand-to-hand combat in the seats. So we are getting into micro-targeted campaigns, not just on social media anymore, but through the policy offerings, and these are going right into what are people’s concerns in these electorates, what’s moving them, and it’s being influenced a lot of the time by micro-campaigns around single issues as well.
Questioning the Effectiveness of Policies
And that is why you’re seeing something which from a high level just looks like complete nonsense, but they know exactly what they’re doing. Now, is this good for the country as a whole? Well, that’s another question entirely. But that is where politics is at right now, and we’ve got to understand that to understand why they’re putting out these policies that seem so strange to us.
Housing Policy Proposal
Well, one of the issues that’s affecting lots of voters in several key seats is housing. And Anthony Albanese’s biggest pitch today was a new housing policy, which was aimed at helping Labor win over younger voters who are locked out of the market.
Albanese’s Housing Plan
Today, I announced that under a Labor government, you’ll be able to buy your first home with just a 5% deposit. It will be available for homes valued all the way up to the average price in every city and region, and you won’t have to pay a single dollar in mortgage insurance. Our government will cover it. Now, it’s said that this new policy will unlock 100,000 new homes, but only first home buyers will be eligible. They’ll be able to put down a deposit on a home that’s as low as 5%, as the Prime Minister pointed out, while the government will act as guarantor on up to 15% of a loan cost of the budget. That magic $10 billion number. Again, I’m not sure what it is about that. Apparently, maybe it’s so round that they think we’ll forget what the cost is ultimately.
Coalition’s Response to Housing Crisis
But before Labor had any real time to spruik the shiny new policy, in came the coalition with, well, their very own answer to the housing crisis.
A coalition government will permit you to subtract interest payments on the first $650,000 of a mortgage from your taxable income. We will allow these deductions for 5 years, provided you continue to live in that home for that period. So, the Dutton government is offering tax deductions for interest payments on mortgages of up to $650,000, representing savings of $11,000 a year for families. It’s also means-tested. It applies only to individuals earning up to $175,000 or couples on up to $250,000.
Vote Winners in Housing Policies
Kell, looking at these side by side, which one, if either, is a vote winner here? Well, in this one, there is a clear distinction. I don’t think the Albanese one is a good idea. His big push is to get more new homebuyers buying more homes. He wants to increase demand. When he says he’s going to produce 10,000 homes, I don’t think anyone believes him. This is the same man who promised us 1.2 million homes.
Albanese’s Housing Promises
Yes, yeah, 100,000 homes. He promised us 1.2 million over 5 years. He’s miles behind on that. We know that the tradesmen don’t exist. We know that there are supply chain issues. He can’t deliver all the homes. All he can do is increase demand. Okay, Economics 101. The price is a product of supply and demand. When demand is higher than supply, the price goes up. If he really succeeds in pushing up demand, the price will go up.
Dutton’s Policy vs Albanese’s Policy
On the other hand, I think Dutton is not a housing policy. It’s actually a cost of living policy. It’s for people who’ve got a mortgage and are in a home. So it’s not another stress on the home market, but it allows them to have a better standard of living because their standard of living has been cut by 8% by the Albanese government over the last 3 years. So it’s a reward for them, and it’s going to lift their standard of living. But I think Albanese will just create extra demand, which will not help.
The Question of Inflation
Joe, is he right? Is it inflationary? No, it’s because he’s creating extra supply, so it should bring prices down. He did last time. That’s what the policy is.
The Ongoing Housing Plan
No, the housing plan is still ongoing. It’s only, you know, it’s obviously takes time to get these things off the ground. And does anyone believe that we’ll see… Well, maybe not on this panel, but I do. But, and like everything else the government delivers, it’ll no doubt be late, but it will eventually get there.
Dutton’s Policy Not Addressing Key Issues
Dutton’s policy just doesn’t address that the number one issue for young first-home buyers, which is how do you get a foothold in the market? How do you actually get in? It’s not necessarily a matter of just being able to retire the mortgage or pay the mortgage. It’s actually having enough money to put down that deposit on a house whose value is skyrocketing.
Labor’s Policy vs Coalition’s Policy
So, I think actually Labor’s policy will be very effective, knocking it down to 5%, so you only have to get half of what you used to and having them over-underwrite the mortgage insurance. So, you get a lot of people who can’t afford to pay the mortgage in the long term into a… not necessarily, because as long as they can service the mortgage and as long as they can hold on to the house for a few years, they will end up being able to.
The GFC Comparison
But this is precisely the problem that underpinned the GFC, right? You know, these were the loans that people couldn’t service and left them in the hole. But that was in America, and then the contagion there wasn’t happening here.
Banks’ Role in Approving Loans
Well, okay, so first off, they’re taking off the lender’s insurance on this, right? So, they’re effectively becoming the insurer of the person who’s borrowing and letting them go get in with a 5% deposit. But the bank has to approve it. Yeah, right. So, okay. So, the bank has an issue here.
Affordability of Mortgage
Yeah, I mean, I don’t know how many banks are going to be approving these loans because if you look at somebody like that, you know, with all the best will in the world, I want them to be in a house. We all want them to be in a house, but is it responsible or wise to put them in a situation of taking out and having to service a loan which they can’t, at the moment, afford the basics of?
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Getting Into the Housing Market
But this is what I’m saying. I think most people would be able to afford to service a mortgage. It is the difficulty is actually getting into the market in the first place. It is saving up enough money for that deposit. And again, you could say the same thing about John Howard’s first-home buyers scheme. I mean, the John Howard government ended up adding an extra $20,000 or something to or more, I think, for first-home buyers who were eligible. And people just said, well, that just made the price of houses go up because it increased demand so much. But what it also did was ensure that more people could actually get into those homes in the first place. So yes, maybe the prices didn’t come down, but it meant that they were able to get into the housing market and start paying off the mortgage.