The following letter to the editor was sent to the Australian Financial review on the 24th September 2014 regarding “Housing worse with no negative gearing“.
In his maiden speech, Senator Bob Day correctly stated, “if every family had a job and owned a house, the benefits to this nation would be great indeed.”
Seven minutes into his maiden speech, Senator Day outlined his preferred method of balancing the budget by removing the minimum wage, so those employers who cannot afford an extra worker at the minimum rate, can afford one at an even lower rate.
Twenty days later, Bob Day came out to defend the existing negative gearing rules along with Independent Economics and the Housing Industry Association.
Australian jobseekers and first home buyers would do well to keep two facts in mind at the next federal election.
- Of the 400,000 net jobs created over 2011 in Australia, 380,000 were taken by foreign workers.
- For every hundred residential property investors who will secure an extra property this Saturday by outbidding an Australian trying to buy a home, ninety three will buy an existing dwelling with the help of negative gearing as it allows them to deduct their monthly losses against their wage.
If Bob Day has a genuine interest in free markets as could be expected from his connection with the HR Nicholls Society, he would be calling for all the demand boosters and supply restrictions on our housing market to be removed.
Any politician who is not standing to end the 457 visa program and abolish negative gearing is not representing Australian jobseekers or first home buyers.
David Collett you do your case no good at all misquoting and misrepresenting what I said. This is what I said on the subject: “the government can reduce its welfare budget, reduce its $5 billion Job Placement program, reduce a dozen social ills costing millions of dollars and at the same time start collecting income tax, if it would simply allow those people who want to to opt-out of the workplace regulation system. There are thousands of jobs in rural and regional Australia where young people in particular are living at home rent-free with no commuting costs and low cost of living who would be able to get local jobs which best suit them. Just yesterday, I had a Y20 delegate to the G20 Youth Summit approach me seeking support for, and I quote, “ensuring young people have flexibility in negotiating workplace agreements.” Young people are telling me, this is what they want. I stress that I am not talking about reforms to the Fair Work Act [which contains the minimum wage]. I’m talking about being allowed to ‘opt out’ of the Fair Work Act if you want to.
Bob Day thank you for taking the time to respond.
The only place where I quoted you directly was here, “if every family had a job and owned a house, the benefits to this nation would be great indeed.”
The next sentence about removing the minimum wage was in my own words.
At 9mins 30 seconds you said, “I have no problem whatsoever, for people that want to work within the regulated system with its awards, minimum wages and unfair dismissals and joining unions and so on. No problem whatsoever. Just don’t make it compulsory. People do things for their reasons, not ours. Let me now move on to barriers to home ownership.”
By giving people the option to ‘opt-out’ you are effectively ending the minimum wage.
If I can opt out of paying speeding fines when I drive above the speed limit, that effectively means there are no more speed limits. The same would be the case with the minimum wage if workers had the option to opt out and employers had the option of choosing new employees based on whether they had opted out and therefore may accept a lower rate.
Just because some young people may be voicing the idea, it does not mean the idea is a good thing.
The important question is whether you are serious about the two goals of home ownership and reducing unemployment. When I watched your speech I felt that you were serious about those two goals.
The actual quote you gave from the delegate was about flexibility, “ensuring young people have flexibility in negotiating workplace agreements”.
There could very well be some good arguments around increased flexibility, but that does not have to mean reducing wage rates. For example, the starting point to this whole topic needs to be looking at case studies of people in these situations and seeing the world as they see it in terms of what the rules from Centrelink and what the rules from the employers perspective are. I would be confident that there are actually disincentives in the way to unemployed people being motivated to go and get one extra shift per week, then two then three.
Personally, I believe that if you, or any elected member for that matter gave those two goals the best shot possible while in office, it would earn yourself (or them) a massive amount of respect from the public and more importantly would be a great policy result for the country.
Both home ownership and unemployment are also measurable, which means that the success or otherwise of any policy changes will become clear with time.
Home ownership rates (the percentage of households who have paid off their home) have been dropping for years, so a lot of work needs to be done to get things back on track.
Home ownership and rented state housing could be boosted if the state issued the national currency instead of private banks. The new money could be credited to a state Housing Department, free of debt, to build houses. The state could also use the new money for mortgages for home buyers.
Inflation would be avoided by carefully monitoring amounts of new money according to the state of the economy.