CAMERON MILNER: Labor’s dud Budget robbing Aussie homeowners of their wealth
CAMERON MILNER: As voters realise the Albanese government has given them pennies in tax cuts while taking tens of thousands from their wealth, they will have every right to believe they’ve been robbed.
Anthony Albanese’s war on aspiration is smashing home values across the country.
The phenomenon is no longer contained to just Sydney and Melbourne.
HSBC bank is predicting an 8 per cent fall in values across the next year.
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By continuing you agree to our Terms and Privacy Policy.To put that in perspective, it will see more than $1 trillion wiped from the value of Australian housing stocks.
The Albanese Government has racked up a trillion dollars of debt and has now smashed the same again from Australian homeowners’ collective wealth.
They had already taken a punch in the guts with three interest rate rises sapping punters’ buying power. Now they’ve been kicked between the legs by Albo’s big new tax on everything.
The Government has failed to show any examples of young buyers or first home owners being the beneficiaries of their attack on house prices.
Instead, what we are seeing is investors abandon the market altogether as the value of everyone’s homes fall across the board.
This means it’s hitting investors and owner-occupiers in equal measure.
But here comes the rub. Investors typically have the cash flow to invest elsewhere — in shares, crypto, ETFs and CFDs or overseas.
Meanwhile, owner-occupiers are locked in with an illiquid asset — their own home — facing a daily erosion in value.
The Australian pastime of property value watching wasn’t contained to investors — far from it. Real estate has long been the favourite way of Australians to build wealth.
Seeing the biggest purchase 99 per cent of Australians will ever make appreciate gave those home owners a sense of pride — and financial security.
Those with modest super balances saw the opportunity to sell their own home, downsize and top up their super. In fact, government encourages this strategy with tax concessions.
So this Budget isn’t just a tax on the supposedly rapacious rent lords (like our PM, himself a property investor), but an attack on the asset base of every home-owning family in Australia.
Many parents help their children onto the property ladder by accessing equity within their own home. That will now be much harder.
Banks are already adjusting house price expectations which in turn will lead valuers to deflate house prices and therefore reduce borrowing power.
There’s also a whole cohort of people who’ve accessed bought in through the Albanese Government’s 5 per cent deposit scheme. Many of these people will now owe more than their dwelling is worth.
This is a group caught within a debt trap laid for them by this Government.
The changes to tax concessions for negative gearing and capital gains should’ve been restricted to the housing sector — and taken to an election.
Instead Albanese lied to Australians and has allowed Treasury off the leash to make a raft of tax changes right across the board.
That has caused a collapse in confidence that in turn is impacting the housing market.
As voters realise that the Albanese government has given them pennies in tax cuts while taking tens of thousands from their wealth, they will have every right to believe they’ve not only been lied to, but robbed.
Had they had the chance to vote on this it would be a shared responsibility. Instead the decline in home value can be sheeted home to Albanese alone.
Whether the hapless Angus Taylor can make any use of this politically is debatable. Pauline Hanson no doubt will.
