EDITORIAL: Labor housing spin in danger of being flippant
‘It was the best of times, it was the worst of times’: With apologies to Charles Dickens, perhaps we can twist the most-quoted line from A Tale of Two Cities into a way of thinking about the Federal Budget.
With apologies to Charles Dickens, perhaps we can twist the most-quoted line from A Tale of Two Cities into a way of thinking about the Federal Budget.
Dickens wrote “it was the best of times, it was the worst of times”.
And so to manipulate the theme a little, the Budget has emerged as a tale of intended consequences and unintended consequences.
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By continuing you agree to our Terms and Privacy Policy.The justification advanced by the Albanese Government for breaking its promises around negative gearing and the capital gains tax was that it was a way to deliver “intergenerational equity”.
The idea was to discourage investors from crowding first-homebuyers out of the market to give them a shot at getting onto the housing ladder — the intended consequence.
What we have seen is the housing market stalling and prices heading down.
Plunging house prices are not happy news for the roughly six million households which face seeing their biggest asset — their home — losing value.
Treasurer Jim Chalmers has deflected some of the reason for prices falling away from the Budget, arguing prices were also responding to interest rate rises, higher fuel costs and a hit to confidence from the war in the Middle East.
He has also been adamant that prices will continue to grow over time, just at a lower rate.
Some of his colleagues have not been so guarded.
Social Services Minister Tanya Plibersek declared jubilantly on Channel 7’s Sunrise on Monday that more than 260,000 individuals and couples had made use of the Federal Government’s 5 per cent deposit scheme to get into the market.
“There’s never been a better time to be a first-time buyer,” Ms Plibersek said.
Host Nat Barr noted that “and now the market’s going down”.
“You’re talking about tiny movement,” Ms Plibersek said.
That remains to be seen.
This week National Australia Bank dramatically updated its forecasts to have Sydney property values plunging by 10 per cent in 2026 as Melbourne values fell by 9 per cent.
There are fears that falling house prices mean those who used the deposit scheme to buy a home in recent months now face negative equity — where they owe the bank more than their home is worth.
If the Government response isn’t quite “let them eat cake” or “I’m alright Jack”, it is in danger of coming across as flippant.
Witness Defence Personnel Minister Matt Keogh. “This happens all the time. I think when I bought my home many years ago, the market kept sliding, I was in negative equity,” he said.
“Negative equity is not something that people who are buying a home to live in, they’re living in it, they’re making the repayments, it’s not something to be threatened by.”
Try telling that to a family who stretched as far as they could to get into the market and now feel effectively trapped.
It will be interesting to see whether that will be called an intended or unintended consequence of the Budget’s changes to housing taxes.
Either way, there remains a sense that those changes are only just flowing through.
The Albanese Government might not end up being so happy to claim credit for what it says is intended.
