Opinion Domestic Politics BF style

[RussellEbertHandball]

Read this article by Alan Kohler from a couple of days ago about housing and was genuinely surprised by what he wrote about apartments being more expensive than houses to build.

Alan Kohler: Housing affordability is largely a matter of tax reform

The Victorian government’s blizzard of housing announcements this month is the first serious effort to deal with housing affordability.

www.thenewdaily.com.au

The Victorian government’s blizzard of housing announcements this month, mainly directed at building a lot of high-rise apartments in 50 close-in neighbourhoods near existing infrastructure, is the first serious, specific effort to deal with housing affordability.

As the Financial Review’s John Kehoe wrote: “Australia is belatedly experiencing an outbreak in good housing policy.”

It’s good, yes, but will it work? Unfortunately, no.

That’s partly because residents are going to fight it – they’ve already started – and while the state government can forcibly provide planning permits, it won’t last beyond November 2026 because the Opposition will no doubt oppose it to win votes in those suburbs, and having won the election, cancel it.

It’s also partly because Australians don’t want to raise families in three-bedroom apartments; focusing housing supply on flats will probably just drive up the prices of houses, as they become relatively scarce.

Apartments cost more to build​

But the main reason it won’t work is that apartments are more expensive to build, and therefore cost more to buy.

You heard right … apartments are dearer than houses, especially existing houses, but also new ones.

Developer Max Shifman told me that a developer needs to sell apartments for at least $14,000 per square metre while a house sells for about $4000 per square metre.

The difference is partly explained by the rule that any building above three storeys must be unionised for insurance and safety purposes.


And as we have learnt recently with stories linking the construction union – the CFMEU – with organised crime and bikie links, not to mention thuggery and intimidation, this is a very effective union at getting higher pay and better (i.e. more expensive) conditions for its members.

How it works​

As Shifman put it, anything needing a crane is a whole different proposition, in terms of building materials, regulations, insurance and unionisation, and the cost of building a block of apartments has increased by about 40 per cent since the pandemic.

That $14,000 price per square metre translates into $650,000 for a small one-bedroom apartment, $1 million for a two-bedroom apartment of 70 square metres and about $1.5 million for a reasonably sized three-bedroom “family” apartment or more. These are not “affordable” dwellings.

As a result the Australian apartment market is now almost entirely directed towards building luxury apartments for downsizers.

My email inbox these days is filled with ads for posh apartments in existing suburbs near train stations (because my recent house-hunting has alerted the marketing bots that my wife and I are in the process of downsizing).

And what I’m seeing in the emails are all premium, luxury apartments. They’re going up everywhere, and most of them look very nice. But a friendly real estate agent told us not to touch any of them; some are well-built, many are made of paper mache, he said, and it’s hard to know which is which till you’re in.

Developer contribution reform​

........

 

[RussellEbertHandball]

That article made me go looking for this tweet by Kohler with his son Chris about housing issues back in August. I was going to post it back then but forgot.

I had no idea the Chris Kohler doing finance for 9 out of Melbourne (thought he was Sydney based), was Alan's son.

Get rid of 50% CGT exemption for housing. Go back to taxing the after inflation real gain, like when CGT was brought in, in 1985 and stop the distortion of investment in an asset class that should be a basic human need, not an investment opportunity, as per another Alan Kohler's graph shown in the video.

 

[Holden Hillbilly]

 

[RussellEbertHandball]

During the Qld election night coverage I heard a couple LNP people say they needed a John Howard (by one person) and a Kevin Rudd (by another person) size swing to form government, early in the night when the swing was still small because only about 10% of the vote had been counted.

They needed about 5% across the board, to get a 1 seat majority, but got 7% so have a 5 seat majority.

Last weekend I decided to look at what the swing was for those 2 elections - didn't analyse what they needed across the board to get a majority of seats, and decided to look at what the swing was for the other times the government has changed at the federal level since WWII.

1949 swing was 5.1% to the Liberal - Country Party coalition. The number of seats had increased from 74 at 1946 election to 121 at 1949 so senate went from 30 to 60 as well, as the constitution says senate has to be approx half the size of the house.

1972 2.5% to Whitlam, but he got a 7.1% swing in 1969 and nearly won government after the disaster that was the Vietnam / LBJ fuelled election of 1966 for the ALP, led by 3 time loser Arthur Caldwell. Had to flip a net 4 seats as it was a 66 v 59 chamber.

1975 7.4% to Fraser after the Dismissal a month earlier. Only needed less than 2% as only had to flip a net 3 seats in the 66 v 61 chamber.

1983 3.63% to Hawke. It was a 74 v 51 chamber so he had to flip a net 12 seats.

1984 seats increased to 148 in the house and senate to 76. House has slowly been increased to 151 as redistributions occur, but some elections there is a decrease by a seat.

1996 5.07% to Howard. It was a 80 v 65+2 independents chamber so had to flip so had to flip a net 10 seats to get to 75 in a 148 seat chamber.

2007 5.44% to Rudd. It was 87 v 60+3 independents in a 150 seat chamber, so had to flip a net 16 seats

2013 3.61% to Abbott. It was a 72 v 72+6 others and Gillard governed with the support of 1 Greens member and 2 independents. So Abbott had to flip a net 4 seats. Labour's 7 most marginal seats all required a swing of less than 0.6% to fall to the coalition.

2022 3.66% to Albanese. It was a 77 v 68+6 others chamber. ALP needed to flip 8 seats to have a majority government. They flipped a net 9, but its now a 77 v 58+16 others with 12 independents and 4 Greens members.

Unless something very dramatic happens between now and whenever the next election is, I think ALP loses seats, the coalition wins some seats, and a minority government happens and depending on the size of the swing, (which I cant see being the 4% the coalition needs and is consistent with above history), and deals will have to be done as to where the independents and Greens move their support to see which of the major parties form a minority government.

Well I find it hard to believe the Greens would support the coalition, but a bucket of money to pet projects type bribery, is always a chance.

 

[RussellEbertHandball]

The talk of left wing vs right wing in the US election thread had me recalling this article from Bill Kelty a couple of weeks ago in the Weekend Oz the day of the Qld election.

Slashing Oz's manufacturing base for jobs to move to services and construction industries, has meant less unionised labor rates have fallen, and the RBA can't make 1% and 1.5% movements in interest rates as there is very little manufacturing industry to put a clamp on the economy to slow it down, so its now 0.25% here and there as people are now locked into huge mortgages and they don't want to spoke them and their mates in the commercial banks.

He talks about the reduction of the manufacturing base.

But he makes an interesting point that tradies, especially who those work in construction aren't a really Labor voters anymore. Once they do well, they tend to buy investment properties as they can do a lot of the work on them for no cost, and get other tradie mates to do things at mates rates, if they bought them for a good price because they were old and run down, or did the buy a big block and knock the old house down and build 2 townhouses on the land type investment. And as they get older and more into the property market, move away from Labor.

On election campaigns and big policy announcements of 30 years ago, politicians used to go to manufacturing plants put on the fluro vest and make an announcement there. Now they go to construction sites wearing the fluro vests to make the announcements there or at some big services business.

https://archive.md/iivhF

Labor’s left wing has ‘died’, it could lose election, says Bill Kelty​

Bill Kelty says the left wing of the Labor Party ‘died a long time ago’, warning the party could be defeated at the next election.

Former union stalwart Bill Kelty says the left wing of the Labor Party “died a long time ago”, warning there is a “real chance” the party is heading to defeat at the next election.
As former Labor minister Kim Carr reopens old Labor wars with the publication of his memoir, Mr Kelty said major shifts in the economy, structural changes to the workforce and a decline in manufacturing jobs had diminished the ALP’s voter base.

Mr Kelty said concern about the environment, the treatment of asylum-seekers and the fall of unionisation had also contributed to an increase in support for the Greens and the independents, especially among young people.

The long-serving Australian Council of Trade Unions secretary said the Albanese government had made some positive changes but needed to put forward an “inspirational set of policies” that are “better explained”.
After the voice referendum was resoundingly defeated, Mr Kelty has also pushed for a treaty as the next step towards recognition of Indigenous Australians, criticising the Labor Party for not providing clarity on its position.

“I don’t think there’s a left wing in the Labor Party,” Mr Kelty told The Weekend Australian. “I think the left wing disappeared. I think the left wing died.
“What is the left-wing position on AUKUS in the party? They support AUKUS, apparently.
“Is there a left-wing position on the treaty? I think many of the Labor Party members probably do have a strong view on supporting a treaty. I don’t know. “Is there a left-wing view on the modern workplace? I don’t know.”

While stressing that he had not read Mr Carr’s memoir, Mr Kelty said the former Labor senator’s criticism that Labor had lost touch with blue-colour, low-income workers was “partly true”, arguing the trend was more extreme in the US than Australia.

“What is happening is that the primary vote has fallen significantly,” he said. “Part of the primary vote fall has been the big structural changes in the economy in which there are less manufacturing blue-collar workers.
“And as a result of that there are relatively more tradespeople, and they’ve had a tendency in the past to vote Liberal Party more than manufacturing workers, and that trend has continued. So I do think there’s a structural change in the employment market, structural change in the demography which has affected it.”

Mr Kelty said there was a chance Anthony Albanese could be defeated at the next election.
“There is a chance they could get defeated at the next election, a real chance,” he said.
“Just look at the polls. Last time it got 33, they’re recording 28 to 32 so that represents a swing against the Labor Party, and they don’t have a buffer. “So there’s a chance. The question is, can the Liberal National Party get in front of the Labor Party? That’s not so hard to achieve. So there is a chance.”

Mr Kelty said the Prime Minister’s attempt to enshrine an Indigenous voice to parliament in the Constitution was a “noble effort” but ultimately the concept was a “very hard thing” to sell to voters.
Pointing to a treaty as the path forward, Mr Kelty argued Mr Albanese had “started at the wrong end” by attempting to pass the voice rather than building from the bottom.

He also argued the case for Labor to implement a “manifesto for young people”, to combat voter disillusionment because of soaring house prices, the high cost of living, stagnant wages and stubborn student debts.

Labor-aligned political strategist Kos Samaras said the polling reflected a decline in support among the party’s traditional base and an increase in the perception that the ALP doesn’t “represent them”.

“When you get in government, and you leave government and people are poorer than they were when you first got into government – that’s your KPI. That’s what you get votes on,” he said.

“So whether it was the Rudd-Gillard years, whether it’s now the Albanese government, if at the end of the this first term people are poorer … then you failed in your objective to represent low-income workers. That’s why they’re moving away.”