Housing Affordability” humbug but, yes, it is the fault of State Governments that

Many consumers are reduced to living in Soviet-Bauhaus style concrete blocks in which you can’t even swing a kitten around, while the new Commissars, such as Bracks and his fellow  thugs, in league with the Toorak Political Brahmins and the KKKR, live in sumptuous housing, thanks to their  policy of making sure only the super wealthy like himself, Steve Bracks ,only can live in castles.Below, in More, is a few Hansard extracts on it.

Howard should stop following the  linguistic ‘consensus’, the herd. To whit, vulgarisms such as, “Housing Affordability”. Irrespective of the quality of the housing, if you can afford it, the housing is perforce ‘affordable’. I’m not being trite, well not altogether, as to what is meant by that ugly expression but, the difficulty is the obvious of: vulgarisms explain nothing at all. Now, the Libs have correctly zoomed on what the State’s govts. have done to housing markets. The problem is, they , in response to A(L)Pes, rose to the bait on interest rates. One question put by some of the Apes egged on Libs, including Howard, to walk down garden paths. Howard, indeed, repeated the mistake on radio this morning. ALP cites banks’ repossession of properties. Howard’s reply, also on radio this morning, attributed it to lenders “other than banks” squeezing borrowers into loans without adequate financial coverage to meet debt. From that, I take it, Howard hit upon the actual problem, fractional banking, without realising it, and why it is a problem, but this would require facing up to why interest rates are so low.

He went down the garden path. Take the RBA out of the picture, there’s nothing wrong with a developer financing buyers who can make little or no payment of principal on purchase as such. It just means the purchaser borrows to the majority or all of the purchase price. The problem is, why firms can extend generous low interest rates, and this is the crux of why consumer debt is a volcano ready to explode:The low interest rates are due to the scam of fiat money, and central banking, which was imposed by the ALP under Curtin in the 1930’s. Here, we have  the real bane of borrowing today on the said contractual basis.

To repeat, there is nothing wrong, as such with firms working out how to finance consumers into housing with minimal deposits – if at all, against principal.The problem is what the RBA has been doing all along, forging money hand over fist and thus, of course, it has to be farmed out and parked somewhere. The explanation of this is to be found on Brookesnews:- why regugitate what is already well and neatly said.

I’ve numbered the passages 1 to 5. No.5 is M.I.P. debate. In it, ALP speakers selected present also their evidence. Here’s a rum thing : In the debate, the question of land supply is raised. The ALP accused Libs of seeking to flood the market and so to  ’devalue’ owners’ houses. I won’t comment because, it is too obvious the contradiction and, hypocrisy contained in that whine. Indeed, due to the RBA, any real correction to fiat money, to conjecture, will see prices fall. So, too, the elimination of subsidies such as the ‘first home buyer scheme’, which actually only functions to raise house prices. So, too the land controls, ‘planning ‘ schemes, ‘environmental building stipulations’, land taxes, stamp duties, and cuts in Local Council rates. So, too, the elimination of that sacrifice to the goddess of death, the ‘Greenbelt’, and ‘conservation parks’ and so forth.

To bring housing down in price entails getting the real culprits right out of the way, the RBA, and governments, each tier of the useless swindling bastards. Yes, any housing is affordable – which shows how silly the expression is. The difficulty is, our Feudal Mastahs, and they include all of the ALP heavies, are making sure the little man has no chance at all to move out of hovels and Soviet style concrete blocks.

You see, they are Goddies and how dare Aussies desire something better than a nasty hovel. Castles are for the  feudal overlords, as compensation for  sacrificing themselves on the altar of the great scam ‘govt. Or, to use the cliché those pretending to be apostles to Christ are fond of:

They are, as they live in generous parish houses – well appointed , sip wine, peruse their libraries, eat nice food, drive cars, wear nice clothes and costumes, all paid for by long abused parishioners, “worthy of their hire’ and it is ‘just’ because, like Christ, they too sacrifice themselves. some sacrifice that, living the life others have to earn by their ingenuity in markets and hard effort, and guts.

 Now, I won’t say any more on what I make of those hypocritical bludgers, pretending to be Apostles to Christ but, many politicians of each  tier of govt. in Oz, and  no less useless goons called public servants, are no  better. A cur of a dog is honest compared to that lot of dribbling bastards. 1. Mr HAYES (2.40 pm)—Has the Prime Minister seen reports in the Sun-Herald on 10 September on thesharp increase in mortgage repossessions in New South Wales since interest rates started to climb in 2002? Didthe Prime Minister see the comments from accountant Anthony Bell, who said, ‘Interest rate rises have made loan service ability harder and harder… When will the Prime Minister finally admit that it is his seven backto-back interest rate hikes that are causing some families to lose their homes? Mr HOWARD—I have seen the reports in the weekend press, and my understanding of those figuresis that they do not relate solely to dwellings; they also include actions to repossess properties involved commercially, and it is not possible on the figures available in the media to know precisely how many of those relate to homes. He asks me a question relating to interest rates. It is true that interest rates rose by 0.25 per cent recently, and there have been three interest rate rises in the last 18 months. I acknowledge that. That is a statement of fact. The other statement of fact is — Mr Fitzgibbon—You said, ‘Go forth and borrow!’ The SPEAKER—Order! The member for Hunter!Mr Fitzgibbon—’Go forth and borrow!’The SPEAKER —The member for Hunter is warned! Mr HOWARD—under the former government, the housing interest rate averaged 12¾ per cent. It peaked at 17 per cent—17 per cent! Can you imagine how many repossessions there would be now were it 17 per cent, Mr Speaker? Let me assure the member for Werriwa that any government would be concerned about any possessions, but the proposition that housing affordability now is a function of the interest rate rises that have occurred since the last election is false… the retiring Governor of the Reserve Bank. He had something to say about housing affordability when he appeared before the House of Representatives standing committee on 18 August. He was asked a question about houses being less affordable.— Macfarlane—”They are. That is caused more than 100 per cent by the fact that house prices have gone up, not because of interest rates going up. Interest rates are lower than they were 10 years ago and are obviously lower than they were 15 years ago.” 2. Housing Mr SWAN (2.46 pm)—My question is directed to the Prime Minister. Has the Prime Minister seen predictions of the impact of new land releases on house prices by Mr Alan Moran, the Prime Minister ’s preferred housing expert, who said:In the case of Sydney, outer Sydney, we would see a very dramatic reduction over time, we would see a reduction of perhaps half. … in Melbourne we would see a reduction of maybe a quarter. … Adelaide about the same again. … Perth a little bit more than that. Given that new land releases would lead to a significant impact on the value of the family home, is the Prime Minister still advocating this proposal as the sole solution to families who are struggling with their mortgage? Mr HOWARD—Mr Speaker, I know my hearing is bad, but I thought the member for Lilley said that anynew land releases would have an effect on the value of the family home…The shadow Treasurer is saying that any land release will have an effect on the value of the family home. I have in fact seen what Mr Alan Moran said. I saw it on Lateline, late on Friday night.Mr Beazley —And it gave you the horrors. Mr HOWARD—No, I took it in calmly, and I thought, ‘I’ll bet that’s a selective grab.’ Of course, on 6PR, he qualified his comments. He said, ‘Well, I’m not suggesting there’s going to be open slather.’ Of course there is not. Obviously, if you decided to hurl vast tracts of land onto the market, of course it would have an impact. Nobody is arguing that. What I have in mind are modest proposals—and they were modest proposals; they came from the Australian Labor Party, actually. That is why I know they are modest! This is what Jenny Macklin had to say—and this was when they were interested in young home buyers: Let’s also work with State Governments to make sure that weget adequate land release— Government members interjectingThe SPEAKER —Order! Members on my right! Mr HOWARD—Do I assume that the value of the family home in Sydney is now going to go down if weadopt those policies? She continued: … that we get proper urban development, regional development, that we address this issue as broadly as possible. On 15 March, Kim Carr not only called on the states but also on the Commonwealth to make a contribution. The reality is that the policies of the state governments have contributed to the very issue drawn attention to by the retiring Governor of the Reserve Bank. 3.Interest RatesMr SWAN(2.54 pm)—My question is to the Prime Minister. Has the Prime Minister heard other comments from the Reserve Bank Governor, Ian Macfarlane, on ABC radio last night where he said he was ‘disappointed’ with the coalition’s interest rate campaign at the last election which was ‘accepted by some members of the community’? Prime Minister, is this why Mr Macfarlane said the coalition’s interest rate campaign was ‘incorrect’ and ‘not plausible’? Mr HOWARD—The answer to the first part of the question is: yes, I have heard those comments. Theywere part of an answer given to Maxine McKew. The question reads as follows: Did you think their line was defensible, within the context of an election? This is what he said: Ah, well it was logically defensible, yes. It was a logically defensible position. 4. Housing Affordability Senator WEBBER (2.23 pm)—My question is to Senator Minchin, the Minister representing the Treasurer. Does the minister recall telling the Senate in November 2005 that: Certainly, there is still reasonably healthy growth in the number of first home owners, which remains above the long run average for the seventh consecutive month… Is the minister aware that ABS figures actually show that the proportion of first homebuyers in the market has now been below the long-run average for more than four years? Is the minister further aware that last week’s Housing finance report showed that the proportion of first homebuyers in the market fell from 19.1 per cent to 16.7 per cent in the three months following the interest rate rise in May—the sharpest fall over a three-month period for more than four years? Does the minister expect the proportion of first homebuyers to fall even further following the latest interest rate hike in August? Senator MINCHIN—I presume that is a question really about the level of interest rates…the level of interest rates that is likely to prevail under a coalition government will always be lower than the level under a Labor government. The Australian people strongly supported that proposition at the last federal election, and it is not surprising giventhat the Labor Party is the party that presided over a $96 billion build-up in debt and continuous government deficits. We are seeing that now with state Labor Governments going into deficits, which put enormous pressure on interest rates because of the competition for funds. It is Labor governments, and the former Labor government — and indeed in opposition—which so consistently advocate greater government spending. Wheneverwe have announced during our period in office any restraint in government spending, we have been roundly attacked by the Labor Party. After every budget we get attacked by the Labor Party for not having spent more than we are spending. They always propose to spend more money and therefore risk returning the government to a deficit position, therefore putting upward pressure on interest rates. The greatest threat to first homebuyers —and any homebuyer—in this country is the return of a Labor government— Senator George Campbell—That’s not what Ian Macfarlane said. Senator MINCHIN—committed to reversing the reforms that we have made to the economy, tightening up the labour market, producing forces in the economy which will put upward pressure on inflation, returning the budget to deficit. With upward pressure on inflation you get upward pressure on interest rates. The Australian people learnt their lesson when they had 13 years of the Labor Party, with interest rates at unbelievable levels. If you were a first homebuyer under the Labor Party, you really knew what high interest rates were all about. There is no doubt that whatever the recent movement in interest rates— The PRESIDENT—Order! Senator George Campbell! Senator MINCHIN—The Reserve Bank governor has indicated in his statements that what is happening with interest rates is a return to a more normal level. Of course, the level of interest rates under us still remains substantially below the level of interest rates that prevailed under the Labor Party. The average rate of interest for mortgages under the Labor Party was some 12.75 per cent— Speaker! Senator George Campbell, shouting across the chamber is disorderly! Senator MINCHIN—and it is in the range of seven per cent to eight per cent now, and that has been the average level of interest under us. So first homebuyers, whatever the current conditions, are certainly experiencingmuch better conditions, much more affordability than was ever the case under our opponents. Senator WEBBER —Mr President, I ask a supplementary question. Is the minister aware that the number of families who own their own home outright has actually fallen by 150,000 during the term of the Howard government? Given the importance of home ownership for financial security in retirement, can the minister explain how this collapse in home ownership helps to address the financial implications of an ageing population, identified in the government’s own Intergenerational report? Why has the Howard government spent the last five years ignoring the housing affordability crisis in this country? Senator MINCHIN—I would remind the senator that it was this government that introduced the First Home Owners Scheme, which has assisted over 865,000 Australians to purchase their first home since 1 July 2000, with almost $6.5 billion worth of grants being distributed to date. That is one of our schemes, which we introduced to help first homebuyers, and if she is concerned about affordability then she ought to talk to Labor state governments about their land release policies, their ridiculously high stamp duties and their outrageous tax burden on first homebuyers through their own state tax systems. Labor senators have it within their power to talk to their state counterpartsabout their outrageous policies on this issue. 5.Senator CARR(Victoria) (3.04 pm)—I move: That the Senate take note of the answers given by theMinister for Finance and Administration (Senator Minchin)…Senator Minchin today was asked a series of questions relating to direct impacts on the wellbeing of hundreds of thousands of Australian families. These are people who are now most at risk of losing their homes because of interest rate rises. In fact there have been seven interest rate rises in a row, and three of these have occurred since John Howard promised to keep interest rates at record lows. Following the Prime Minister’s lead, today we saw Senator Minchin attempting to pass he buck on the issue—trying to blame everybody else but of course the government itself.Unfortunately for him, he is also on the record—and Senator Minchin is still with us here, perhaps he could advise us as to why this is the case—in February this year as saying that interest rates are the most important factor in relationto housing. Now of course we have a situation where the government is seeking to blame the states and blame anyone else for the increasing deterioration in housing affordability. One minute we are told that interest rates are the most important factor and then when they go up, causing pain for many hundreds of thousands of hardworking families, suddenly someone else is held responsible. Senator Minchin’s somewhat condescending response has demonstrated that this government has simply run out of ideas when it comes to the question of housing repayments and meeting the cost of keeping a roof over your head. They simply do not care about the fate of hundreds of thousands of Australian families in the face of skyrocketing default rates. All they offer is condescending financial advice. Senator Minchin, in a somewhat desperate manner, resorted to arguing that the first home owners grant scheme was introduced to help first home owners into ownership. Of course this esponse directly conflicts with what Senator Minchin has said in the past. I have referred already to the fact that, back in February, he said that the first home owners grant was: … introduced at the time of the new tax system’s introduction was very much and overtly in recognition of the consequences for home purchasers of the introduction of the goods and services tax. We heard Senator Minchin go on to say that the grant: … was and is a grant which acknowledges the one-off impact of the goods and services tax on the purchase of a home. Then, we were told that this was a grant to compensate for the GST; now, we are told it is a device by which the government seeks to address the question of housing affordability. We know that the pain being felt by Australian families is real and is not just a fantasy which the government seeks to dismiss in its rather cavalier manner. The Supreme Court of Victoria’s figures on mortgage repossessions show there has been a massive 58 per cent increase in the number of writs issued between 2004- 05 and 2005-06. There was an increase in mortgage repossession writs from 1,948 to 3,084. In South Australia the Supreme Court figures indicate that the number of repossession summonses lodged increased by more than a third over the same period: from 371 to 476. In New South Wales, Supreme Court mortgage repossession statistics show an incredible 59 per cent increase in judgments between 2004-05, which is the fastest increase in 16 years—a jump from 3,061 in 2004 to 4,873 in 2005. What we are seeing, of course, is the dark side of the housing boom — a boom described by the Prime Minister on 17 March 2004 as being ‘fantastic for the economy’ At that time, the Prime Minister and the Treasurer were happy to take the credit for higher house prices when they thought they were good news. Of course, now that we see clearly that the housing boom is far from being fantastic for the economy, the Prime Minister and the Treasurer have been trying to shift the blame for this pain to state governments. In yesterday’s motion in the House of Representatives, they went one step further and tried to shift the blame to local governments. One minute they are shifting costs; the next moment they are shifting blame. It goes to show how hollow the resolution on local government that they passed just last week was. Labor does agree with Peter Costello on something; at least, we agree with something he said in 2003, where he— (Time expired) Senator BERNARDI(South Australia) (3.09pm)—I have never, ever accused Senator Carr of being ineloquent but today he has simply demonstrated the pervicacious nature of the Labor Party and their entire policy-free zone. He has demonstrated to me exactly why the Australian people have rejected the Australian Labor Party at four successive elections. We are talking about home ownership today, and specifically about affordability of home ownership and the burden upon regular Australian families. The dream of home ownership remains a uniquely Australian dream.It is a dream that, in this great country, allows all Australians the opportunity to own their own home. And it begins, let me tell you, with having a job. This government has lowered unemployment to such a level that every Australian in this country who wants a job can actually get a job. We can only contrast this with what happened under the Labor Party. In 1992 the unemployment rate across this nation was 10.9 per cent, and it in fact averaged 8.5 per cent under the Labor administration. How do you buy a home or ford to pay for a home when you do not have a job? The answer is: you cannot. How can you afford to buy a home, if you have a job, at 17 per cent interest rates? The answer is: most people cannot. You want to talk about home loan affordability and how many people defaulted on their payments; you need to go back to the high point in this country—the high point of defaults.In fact, it should not be the high point: it is actually the low point in economic mismanagement in this country, and it occurred under a Labor government.What we need to remind people is that this government — and I remind Senator Carr—has reduced the tax burden on the regular taxpayer so that 80 per cent of the taxpaying public pay 30c or less in the dollar. This is a very important point because, under the Labor Party and under their administration, the top tax rate kicked in at around $50,000. Today it does not: today the average taxpayer pays around 30c in the dollar. This government has assisted first homebuyers by providing over 828,000 first homebuyer grants. This enabled a lot of people to put their foot on the housing market ladder — the ladder of opportunity — which, under this government, has every rung intact. It is not missing a few rungs along the way so it is only an opportunity for some, because it is an opportunity for every single person. We have reformed taxation rates not only by reducing the marginal tax rates but by reforming our entire taxation system. By doing that, there were some agreements reached with the state governments that they had to fulfil in order to receive the rivers of gold in the GST. What has happened? We are talking about housing affordability. The estimated costs—the exact figure—escapes me. I must be suffering from lethologica, I think, because the word was on the tip of my tongue. However, we have to decide here that the states have abrogated their responsibility. They have not cut stamp duty, which adds an unfair impost and an unfair burden to the new homebuyer. In fact, it adds to the cost of housing for any person upgrading, or even downgrading, their home ownership dream. What else have the state Labor governments not done? Perhaps it is what they have done. They have fully loaded the costs of development of land onto private individuals and private developers. This is one of the tragedies that our developers are facing at the moment. Land banks are being released on an everdiminishing basis by the state Labor governments. When they are released, the developers are expected to fully fund the infrastructure costs that go into them and pass those costs on to local homeowners and to new homebuyers. The cost of building a home has actually risen only marginally over the last 10 or 15 years in real terms — what we have are massive costs of land. This is the responsibility of the state Labor governments, I have to tell you, because the land is being released by them and they are failing in and abrogating their responsibility to support affordable home ownership for Australian people. Let us talk also about the level of investment, the level of asset growth and also the level of debt in the Australian nation. Senator PARRY (Tasmania) (3.19 pm)—I also rise on the matter that was raised in question time today and the answers given by Senator Minchin. Senator Carol Brown has highlighted the fact that Labor will introduce a minister for housing. I think before they do anything on that basis they should have a minister that will look after economic management, because that is how the housing situation in this country has become very strong. That is how our economy functions —we concentrate on economics, and that is the broad picture. Turning to some of the minor detail, Senator Brown mentions interest rates. Interest rates fluctuate withinbandwidths, and the interest rates under this government have fluctuated within an extremely low bandwidth. Under the Labor government, prior to this government taking office, interest rates fluctuated on a high bandwidth. I know because in 1990 I had a mortgage and mortgage rates went to just under 20 per cent. I still have a mortgage today, but mortgage rates are nowhere near that level. My mortgage rate is at a very affordable and manageable level. Also, from my family’s perspective, I have a son who recently married. They are saving for their first home. They have purchased a block of land. They have borrowed money to do so because interest rates are affordable to do that.That is a very important and significant factor: whilst interest rates move within bandwidths, they are relatively low. They have been a lot lower under this government than they have been in the past. Senator Brown also blames the Prime Minister for blaming others. That is incorrect. The Prime Minister is not blaming the other states; he is pointing out facts and stating the obvious. I quote the Reserve Bank Governor, who on 18 August this year said: I think it is pretty apparent now that reluctance to release new land plus the new approach whereby the purchaser has to pay for all the services up front —the sewerage, the roads, the footpaths and all that sort of stuff — has enormously increased the price of the new, entry-level home. That is a supply- side issue, not a demand-side issue. I think there is a lot of evidence that, at the moment, those factors are becoming very important.So it is not only the Prime Minister and this government but also people outside of this government who understand these issues who are saying that the state governments are a serious part of this issue. And the state governments are ensuring that housing affordability at the new entry level is too hard. It is just too difficult, because of those state costs.That is not to mention stamp duty. We can look at stamp duty for forever and a day. State governments need to reduce stamp duty. If Labor were serious about low entry level into the housing market, the Labor Party would certainly be encouraging their counterparts at each state level to reduce and remove stamp duty. It is very important… Then we come to first home buyers grants and subsidies… They enable people to have some offset when they first take up a mortgage… This government has a very serious approach to housing affordability. We can only ask that the state Labor governments follow the lead of the national government and reduce their charges to make it easier for those first-time entrants when they wish to move into their first home or, indeed, buy a block of land. Senator WEBBER(Western Australia) (3.25 pm)— What Senator Parry might also find is that this government has ignored five years’ worth of warnings from esteemed organisations like the Reserve Bankabout housing affordability and the need to invest in skills and infrastructure to put downward pressure on inflation and interest rates. That is just a fact of life…If the government’s economic management was so rosy and if housing affordability was such a simple issue, why is it that, in 1996, when this government first came to power, people were spending on average 28.7 per cent of their incomes on mortgage loan repayments and yet, in early August this year, only a month ago, average repayments were consuming 32.3 per cent of people’s incomes? It is not only that a greater percentage of household income is being absorbed by the cost of housing. When you also bear in mind that people are actually earning more money these days, on the whole, then that says there is a serious affordability crisis in our community. It seems we are going to play the game of blaming the states. As I say, that seems to be this government’s only solution or option in discussing this. Whenever we define a problem it is always someone else’s fault. There is never any national leadership to fix this problem for all Australians; instead we are going to blame the states. In my home state of Western Australia, when the Labor government came to power —and they took over from the Liberal Party, when last I looked —there were only 7½ thousand blocks of land per year released for new homes. Some five years later, there will be over 16 ½ thousand new blocks of land released for homes, just in the Perth metropolitan area. If that is not the sign of a state government accepting its responsibilities and trying to do its bit to address the need for housing affordability, I do not know what is. Where is the action from the federal government to assist in that, in what is a booming economy? Nowhere. All they can do is just keep blaming others. That is hundreds of percentage points of increase: in five years it has gone up from 7,500 blocks of land released to over 16,500, with the aim to have released 20,000 blocks of land in this financial year. That is a significant contribution to easing the supply of housing. And those opposite then carry on about state government fees and charges.

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