Liberal MP gives his advice to help young people achieve home ownership.
It’s no surprise to anyone that a “highly paid job” is the “first step” to owning your own home. That’s the ground breaking advice given by Victorian Federal Liberal MP Michael Sukkar in a statement about tackling the nation’s housing affordability problems.
Mr Sukkar’s comment echoes the highly-criticised advice of former treasurer Joe Hockey from June 2015, when he suggested Australians wanting to buy their first home should “get a good job that pays good money”.
Mr Sukkar, a former taxation lawyer and Assistant Minister to the Treasurer, is responsible for designing the Government’s policy on housing affordability. In a statement on Monday night, Mr Sukkar said the Government was doing what it could to help young people get their foot in the door of home ownership.
“We’re also enabling young people to get highly-paid jobs, which is the first step to buying a house.
“It’s not the only answer, but it’s the first step and I think this idea that we’re arguing for corporate tax cuts because somehow we love big corporates is absolutely ridiculous,” he said.
“We’re for corporate tax cuts because I want to see young people like me, leave university, I was a terrible university student but I left university because the economy was so good.
The newly-appointed Assistant Minister pointed to his own experience in purchasing property. As he mentioned, he currently has two mortgages: a “Canberra investment property” and another residence.
“I got a great start and I was able to forge a career. But now if we don’t have that investment coming into our country those opportunities will dry up for really excellent young Australians,” he said.
Mr Sukkar said the Coalition had no plan to reduce the capital gains tax discount.
“If you cap negative gearing and you reduce the discount in the way Labor’s proposed, you suck investment out of residential property which means you make it harder for first-home buyers, more expensive for renters and you ultimately reduce jobs in residential construction,” Mr Sukkar said.
Labor MP Tim Watts has criticised Mr Sukkar’s comments, posting a comment on Twitter saying that the Coalition was “back to where Joe Hockey started on housing affordability”.
While the average wage in Australia is $78,832 per year, MPs such as Mr Sukkar are paid a base salary of $199,040 per year. He also receives the $273-per-day taxpayer-funded living allowance, and lives in a one-bedroom flat while attending Parliament. Mr Sukkar is among many Federal MPs using their top-up perks to assist paying off supplementary investment properties.
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In December last year, the Government released its findings on a 20-month inquiry into housing affordability, and reported that there was no structural issue (pardon the pun) with housing affordability.
The finding stated: “The committee notes that rates of home ownership and investment in housing have remained broadly steady for many decades and that the current price cycle in the housing market across the nation overall is not inconsistent with historical trends.”
At the time, many people, including the Grattan Institute Chief Executive John Daley, criticised the findings, along with the Government’s failure to provide recommendations.
“They cannot be serious. It's laughable. There's clearly a housing affordability problem for younger households,” he said.
This report came just 18 months after Joe Hockey’s infamous 2015 comment: “get a good job that pays good money” if you want to buy a house.
At the time when Mr Hockey made this comment, Sydney was experiencing some of its worst housing affordability problems to date. Mr Hockey was criticised for being out of touch with regular Australians, particularly when he said that, “if housing were unaffordable in Sydney, no one would be buying it”.
Last year, the Government ruled that housing affordability was a non-issue. Now with Mr Sukkar’s comments, it seems housing affordability is a real issue again – at least in the country's major cities. Why can’t the Government make up its mind long enough to formulate effective real policies that stick?
While writing this piece (at my job, which means I can write for living but not be a homeowner), it was challenging to find many concrete recommendations that Mr Sukkar had to put forward. However, he did make the vague suggestion that the Libs would “pull the levers” required “to increase supply and to put downward pressure on prices,” all while managing to make a well-timed dig at the Labor Party.
“Labor’s view is that you limit demand for housing, you ration housing; their negative gearing policy is that you ration housing like you rationed sugar in the Second World War. It is not going to work.
“Our approach, which is my instinctive approach, is you pull the levers you need to increase supply and to put downward pressure on prices.”
Mr Sukkar said he would reveal more about the government’s policies on housing affordability over the next few months – then had one final dig at the Opposition.
“And at the same time I will be seeking to highlight why Labor’s negative gearing policy will be ineffective in dealing with this issue,” he said.
In summary, what we have learned is that housing affordability is an issue (again), you’re going to need to cough up a lot of money to buy a house in the east coast capital cities, and Labor, apparently, is still the pits.
Tell us something that we don’t know, fellas.
Why won’t the Government stop seesawing on housing affordability and produce a solid policy? Does Mr Sukkar’s suggestion that prospective home owners get higher paying jobs reveal that he, like Joe Hockey, is out of touch with the average Australian? Should we even be encouraging private homeownership anymore, or is there another way to house people?