Australia’s Treasurer Jim ‘Zippy’ Chalmers is showing his true socialist ‘It’ll work this time!’ colours with his latest desperate pork-barrelling effort, ahead of the looming election. This time, he’s resurrecting the sort of policies that led directly to the US subprime mortgage crisis, itself a major contributor to the 2008 Global Financial Crisis.
Jim Chalmers has instructed financial regulators to soften home-lending rules for millions of Australians with university debts and developers who can’t guarantee “100 per cent pre-sold apartments”, in a pre-election move to help achieve Labor’s 1.2 million new homes target and woo younger voters.
After the rare intervention by the Treasurer ahead of the election, the Australian Prudential Regulation Authority and Australian Securities & Investments Commission will immediately launch consultations and implement changes to help “unlock more finance from the banks”.
Because encouraging banks to give mortgages to people who normally couldn’t afford them couldn’t possibly go wrong. It’ll work this time!
The Australian understands banks will continue to apply strict lending protections put in place following the global financial crisis and Kenneth Hayne’s royal commission into misconduct in the banking, superannuation and financial services industry.
Except where it comes to the single biggest debt most young people are going to have…
Under the overhaul, APRA will tell banks they can exclude Higher Education Loan Program (HELP) repayments from serviceability assessments where they expect a borrower to pay off their debt in the near-term.
APRA will also change Debt to Income reporting definitions so that HELP debts are not treated as debt for reporting purposes, recognising ‘the income-contingent nature of HELP debts’.
The political gambit here is glaringly obvious: Labor is trying to stop the bleed of university graduates, generally the most left-wing voting bloc, to the Greens. Not to mention trying to save Anthony Albanese’s ‘KiwiBuild’ moment from blowing up too obviously in his face.
Amid flatlining apartment construction starts and industry warnings that a shortfall in multi-unit blocks will blow up Anthony Albanese’s promise to build 1.2 million new homes by mid-2029, Dr Chalmers has also delivered a shot in the arm for smaller developers struggling to access finance. The Treasurer has asked APRA to update and clarify regulatory guidelines designed to turbocharge construction of more units across the country. The regulator will communicate to banks that, while it expects them to “consider the extent of presales as part of prudent credit risk management”, the banking regulator does not expect 100 per cent pre-sales.
Not that the opposition are any strangers to dubious quick-fix ideas when it comes to housing affordability.
The coalition, which has made a number of housing election policy commitments, has proposed to allow first-home buyers to withdraw 40 per cent of their superannuation savings – up to $50,000 – to assist in the purchase of a property.
Under the plan, first homebuyers would have to later repay the withdrawn amount, plus a share of the capital gain made on the property, when they later sell the house.
Which will be a nasty shock to them, I’m sure. But by then, Albo and Zippy will be long retired on their fat parliamentary pensions, kicking back on the balcony of their clifftop mansions and wondering what the poor people are doing this year.
In all of this, no one is talking about the root cause of the housing crisis: mass immigration.
It’s simple economics: short supply and rising demand, prices skyrocket.
So, one solution is to increase supply – and turn more and more of Australia’s scarce arable land on the eastern seaboard into suburban sprawl. At least, what hasn’t already been ploughed under miles and miles of silicon, aluminium and turbines, if the demented Chris ‘Boofhead’ Bowen gets his ‘Net Zero’ way.
The other solution is to reduce demand – slash mass immigration to sane levels. That’s what poll after poll show that ordinary Australians desperately want. But the elites are addicted to mass immigration, so no one is allowed to talk about that.
