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Well, the Albanese government has managed to pull off an impressive feat: delivering a budget that pretty much everyone hates. Even the very voter bloc they claimed the budget was aimed at winning over is – at best – indifferent. Only six per cent of Gen Z voters even took any notice and, those that did, hate it just as much as everyone else. Millennials are bucking the trend of younger voters turning left: they now support One Nation more than Labor.
It’s only going to get worse for Anthony Albanese and Jim Chalmers when the Reserve Bank of Australia keeps on hiking up interest rates, which, if even their unofficial response to the budget is anything to go by, they almost certainly will.
Because the RBA – one of the country’s top economic institutions – has just dropped a quiet but devastating internal verdict on Labor’s entire housing agenda. And it ain’t pretty.
Reserve Bank officials judged that Labor’s first-term housing agenda did little to improve supply and possibly raised prices, directly linking migration to affordability as Labor battles to prove the budget will increase the availability of homes.
Internal notes from the bank, which it initially sought to keep secret, described Labor’s first three years of housing policies as “relatively modest”. The documents obtained under freedom of information laws were prepared for a meeting of RBA board members in May last year, the same month as the federal election.
The bank documents show its policy experts were critical of policies such as Labor’s Help to Buy share equity initiative and an expansion of a scheme allowing people to buy a house with a five per cent deposit.
In other words, exactly what every sane observer has been saying for years. Labor’s ‘help’ for first-home buyers is just pumping more demand into a choked market while doing sweet FA about supply. Classic socialist economics: rob taxpaying Peter to pay welfare-dependent Paul, create a bigger mess then wonder why the young are furious.
Worse still, the RBA explicitly fingers the elephant in the room that Labor and its legacy media cheer squad have spent years fervently denying: migration policy. The notes state bluntly that the key levers the government uses to influence housing, including migration policy, have “not changed” under Labor’s first term. What they’re trying to say, in polite bureaucratic jargon, is that record immigration has been slamming into a supply-constrained market like a B-double into a toll booth and Labor’s response has been to import more truck drivers who can’t even read road signs in English.
Treasurer Zippy tried to spin his latest budget tax grab on negative gearing and the capital gains discount as the magic fix for housing affordability. The RBA’s sotto voce judgement makes that claim look even more threadbare. The bank’s analysis came before Labor’s second-term tinkering, but the pattern is clear: demand-side bandaids and punitive taxes on investors do nothing to conjure new homes into existence. They just distort the market further.
Even Labor’s much-ballyhooed 1.2 million homes target gets the side-eye. One RBA official noted drily that it is ‘essentially just a target’. It’s not even ‘aspirational’ – it’s pure Pollyanna day-dreaming.
Still, what can we do when even the establishment right is rusted on to mass immigration?
Chief economist at the right-leaning Centre for Independent Studies Peter Tulip said […] the government had done “very little” on supply, which he argued was by far the biggest driver of the housing crisis. Supply was largely the domain of state governments, but the federal government could do a lot more through incentives to states, he argued. Labor pledged $3.5 billion to the states to boost construction.
As an economist, he should know that supply is only one half of the equation. Those of us on the ground see the ‘supply’ side every day: endless suburban sprawl blanketing Australia’s scarce arable land like a rapidly spreading scab.
So, let’s talk about the demand half of the equation: demand that is almost entirely driven by mass immigration. The Reserve Bank has quietly admitted it. It’s time for the normiecons to let go of their junkie-like dependence on mass immigration.
