Extract from The Guardian
Tony Abbott accuses Bill Shorten of bringing the house down: ‘Why
does this leader of the opposition want to punish the people of Sydney?’
It’s astonishing how little policy debate is able to penetrate the chamber of slogans.
You may have noticed that the treasury secretary, John Fraser, told a Senate estimates committee hearing on Monday that Sydney and parts of Melbourne were “unequivocally” experiencing a house price bubble.
The Coalition-appointed mandarin said: “It does worry me that the historically low level of interest rates are encouraging people to perhaps overinvest in housing” and commented that the impact of this on young people trying to enter the housing market was unfortunate.
You may have heard the Reserve Bank of Australia’s assistant governor, Malcolm Edey, tell estimates: “A lot of people do think it’s a bubble – serious people think that – and we agree that this is a situation where the market is strong, it’s overheated.”
You may have noticed that the chairman of the Australian Securities and Investment Commission, Greg Medcraft, has said much the same thing.
You may have seen that, last December, the Australian Prudential Regulation Authority and the RBA jointly announced measures aimed at trying to curb further lending to housing property investors.
But when the opposition leader, Bill Shorten, asked the prime minister, Tony Abbott, about the treasury secretary’s remarks on Tuesday, it was as if none of that had ever happened.
Shorten’s question, Abbott claimed, should be taken by Australian home owners as clear evidence “he wants your house to be worth less”.
“He is saying that people’s houses are worth too much ... Do not trust this man with your house price ... because what he wants is your house to be worth less ... Just imagine how you would go paying back your mortgage when your house is worth less. Just imagine how you would go if you had to repay your mortgage when your house was not worth what it was when you bought it.”
He did not mention whether he thought Fraser, Edey and Medcraft were similarly intent on the proliferation of negative equity, or how considering a possible problem was the same as hoping it would eventuate.
He did read from the Reserve Bank’s just-released interest rate statement – the bit where it said “dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities”. And asked: “Why does this leader of the opposition want to punish the people of Sydney?”
But he did not read the next sentence which explained quite well why the opposition leader might have been asking the question that he did.
“The bank is working with other regulators to assess and contain risks that may arise from the housing market.”
None of this means we are facing an imminent crisis. None of it means politicians have to do anything hasty. But surely it means they should look at the concerns, even repeat the message of caution for property investors expecting never-ending capital gains. And it might just mean that saying things to reinforce the notion that rapid price rises will always continue (so long as we continue to elect the right party) is not such a great idea.
You may have noticed that the treasury secretary, John Fraser, told a Senate estimates committee hearing on Monday that Sydney and parts of Melbourne were “unequivocally” experiencing a house price bubble.
The Coalition-appointed mandarin said: “It does worry me that the historically low level of interest rates are encouraging people to perhaps overinvest in housing” and commented that the impact of this on young people trying to enter the housing market was unfortunate.
You may have heard the Reserve Bank of Australia’s assistant governor, Malcolm Edey, tell estimates: “A lot of people do think it’s a bubble – serious people think that – and we agree that this is a situation where the market is strong, it’s overheated.”
You may have noticed that the chairman of the Australian Securities and Investment Commission, Greg Medcraft, has said much the same thing.
You may have seen that, last December, the Australian Prudential Regulation Authority and the RBA jointly announced measures aimed at trying to curb further lending to housing property investors.
But when the opposition leader, Bill Shorten, asked the prime minister, Tony Abbott, about the treasury secretary’s remarks on Tuesday, it was as if none of that had ever happened.
Shorten’s question, Abbott claimed, should be taken by Australian home owners as clear evidence “he wants your house to be worth less”.
“He is saying that people’s houses are worth too much ... Do not trust this man with your house price ... because what he wants is your house to be worth less ... Just imagine how you would go paying back your mortgage when your house is worth less. Just imagine how you would go if you had to repay your mortgage when your house was not worth what it was when you bought it.”
He did not mention whether he thought Fraser, Edey and Medcraft were similarly intent on the proliferation of negative equity, or how considering a possible problem was the same as hoping it would eventuate.
He did read from the Reserve Bank’s just-released interest rate statement – the bit where it said “dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities”. And asked: “Why does this leader of the opposition want to punish the people of Sydney?”
But he did not read the next sentence which explained quite well why the opposition leader might have been asking the question that he did.
“The bank is working with other regulators to assess and contain risks that may arise from the housing market.”
None of this means we are facing an imminent crisis. None of it means politicians have to do anything hasty. But surely it means they should look at the concerns, even repeat the message of caution for property investors expecting never-ending capital gains. And it might just mean that saying things to reinforce the notion that rapid price rises will always continue (so long as we continue to elect the right party) is not such a great idea.
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