Two ludicrous lies are destroying the Australian political economy.
The first lie is about immigration and housing.
Nobody in the parliament is serious about fixing the housing crisis because nobody will challenge the immigration sacred cow.
The Coalition has the right idea with decent immigration cuts to reduce demand. But any benefit from that is more than undone by its idea of unleashing super for deposits.
Labor is useless. Its three-headed carbuncle of a shared equity ponzi scheme, high-risk equity fund to build a few houses, and hideous corporatisation of rents will drive up rents and prices.
The Greens have no idea. Their unworkable (and counterproductive) rent freezes, public building extravaganza and tearaway immigration surge will cripple the market for years.
The failure to address the issue is killing the economy via rent and building material inflation, misallocation of capital into unproductive houses, disproductive urban landscapes, not to mention the incredible inequity of the war on youth.
Yet, the answer is incredibly easy: cut immigration to 90k per annum for five years and let housing catch up.
The second lie segues with the first.
It is the role of the east coast gas cartel in derailing the energy transition, inflation permashock, and industrial hollowing out.
Utility bills are out of control. No business can operate efficiently with expensive power. It is making the housing crisis much worse via energy-intensive building material inflation. The inflation shock has driven a wedge between fiscal and monetary authorities.
As in the case of housing, the lie plays out in a self-censored discussion that is corralled to supply-side expansion: more gas, more pipelines, more imports.
Yet, again, the answer is incredibly simple. Use the domestic reservation mechanism already in place and apply export levies to the LNG cartel.
If we were to do these two things—slash immigration to 90k for five years and smash the LNG cartel—the following would happen:
- Rents would fall.
- Building material prices would tumble.
- Interest rates and AUD would crater.
- House prices would rise, enabling builders to clear the huge approval backlog and preventing prices from running too far.
- Industry and non-mining exports would recover.
- Productivity and wages would rise as the market sector took over from Jim Chalmer’s spending your taxes.
Most importantly, per capita GDP and per capita incomes would begin to rise again versus Labor’s utterly destructive lying economy:
The Australian political economy can be fixed with a pen in under one minute.
That it isn’t means we must raze Canberra.
