Crisis is about supply, but not of houses

PLENTY: While rhetoric around the housing affordability crisis continues to focus on supply, one contributor argues it’s taxation and lending that need addressing. “SUPPLY, supply, supply”, was the answer provided by the Premier of NSW to the affordable housing crisis recently. In addition, at least twice this month I recall the Property Council of Australia Hunter chapter has also identified a lack of supply to be the Achilles heal of Newcastle’s apparent investment boom. In a simplified world, this supply-demand equation is one of those “no-brainers” that motivate us to invest.Demand is strong. Increased demand usually puts pressure on supply. Nothing unusual here, right?

But weneed to look at the other more important factor; the supply and demand of credit (ie, bank loans for property). The supply and demand for debt-to-invest is where the housing crisis has become amplified.The current tax arrangements for landlords to offset losses on investment properties were instigated to provide rental stock for the growing population. The concept makes sense – but it has created a monster.

If you web search homeless numbers in comparison to empty homes in Australia, you will be in for a shock. We have enough housing stock to accommodate everyone and have homes left over. Rather than see this as a supply issue, many economists are now acutely aware the crisis is created at the investment level. Lenders are falling over each other to lend to existing home owners. This has created an ‘over-supply’ of credit, fuelling an ‘over-demand’ for property.

Narrow this formula down further and we see an over supply of credit fuelling investment, not in homes to rent out – we are seeing increasing investment in properties to ‘flip’. The buy and sell of property is easy money if you can get a shoe in. A $1 million property needs to yield at least a 3 per cent to be better than a term deposit. That means the tenant needs to pay $650-$750 per week, if not, the house remains empty. Thecapital gainis the return, as losses are tax deductible. This powder keg scenario makes property unaffordable for many and creates the perverted reality of 2017 where there are more empty houses than homeless people.

These economic rationalist outcomes are not what the Australian ethos was built upon. The ‘fair go’ is now a pipe dream. Increasing housing supply is not an answer when the supply already exists. Increasing fairness in the lending, investing and taxation regulations is the only place to start.

Scott Cooper-Johnston,NewcastleThe antidote to terrorismWHEN one hears about a terrorist attack, it’s in a country where the governments are reluctant to accept refugees. One doesn’t hear about terrorist attacks in Brazil, for instance, apart from one time to do with the World Cup, which was averted. Other countries in South America have accepted refugees, and do not have a problem with terrorism. Germany has had several teething problems with their influx of refugees, although many attacks have been from right wing extremists.

Terrorist attacks have occurred mainly in the countries that vocally try to reject refugees. Countries such as UK, USA and Australia hear about terrorism to such an extent that much of the news concerns it. Attacks from Muslim extremists have recently occurred in UK (Theresa May), USA (Donald Trump) and France (Marine le Pen).It is a relief Australia is so far away from the areas that terrorism abounds. We are so secluded, few terrorists are that bothered by us. But that could change in an instant. Several terrorism groups have made warnings against Australia for their actions.

This makes acceptance of refugees even more valuable for Australia. By accepting refugees and rejecting the rhetoric on terrorism, our problems with terrorism will melt away.

Tracie Aylmer,Perth WASupport for victims slowIT has been over four years since the Royal Commission into Institutional Response to Sexual Abuse began. Thousands of hourswork and millions of dollars have been spent.

Initially, there were a few signs that justice would be served to deserving victims/survivors. While some victims have had satisfactory results, there are many who have described the ordeal as another level of abuse and have brought themediation to a sudden conclusion by exiting the belittling experience, and requesting they (thehard nosed panel) pay the bills and give them what is left.

This is an example of whymany survivors/victims are criticising what has been their experience of recommendations so far from the royal commission. I believe it is important when we look back and say “how did this happen”, that we recall the followingnewspaper articles to determinethe fundamental attitude of the Catholic Church and some state run institutions. ‘Holy delete’, (Herald,19/6), ‘Catholic archbishop intervenes in schools war’, (Sydney Morning Herald, 22/6), ‘Marist Hamilton head guilty of sexual abuse’(Herald, 22/6),‘Punched after child abuse’ (Herald,22/6),‘Pell’s man quits job’ (Herald,22/6),‘Schools breached gravest contracts of all’(Herald,22/6).This has been only one week of media which has encompassed an array of headlineswhich, I think, demonstrateit’s “business as usual” for the Catholic Church. Their inactivitywhen it came to investigatingcomplaints of sexual abuse is already well documented.

I think support for those suffering sexual abuse in the Maitland-Newcastle diocese has been sparse and slow.Is there any joy for these people in the near future and what form will it take?

Pat Garnet,Newcastle EastSurviving after sell-offTHE back slapping and high fives continue for the NSW Liberal government as they congratulate themselves for the massive budget surplus.

Now with the majority of the people’s public assets sold off and gone forever, we can enjoy the “sugar hit” as infrastructure and services aplenty are created for the state. Well, for Sydney, anyway. But after the sugar sweetness fades, the bills will still need to be paid for the running of the state.

With the lion’s share of our income-producing assets gone, we will be heavily dependent on duties and tax.

Well, at least the Liberals know how to reduce spending to allow for the pending income cuts.

Simply buy everything from overseas where it’s cheaper. After all, it’s the federal government who will pick up the tab for the then created unemployment costs.

Hats off to Luke Foley for daring to suggest Hunter manufacturing should be utilised for ambulance construction. It’s a step in the right direction, albeit a very small one.

John Gilbert, Lake Macquarie councillor