: “Structural changes to the economy are projected to put pressure on the revenue base over the coming decades”. That’s an extremely dull way of saying we have a massive tax problem.
Meanwhile, we seek more workers to fund expanding government spending. That’s hard in an ageing society where an ever smaller proportion of people work and pay tax. Hence, the imperative for us to have more babies, take in migrants or both. Accordingly, the housing crisis is not an adjunct to our tax problem: it’s at the core of it. People who can’t afford housing aren’t likely to rush into having kids.
We’re used to talking about productivity when it comes to workers. Specifically, we hear that wage growth without a corresponding increase in productivity simply leads to inflation, and because Australia has a productivity problem at the moment, real wage growth is unrealistic. Why, then, doesn’t a similar idea apply to property investment? We encourage it, and our politics therefore requires property prices to keep increasing, but we never talk about whether this is productive.
This is not some piercing, new analysis. The whole point is that it’s a basically conventional one. Since the late ’60s, economists have used the concept of “rent-seeking” to capture the economic harm that occurs when people seek to increase their wealth without doing anything to create new wealth for society. They often illustrate this with the extreme example of something like theft, or piracy.
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Source: SkyNewsAust - 🏆 7. / 78 Read more »