Stall tactics and the great inquiry: Terry Ryder

Stall tactics and the great inquiry: Terry Ryder
Terry RyderDecember 17, 2020

If politicians wish to stall on a difficult issue, they hold an inquiry.

If the issue is really thorny and they’re reluctant to confront it, they’ll hold two inquiries, with the second to begin after the first has ended.

This is what federal politicians have done with housing issues. 

All the core problems with housing could be solved if government stopped taxing it to within an inch of its life. Politicians won’t face that hard reality, because they’re addicted to the revenue they rip out of real estate. So they hold inquiries.

They spent all of last year and part of this one conducting an inquiry into housing affordability. Recently, having just handed down their findings from this long and expensive exercise, they announced another inquiry.

I have commented many times on the similarities between real-life government processes and the 1980s television series Yes Minister. Those who thought Yes Minister was a comedy were mistaken. It was a documentary.

According to the Yes Minister philosophy, the best way to do nothing on an issue, while giving the appearance of action, is to hold an inquiry. The longer it lasts and the less it achieves, the better.

This means you can hold press conferences, issue media releases, express lots of moral outrage, point the finger of blame in various random directions but ultimately change nothing. 

The perfect outcome of a smokescreen inquiry is to identify an unpopular minority and make them the scapegoat for all the perceived problems. 

If you think I’m being a tad cynical, consider this chain of events. On 12 December 2013, the Senate referred an inquiry into affordable housing to the Senate Economics References Committee and asked it to report by 26 June 2014. On 17 June 2014, the Senate granted an extension to the committee to report by 27 November 2014. On 2 October 2014, the committee was granted a further extension to report by the first sitting day in March 2015. On 2 March 2015, the committee was given yet another extension and was scheduled to report by 14 April 2015. On 13 April 2015, the committee presented an interim report, with the intention of tabling its final report in May 2015.

This long-winded and bumbling inquiry, which was almost a year late in delivering its findings, produced nothing of value. One example was its conclusions on negative gearing, one of the fundamental issues it sought to examine. The Senate Economics References Committee’s final report found that negative gearing “probably” had “a detrimental effect” on housing affordability, but they weren’t sure. The committee said that it was also unable to clearly determine what effect negative gearing had on rental affordability.

In a word, pathetic. They were given 11 extra months but they came up empty.

But the inquiry served its primary political purpose. It identified a scapegoat. Foreign investors, despite their small numbers and minimal impact on housing markets, were deemed the culprits for rising prices and poor affordability. 

This allowed the Federal Government to look tough while threatening all kinds of consequences (including jail) if foreign investors broke the rules. This was justified, the Prime Minister said, because it would help first-home buyers. He was unable to explain how. And that was because it was bullshit.

Within days of the committee delivering its tardy report, federal politicians compounded their failure by announcing, don’t laugh, another inquiry.

The new inquiry, by the House of Representatives Standing Committee on Economics, will allegedly examine rates of home ownership, supply-demand drivers in the housing market, the proportion of investment housing relative to owner-occupied housing and the impact of current tax policy at all levels. 

I almost fell off my chair when I read this, because the answers to all of those questions are well known. Anyone who doesn’t know the answers could discover them with 10 minutes on the Internet. Our 17-year-old could write a quick assignment on it because they’ve been studying real estate at school.

But of course the objective is not to find answers and make changes. The goal is to achieve further delays, distractions and diversions.

No one has the political will to take action on the fundamental problems, especially the taxation component in the cost of new dwellings. Lots of research has been done on this already. The facts are well known.

The committee chairman John Alexander set the tone for another drawn-out waste of money and lots of people’s time with a series of motherhood statements including this classic: “Home ownership is an issue that lies at the core of the Australian dream and represents the largest investment that most taxpayers will make during their lifetime.” 

Stunning stuff. With any luck, Alexander and his mates should be able to drag the process out until at least 2017, before recommending a royal commission.

TERRY RYDER is the founder of hotspotting.com.au. You can email him or follow him on Twitter.

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

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