Housing Hypocrites: Tim Wilson’s housing affordability crusade just an assault on super

by | Feb 8, 2021 | Economy & Markets

Tim Wilson is the latest Coalition politician to cry crocodile tears over the housing affordability crisis, calling for Australians to access their superannuation to buy a house. Yet Coalition policies – from negative gearing, property subsidies, money-laundering, super fund borrowing to banking and lending standards – are all about pushing house prices up for those who already own them, writes Elizabeth Minter.

The Coalition’s track record shows it has no intention of making housing more affordable. It continues to implement policies that inflate the housing market, while offering straw-man solutions.

High housing prices in fact are demonstrably a plank of Coalition economic policy. Rising house prices, it is argued, lead to a feeling of wealth, which in turn, it is hoped, will translate into consumer spending.

Negative gearing

When in 2018 Labor announced its election policy of ending negative gearing, the Coalition claimed it would “smash” housing values with a “sledgehammer”. Former prime minister Malcolm Turnbull called Labor’s plan reckless and that it put “the value of every Australian home at risk”. As treasurer, Scott Morrison had acknowledged the “excesses” of negative gearing but in the lead up to the 2019 election Morrison claimed Labor’s policies would “erode the value of Australians’ homes”.

Treasury criticised the Coalition for exaggerating the impact of Labor’s policy: documents obtained by the ABC under freedom of information laws revealed that Treasury explicitly told the Coalition Government it should not claim that home values “will” fall under the proposal.

SMSF borrowing for property

Another Coalition policy that turbo charged the property market was the decision by John Howard, in the final days of his government, to allow self-managed superannuation funds (SMSFs) to borrow money to invest in property. Independent economist Saul Eslake described it as “the dumbest tax policy of the last two decades”.

The Council of Financial Regulators recommended the federal government ban such property investment after it was found that 18,000 SMSFs had more than 90% of their savings in a single asset class, primarily investment properties. Treasurer Josh Frydenberg ignored the recommendation, though Labor promised that if elected it would ban direct borrowing by SMSFs as part of its plan for housing affordability.

Action on money laundering

Australia’s property market has been labelled a prime target for money laundering,  with young Australians forced to pay more for housing as a result.

In 2015, the global regulator of money laundering – the Paris-based Financial Action Taskforce (FATF) – released its mutual evaluation report, which found Australian homes were a haven for laundered funds.

Transparency International ranked Australia as having the weakest anti-money laundering (AML) laws in the Anglosphere, failing in all 10 priority areas.

Nobody really knows just how many billions of dollars in dirty money is pouring into Australia’s housing market.

And as AMP chief economist Shane Oliver noted in 2018, criminals willing to pay extra to wash illegal funds have probably had an impact on the high end of the housing market. Real estate agents say corrupt money can also increase average house prices, because criminals paying more than market value for one house are likely to encourage higher asking prices for similar properties in the same street.

Yet for more than a decade, Australia has refused to complete the second half of its anti-money laundering reform, despite repeated promises from federal government ministers that it was about to do so. The reforms are known as Tranche 2 of the AML/CTF regime — rules that would force lawyers, accountants, real estate agents and other “gatekeepers” to join the global fight against serious and organised financial crime.

As Nathan Lynch, a financial crime intelligence expert at Thomson Reuters, says:

“That Australia has become a sink for the illicit wealth of some of the Pacific region’s worst kleptocrats should horrify all Australians.”

Money-laundering bill finally back in Parliament despite fight by Law Council, property lobby

Throwing bones at home buyers

Negative gearing, SMSFs borrowing and failure to act on money laundering are key areas where reform could make housing more affordable. But the Coalition’s policies instead are geared at the opposite.

The Coalition has offered $25,000 HomeBuilder grants for people buying a home or people who want to conduct substantial house renovations – those who are already in the market. As has been noted by experts, home buying grants increase house prices. For example, following the implementation of the First Home Owner Grant of $7,000 in July 2000, “property prices went up quickly – and by much more than the $7,000 value of the grant in many suburbs”.

Again, it gives the impression it is trying to tackle the housing affordability crisis. Yet, as Greg Jericho noted in the Guardian, Coalition policies continue to ensure the housing market goes in the opposite direction to the rest of the economy, especially wages.

Concerns have also been raised that the Coalition’s push to relax responsible lending laws could push up property prices by allowing people to borrow more – particularly given the record-low interest rates.

Meanwhile, the Coalition blames planning restrictions for pushing up house prices. It says cutting red tape is vital.

Yet as comprehensively argued by academic Cameron Murray, property developers maximise profits by limiting supply in a number of ways – from building developments in stages to reduce the number of properties available to letting planning approvals lapse and then reapplying for approval for a higher density. As Murray argues, it is economic incentives, rather than planning regulations, that limit the supply of housing and push up prices.

Land Banking: red tape and a dearth of housing supply are a myth

Public secret

In one survey 93% of respondents cited housing affordability it as a leading issue of concern. Yet large sections of the community keep voting for political parties with policies that keep prices high.

As Iain White, a professor of planning at New Zealand’s University of Waikato, points out, ever rising house prices is considered desirable by many in the community, at least among those already in the housing market.

Professor White calls this a “public secret” – a term coined by anthropologist Michael Taussig that refers to a collective social understanding, a truth generally accepted but not articulated. Public secrets allow the existence of seemingly contradictory positions and help maintain power relations.

While politicians from all parties routinely acknowledge the existence of a housing crisis, part of the public secret involves ensuring that any policies that are put in place to tackle the housing affordability crisis must have a minimal effect.

Former Liberal leader John Hewson described Australia’s housing affordability crisis as intergenerational theft. It is up to the community, all of us, to decide what we want to do about this theft.


Elizabeth Minter

Elizabeth Minter

A 30-year veteran of the mainstream media, Liz is the editor of Michael West Media. Liz began her career in journalism in 1990 and worked at The Age newspaper for two 10-year stints. She also worked at The Guardian newspaper in London for more than seven years. A former professional tennis player who represented Australia in the 1984 Los Angeles Olympics, Liz has a Bachelor of Arts and a Bachelor of Letters (Hons). Her Twitter handle is @LizMinter_


  1. Avatar

    A very important article, Elizabeth. The pages of history have taught us the low start loans and borrowing from super etc to artificially improve housing affordability inevitably leads to housing bubbles e.g. https://www.investopedia.com/articles/economics/09/subprime-market-2008.asp. The result is usually negative equity in housing after the correction. This time, with record global low interest rates the risks are clear and extremely high. Better risk management of interest rates and debt generally is required. The UK learnt its lesson from 2008 and now has free and impartial money advice set up by the government, see here: https://www.moneyadviceservice.org.uk/en. Debt management figures prominently. We have looked at the main risk to consumers in the aftermath of a correction in repaying negative equity here: https://www.negativeequitytoday.com/rights-to-a-fixed-rate-home-mortgage/. Elizabeth, what is your view for Australian homeowners rights to a fixed rate home mortgage when in negative equity? It is reasonably foreseeable that this is going to be a major issue for Australia given the high dependency of the Australian banks on offshore wholesale funding, see here: https://www.rba.gov.au/publications/bulletin/2019/dec/the-nature-of-australian-banks-offshore-funding.html. I for one, and undoubtedly many others, would be interested in a comprehensive article on that issue.

    Keep up the good work.


    John Cosstick

  2. Avatar

    Another great article yet again exposing the corruption, I had never given thought to this, but when you see big homes bought for record prices then sit unoccupied now makes sense. Keep exposing the truth, this needs to stop, our Aussies kids will never get a chance against this to buy their homes. This goos against the fabric of our hard working Australian ethics, but once again the government’s turning a blind eye. They should be ashamed.

  3. Avatar

    It’s a real head scratch. Why would anyone in their right mind take money out of their superannuation which after all is returning something like 5%, and in some cases, like Unisuper’s Global Environmental Opportunities, about 50%. For what?

    A house 40 kilometres from the CBD that will cost 500,000 or more, soak up about $500 or more a week, and if you are lucky appreciate in value by about 1 to 5% a year before interest, rates, and insurance is taken into account. It is just throwing good money to the banks, and all the other rent seekers and hangers on including the Federal government who has failed to rein loans in and in fact are encouraging banks to make shonky loans.

    It might have been alright in my day (I am a baby boomer) to buy a house and over a few years trade up, but for a young couple today to buy a house and not turn themselves into slaves to it, is just ludicrous. I would advise young people, save your money, rent a house or unit, and get and stay debt free. Put as much as you can into superannuation green environmental investments, because twenty years or thirty years passes quickly, and the bigger your nest egg, the better off you will be.

    The government cannot stop the future, but they are giving it a bloody good try by telling you to invest your hard won superannuation into housing, so they don’t have to.

  4. Avatar

    There’s one dominant factor to add to the list of house price drivers: the immigration Ponzi. There is no better evidence for this than increasingly strident calls by Harry Triguboff to open the immigration taps again (so Meriton can continue its rampage through the suburbs of Sydney and Melbourne). We all bear the costs: pollution, congestion, inadequate schools, hospitals, policing, water scarcity, etc. Howard’s decision to lift immigration from ~50,000 to 200,000+ pa. without concomitant lifts in infrastructure spending have ensured our quality of life has deteriorated ever since. Who cares? Developers pay for the best government money can buy.

  5. Avatar

    Elizabeth it is not only the liberals . I totally agree about negative gearing as being wrong and now would be a good time pursue this issue. It should never have been allowed You should also advocate that those whose super payments are 15% should be reduced to the same level as everyone else. The main recipients of the 15% are politiicans , uni staff, ABC and most public servants

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