Another day and another revelation that screams Jim Chalmers is not the Messiah of Treasurers. To channel the Monty Python film Life of Brian, it’s fair to say that “he’s not the Messiah. He’s a very naughty boy”. And looking at what property experts are saying about the rent implications of his Budget, I could be going very soft on him!
The Australian newspaper has looked at modelling commissioned by the Real Estate Institute of Australia, the Property Council of Australia, the Master Builders Australia and the Housing Industry Association to understand how their sector will be affected. Here are the main discoveries we can put down to the Budget’s hits: housing construction will be slowed down; GDP will be lower by $1 billion over four years; the average rise in rents will be $10 a week, each year, five times higher than the $2 predicted by the Treasurer and his team of number crunchers; the measures will add to inflation; and 4,700 jobs will be lost.
The Australian also reports that the “ban on self-managed super funds borrowing to buy property alongside changes to negative gearing and capital gains tax will likely lead to 10,700 fewer homes being built to 2029-30.”
The four property groups agreed that “the SMSF changes would push the Housing Accord targets of 1.2 million new homes by mid-2029 further out of reach.”
The analysis was done by Qaive and Tulipwood Economics, with the latter’s Economics Director Joe Branigan. Looking at the SMSF ban, this is what Branigan said: “Our modelling for the REIA finds the SMSF measure on its own takes close to 2,000 dwellings and more than 800 construction jobs out of the pipeline between 2026-27 and 2029-30, reduces GDP by almost $200m, and adds around $1.15 a week to average rents.”
Given that every economist in this country with a degree and even the galah in the proverbial pet shop without a degree, will tell you that house prices have spiked in this country, not because of aspirational property investors helped by tax laws but because we have a supply problem, not helped by government taxes, charges and regulations.
It’s more a supply problem than a demand problem. Had immigration policies been more aligned to our home-building achievements, we might not have seen the median price of a Sydney house go from $500,000 in 2005 to $1.45 million in 2025.
I have learnt over the years, it is often who you hang out with and listen to that will determine your grasp on both reality and complicated topics, such as the impact of economic policy changes on the real world.
The Opposition Treasury spokesman Andrew Bragg told The Australian that it was “nonsensical” that the Albanese government would stop SMSF purchases during a housing crisis.
“The ban on SMSFs was an insane idea because, by definition, the owners can’t live in the houses, so it was always going to create a hit to rents,” Senator Bragg said.
Unlike Jim, Bragg is hanging out with the smart people when it comes to the housing sector, which suggests that our Treasurer is not only a naughty boy, but he’s also running around with a pretty dumb crew.
I’ve said a number of times that I think Jim Chalmers is a nice bloke, and I told the YBR conference this on Wednesday at the Gold Coast, but I’m finding fault with his work, nearly on a daily basis.
It’s time he got real on his Budget changes and their economic effects.
The late eighteenth century UK prime minister Benjamin Disraeli once advised all of us some wise advice, saying: “One of the hardest things in the world is to admit you are wrong. And nothing is more helpful in resolving a situation than its frank admission.”
Jim Chalmers – Just DUMB.
Socialist policies are always looking for someone else’s money.
The country (Feds and states combined are over $2 trillion in debt and yet no attempt to slow down government spending.
Rate rises on the horizon – no worries for the government. The taxpayers will pay.
Tax up 61% in the past few years. The taxpayers will pay.
Albo’s handout to his local golf club. No worries the taxpayers will pay.
Never trust labor with our dollars. It always ends in a mess.
Spot on. Restricting SMSF investment and increasing tax pressure won’t magically build more houses—it just constrains capital. If the core problem is supply, policies that reduce the construction pipeline are only going to squeeze renters harder.
Not one of these ‘Government’ Ministers can admit to being wrong.
They think we are all stupid…..and to a degree we must be…to continue to live with this regime. Climate control, Immigration, Foreign Policy, Economy etc etc all disasters. Mountains of our money distributed overseas and we have homeless and desperate families ignored.
Keating brought in capital gains tax and took away negative gearing in 1985.
He brought neg gearing back in 1987.
Only an idiot doesn’t learn from history.
Only a moronic egotistical idiot does a doctoral thesis on that very piece of history and doesn’t learn from it.
The best example on how to create a wealthy and successful country is Singapore-
“It’s not what you have under the ground; it’s what you have on top”
Dimbo Jimbo is a Tertiary Dumbo .
🤣 love the comments herein Peter. The only thing I don’t agree with in your paper is that Chalmers is a nice guy
He is a blithering idiot. Hard left intent on trying to distribute private wealth accords the whole economy without addressing the key issues; over regulation in the building sector, lack of building resources, lack of land and too many taxes
I have no idea how we will ever get out of this malaise
One thing for sure. I did not vote for them and I don’t think the opposition are any better either. They need to build a strong team and join up with one nation.
Labor have a lot of voters on the purse which is also unsustainable.
😢
I’m shaking with fear. Those figures are incredible. We are going to be in extreme trouble.
Just imagine, rent will be increasing as much as $10/wk in an economy that is running its inflation at 3.5 … it sounds bad UNTILL you do some basic calculations. Current Average Rent in Australia is $705/wk and an increase of $10 is a massive 1.4%, about a shade less than a 1/3rd. Ooops. that doesn’t seem that bad, rent increase is less than inflation, that could be good, so why claim it it’s bad?
Ahhh, maybe the drop in GDP is where the real bad news is hidden. Let’s have a look. The GDP, because of bad Boy Jim budget with regard to changes in housing, will drop at a rate of “$1 billion over four years” or 250 million per annum. That sounds a lot … but what’s Australia GDP? It turns out our GDP is 3.1 trillion and the drop represent a substantial 0.008%, frightening!!
Peter, the problem is that if you ask a Mordoch paper, like The Australian, to criticise Labor policies, no matter what they are, the outcome is totally predictable. Black becomes white and viceversa.
Let’s take the reported findings “ban on self-managed super funds borrowing to buy property alongside changes to negative gearing and capital gains tax will likely lead to 10,700 fewer homes being built to 2029-30.” This outcome smells more like scare mongering from interested parties that are hocked on ever increasing house values than reality. Investors would be drawn to invest in new housing as these carry the ‘carrots’. The subsequent buyer of these properties will be owner-occupiers, and they would not care about negative gearing or investor-targeted CGT discounts, because those tax incentives only apply to landlords. It’s a win-win situation, investors gain the benefits which they could roll on to the next housing project.
Are self-managed super funds (SMSFs) an important sector of the Australian residential housing market? Apparently not as this sector represent less than 1% of the entire Australian residential housing market. Further, residential market isn’t an attractive investment for SMSFs as less than 6% of total SMSF assets are invested in residential property. Given these details, which of course neither you or The Australian bothered to look into and report, the title of “scare mongering” is most appropriate for your efforts today.
Keep it up, I’m having lots of fun discovering how bent you are.
dante crisante obviously works for some government department and watches the ABC.