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.”
