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The Finance Show With Joe
Welcome to the Finance Show with Joe hosted by It’s Simple founder, Joseph Daoud. We chat about the financial issues facing ordinary Australians from managing the cost-of-living to investment strategies in order to help you make more informed financial decisions.
Join us as we discuss finance, mortgages and home buying in Australia!
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The Finance Show With Joe
The 2025 Australian Housing Election: Labor vs. Coalition Policies
Australia's housing crisis has reached a breaking point, forcing all political parties to place housing policy at the forefront of their election platforms. In this episode, we dissect the competing visions for solving Australia's housing affordability crisis, exploring whether any party has realistic solutions to the mounting pressure.
Labor's ambitious promise of 1.2 million new homes by 2030 sounds impressive, but we examine whether this target is achievable given construction industry constraints and regulatory hurdles. We break down their policy framework including the Help to Buy scheme, stronger renter protections, and infrastructure funding designed to increase supply. But will these measures be enough when housing demand continues to outpace construction capacity?
The Coalition's alternative vision focuses on unlocking superannuation for first home buyers, implementing a two-year ban on foreign investors purchasing existing homes, and freezing the National Construction Code for a decade. We evaluate whether these market-oriented solutions address the fundamental challenges or simply shift the problem.
Most revealing is our discussion about the realities faced by everyday Australian landlords. As interest rates climbed, many small investors found themselves unable to cover their mortgage costs through rental income. The narrative of "greedy landlords" emerged only after these rate hikes, highlighting the complex relationship between monetary policy and housing affordability.
For first home buyers, the situation looks increasingly bleak. With the average age of first home purchase now 38 years old in Australia, we consider whether radical interventions are necessary or if incremental policy changes can restore balance to the market. Share your experiences with housing affordability and let us know which policies you believe could make a difference in solving Australia's housing crisis.
Follow us for more property news and mortgage advice!
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1.2 million new homes by 2030, more tradies. We cut construction red tape. The home guarantee scheme helped to buy and you got a better deal for renters. It's the hot button topic going into this election, and cost of living as well 1.2 million homes.
Speaker 2:Is it enough? It's not about greedy landlords. Greedy landlords didn't exist until these interest rates started to go up. People need to understand the difference between Labor and the coalition. And People need to understand the difference between labor and the coalition and they need to understand the differences in their housing policies. Our GDP per individual in New South Wales has decreased substantially. Our productivity has decreased. So how are we as people, supposed to increase our productivity, increase our net wealth, if we can't get to freaking work Sharehouses in Sydney CBD where people are renting out balconies? How did we get to this point? I want to ask you do you disagree with any of this?
Speaker 1:Mostly for me and people at my age, it's not bad. Welcome to the Finance Show with Joe. He's Joe, I'm Michael and today we're going to have a very fun episode. We're talking about housing policy in the upcoming election.
Speaker 2:So a lot of listeners might consider this episode to be boring. Politics often is.
Speaker 1:Well, actually it hasn't been for the last few years. I would like it to be a little more boring than it has been.
Speaker 2:However, this is a very important episode because people need to understand the difference between labor and the coalition, yeah, and they need to understand the differences in their housing policies. You know, labor leans one direction and then the coalition leads a different coalition being. You know liberals and nationals, yeah, um, labor being you know the current, the current labor with the sprinkling of the greens, depending on if they like them today or not oh man, we can get it.
Speaker 1:We'll get into that bloody green saying one thing and just refusing. I wish the greens were more pragmatic. It would just make them easier to like. Well, we'll get. We'll get into it once we start actually talking about policy. But they, you know, is it a minority government right now? Um, with labor, like they don't have a majority right they don't have a majority.
Speaker 1:However, they're still in power yeah, yeah, they work with the crossbench, yeah with the greens and stuff like that. Correct, but it's just, it's a club in a happy relationship, it's it's a happy relationship.
Speaker 2:It's a mess over there. A lot of people who have watched these episodes before they know which way I lean. I am a lot more conservative, I am a lot more for small business, big business, and I have reasons behind that. Yeah, and we're going to unpack all of that today.
Speaker 1:I am typically a little more left-leaning when it comes to housing policy. Mostly, for me and people at my age, it's more about affordability and supply, which I mean. It is the hot button. It's the hot button topic going into this election and cost of living as well, obviously.
Speaker 2:So, michael, you've got some really good hot points on the Labor and Liberal government and their housing policies. Can you quickly run through each one? Just tell the listeners you know what each government is proposing.
Speaker 1:Yeah, I'll give you the real, real basic stuff.
Speaker 1:And, just for reference, this is all from each party's websites. This is straight from the horse's mouth. I'm not coming up with anything. So for Labor, we've got the $10 billion Housing Australia Future Fund. That's 30,000 affordable homes in in five years. That has been recently blocked by the coalition and greens.
Speaker 1:The other policy is homes for australia. Now this is their big policy. Um, for long-term things 1.2 new, 1.2 million new homes by 2030, more tradies, which is like a mixture of immigration and more free training, cut construction red tape and incentives to state governments to continue building homes. You've got the home guarantee scheme, which includes, like the first home guarantees, all those like family home guarantees for first home buyers. You've got the recent help to buy that just became law in February.
Speaker 1:That's the government contribution of up to 40% for 40,000 low and middle income households to purchase a home. And you, you got a better deal for renters. This is about strengthening renters' rights, so that's things like minimum rental standards, limiting rent increases to once a year and requiring genuine, reasonable grounds for eviction. And you've also got the National Agreement on Social Housing and Homelessness $9.3 billion to states and territories to combat homelessness and repair social housing, social Housing Accelerator. So another $2 billion to help states and territories build 4,000 homes, excluding HECS from mortgage applications and the housing support program, which is $1.5 billion for infrastructure and amenities across Australia, which should provide 25,000 new homes in just New South Wales alone.
Speaker 2:Serious tongue twister there from the labor government says they, they have there.
Speaker 1:I'll give them this. They have a long series of policies and it was very interesting going through each of their websites and how they presented this information. You know labor. They had it in like uh tables and graphics explaining each thing with like little dot points to explain. The coalition had a essentially a long blog post that I had to decipher what their points were, and then the greens had a essentially a long blog post that I had to decipher what their points were, and then the greens had a fucking manifesto with like numbered points that went up to like 60 or 70 and I'm like, oh, this is so hard to read anyway that was interesting.
Speaker 2:I just want to break down each of labor's points. Okay, so we've got a 10 million dollar housing australia future fund, so that's 30 000 affordable homes in five years.
Speaker 1:Yeah, and that's been blocked by the coalition and the grains yeah, that's, that's been stalled, and that's been stalled for a while so 10 billion dollars for 30 000 affordable homes, that's, you know, a cost per acquisition of 333 000 for each home. That's not feasible well, I guess it would depend on, like, what they're building and how they're building it.
Speaker 2:But yeah, I don't understand, with construction costs and stuff because we were talking about this in the last episode that the construction costs just keep going up construction keeps going up, land acquisition keeps going up, you know, uh, the cost of labor keeps increasing and there are so many different metrics at the micro and the macro level that are causing these cost increases. But that's not going to happen and I think the reason why the coalitions and the grades blocked it is because they know, budget-wise, that's going to blow out. So what the government always does every single year is they release a budget. Yeah, of course, and when they release a budget, you know this is what we want to adhere to, this is what we want to achieve.
Speaker 1:Last year, the big winner was electricity bills yeah, yeah, there was electricity bills and uh like, uh stuff for domestic violence, things like that yeah.
Speaker 2:So putting aside 10 billion dollars for australia's future fund, 30 000 affordable homes in five years that's, that's a pipe dream. That's not going to happen. So I'm going to cross that one out. Okay, homes for for Australia 1.2 million new homes by 2030, more tradies, cut construction, red tape, incentives to state governments this I like a little bit more.
Speaker 1:Yeah, this is the overall goal. So, like all these little policies and stuff kind of working towards this one big thing, yeah but 1.2 million homes, is it enough? No, it's interesting too. It was 1.2 million in five years. This was going back three years now and it wasn't feasible. It's not happened. They pushed it to 2030 now.
Speaker 2:If you look at Labor's recent immigration policy, it's been increase, increase, increase the amount of people coming to Australia.
Speaker 1:Yeah, but they have been dropping it steadily over the last two years. I think the big reason why there were so many immigrants like immediate post-lockdown it was the backlog, wasn't it from COVID?
Speaker 2:No, it wasn't just the backlog. There was a lot of individuals that were allowed to come in on student visas, on professional visas, the workplace visas and stuff. A lot of them had fake documentation. A lot of them had applied for these visas unethically. Let's say, go pay somebody X amount of dollars and they'll be able to get you a visa in Australia, and essentially what we had was a large amount of migrants that weren't skilled migrants. We also had a large amount of migrants that weren't actually students.
Speaker 1:Yeah, I know about the student one because they've been, because they've recently tightened up now that student visa and the student requirements and things like that.
Speaker 2:The reason I'm bringing this up, though, is I think we let in a lot more people than 1.2 million over the last couple of years, and I'd have to look up the numbers. You can't only look at, you know, 1.2 million new homes by 2030 and just think about the immigration. You also have to think about all the people that are turning 18 now. Yeah, you know all the people that already exist in australia, all the people that are in their 30s and 40s that haven't purchased a home yet. Oh, is that 1.2 million new homes going to suffice? No, but what I do like is they're cutting the construction red tape, because it's essential right, right, right now, in this current situation.
Speaker 2:I need to see something in writing. I need to see an actual proposed bill that is going to decrease the amount of construction red tape, especially in New South Wales. In New South Wales, we have a serious housing problem. The housing problem doesn't stem from the lack of land or the lack of people willing to work. It stems from the feasibility. So when you approach a lender as a property developer, as a builder, they look at the feasibility. They see if it stacks up, and what I mean by stacks up is they need to see if it's making a 15% profit or more in order to be able to fund a project. So let's say, you purchase something for a million dollars.
Speaker 2:It's going to cost $1.5 million to complete the construction. So that's $2.5 million If the total cost of construction, the total cost of acquiring the land and stay-at-duty holding costs, if the profit on top of that isn't 50% once you sell, the $2.5 million worth of property or whatever, they're not going to fund it.
Speaker 1:Yeah Well, it's profit-driven, and if there's no profit in it, then it's harder to get loans and stuff like that, so a lot of the construction red tape hasn't come from the government per se. No, I thought it came from more like state and council governments.
Speaker 2:You are correct. So it's a lot more expensive to build, okay, and it's a lot more expensive to insure. It's a lot more expensive to hold. So they want so the government wants more housing, but they also want the housing to be regulated. Under the current red tape that they have, it's not feasible. Okay, land in New South Wales is expensive, yes, and then, once you look at all the costs that are incorporated with that or included in that, developers and builders aren't looking at new south wales as a profitable venture anymore. So that's why you're seeing, for example of the last episode manny mentioned stocklands okay, stocklands is a large property developer and they're looking at areas like Queensland, regional Queensland. Why? Because they're going to make more money up there than they would in New South Wales.
Speaker 1:Question about the Stocklands thing Is it the same Stocklands that do the shopping centres Correct Like that, stockies? Oh, wow, okay, I didn't know they were property developers. Yeah, so the developers as well.
Speaker 2:So you look at those items and you have to think to yourself okay, how can we decrease the costs for developers and builders to incentivize them to build in metropolitan areas? This also includes Melbourne, this also includes Brisbane. You have to look at all the major capital markets and ask yourself why are developers not willing or not wanting to buy in these areas? And the reasons are clear as daylight it's because it's too expensive. That's why they're looking at the regional areas. That's why they're looking at, rather than looking at, melbourne CBD. They're looking at Geelong Rather than looking at Sydney CBD. They're looking at Penrith, they're looking at Oren Park. They're looking at Sydney CBD, they're looking at Penrith, they're looking at Oran Park. They're looking at Wollongong, for example. They're looking at Newcastle. These areas are so much cheaper to be able to build in. Why? Because the cost of land is cheaper to acquire and once they start building in those areas, the people that are able to enter the market because of interest rates being so high are able to afford it.
Speaker 2:You know a tradie living in New South Wales sorry, a tradie living in Sydney, an electrician living in Sydney and an electrician living in Newcastle. What's the variance on their income? It's got to be 5% to 10%. Maybe it's not going to be too high. You know, one might make $180,000 a year. Another one might make $200,000 a year. I'm just spitballing.
Speaker 1:Yeah, what you're saying is there's negligible differences.
Speaker 2:But somebody that's looking to buy a property in Sydney, that might be $1.5 million. If you're purchasing in Newcastle, it might be $800,000. So I agree they need to cut the construction red tape. It is way too expensive to build in areas like Sydney and that's because of all the added costs that they've created. There is a high probability that if there was a decrease in the amount of red tape around the construction industry, the housing market would boom again and people when I say people, developers would be more willing to jump into the market again and start developing in these areas. But unfortunately right now they've added too much red tape around the construction code and they're not willing to jump in.
Speaker 2:There's something called homeowner's warranty. Homeowner's warranty exists for properties two stories and under. So if you're building a large-scale townhouse development, there is a homeowner's warranty that you need to pay for every single lot. Okay, two stories and under. So townhouses, you're not going over three stories, it's all going to be two stories. If you look at that, that is going to cost more to develop and build than it would to develop and build apartments. The problem is with apartments is nobody wants to buy them anymore after what happened with the mascot towers and the Opal Tower, so people are scared of them.
Speaker 1:Yeah, for those who don't know, it was dodgy builds and they were kind of falling apart, right yeah.
Speaker 2:So cutting the construction red tape. I agree with yeah, Home guarantee scheme.
Speaker 1:I think this is just a continuation of the stuff that I've said.
Speaker 2:No, no, no, no. I just need to bring up something.
Speaker 1:That was Liberals' idea. Yeah, no, they're just continuing it on. Yeah, yeah, this is based on information because this is from the 2024 budget, which is actually set to change upcoming, but I can't imagine that they're going to change too much.
Speaker 2:I think that's just bollocks. Okay, as the British would say Help to buy. I hate this scheme. I hate this scheme. Do you know how many people could qualify for the help to buy scheme?
Speaker 1:We talked about the. What was it? Well, there's 40,000 positions, I know that much yeah.
Speaker 2:And I can guarantee you maybe 400 are filled up. It is so hard, so hard to get access to this scheme that I wonder why it even exists.
Speaker 1:Well, it's for low-income holders.
Speaker 2:Okay, low-income holders, but by the time you factor in interest rates and all the other costs, it doesn't benefit them anymore. They are actually better off renting than actually applying for this scheme. And then the government's going to own 40% of their property. What happens when they need to sell the property? Does the government get 40% of the profits as well, or do they just get their money back?
Speaker 1:No. So how it works is the government puts in the initial 40% and it depends on you. You can pay that off and buy it back from the government. The goal is that you would buy the whole thing off, because the idea is not for investment or anything like that, it's purely owner occupied um. So the idea is over time you'd be able to buy you own it.
Speaker 2:Okay, you've changed my mind on that one. That one I'm gonna. I'm gonna surrender a better deal for renters strengthening renters rights, minimum rental standards, limiting rent increases to once a year and requiring general reasonable grounds for eviction. This one I like. However, 2023 and 2023, when interest rates spike like that, and if they ever spike like that again, you are going to see people foreclose on their properties because of a one-year rule.
Speaker 1:It's one of those things where it's like it's that delicate balancing act of you know the rent. We saw the crazy rental lines you know, going down the street for you know an apartment or whatever, and I mean it's a reaction from a lot of people to help strengthen rents because, you know, you heard horror stories. I mean I heard, like I know people where they got kicked out for no real reason other than the fact that the owner, the landlord, knew they could get more money by evicting this person. I'm not saying that's what every landlord is doing.
Speaker 2:No, no, no. This is actually a good argument. I'm going to close the iPad. Let's say I'm a schoolteacher. Let's say I'm a school teacher. Yeah, okay, as a school teacher, I know that my salary is a lot lower than other individuals. Yeah, I'm making $85,000 to $95,000 a year. Okay, I have done well for myself and I have been smart. I've been a smart person and I have invested in different regional areas. Okay, I've got two investment properties. I've got two investment properties and I have held these investment properties for three years or so. In this time that I have held these investment properties, my interest rates went up 4%. Yeah, okay, and I am now limited, as a school teacher, to increase the rent on my tenant. I am now having money taken away from me by the banks for something I cannot control at all. I can't control that.
Speaker 2:I'm having money taken away from me and I need to increase my rent yeah okay, I have a tenant that's in there and they're paying five hundred dollars a week. Yeah, my interest rates have gone up x amount and I need to increase the rent to 550 a week. Yeah, okay, yet again, I'm just a school teacher. All of a sudden I request from the tenant hey, this is the market value, this is what I want to increase it to. I have to increase it to 550. I'm sorry, but this is just because of my circumstances. I only earn 95 000 a year pre-tax. Am I now a bad person?
Speaker 1:no, no and I. But that's the thing that's. You know, that's an extra 50, right 500 to. The problem was it was crazy increases, like when I left my apartment after I bought. My landlords were actually quite nice to us and they increased it. They showed us the report as to why. Because, again, property values, this is what the median rent is now. This is just what should be expected. So they increased it, maybe like $20, $30 sort of every year, but as soon as I left, they increased it by $200.
Speaker 2:Okay.
Speaker 1:Yeah.
Speaker 2:But where were you living?
Speaker 1:I was in.
Speaker 2:Wollstonecraft Okay, so Wollstonecraft is a very premium area.
Speaker 1:Yeah, it is.
Speaker 2:In Sydney. Yeah, it's right next to North Sydney, I believe.
Speaker 1:Yeah, literally it's in between North Sydney and Crow's Nest.
Speaker 2:Okay, so it's a beautiful part of Sydney. Yeah, it north sydney and crow's nest. Okay, so it's a beautiful part of sydney. Yeah, it's very nice, do you not think there's a high?
Speaker 1:probability that their interest rates increase so much and that they need to pay off that amount. It was interesting because they could have I mean, they could have just increased our own, like my current rent at the time, to buy that much. Clearly because, like they had the data and they only increased it by the minimum recommended recommended amount because we were never late with rent, we didn't break anything you know like for all you were good tenants.
Speaker 1:We were good tenants and they treated us as well as they could. And I understand, like my like, I understand that landlords raise rents not because they're greedy, it's because, yeah, rates rise. But again it's that. It's that some, there are some landlords who really put like no effort in and they don't, they don't care too much, like they don't want to repair things. You call them and you're like, please, like, let's just say the fly screen's broken, I just need this fly screen repaired and it takes three months and you you've been texting them fucking every day, every week, those kinds of things. However, I do tend to agree that limiting rent increases to once a year, like you said, if there's a spike again and interest rates went up, it was quarterly rises, right, it was 0.25% every month for like god knows how long yeah, exactly.
Speaker 1:And if you're limited, um, if you're limited to only one rent rise that year and you didn't think that the interest rates were going to keep going up, you've now not. You're not covering those costs the same way you would have if you could have adjusted multiple times so effectively if I'm only allowed one rent rise a year?
Speaker 2:yeah, okay, I've got two kids at home that I need to feed and now I can't afford my home loan repayments, my investment loan repayments. Yeah, all of a sudden I call up the bank and I say, hey, can you please put a pause on my home loan repayments just for a few months, just so I could catch up. Do you know what happens to the credit report then?
Speaker 1:yeah, that doesn't look good.
Speaker 2:your credit rating down you go into something called financial hardship. Okay, when you are in financial hardship, guess what happens after that? You can't apply for a different loan for over 12 months, okay, okay. So everyone thinks of themselves greedy landlords, greedy landlords. It's not about greedy landlords. Hmm, greedy landlords didn't exist until these interest rates started to go up. Okay, I never heard this term greedy landlords, greedy landlords until the interest rate spike started to occur, because a lot of people they rent, they rent out their properties based on what the market is asking for.
Speaker 1:Yeah.
Speaker 2:If my repayments are this much, this is how much I need to charge in rent because I've got kids at home. So this exact policy that Labor's preaching I don't agree with and I am going to continue not to agree with it, because I think it's unfair to good people who have saved up, who have purchased investments, who are trying to set themselves up for retirement and then all of a sudden they are being handcuffed again by a government that does not understand what is actually happening in the market.
Speaker 1:I agree with the again with the limiting rent increases to one year. Don't I think that's that's, that's too difficult. However, I do agree with minimal rental standards and having reasonable grounds for eviction, because I mean, I think people, when they they are paying for this, and I think that these houses should be up to a certain standard, and if you can't afford to keep your investment property to that standard, well then you can't afford the investment property. That's how I think of it?
Speaker 2:What if wages don't increase at the same time as the interest rates? I know? And then what about the cost of labour to to get something? Let's say I've got a fly screen that needs to be repaired. Actually, perfect example. I've repaired a fly screen recently in my house. Okay, it's for my door, whole backyard. Okay, this cost me two thousand dollars. Okay, for me to get someone out there repair it, measure it, all that sort of stuff. Call out for you that I've been about 2400 with cost of labor and everything. Let's say I rented out my property and I got $600 a week. That tenant lies and tells us the fly screen is now broken, when really their dog was the one that ran through it and I now have to pay for it. It's $2,400. So that whole month's rent gone. I've now needed to pay for the fly screen at the same time. And then I've still got mortgage repayments at the end of that month of, let's say, three thousand dollars. Is that fair?
Speaker 1:well, to an extent, again, it depends like if you've, if you've got a. This is why people don't put dogs on there, like when they don't want dogs in their rentals because of things like that. Like it's not really the dog, well, you should be able to train your dog to not break the the fly screen, but at the same time, you know, happens sometimes like that so happens, but it's the landlord's fault now well, again, this is how this is, when the ombudsman and stuff come in and like, uh, all that sort of stuff but this is what I'm trying to explain.
Speaker 2:It shouldn't have to take an ombudsman to come in. It shouldn't have to take these sorts of things. I know 150 real estate agents that just focus on rentals. Okay, and I'm telling you now, each one of those people have at least 50 people, 50 tenants, that they're taking care of. Not every single one of them is verifying their rental applications. Not every single one of them is going to be able to go to the houses and do an inspection and guess what? 100% guarantee that there is a dog at one of these premises that was listed as a cavoodle and when you get there it's actually a golden retriever, and that golden retriever has damaged the property and now it's on the landlord to fix it. So, whatever the Labor government theoretically you know their overarching belief is, it's going to impact the everyday Australian, because the everyday Australian is the landlord. The everyday Australian has been taught, has been bred, has been, you know, uh, not assimilated, uh, brainwashed. To think that brainwashed? Now, that's not the right word either, but you know what I'm saying.
Speaker 2:That property is the way to build wealth in australia and if you're going to have one rental increase per year, this is going to heavily affect them in being able to maintain their investment loans and their investment properties. All right, social housing accelerator two billion dollars to help states and territories build for 4 000 homes. I want to actually see the feasibility analysis of that one. I'm so sick of these balloon numbers. Yeah, we're gonna put two billion dollars and we're gonna do 4 000 homes. Just just just give me an actual funding table. Show me where the properties are going to be.
Speaker 1:Show me where everything's going to be oh, and then that, and that's honestly, if that's fucking across the board for all of them, they just sort of throw out these numbers and again, like I tried to look for exactly what you're saying and none of them have it.
Speaker 2:They're just all bullshit round numbers yeah, exactly. Okay, exclude HECS from mortgage applications. We spoke about this a couple of episodes ago, I think I almost got fired from Macquarie Bank for bringing up this argument, and now the government wants to bring it in.
Speaker 2:I'm taking credit for this Back in 2018, I came up with this idea Housing support program at $1.5 billion for infrastructure and amenities across Australia. We discussed this one as well Exactly At 25,000 new homes in New South Wales alone. That's fantastic. I want to actually see it put to paper. Let's go through the coalitions. Yes.
Speaker 1:Yes. So the coalitions have a few things they aren't throwing around. Let me just read it. So their big thing is the housing infrastructure program. That's $5 billion to enable infrastructure like water, power, sewage and access roads. Allegedly that's 500,000 homes. Where that's coming from, we don't know. That funding is based on a use it or lose it basis, so if there's no progress within 12 months, you don't get any funding.
Speaker 1:So they want to freeze the National Construction Code for 10 years. It's controversial in the industry because the leader of the I can't remember his name. Regardless, one of the industry heads was worried about quality and innovation and how that might compromise it. Like they're on board with a lot of the coalition's things, but not so much the freeze on the national construction code. Another one for them is the two-year ban on foreign investors and temporary residents purchasing existing homes in austral, capping overseas students, reducing immigration from 185,000 to 140,000 for two years. Deregister the CFMEU, which is the big construction union, and using superannuation to buy your first home. So that allows access up to $50,000 or 40% of your super to buy your first home and that needs to be returned when the house is sold I want to ask you do you disagree with any of this?
Speaker 1:um, I'm not gonna. I'm not gonna pretend like I know much about the construction code, so that's more of a question mark on my end. Um, the housing infrastructure program, I don't really see how five billion will equal to 500 000 homes, like if what was it?
Speaker 2:it's another umbrella, bullshit number yeah yeah, in general.
Speaker 1:Like building infrastructure, yeah, that's, that's all good. But labor has a has a very similar one. The super energy, uh, the deregistered cfmu. That seems more like a political thing. I again, I don't work in construction. I don't know much about how, like, what kind of costs these. This is happening, um, so again, sort of a question mark, but I feel like that's more of a political move based on the recent controversies.
Speaker 1:Reducing immigration yeah, that's pretty standard. I expect that from the coalition. Capping overseas students Again, that's standard as well. The two-year ban on foreign investors on buying existing homes that's not bad. What I dislike the most is the superannuation to buy a first home because it's framed in such a way as, like, you buy a home, so therefore you have something to live in and you have equity when you retire, right. But it kind of just feels backwards to use your retirement money to buy a retirement plan, like I don't like the idea of tapping into your retirement fund to set yourself up for retirement when really there should be other schemes involved to help you have to help home ownership. I don't know what are your thoughts I I love everything.
Speaker 2:First of all, I don't like the housing infrastructure program because it's another bullshit number. Random numbers thrown out so I'm just going to cross that one out. It's bullshit. I don't care what I do like is the funding provided on a use it or lose it basis. No progress within 12 months, no funding. I love that. I absolutely love that, because I've seen so many times government grants be given you know, oh, they get rewarded, yeah, yeah, everybody gets rewarded. No, they're saying hey, if you don't do this in 12 months guess what we're taking the many times government grants be given.
Speaker 2:You know they get rewarded. Yeah, yeah, Everybody gets rewarded. No, they're saying, hey, if you don't do this in 12 months, guess what? We're taking the funding away from you and you're not going to have access to this. Okay, so you better get started. You're not allowed to go spend that money on some bullshit. Get started on your projects, because we need a better Australia. So I do like that one. Freeze the National Construction Code for 10 years. Bellissimo. Every single year, the National Construction Code. There's changes to it, there's things that are added to it. They want to freeze this. They think that we have enough. We have enough policy around construction right now. They don't want to add anything further to it.
Speaker 1:Yeah, and I don't disagree with that part, it's the it wouldn't freezing it. So we were talking about how we needed to cut red tape for construction. Wouldn't freezing the national construction code sort of lock in what we've got right now, which we already said is inefficient? Wouldn't this prevent that cutting of red tape?
Speaker 2:Yes, However the code that we have now is good, but people can't keep up. So every single year, the construction code changes and they add more to it. So let people catch up for the next 10 years. Let them catch up, let them get used to the systems that we have in place so that we have the better quality builds that they've hoped for from the national construction code. Yeah, but at the exact same time, they're not having things randomly added. You know, halfway through a build, let's say, you start building in January and you're following the 2024 national construction code and then, all of a sudden, your project got delayed because of rain, flooding, whatever. And then, all of a sudden, the 2025 code has come in and now you've got to adhere to that, okay. So all of a sudden, the 2025 code is in and all these extra items have been added to your build, and now you can't afford it yes, and I agree that adding this stuff is only going to increase costs and delays yeah, and delays and things like that.
Speaker 1:But I think freezing it does just sort of lock us into what we've already got right now and we're already complaining that we can't we can't build enough to match demand.
Speaker 2:I'm I'm going to agree with you there. However, if this is the only plan, or if this is the only way we can move forward, they can't remove things, they can only freeze it. I would rather they freeze it and stop adding, as opposed to, um, you know, allowing it to continue and more items get added every single year to make sure that your building is up to code.
Speaker 1:Well, you guys. Let us know because I just can they remove things from the construction code like is that, is it flexible in that sense? Um, we don't know, I'm not sure.
Speaker 2:Yeah, we don't know, but if it's just a freeze, rather than adding consistently, or rather a freeze um two-year ban on foreign investors and temporary residents purchasing existing homes in australia. This is beautiful. This is music to my ears yeah, yeah, however yeah, the cheapest properties in australia are always going to be off the plan purchases. Yeah. The new, new, new ones, yeah, and all this is doing is pumping that market up. The existing home markets is already pumped up. That's already inflated.
Speaker 2:Yeah yeah, that they're doing just fine, they're just doing just fine, so you know there's going to be less people on that side. It's actually going to devalue some of the properties, I believe. However, off-the-play purchases that's where, a lot of the time, people are able to find themselves bargains. That's when you're able to invest in new areas. If a foreigner who is a multi-millionaire billionaire can only buy brand new homes in Australia, they're going to buy the shit out of brand new homes.
Speaker 1:Yeah, of course I mean, especially because it's all like I mean, it's easy technically speaking you pick, I want this pot, I want this pot, put that kind of house on it and you go do it. I don't have to touch it now. Capping overseas students love it. I mean, yeah, that's been on the cards for a long time on both sides of the aisle on that one, mostly because, again, that rental crisis that occurred just after lockdown, everyone coming back, all of a sudden there's no more rentals.
Speaker 2:Reduce immigration from 185,000 to 140,000 in two years. Love it. Okay, that's 45,000 less people coming to Australia. That's 45,000 less homes that are needed. You know we need to be able to catch up with the rate of immigration. At the moment you've got share houses in Sydney CBD where people are renting out balconies, balconies.
Speaker 1:Some of the stuff that's going up, like you see on the rental things. It's absolutely crazy, and the amount that they charge for them as well. Yeah stupid, literally a shoebox.
Speaker 2:De-register the CFMEU. I 100% agree with this. Did you see the news report that came out recently that who the head of the unions are?
Speaker 1:Well, I remember when the news broke that bikies were involved. And then what have they done? They, oh, it's the top of my head. They fired everyone because technically, no one's an employee, they're all volunteers, because it's a union. Um, they fired everyone and now there's a third party administrator that is now running the show of things that's's where we're at, I think, yeah, they're all corrupt, mate, they're all corrupt.
Speaker 2:Look at the trains right now in Sydney, every single day, we have a train delay, train delay, train delay, train delay. Why? The train drivers want more money. How much are they getting paid? I think it's $118,000 a year somewhere around there, right, and they want a pay increase. Why, around there, right? And they want a pay increase? Why? Because they believe that they deserve one. Okay, that's cool, you deserve a pay increase. The government came to the table and they said hey, we're actually going to give you a pay increase. They turned around and said no, it's not enough. What has happened? People all across New South Wales can't get to work. We now have a more inefficient economy. Okay, our GDP per individual in New South Wales has decreased substantially. Our productivity has decreased. So how are we, as people, supposed to increase our productivity, increase our net wealth, if we can't get to freaking work?
Speaker 1:I agree it's incredibly frustrating with the trains and things like that and it just seems like well, at this point it honestly seems like bad faith on both parties involved that they can't come to an agreement because, as easy as it is to simply blame the unions and don't get me wrong I'm certainly losing sympathy for them, because I catch the train to work. I catch the train to work and on the days where it's not working, it's a goddamn nightmare.
Speaker 2:And how many hours work do you lose?
Speaker 1:Well, it depends. If I know it's happening happening, I'll be able to work from home and then I lose no hours. But obviously, if I didn't know it was happening, that day I won the train station. I've already started going and I get stuck at two and gabby yeah, I'm losing like an hour or two at least okay, but also the stress that builds up, the cortisol that builds up when you get back to your desk.
Speaker 2:How much less efficient are you? 50?
Speaker 2:I couldn't say I've never really thought about it like that these are things that, as a business owner, you have to think about. So me, I'm running a small business. Trains are out all of a sudden. I know my staff are going to be less efficient, so that means I have to pick up the slack in other areas. That might mean I need to hire someone else okay, to be able to pick up that slack. To get back to 100% efficiency. It's fucked, mate. That's all I'm going to say.
Speaker 1:Like I said, this is a political thing, whereas I don't think it's actually going to affect construction costs.
Speaker 2:Superannuation.
Speaker 1:Sorry to cut you off, keep going.
Speaker 2:Superannuation to buy a first home. Allow access of up to $50,000 or 40% of their super to buy their first home. I love this.
Speaker 1:Like I said, I already don't like this, and I just feel like this will increase house prices rather than decrease them.
Speaker 2:Yeah, that's okay, increase house prices, that's fine.
Speaker 1:Okay, this is part of the problem.
Speaker 2:No, no, no, no, people are struggling to save. Yeah, we've spoken about Woolies, we've spoken about Woolies, we've spoken about Coles, we've spoken about all these different parts of the economy where it has become more difficult for the average individual to save. So let's say you've got a piggy bank that you're not actually allowed to touch and that piggy bank accrues interest of 12.1% per item. That's the average rate of super adulation. So it does get anywhere between 11% to 12%, depending on the super fund you're with.
Speaker 1:Yeah, yeah, okay.
Speaker 2:So all of a sudden, I'm making $90,000 a year. $10,000 or $11,000 every single year is going towards my superannuation. Yeah, in four or five years' time? Okay, I haven't been able to touch that money, remember, in four or five years' time I've now got $50,000 in my superannuation account. Hey, there's a property over there for $500,000. Oh, I can buy that with my superannuation. I go and buy that property with my $50,000. Okay, I tip it to my super, I grab that 50 grand, I put it towards that property. Okay, now I've got a property that's going to appreciate in value.
Speaker 2:So by the time I retire, guess what's going to happen? I'm able to retire based on a reverse mortgage or based on the equity or based on the items that are in my property, because I was able to purchase that at 25, 26 years old. And you highlighted something If you sell the property, you've got to put the money back into your superannuation. So let's say I do sell that property. Let's say I make a profit, I still have to go put that $50,000 back into my superannuation, so I've still got money left over for retirement. This is a better way to set people up for the future as opposed to waiting for them to retire to be able to access $300,000.
Speaker 2:Because I've seen superannuation balances when people get to 70. They're $300,000 to $350,000. Do you know what happens when you're 70 years old? You can't get a mortgage because mortgages are based on 30-year terms. So let's say I'll wait until I retire to access my house deposit that I'm going to use to purchase a property. Guess what? I am not allowed to get a mortgage with most banks because they're going to look at it as an owner-occupied property. They're going to say what is your exit strategy? And if you can't provide a sufficient enough exit strategy when purchasing a property, they're not going to provide you with a mortgage. And you're going to have all this cash but you're going to be renting for the next seven to eight years with it. I changed your mind and you don't want to agree with me.
Speaker 1:No, I'm just thinking because, again, I'm not an economist, I'm not even that great at maths. I'm not even that great at maths. Yeah, but I just don't really. It just doesn't feel right to have to tap into like. It feels like why are we in this position in the first place, where you have to access your retirement fund?
Speaker 2:Because people can't save anymore.
Speaker 1:I understand, but like, what are the greatest situations? How did we get to this point? And this is my problem with everything is I don't really trust the coalition to keep affordability, like keep things affordable or whatever. It's all about growth. I mean, fucking Peter Dutton's got 26 investment properties. He doesn't want them to go down. Government under labor, under labor, under the liberal government, the house prices have jumped up astronomically, which is great for their electorates and the people who vote for them and stuff generally speaking. But I think overall, like we're in such a point now, like you said, people can't save because part of it is because of housing and property prices going up so dramatically. Like I think I've got a stat here what, what?
Speaker 2:was it? I'm going to let you in on a little secret Michael Property's going to keep going up.
Speaker 1:No, I understand that and that has happened worldwide.
Speaker 2:Whether you're living in the desert, or whether you're living in Alaska, where it's freezing cold, or if you're living in Sydney, australia, property keeps going up in price and we can either work with it or we can't. We can't sit as we are because we always have a growing population. We've got a world population of eight point something billion now. That's going to keep going up. People are going to keep reproducing and when people keep reproducing, more housing is is needed. The more housing is needed, the more the demand is going to increase. So we can't fight that. But what we can do is provide something for the everyday Australian, provide some sort of solution for the everyday person that has $100,000 a year salary but they have $120,000 put aside in their superannuation. You know makes $200,000 a year or makes $50,000 a year or $80,000 a year.
Speaker 2:This is a solution for first home buyers to be able to purchase something before the age of 30, as opposed to waiting to the average first home buyer age in Australia, which is 38 years old. Build up your super, make extra contributions to it, access that super and guess what? You'll be able to go buy something. You'll be able to combine that with the first home super, guess what? You'll be able to go buy something. You'll be able to combine that with the first home super saver scheme. You'll be able to combine that with the first home guarantee and you'll be able to get into the market. And they said if you're ever going to sell the property, you're going to pay the superannuation back.
Speaker 1:So if you're purchasing an unoccupied property, the chances are that property is going to grow more in value than what your superannuation would anyways yes, I, but it just feels like such a short-term thing and the growth is not sustainable at a certain point because I agree with you, like, property prices are always going to go up, but it's keeping that relative like to inflation and quality and things like that.
Speaker 1:So, like, like here you go for example, in the in the 80s, from 86 to 96 under under labor I think it was bob hawk at the time um, house prices went up nine one, nine point one percent. Not not too crazy, but once the howard government came in it was 121 percent. Now that is such an exponential like. That is such a huge amount of growth in such a short amount of time. And every time that the liberals are elected those prices do go up, which again they're accommodating their base, which makes sense. So I'm not. These are people voting with their interests, their homeowners. They want their property prices to go up.
Speaker 2:So labor aren't homeowners.
Speaker 1:Well, no, of course they are homeowners and stuff like that, but the growth is at a more sustainable level, is what I'm trying to say? Like it's not about growth, by all means necessary.
Speaker 2:I'm going to disagree with you because Labor's been in for the last four years. They increased the shit out of immigration and guess what? Housing markets still boomed like crazy. If you wanted to buy an apartment in Coggera back in 2020 or 2019, it was going to be about $600,000. Now you're looking at 850 to 900K.
Speaker 1:Yeah, but historically speaking it's never been like that big a drop.
Speaker 2:But you can't use history. I'm going to explain why you cannot use history. Because the markets are ever-changing. If you compared Liberal and Labor governments in the 20s to the 60s, there is a chance that the difference is more, you know, dramatic, because liberal would have focused more on the housing increase. Labor would have focused on, you know, economic, social housing policies. Unfortunately, it is a different time. People are a lot smarter. People now know that property is the way to accumulate wealth in australia, even big business all across the world. They are no longer investing in tech. They are investing in stadiums. They're investing in hotels. They're investing in apartments. They're investing in real estate. Why? Because tech has had its run. They realize that the population of the world is ever-growing, so they realize that real estate is where it's at. We can either work with it or we can work against it.
Speaker 2:Let's continue on the Greens Freezing cap rent increases for immediate rental relief. National renters protect authority and protect their entry rights. Phase out tax benefits like negative gearing for property investors with more than two properties. Introduce a discount homekeeper rate to deliver cheaper mortgages. Create a public I'm sorry, I can't. I can't this. This is all ridiculous. Create a public property developer to build 360 000 good quality public homes for over five years. Extreme wealth property tax, a new land tax on high-end residential properties oh man, okay, have you read the grains manifesto?
Speaker 1:I've read bits and pieces and most of the time, especially like when I was reading about the extreme wealth property tax, my first thought was good luck, it's communism.
Speaker 2:The Greens try and support an equal landscape for all and let everybody benefit. I'm going to be honest with you. In economics, in our classes, we are taught to be socialists. Okay, we are taught that everyone is equal and everyone should be able to grow and everybody should be able to benefit off each other. And there's a theory of Ubuntu, and Ubuntu is we grow together to make something happen. If I am strong, you are strong. Unfortunately, the real world is not like that, and let me highlight why. Unfortunately, the real world is not like that, and let me highlight why. In 2022, there was a Reddit thread that said does anyone miss lockdowns?
Speaker 1:Okay.
Speaker 2:I saw this Reddit thread and I thought to myself oh, this is going to be a joke. I saw people commenting saying I love lockdown, I'll wake up at 9, 10. I would log onto my computer and I would get back into bed. I love lockdown. I would wake up at 9.10, I would log into my computer and I would get back into bed. I love lockdown. The government was giving me $750 a week and I was able to get drunk at home every single day. I love lockdown all these things. Then, on the other side of the coin, you saw people going bankrupt people genuinely going bankrupt. Why?
Speaker 1:because, all of a sudden, their places of work weren't as efficient well, yeah, the whole world shut down, like the supply chains were ruined, so on and so forth if they're a cafe owner, they still had to pay rent because, guess what, the landlord has a mortgage and they have to be able to pay their items off.
Speaker 1:Well, that was like with the. That was the. I don't think it was JobKeeper. Was it JobKeeper where business? Because the business has got the payouts for the JobKeeper right and then that was distributed by the employer to their employees. Is that was that how that worked, correct? Yeah, I'm just highlighting a number of things okay.
Speaker 2:So you had all of these items and then you had people celebrating that they were doing 10 of the work, just as much pay, they were getting drunk at home, they weren't being as efficient and stuff. Unfortunately, the greens supports those individuals. The greens think to themselves that everybody has the best intentions for everyone around them at heart which is not true and to create a level playing field so everybody can rise, and then punish those that rise faster than the people that have risen slower. It's barbaric, because people have ambition and people want to grow. And if you are going to punish those for growing in an ethical way, for growing in a way where I have more than two investment properties, so all of a sudden my negative gearing should be taken away, it's arsenite.
Speaker 2:I understand where the leaders of the Greens are coming from. I understand the theory behind it. However, in the practical world this will not work, because people are selfish, people are greedy and once you hit a certain income level, people become lazy. They no longer chase the dreams that they wanted beforehand. So once people get to that $120,000 a year salary, they actually start dropping off a bit in their productivity, and what the government was providing was a way for people to get there with minimal work, and what the Greens are doing is they support those individuals. So for adam brant or whoever the leader of the greens at the moment is to come, for him to come, turn around and say no, we're going to tax the wealthy, let's tax the rich and give it to the poor.
Speaker 2:I'm going to highlight something. If you took all the wealth in the world and you distributed it equally amongst everyone, there is a theory that within 12 months time, the curve would be exactly the same. All the people that accumulated wealth previously would become more wealthy. All the people that didn't accumulate wealth will become less wealthy. And what the Greens are constantly trying to do is punish those that have become wealthy through property, through strategic investment, through risk-taking and making those developments, and they're trying to reward individuals out there who want to sit at home. So anything that the Greens have said I'm throwing out. Anyways, that was our episode on politics. I think we went for 50 minutes, yeah.
Speaker 1:I'm sweating. It's hot under these lights. We have to turn the aircon on.
Speaker 2:I'm not going to do. I'm not going to do any shameless plugs. I'm not going to do anything like that. All I'm going to highlight is I've been Joe, that's been Michael, and we'll see you on the next episode.
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