On 3AW’s breakfast program this morning, in view of the ridiculously high residential real estate prices currently being achieved, of which they provided evidence, Ross Stevenson and John Burns asked one of the local property spivs when we may start using the ‘B’ word: B for bubble, that is.

“Oh, no, it’s not a bubble yet”, replied the spiv.

“Should we consider abolishing negative gearing, then?”

“No, definitely not” replied the spiv. (I could imagine Ross and John sharing a subversive wink in the studio!)

That’s the sort of self-interested commentary you get from many in the real estate industry whose fees are related to the prices they achieve for their clients.

Now, I’m not saying they shouldn’t get the best price for their clients, but they ought to be able to tell the truth about where we currently stand in the market — such as “Yes, we’ve been in an incredible bull residential real estate bubble since the late-1990s, because the tax system encourages property speculation above productivity.”

Or alternatively, “If we abolished negative gearing and applied an all-in land tax as the Henry Tax Review recommended, we could keep prices down for our children. Mind you, we’d have to charge a fee for our services instead of a commission on the selling price.”

Curiously, both major political parties have thrown their lot in with the real estate spivs because they know a great many Australians are into property speculation.  Neither party is prepared to provide leadership on the obvious fact that this 18 year-long bubble is absolutely unsustainable and has come at great cost to Australia’s productivity.

So, as both parties have been unrelenting in their support for the bubble, rather than encouraging its demise, the only question becomes on whose watch is it going to burst: who’s going to be left on on the musical chair to answer questions?

Pathetic.  And whichever party it is will then act so innocently: “We didn’t know! What could we have done?”

Our ‘representatives’ should be hung, drawn and quartered.

2 thoughts on “MUSICAL CHAIRS”

  1. Could be, and may send Tony into the wilderness. However, if Malcolm Turnbull happens to be in the seat when it bursts, he’ll be given short shrift. [See the chart in this blog post showing that Gough Whitlam and the late Malcolm Fraser were both victims of burst real estate bubbles. Swinging voters always feel it in their hip pockets and certainly let whomever is in power at the time know they don’t like it.] ]

  2. I reckon it might burst on Tony’s watch and Malcolm Turnbull knows it. Hence his reluctance to put his hand up to take over Tony’s roll.

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