Aussie John Symond couldn’t help himself from weighing into the debate on negative gearing.
There are a couple of things he should know
1 If you have a policy that is discredited and indefensible, don’t keep re-emphasising its inherent stupidity and unfairness
2 If you going to talk about an issue, don’t fly in the face of the well-established facts or the opinions of people better informed than you.
But no, Aussie John couldn’t resist the temptation to get onto national television and throw support behind Malcolm by criticising Labor’s negative gearing policy.
Every statement was a classic
“Well, what I’m concerned about is bringing out a sledgehammer and overnight hitting negative gearing on all established housing across Australia.”.
Wrong on two counts: Firstly, all establish housing in Australia is not subject to negative gearing and secondly it won’t affect negative gearing all over Australia either
“I don’t know whether prices will drop 10 per cent, 20 per cent or more. There’s others out there saying it could drop 30 per cent or 40 per cent. I wouldn’t think it would drop that much, but one thing I am prepared to bet on it will definitely drop the value of homes.”
Gross overstatement and simplification: Prediction is always difficult, particularly about the future. No one knows where the prices will drop or if they do, by how much. It’s extremely complex because there are numerous feedback processes in this system and unique complex mathematical modelling to have any chance of a prediction and fairly clear that Aussie John has not done any modelling.
“All I’m saying here is this will hurt everyday Australians. Eighty per cent of property investors are regular mums and dads, with the majority earning less than $80,000 a year.”
Plain wrong: There are ABS statistics that demonstrate this is not true.
“It is frightening and it will frighten others . . . and it creates this stampede. And that’s my concern that there could be a glut of properties come on the market, force the prices down, and then all of a sudden it could be Armageddon with the housing industry that’s propped up the Australian economy the last four years,” he told Seven’s Sunrise program.
Scaremongering: Stampedes are started by people who get on national television, overstate the case that is plain wrong and frighten the gullible. Armageddon is the end of the world, a decline in house prices in Australia will not be the end of the world. Many potential first homeowners would see it as the beginning.
The government’s economic modeller of choice on negative gearing, BIS Shrapnel, finds that after 10 years of a policy similar to Labor’s, Sydney home unit prices would be 15 per cent higher. Without a Labor’s policy, they would be 22 per cent higher. The main impact of Labor’s policy would be to slow price rises, something an honest broker trying to get people into houses ought to want.
On Monday, Malcolm Turnbull backed Symonds. He said Labor’s policy would smash the value of properties. At least he didn’t mention mass unemployment.