Only this week, Malcolm Turnbull was emphasising how he was focused on economic growth while the “elite media” were distracting people from the government’s achievements in this area.
Focussed but not happy
Greg Jericho wrote in the guardian: If you like records being broken, now is the most exciting time to look at economic data. The annual growth of wages in September of 1.9% was a new record low, breaking the old mark of 2.1% set only three months ago in June. It was the 16th consecutive fall in the growth of annual wages. The last time Australians wages grew faster than they had three months earlier was September 2012.
The problem is that the growth in house prices and wages growth are heading in opposite directions.
The rise in house prices does not mean that young people are not buying their first home. What it does mean is that they are taking on increasing burdens of debt to do so. This means that a large amount of their discretionary income, and hence consumer spending power, is taken up paying interest.
This effectively shifts resources away from the consumer sector to the investor sector, primarily superannuation funds and increasingly wealthy old folk.
And while Malcolm Turnbull is doing a lot of focusing, his government is doing nothing.
The problem of housing affordability is a serious one and there is no chance that it will be solved until there is serious action on the issue of negative gearing.