Australia’s entire economy is built on housing, and operates on a “myth” that we can keep generating wealth by constantly inflating housing prices, argues the head of Australia’s largest super fund.
Paul Schroder, the chief executive of AustralianSuper, has issued a stark warning that our nation must rethink its over-reliance on real estate.
He said he’s calling out the “central truth” that Australia spends way too much on housing and “not anywhere near enough” on productive investment.
Indeed i’ve been saying that since the 1990s and yet here we are.
He said many Australians say they want improved housing affordability and lower house prices but it’s “nonsense” to expect that those things will occur under our current policy settings, because the “entire construct of the Australian economy” is embedded in the housing mortgage book.
Unless there’s a volte-face by voters towards The Greens, everything remains the same BUT gets worse
“A dwelling-house, as such, contributes nothing to the revenue of its inhabitants”. - Adam Smith - The Wealth of Nations
>This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments - Adam Smith
Yeah, I did think about that… Does seem inevitable. I’ll keep pondering haha 😆
I’ve always thought that the older generation should be able to sell their house and transfer the profits across to super without tax penalty (or maybe the standard 15%) . There’s so many investors because there used to be a big push before super to grow your “nest egg”, so understandably that generation should be supported to transition the plan.
I like that. Definitely thinking that any transition would have to support/entice people out of the current paradigm, rather than punish. Yeah, owning a glut of properties is morally shady these days, but the system supported people down that path, so changes to the system would also need to support them out. Tax incentives to shift into super or other investments. But yeh, can’t be massively enticing or attract too many people coz that would also crash things haha