Treasurer Joe Hockey’s path to property prosperity is very simple: “the starting point for a first home buyer is to get a good job that pays good money”.
Mr Hockey made the comments, which have drawn widespread criticism, Tuesday morning as he faced the media about his record on foreign investments in property.
House prices, especially in Sydney and Melbourne, have increased substantially in the past year. In Sydney the prices have grown by 12.2 per cent in 2014 according to the Australian Bureau of Statistics, prompting bubble warnings from financial regulators.
Mr Hockey, referring to the low interest rates on home loans said “(it’s) more affordable than ever to borrow money for a first home now than it has ever been”.
He then began a granular explanation of the supply-and-demand equation.
Was that Joe Hockey’s “let them eat cake” moment? #getagoodjobthatpaysgoodmoney
— Stephen Koukoulas (@TheKouk) June 9, 2015
“I know, it’s a difficult concept for some to get their heads around, supply and demand, but it’s not that complicated,” he said.
“If you increase supply to meet the demand, then obviously you won’t get the growth in property prices that you may have thought if you have less supply,” he said.
Opposition leader Bill Shorten has slammed Mr Hockey for his “get a good job” comments, calling them insulting and out of touch.
“How are Australians supposed to find the good jobs that pay more when unemployment is at its highest levels in more than a decade under his government?” Mr Shorten told AAP.
“As if Joe Hockey hasn’t insulted families enough, he’s at it once more,” he said, as quoted in Fairfax Media.
“This is ‘poor people don’t drive cars’ all over again. This isn’t just another Joe Hockey gaffe — this is proof he just doesn’t get the pressure families are facing,” he said.
“What planet is Joe Hockey living on?” he said.
Mr Hockey doesn’t believe cracking down on dodgy foreign investment in housing will damage Australia as a destination for other investment from overseas.
Almost 200 cases of unlawful purchases of Australian houses by foreigners have been uncovered since the government started enforcing the law, and before new, tighter rules are due to come into effect on December 1.
Mr Hockey expects he will have details of more before then.
“I understand there may be a number of cases coming up,” he told reporters in Sydney on Tuesday.
Asked if this would damage Australia as a foreign investment destination, Mr Hockey said: “None whatsoever.”
“This is about the integrity of the current laws. We are applying penalties in the case of people who breach the laws,” he said.
Under the new rules, foreign buyers and those who facilitate illegal property sales face new penalties including fines of more than $100,000 or up to three years’ jail.
Foreign investors cannot buy existing properties, but are allowed to invest in new housing.
So far the Foreign Investment Review Board is investigating 195 cases, of which 40 were found thanks to community tip-offs and another 24 buyers voluntarily came forward.
The rest were discovered through an audit by the tax office.
A UK national could be the second to undergo a forced divestment after self-reporting his $700,000 West Australian property purchase.
It follows the forced sale of the $39 million Sydney mansion Villa de Mare illegally bought by a Chinese-controlled company.
Mr Hockey later confessed on 3AW radio in Melbourne that he had dobbed in one of his own neighbours, and while they did have approval to buy, it was made on “pretty spurious grounds”.
That case is yet to resolved.
— with AAP