Treasurer Jim Chalmers aims to climb out of trouble in Knight toon

It is tough business for young Australians to buy their own home these days. Owning your own patch of Aussie real estate was known as the “Great Australian Dream” once upon a time, but now it seems more of a nightmare. It is even hard to rent a place, with rental properties in the major capital cities becoming scarce and expensive.

That’s why so many young people in their twenties and even thirties continue to live at home with their mum and dad. This is the intergenerational* wealth debate that we are having as we head into this year’s federal budget*.

Experts believe that homes have become an “investment” market instead of a housing one. They are blaming cashed up Baby Boomers* supported by government policies like negative gearing* and the capital gains* tax (CGT) helping them to raise the price of property and price younger Australians out of the market.

These houses are then rented, which provides income for the owners and helps provide a place to live for those who can’t afford to buy a house. We do need to build more homes. More homes mean prices come down. Governments are trying to increase the number of properties constructed annually, particularly as our population grows due to increased immigration*, but material costs are way up, making building a home way out of the reach of many.

So the Federal Government in its pre-budget leaks last week looked like it might try and assist younger property buyers by winding back the tax breaks for property investors. The talk was that they would either heavily reduce negative gearing or overhaul the capital gains tax discount. All in a bid to make it a more level playing field when it comes to buying a house.

Now, you political observers may remember, prior to the last election, that Prime Minister Albanese and Treasurer Jim Chalmers said that they would not be touching the CGT and negative gearing. They swore with their hands on their hearts and dismissed journalists’ questions on the matter as a beat-up and pure fallacy*. It wouldn’t happen, they said, as they stared down the evening news TV cameras. Looks like it will now.

Politicians’ promises have a use-by date, obviously! Albo won a huge majority at the last election and we are still two years away from the next, so it looks like he’s going to spend some of that political capital on breaking his tax promises. And the federal budget could do with a tax boost, due to the tough economic times. The question many were asking was, is this a fair dinkum* attempt to reform the housing market or just a tax grab by a government desperate for cash?

I thought it would be a great subject for a cartoon. Housing policy sounds like a pretty dry topic to cover but I thought I could have a bit of fun with it, particularly because it involved broken promises. With a huge increase in break-and-enters going on in homes across Australia, especially in Melbourne, I thought it might symbolise Treasurer Jim Chalmers taking something that wasn’t his, namely the property tax policies for investors that he said he wouldn’t touch. I pictured him looking a bit sus* entering a rental property via a front window.

He’s wearing a black hooded tracksuit so you get the picture. He is carrying a knapsack that he intends, most likely, to fill with the cash windfall* that the removal of the tax breaks will offer up. To get the Treasurer to explain what he is doing, I thought I would have a police patrol car happen by and shine a torch on Dr Chalmers and ask him what’s going on.

The caption is a play on the word “break” in his reply to the police in the cartoon. The removal of the property investor tax breaks is an attempt to help young home buyers “break” into the housing market, increasing their ability to buy in. On the other hand, we see him “break” into the property investment market in an underhanded* way, doing something he said he would never do: get rid of the tax advantages for investors.

Let’s just hope that the Treasurer is right and despite the broken promises, these changes do go some way to making it easier for young Australians to buy their first home. I mean, do you really want to be living with your mum and dad into your thirties?!

POLL

GLOSSARY

• intergenerational: involving different generations
• federal budget: the government’s annual financial report and policy statement to the parliament and the nation, laying out its plan for collecting and spending money
• Baby Boomers: the generation born during the post-war baby boom, from 1946 up until 1964
• negative gearing: borrowing money to invest where the return (rental income) from your investment is less than the borrowing cost, for example, housing loan repayments
• capital gains: the profits that you make when you buy something and then sell it again at a higher price
• immigration: the act of coming to live permanently in a new country
• fallacy: falsehood, something that is not true or real
• fair dinkum: genuine, honest true, a real deal
• underhanded: done secretly, and sometimes dishonestly, in order to achieve an advantage
• sus: suspect, suspicious
• windfall: a sudden, unexpected piece of good fortune or financial gain

EXTRA READING

How war fuels federal budget fires

All aboard RBA runaway rate train

Why Australians are on the move

QUICK QUIZ

1. The government is looking to change tax rules for what type of investment?
2. What does CGT stand for?
3. Owning your own home used to be regarded as what?
4. Who is being priced out of the property market?
5. What have the older generation known as Baby Boomers got to do with housing prices?

LISTEN TO THIS STORY

CLASSROOM ACTIVITIES
1. What’s the tax?
Do you understand the changes in the budget that Mark is thinking about? Write three questions that you would ask Mark to help you understand this. Then, write the answers that you think he would give. Use information from the story and perhaps your research skills to help you.

Time: allow at least 30 minutes on this activity
Curriculum Links: English, Economics, Civics and Citizenship

2. Extension
Imagine that Mark changed his mind about the capital gains tax reforms and wanted to convince people to support Treasurer Jim Chalmers. Create the cartoon that you think he would draw.

Time: allow at least 30 minutes on this activity
Curriculum Links: English, Visual Communication Design

VCOP ACTIVITY
Describe it
Look at the cartoon and make a list of five nouns that you see. Then describe those five nouns with five adjectives. Now add a preposition to those five nouns and adjectives.

Finally, choose your favourite bundle and put all the words together to make one descriptive sentence.

(For lower reading level articles, remove “add a preposition”)