Our first question on Q&A tonight comes from Barista
'Hi Tony, this is a question for Penny Wong. Does the Senator believe, as FIRB would have us believe, that there has not been a single incidence of a foreign national without a visa or passport basis for doing so, buying Australian residential real estate over the last 7-8 years?'
Let’s just be very careful in discussing this issue, that we are discussing the facts relevant to the matter, and not lurching about grasping for someone to blame. I’ll get to the point of your question in a moment, Barista, if you’ll just let me finish. We hear a lot in this debate about how foreign nationals, and let’s be clear, the blame is being shifted largely to the Chinese, about how foreign nationals are somehow making real estate more expensive in this country at the expense of this country’s own citizens. Now, it beggars belief that in a nation of 23 million people, that a few people – and I acknowledge that the system as it stands may not be functioning with 100% accuracy in screening out unauthorised foreign purchases – that a few people jumping the fence, as it were, are somehow pushing house prices up by orders of magnitude.
I appreciate that through your own efforts, Barista, that you have been able to highlight some of the issues of efficacy around the FIRB screening process, but frankly, I think we all need to take a deep breath. By and large, the great majority of purchases of Australian property by foreign investors are legal. And these investors are from the United Kingdom, the United States of America, from New Zealand, Switzerland – from all over the world, in fact. Investment in houses is not the sole domain of Chinese investors. And it should be stressed that FIRB restricts these purchases to new, let me stress that – for new residential development. This nonsense of some mythical horde of Chinese coming to take away Australian’s homes is just that, a nonsense, and I think it’s time for the more serious minds around this Q&A table here tonight to put to rest.
*Audience applause*
Frank Lowy, you had something to add to this.
Yes, Tony – I would only just want to say that I agree with Senator Wong, and it has been a really … ugly feature of this debate to see so much focus on the Chinese. Chinese investment is an important feature of the strength of our economy, and it would be disappointing to see this debate descend into the kind of racism we saw emerge in Europe in the 1930s.
I think we have a follow up question from that audience member on this topic
'Thanks Tony, does Senator Wong believe it appropriate that younger Australians in particular, are ranked behind people accruing funds abroad in circumstances where the processes leading to funds abroad may not be legal in Australia, when it comes to buying a home in Australia?'
Penny Wong, I’ll let you think about that for a moment, I’d like to hear from Judith Sloan on this
You hear a lot in this debate, people trying to raise anxiety about foreign investment. We see this a lot on the Labor side, though to be honest unfortunately it crops up on the conservative side of things, too. This bizarre flirtation with economic nationalism that continues to prop up its ugly head, this cheap populism of anti-foreign investment that comes from – it has to be said – from ill-informed people.
Let us get back to basics. We live in a global economy, and the Australian economy has always relied on the inflow of foreign capital. In a large country with plentiful resources to exploit, our small population could never provide the capital required. And Australia will continue to rely on foreign capital for the foreseeable future. Some of that investment is inevitably going to find its way into residential property, but this is a good thing. This means that Australia is able to increase its stock of available housing – something that Labor would have been happy about, I would have thought.
But the most crucial benefit of maintaining that opening economy is that investors, wherever they come from, are able to provide the capital to fund that investment. When it comes to making Australia more productive and competitive, we need to embrace the free movement of both capital and workers. Those workers are always going to need new housing, whether they are renters or owners. And if foreign investors are willing to provide that capital for the construction of new housing available for rental, then that is a good thing. There is competition for foreign investment, and Australia should be careful what we wish for.
Penny Wong ?
Tony, I’ll have to admit to agreeing with Judith Sloan on this one.
*Panel chuckles*
Alright, we’ll draw the line under that debate there, I think. Our next question from the audience is about climate change.
It was back in 2011 that the govt intervened to forbid foreigners from buying established homes...this was supposed to make things more equitable. What makes it harder to regulate is the fact that temporary residents are allowed to buy 1 property to live in..
We have had low IR that have made a lot of increases in activity in borrowing by investors who are local.
The Chinese get a lot of media coverge due to the economic & political volatility in their own country, but don't forget there's also foreign interests from Canada & US .
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
Yes, Tony – I would only just want to say that I agree with Senator Wong, and it has been a really … ugly feature of this debate to see so much focus on the Chinese. Chinese investment is an important feature of the strength of our economy, and it would be disappointing to see this debate descend into the kind of racism we saw emerge in Europe in the 1930s.
Good one Lowy, bring the holocaust into the debate.....
Penny needs to appreciate that there is a flow on effect with pricing.
If every prime location fell into the hands of non citizens, the citizens with the most money would naturaly bid up the next area.
Forcing citizens to pay top dollar for what could (or should) be mid dollar property is poor governing IMO
People should be able to sell their properties to whoever is willing to pay the highest dollar. Just because you are too far down to compete it's not their problem.
People should be able to sell their properties to whoever is willing to pay the highest dollar. Just because you are too far down to compete it's not their problem.
What makes you think I'm on the low end of the ladder?
Read the last sentence of my post again very carefully.
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