TREASURER Scott Morrison’s address to Urban Development Institute of Australia this week highlights much of what is has been wrong with Australian politics in the 21 st century.

Having identified a “housing affordability” problem (wow!), Morrison did what every federal politician has done since the 1990s – refused to acknowledge the nasty political conundrum by resorting to opaque language; ignored the obvious; and blamed someone else.

The use of the words “housing affordability” is Orwellian. Saying you are going to improve “housing affordability” is a Good Thing. Saying you are going to reduce house prices is a Bad Thing that sends shivers through the spine of every voting home-owner in the country. Saying you are going to increase incomes is a Bad Thing that causes every business owner to bristle.

And guess what? The only ways to improve “affordability” are to reduce prices or increase incomes (or a combination of both).

Even Morrison’s wrong assertion that the problem is with supply, points the same way. If you flood the market with extra supply it is true that houses will become more “affordable” but only because prices have crashed.

Morrison said, “Of all the determinants of house prices in Australia, whether cyclical or structural, the most important factor behind rising prices has been the long running impediments to the supply side of the market.

“This not only relates to the volume of supply but also the responsiveness, flexibility, diversity and composition of that supply, as housing needs become more complex.”

That is just woolly language for saying that local and state governments should open up more raw land for housing and allow people to sub-divide and in-fill willy-nilly.

That will surely boost supply and prices will fall, but too bad for the environment and the amenity of existing residents.

Land supply and planning are state matters, so like all federal politicians since the 1990s he has blamed the states.

But he is completely wrong. Commonwealth policies have caused the housing crisis and they are all on the demand side, not the supply side.

Three catastrophic Commonwealth policies have caused the housing crisis. In order they are: high immigration and a lack of a population policy; huge tax advantages with negative gearing and capital gains tax concessions; and the first home-buyers’ grants schemes.

If the Federal Government had not pursued those policies, the states would have been able to release enough land; plan good built environments and provide the infrastructure as needed.

Morrison’s address even acknowledged population growth as an issue. He said: “Between 2005 and 2010, Australia had the highest average rate of population growth in the OECD, except for Israel. More recently, interstate migration patterns have reversed from flows towards the mining states to flows back to Sydney and Melbourne . . . . This, in turn, has added to housing demand in these capitals that have seen the strongest price growth in recent years.”

Surely that evidence should tell him that population is driving housing demand and prices, not lack of supply. But he ignores it. He also ignores the fact that the Federal Government can do something about it by simply reducing the immigration intake.

Morrison said that Labor’s policies to change negative gearing and capital gains tax would “crash” the market. Well, isn’t that an acknowledgement that the existing tax regimes caused prices to rise in the first place.

Because so many investors are in the housing market in order to minimise tax the demand for dwellings has gone up and so have prices.

The first-home buyers grants during the Howard Government caused a massive increase in demand as people got desperate to get their share of the freebies. As the level of the grants went up, demand shot up and the increase to housing prices vastly overtook the value of the grants.

In the meantime, the states did what governments around the world have done across all policy areas since the 1970s: an orderly increase in environmental and safety regulation that has improved all our lives by raising livability and life expectancy. To push those out the window to allow a boost in supply of “affordable” housing would be a backward step.

But we know what it would also do: it would enable housing and construction companies to make higher profits. Profiteering at cost of sustainability, a good environment and good residential amenity.

In short, the Morrison solution (which includes doing nothing about negative gearing and capital gains tax) would help the Coalition’s supporters. And it would probably not help the housing crisis much as long as immigration remains high.

So in the words of Mark Twain: “Buy land, young man, they are not making any more of it.” And you can rely on the Federal Government to keep immigration high so that demand remains high for the products of its business mates who can also pick up cheaper trained labour, and too bad for the environment, sustainability and residential amenity. And politically we can just blame the states.

In the OECD, Australia is in the top three for generous capital gains and negative gearing and population growth. It is in the middle for building and environment regulation. Yet it has the worst housing affordability. Looks more like a demand-side rather than supply-side problem to me. But then one-sided Morrison thinks our budgetary problems are all on the spending side.

As it happens, people are becoming awake to this. A Roy Morgan poll this week revealed a less favourable attitude to immigration as a whole but not as opposed to refugees and Muslim immigrants – so it is a growing concern about the economic and environmental effects of immigration, not a race matter. Fifty-eight per cent want Australia’s population kept under 35 million.

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MEANWHILE, the major parties have no population policy.

So John Howard got it wrong when he said you had to be tough on refugees lest you weaken support for the high immigration that his business mates like. Quite the reverse. You need to reduce immigration so you can deal more humanely with refugees.

In short, Morrison’s address is just another example of ignoring the evidence, opposing good policy, ignoring sensible majority views, blaming others, opposing for the sake of opposing whatever the other side puts up, and looking after your mates. The hallmarks of Australian politics in the 21 st century.

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