Alan Kohler
$27.99
Black Ink

Former editor of The Australian Financial Review, Alan Kohler, delves into the spiralling cost of housing, looking at how it came about and what can be done to stop almost entire generations being shut out of home ownership.

Much of the problems, Mr Kohler points out, can be laid at the feet of Prime Minister John Howard, who implemented tax reforms that transformed home ownership into a means of wealth creation for millions of Australians, henceforth cutting others out of the market.

He also blames negative gearing, which was introduced by the Hawke Labor Government in the 1980s, and goes further back to condemn Robert Menzies, who cut into public housing in the 1950s. The author is particularly scathing about another Menzies plan introduced in 1964; cash grants to home-buyers. Such handouts have been repeated in different guises by different governments since then, with the only effect being inflationary.

Throw in immigration, strict planning laws and an economy centred on big cities, Mr Kohler points out, and we have housing costs rising much faster than wages.
The last chapter outlines some of what Mr Kohler recommends be done to make housing more affordable to more people. He believes immigration needs to be linked to housing supply, the tax system moved away from encouraging property accumulation and local government encouraged, or forced if required, to create more opportunities to build.

The Great Divide is a great look at a crisis facing Australia and should be on the reading list of every MP in the country.