Joe Hockey Belongs To A Class Of Wealthy Landlords, Of Course He's Untroubled By Housing Affordability


You’ve got to hand it to Joe Hockey. No-one is better at derailing the Abbott government’s political prospects.

Housing affordability has long simmered as a political issue in Australia. As home prices have skyrocketed in recent years, more and more first-home buyers have been locked out of the market.

But if housing affordability has loomed in the background, the remarks of the Treasurer this week have catapulted it to the forefront of political calculations.

Hockey did it with a single line, to be added to his increasingly long list of political gaffes. “The starting point for a first-home buyer is to get a good job that pays good money,” he said this week, with that stunning lack of political common sense that has become the hallmark of his time in office.

Politicians say dumb things all the time, so it’s perhaps surprising that this particular remark has blown up into a major controversy. But there are a number of reasons why this gaffe has resonated.

Firstly, Hockey was wrong to say that a good job would be sufficient to buy a home in this country. For first-home buyers in Sydney and Melbourne, the possession of a high-paying job may still not be enough to gain a foothold in their white-hot housing markets.

Sydney’s median house price is now above $910,000. The median apartment is above $600,000. Even small flats far from the central business district are selling for half a million dollars. And yet the median household income in Australia is still only around $52,000.

Many 30-somethings on above-average wages find the prospects of buying a home receding into the distance. How many cleaners, baristas, or factory workers earn enough to put down a deposit for a dwelling in this country? Fewer and fewer.

For renters, the situation is critical.

Anglicare’s recent rental market surveys have demonstrated in vivid detail the plight faced by low-income renters in our capital cities. Less than one per cent of properties are affordable for renters depending on government benefits. Less than seven per cent are affordable for a household with one earner on the minimum wage.

And that’s before we even mention the roughly 750,000 Australians who are looking for work. Needless to say, the prospect of a “good job that pays good money” is something many among us can only dream about.

Secondly, Hockey has form.

This is the politician who lectured Australians about the “end of the age of entitlement”, while drawing a handsome parliamentary allowance that he has used to pay off the mortgage for his Canberra home. This is the politician who told us that increased petrol excises were unlikely to worry “the poorest people”, who, after all, “either don't have cars or actually don't drive very far in many cases.”

This highlights the final aspect of Hockey’s gaffe: his astonishing loss of touch with everyday reality. Ordinary Australians do not begrudge wealthy individuals who have worked hard and risked much to achieve success. But they can smell the hypocrisy of privilege a mile off.

Joe Hockey’s family trust owns four houses, including a stately pile in Hunters Hill that could be worth as much as $5.4 million. With a combined household worth reportedly above $10 million, Hockey and his merchant banker wife are well and truly in the top one per cent of Australian households.

The Treasurer has not arrived at his current wealth and status by dent of entrepreneurial savvy, or even sheer hard work. As we know from the facts of his biography, Hockey enjoyed a comfortable upbringing and then married well.

He worked as a corporate lawyer only briefly before entering politics, where he has enjoyed high wages and generous allowances ever since. And yet, as Treasurer, he has attacked government payments like family tax benefits as “middle class welfare.” Both of his budgets have redistributed wealth upwards, from the poor to the rich.

The issue of Parliamentary allowances remains a sore point for many voters. Like all parliamentarians, Hockey receives a generous nightly allowance meant to cover accommodation costs for MPs travelling to Canberra during sitting weeks. Hockey collects the allowance even though he stays in his own house in the Canberra suburb of Forrest.

The practice is acceptable under current Parliamentary entitlement rules. But it sticks in the craw of ordinary taxpayers. In effect, the taxpayer is paying off the Treasurer’s mortgage.

Is it a rort? Of course it is. How many Australians are lucky enough to get their boss to pay for their mortgage?

Today, South Australian independent Senator Nick Xenophon quite properly began a debate about whether the perk should be abolished.

Hockey’s living arrangements also reveal a major public policy issue that deserves far more scrutiny: the conflict of interest Australian politicians face when it comes to housing policy.

While Hockey owns four houses in trust with his wife and father, Finance Minister Mathias Cormann owns five, and Malcolm tunrbull owns seven. Collectively, Australia’s parliamentarians belong to a class of wealthy landlords. Can we be surprised that they seem quite happy with current housing policies designed to drive up property prices, or that they seem to care so little for the problems of renters?

Many have remarked on the irony of Joe Hockey’s comments about securing a good job that pays well. After this week’s gaffe, the hardheads in Peta Credlin’s office must be wondering if the government can afford to keep Hockey on as the Coalition’s top economic policymaker.

Come to the next cabinet reshuffle, Joe Hockey may be looking for a new job himself.

Ben Eltham is New Matilda's National Affairs Correspondent.