Matters of Urgency – Housing, Wednesday 15 November, 2023
Senator BABET (Victoria—United Australia Party Whip) (16:05): I understand Senator McKim’s intention with the Greens’ urgency motion on the rental crisis, but, unfortunately, I cannot support it, because of basic economics. Price caps are not the answer. We all know that. They have never worked. They will never work. The Australian people are hurting because they want to see action from their government, but, unfortunately, the government is fuelling the fire of inflation with the big migration and big, wasteful spending. Rent caps may appear attractive on the surface, but they are not the solution. In fact, they’ll make the problem worse. As our good friend Senator Scarr keeps saying, price caps do not work, because of basic economics. He says it all the time. If there is one rule for economic success, it should be this: do the opposite of what the Greens say or recommend.
Price cap policies often worsen the very problems they seek to address. This has been shown across the world, in places like Paris, Berlin and San Francisco. Overseas experience has shown that rent controls lead to many unintended consequences, including reduced supply, higher housing costs and more bureaucratic control. Forget artificial price controls; the real solution is actually very simple. Just increase supply. But how do we increase supply? That’s also very simple. I’ll tell you how to do it. We’ve got to reduce regulations on land developments and to fast-track building approvals. We must incentivise supply by eliminating unneeded taxes, duties and levies on land. Increased supply will naturally reduce rents. Socialism, unfortunately, is not the answer. It’ll only lead to greater problems, a lower quality of life, higher prices on absolutely everything and a reduction in our standard of living. Make capitalism great again.