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Stephen McMahon

Nov 11, 2010

The people will be angry about what we tell them they're angry about

Check out this headline from yesterday's Herald Sun, and


Check out this headline from yesterday’s Herald Sun, and the story it accompanied:


It’s obvious what’s important to Stephen McMahon and his editors:

STAMP duty reform is shaping as a key issue at today’s Herald Sun/Sky News People’s Forum.

The latest Treasury figures show home buyers will be slugged more than $15.6 billion in property taxes over the term of the next government. Stamp duty is forecast to peak at $4.17 billion in 2013-14 as the State Government cashes in on Victoria’s booming property market. When Labor took power 11 years ago, the annual tax was worth $1 billion.

But neither party is willing to commit to stamp duty cuts with less than three weeks until the November 27 election.

Alright, but what evidence does he present in support of his headline and primary contention that stamp duty is “shaping as a key issue” at their forum, where “the people” will “have their say”?


The only quotes in the article about stamp duty and taxes are from self-interested lobby groups like the Real Estate Institute of Victoria. They find one bloke on the printed page to ask about stamp duty, but to suggest that makes it “the key issue” about which there is “rage” in the community (as opposed to in the REIV, which will obviously benefit if stamp duty is cut and house prices inflate to make up the difference) is absurd. Who’s “raging”? Where? Why are they not in your story?

A spectacularly shameless example of a paper trying to tell people what they think (in a frankly misleading way), ahead of asking them.

But did it work?

Well, not one single question on the issue made it to the Herald Sun‘s transcripts of the questions for either Mr Brumby or Mr Baillieu. These “locals” it found didn’t mention it (actually, they mentioned a Greens policy, a rail line out to Doncaster – but of course at “Herald Sun/Sky News People’s Forum” the Greens were not allowed to speak). From their story, it looks like the only mentions of stamp duty were from Baillieu, indicating that he was going to make an announcement in the future to cut it in some way.

But, if you ignore the shameless editorialising in the Hun’s report (“VIOLENT crime, cuts to stamp duty and the Labor Government’s 11-year record last night dominated Victoria’s first people’s forum”) and look for the actual evidence of voters being particularly concerned with stamp duty – it’s simply not there.

Some “rage”.

PS: For the record, although at first glance it sounds like a cut to stamp duty would make housing more affordable, in reality it would – like the first home buyer’s grant – push prices up.

That’s because people tend to bid what the bank will lend them, which means that a $380k house plus $20k stamp duty will just become a $400k house. The vendor and real estate agent will pocket the difference – and existing home-owners, with more equity in their existing properties, will be able to borrow several times more than the difference when they go out to gobble up entry-level properties as investments by outbidding first home buyers.

And that’s quite apart from the tax revenue that would have to be sought from another source.



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26 thoughts on “The people will be angry about what we tell them they’re angry about

  1. AR

    RavenRed – I thought that was the (ex)Frank Zappa – “rock journalism is written by people who can’t write, interviewing people who can’t talk, for people who can’t read.”
    Or “Yes minister” which is along the lines (no Oz equivalent given our paucity of newspapers) ‘the Grauniad is for who think they should run the country, the Torygraph for those who own the country, the Mail is for those who think another country runs the country and the Sun is for people who don’t care who runs the country as long as they have big tits”. Curently the PM of the UK is a big tit, propped up the most shameless charlatan to enter any Parliament since the Oxley Moron.

  2. Shabadoo

    Charmingly naive of you to think that everything in the NSW budget is for “much-needed public services”, right down to the tens of millions in compensation payments for those involved in cancelled public works projects … but to follow your logic, I presume you must also be quite skeptical of the solar rebate scheme? http://www.smh.com.au/environment/energy-smart/rebate-for-solar-plan-favoured-the-rich-20101110-17npf.html

  3. Jeremy Sear

    “Even if a reduction of stamp duty leads to higher prices, I’d rather that cash in the hands of private citizens where it can do less harm.

    – LOL – can’t argue with that!!”

    Really? I’d rather it be paying for much-needed public services, rather than being effectively handed back to the wealthier amongst us.

  4. RobJ

    He’s an architect.

  5. confessions

    [Got to remember Big Ted used to be in real estate]

    Really? I had him pegged as a former school teacher with all that ‘show of hands’ stuff last night.

  6. twobob

    (…put ‘em together and what’ve you got?)

    A newspaper designed for Victorians?

  7. Ravenred

    As the old, old joke used to go:

    “The Sun is for people who can’t read”
    “The Herald is for people who can’t think”

    (…put ’em together and what’ve you got?)


  8. Shabadoo

    That’s part of the problem, Dam, is that they can carve a great hunk out of homeowners once every seven years (on average), but at any given time it’s a theoretical concern for most of the population, so the political impetus to change remains low.

  9. dam buster of Preston

    Tim Graham @ 11 – Got to remember Big Ted used to be in real estate but mainly commercial (and schools)

  10. dam buster of Preston

    DeanL – I purchased an existing home in 2002 and got the $7k FHOG.. woo hoo. It covered less than a half of the stamp duty that was imposed. So fater scrimping and saving (house sitting to save on rent, actually winning a share in 2nd division in tattslotto!) to have about 10% of the purchase price it was blown away by the stamp duty.

    I agree it is an issue IF you are trying to buy a house. But now I don’t really care because I am not in the market for a house. If I was then I would care.

    I personally don’t think it is an issue as big as it is made out to be because not everyone is in the situation right now of having to deal with it on a daily basis.

  11. mondo rock

    Even if a reduction of stamp duty leads to higher prices, I’d rather that cash in the hands of private citizens where it can do less harm.

    LOL – can’t argue with that!!

  12. Jeremy Sear

    “Actually that’s not true.”

    What I said was true – if it was briefly mentioned at the forum, it wasn’t in the Herald Sun‘s transcripts.

  13. Shabadoo

    I’m not sure what the property market is like in Vic, but in Sydney, $500,000 is about what you pay to get your foot on the ladder when you’re young. All your subsequent property purchases will not have stamp duty offset by grants (though talk about your churn!). We just bought a house and had to pay about $50,000 to the venal NSW government. Even if a reduction of stamp duty leads to higher prices, I’d rather that cash in the hands of private citizens where it can do less harm.

  14. Holden Back

    Anyone caught up with Our Tone shooting the breeze about elected judges?

  15. confessions

    [Well, not one single question on the issue made it to the Herald Sun’s transcripts of the questions for either Mr Brumby or Mr Baillieu. ]

    Actually that’s not true. I watched the entire forum, and there was a question put to Bailleau about ‘property tax’ which he answered in the context of stamp duty. The moderator Speers put a predicted headline to him of wtte ‘Bailleau will lower stamp duty’ which he ran away from pretty quickly.

    But it is a stretch for the tabloid to imply the issue dominated the forum. It didn’t.

  16. Tim Graham

    Watching last night, there was actually a question to Baillieu about it but it was framed as “unfair property taxes” or something along those lines. He did respond to it by talking mainly about stamp duty though. Nothing asked of Brumby, though.

  17. DeanL

    Some facts on stamp duty here:



    For a new home in Melb, a first home buyer is eligible for $20K in grants ($7K for an existing home first home buyer).

    Stamp duty on a $500K home is around $22K.

    So, the grants are pretty much off-setting the stamp duty, exceeding it if the home is lower in cost (a $400K home has stamp duty of around $16K)

  18. quantize

    like we need ’small l’ lies when we have the MSM

  19. quantize

    Ah ‘mischief’…

    like we ‘small l’ lies when we have the MSM

  20. DeanL

    @ 4

    It wasn’t really my argument. Just a bit of mischief to start the day.

  21. twobob

    a paper trying to tell people what they think?

    whale oil beef hooked!
    I’m gob smacked!

  22. DeanL

    I think you’re right about stamp duty. I’m not sure how it would be divided up but, if the money isn’t going into the government coffers for services, then it is going to end up in other hands and the argument that it will be the hands of the mortgagee seems unlikely to me. Perhaps a more sensible policy might be to get rid of first home buyers grant and abolish or reduce stamp duty for first home buyers leaving (higher) stamp duty for investment buyers?

  23. Jeremy Sear

    Well, depending how you define “formed government”. I’m not sure how that helps the original claim you were putting, though.

    Anyway, let’s leave this for the Victorian Election thread I suppose I’d better put up now.

    This thread is here to talk about the post.

  24. DeanL

    The Greens have formed government with the ALP at the federal level have they not, Jeremy?

  25. Jeremy Sear

    “It appears that the Greens seem more likely to align themselves with the Liberals and vice versa this state election.”

    That is, of course, rubbish. The Greens never have and, unless there’s some huge change in the Liberals or the ALP, never will “align themselves” with the Liberals. The worst the Greens do is open tickets – in contrast, the ALP has preferenced the Liberals (and, remember, given us Steven Fielding) and is actively trying to persuade the Libs to preference it against the Greens this time.

    You’re talking about the effort by the ALP bullshit machine in yesterday’s Age, right?

    Anyway, it’s not really on topic for this post. We might need to have a Victorian Election thread.

  26. DeanL

    It appears that the Greens seem more likely to align themselves with the Liberals and vice versa this state election. I wonder how this might be spun in some quarters of the media. This may make hypocrites of many people on both “sides” of the major-party political divide.


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