Ideas@TheCentre – The Centre for Independent Studies

Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Sonia Kruger, terrorism, and social cohesion

Jeremy Sammut

22 July 2016 | Ideas@TheCentre

sonia krugerBanning Muslim immigration — as TV personality Sonia Kruger has urged — would cause more problems than it would solve. It would, at a minimum, violate the first rule of a successful non-discriminatory immigration program, which is that you cannot invite people into a country, insult them, and not expect to compromise social cohesion.

That said, Kruger does not deserve the abuse that has been doled out for thinking aloud about Islamist terrorism and throwing up the idea of a religion-based migration bar.

The idea that Kruger is a racist is absurd. What is more telling is that someone who is far from being a culture warrior dared to cross a cultural fault line and express such an un-PC opinion.

Kruger is a modern woman who, like most of us, takes the norms of western democratic societies for granted. Like most of us, as well, she finds it unfathomable that religious belief would motivate the kind of horrific acts of political violence that are proliferating in number and scale in countries with large Muslim populations.

Unlike her critics, at least Kruger is honest, and takes the religious origins of terrorism seriously — and doesn’t buy the myth that atrocities like Paris and Nice are ‘nothing to do with religion’.

There have, of course, been predictable claims made about hatred and ‘Islamophobia’ … lead by local Islamic leaders and organisations.

Once again, the Islamic community has failed to adopt a more constructive approach. Instead of denying that terrorism has anything to do with Islam, they should accept that the kind of concerns Kruger articulated about religiously-motivated terrorism are entirely legitimate.

Many Australians simply do not understand why the Islamic community cannot come out strongly and state plainly that they share their fellow citizens’ concerns about what a minority of their co-religionists do in the name of their religion.

If they did this, they would practise what I think is the second rule of a successful non-discriminatory immigration program: fears about social cohesion are best addressed not by migrant groups playing the perpetual victim, but by demonstrating that these groups fully share and believe in mainstream Australian values.

Selling farm policy

Michael Potter

22 July 2016 | Ideas@TheCentre

farm farming harvest MPA Productivity Commission draft report has found that Australian farm businesses are subject to a “vast and complex array of regulations”. The report won’t be pleasant reading for any of the major political parties: it criticises bans on genetically modified crops and foreign shipping, which are generally supported by the ALP. But there are also criticisms of policies supported by the Coalition; such as effects test in competition law, tighter restrictions on foreign investment, and several monopoly marketing regulations.

The Coalition will need contortions to deal with the report’s finding that the tightening of foreign investment rules for farms is not warranted. While foreign investment is usually reviewed for businesses worth over $252m, the Coalition has mandated that review is required for farm land and businesses worth more than $15m.

The PC skewers the main arguments for this stricter rule, confirming yet again that foreign ownership of farm land won’t endanger Australia’s food security or sovereign control and won’t cut employment opportunities for locals. The PC also argues existing land use rules apply equally to foreign owners as local owners, so the argument that foreign owners will ‘misuse’ land is a furphy, and many farm businesses were started as a result of foreign investment.

So the benefits of tighter regulation are minimal; and the PC unsurprisingly confirms that costs of tighter foreign investment rules may be substantial, although precise costs are difficult to estimate.

But these criticisms of the Coalition’s foreign investment policy should provide no joy to the ALP, as they (along with the Greens and others on the Left) have been extraordinarily critical of foreign investors in the debate over company tax. If the ALP argues investment in farm land is to be promoted, why not promote investment in all industries through a company tax reduction?

We can only hope politicians actually study the arguments in the PC report and don’t take the easy way of arguing the report is brilliant where it helps their position and woeful when it opposes their preferred view of the world.

HILDA points to the home

Simon Cowan

22 July 2016 | Ideas@TheCentre

pensioners seniors retirees home houseThe big news from this week’s latest Household, Income and Labour Dynamics in Australia (HILDA) survey is that the proportion of homeowners is declining, with fewer young people owning homes than ever before.

Slightly lost in the data buzz was the fact that the groups who have seen the biggest increase in their wealth over the past 12 years are (roughly in order): elderly couples, followed by elderly men and women. The groups that have done worst? Lone parents, single men and women who are not elderly.

The reason for this is housing equity. The groups that have a lot of it (retirees) have done well; those that don’t own homes are treading water. While home ownership fell among every age cohort under 65, retirees’ homeownership remains basically unchanged at 75%.

Although this HILDA module shows a slight decline in average home values between 2010/11 and 2013/14, it is worth noting that between May 2012 and May 2016, house prices increased in Sydney by 57% and Melbourne by 40%. These increases will feed into the next HILDA wave.

Median home equity not only increases across each age cohort, but the percentage increase in the value of that home equity increases too. Those over 65 have seen a 52% increase in the value of their home equity over the past 12 years, yet those between 25 and 34 actually lost 8%.

This increase in housing wealth among retirees has occurred in conjunction with increases in pension costs, as retirees continue not to use their wealth to support their retirement. HILDA again lays bare that the reverse mortgage market is completely underdeveloped, estimating that reverse mortgages make up a fraction of 1% of home loans.

Younger workers are being locked out of the housing market, yet being expected to pay increasing pensions to retirees whose wealth has soared.

This situation needs remedy. The answer is for the home to be included in the pension means test, together with a government backed reverse mortgage product that encourages retiree households to translate their wealth into higher living standards.

HILDA again shows us that the home is the answer to the ageing population.