Treasurer's advice to home-buyers: Get a good job

Joe Hockey. Photo / Getty Images

Australian Treasurer Joe Hockey has again been accused of being out of touch with everyday economic realities after advising would-be home-buyers facing spiralling prices to get "a good job ... [that] pays good money".

Hockey, who earns A$365,868 ($393,778) a year and lives in a A$6 million home on Sydney's leafy north shore, made the remark amid heated debate about an affordability crisis that is leaving Australians - particularly young people in Sydney and Melbourne - priced out of the market.

The Treasurer, who was pilloried last year for declaring poorer people "don't have cars or actually don't drive very far", also claimed this week that "if housing were unaffordable in Sydney, no one would be buying it".

His comments were seized on by the Opposition leader, Bill Shorten, who said: "As if Joe Hockey hasn't insulted families enough, he's at it once more ... This is proof he just doesn't get the pressure families are facing. What planet is Joe Hockey living on?"

Not long ago, owning a home was the "great Australian dream", accessible to more or less everyone. But with an average Sydney house now costing nearly A$1 million, even in less salubrious suburbs, the lower-paid such as teachers, nurses and childcare workers have little hope of realising that dream.

Sydney and Melbourne were recently ranked the world's fifth and sixth most expensive cities, ahead of London, New York and Hong Kong. Median house prices in Sydney rose more than 12 per cent in 2014, and 3 per cent just in March.

Yet last week ministers rejected suggestions of a "housing bubble", contradicting Treasury head John Fraser, who said there was "unequivocally" a bubble in Sydney and areas of Melbourne.

In Parliament, Prime Minister Tony Abbott - also blessed with a generous salary and a spacious family home - said that, as a Sydney property owner, "I want housing to be affordable but ... I also want house prices to be modestly increasing." Hockey echoed that sentiment, saying while Sydney prices were "expensive as a multiple of average weekly earnings", he believed "a lot of people would much rather have their homes go up in value than fall in value".

Critics say both are missing the point, which is that increasing numbers of people cannot afford a home - a prerequisite before they can enjoy watching its value rise.

Although interest rates are at an all-time low, after the Reserve Bank cut the cash rate to 2 per cent last month, wages have risen far more slowly than house prices.

Meanwhile, policies such as negative gearing - which the federal Government has resisted calls to abolish - have fuelled investor interest and driven prices up even further. Investors account for nearly half of all new home loans.

Cassandra Goldie, chief executive of the Australian Council of Social Service, told Fairfax Media Hockey was "out of touch with the reality of everyday families and individuals who are doing their best at a time of rising unemployment and a slowing economy".

While some government supporters said Hockey was simply stating the facts, even they agreed his comments were insensitive.

The Daily Telegraph translated his advice as "all you need to buy a house in Sydney is a job like mine".

The Sydney Morning Herald said in an editorial that many people "would be tempted to return the favour with some personal advice for the Treasurer: find another job altogether, one that suits your apparent arrogance and disconnect from reality".