The Stats Guy: Praise for politicians. No, seriously, some deserve it

Image: Getty, TND

Happy New Year! I know you might be hungover as you are reading this column. I won’t be gentle today. We will start the year with a concept so bizarre, outrageous one might say, that it will make you forget your hangover right away: Today I will be praising politicians for things they’ve done in 2022.

Land tax reform

First let me congratulate Dominic Perrottet (the Liberal Premier of NSW) on the land tax reform in NSW. The reform was explained succinctly in previous reporting. Here is my simple summary:

First home buyers in NSW can now choose between paying a tiny annual land tax or a big fat lump of stamp duty upfront. When land and construction costs are very high, big stamp duty fees make it even harder for potential first home buyers to save enough money for their down payments. I view this as a smart policy change and a fair one since it gives first home buyers the choice. This is potentially a smart way of transitioning to a new policy (land tax for all new buyers) while slowly phasing out an old policy at a snail’s pace.

TAFE reform

My second bit of praise goes to Brendan O’Connor of the Labor Party, the federal Minister for Skills and Training, who oversaw the TAFE fee reform. Here is another simplistic summary:

The federal government negotiated a deal with the states to make a total of 180,000 TAFE places fee-free (a 50:50 funding arrangement between the states and the feds). I view this as an important step towards universal free TAFE in Australia. Charging Australian residents to acquire a TAFE qualification is short-sighted. The skills shortage in these sectors is huge and won’t improve in the long-term, as I suggested in previous columns.

The median income on a TAFE qualification isn’t enough to justify fees, whereas the higher incomes for university graduates justify fees to a degree (see the table in the very first column I wrote for The New Daily). Ideally, we would restructure our workforce by automating low-paid jobs away as much as possible and pushing workers destined for these jobs into TAFE-level jobs. We certainly have the demand for enough such jobs.

Neither of these policy changes is guaranteed to work. The future is never that easy to predict. What I care about is that both policies are systemic in nature rather than lazy duct tape policy changes that try to hold a broken system together.

Pollies should be brave

In 2023 I want more politicians to think big and to push big changes. The land tax reform is much more helpful to first home buyers than the idiotic first home buyer grantsm, which only drive up house prices. Free TAFE lowers the barrier entering the Australian middle class. We are facing big issues that are systemic in nature (climate change is a nice example) and that need systemic thinkers, systemic solutions, and systemic policy interventions.

Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. Follow Simon on Twitter or LinkedIn for daily data insights.

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