Way back in 2014 politicians held $300m in property, so how should they influence housing policy?

Dallas Rogers, Western Sydney University

Australian politicians are keen property owners. Data compiled by Lindsay David, Deakin University’s Philip Soos and Paul Egan from the parliamentary register of members’ interests shows the 226 members of federal parliament (both houses) have an ownership stake in some 563 properties. While these properties may be jointly owned with a spouse, this is an average of 2.5 properties per member.

In 2013, the 76 members of the Senate had 202 property holdings and the 150 members of the House of Representatives had 361 property holdings.

Top of the leader board is National Party Senator Barry O’Sullivan with a portfolio of 50 properties. David Gillespie follows with 18 and Palmer United Party Senator Clive Palmer has a seemingly conservative 13, although the total value of Palmer’s properties is unknown (see table below).

The estimated total value of these properties is said to be around A$298 million. This was calculated by multiplying the 563 properties by the median dwelling price of $530,000, as of July 2014. If these properties are located in major cities or other high-value areas the property holding could be substantially higher.

Property, democracy and fairness

Major Australian cities have been feeling the housing affordability squeeze for some time now. Owning multiple investment properties does nothing to ease the upward pressure on real estate prices or to increase first home buyer opportunities. Ensuring housing equality – for example, by providing adequate housing for all social groups – is becoming an increasingly complex task in Australian cities.

When the philosopher John Rawls coined the phrase the “property-owning democracy” he was interested in how property might be used to satisfy the principles of justice as fairness. Rawls could hardly have known the illuminating irony he might cast on the property holdings of politicians.

Should we be alert, perhaps even alarmed, at the real estate investment practices of the guardians of Australian democracy? Well, maybe. Some 94% of the members of federal parliament owned real estate in 2013. More than 50% own investment or commercial property. By comparison, ABS data show less than 20% of the general population owned a property other than the one they lived in in 2012. But it’s politicians that set the taxation and housing policies that attempt to address our housing concerns.

Policy push

Senator Xenophon is currently seeking changes to the Superannuation Act that would allow funds to be released to purchase a first home. This would not put downward pressure on first home buyer housing stock. In fact, it could diversify the investment pool and lead to upward pressure.

According to the register, Independent Senator for South Australia Nick Xenophon has a portfolio of eight investment properties.

A spokesperson for Senator Xenophon said the register was outdated, but confirmed the Senator owns four investment units and his super fund also owns a property (under management). The correct figure is expected to be reflected in the next register of Senator’s interests.

Addressing housing disparity

Australia’s democratic process is predicated on notions of impartiality and transparency. The parliamentary register of members’ interests is an important citizenry “watch dog” mechanism. It is a mechanism that should be employed to monitor the property holdings of Australian politicians and then deployed to call their actions to account.

It is important to note that the research doesn’t show a causal link between property holdings and decisions of politicians. But it would be imprudent to assume prima facie that the property holdings of Australian politicians do not play a role in their political thinking, especially as this thinking relates to housing, taxation or even superannuation policy.

What is needed is a broader discussion about housing disparity that fully acknowledges and accounts for these vested interests and tools of political influence. This should include the politics and interests of the politicians themselves.

The naïve assumption that housing wealth will trickle down through a property-owning democracy have been shattered by the realities of 21st century Australian cities. The question which remains is whether our democratic processes can be reorganised to address these now clearly evident housing disparities. A discussion about the real estate ideologies that underwrite the investment agendas of Australian politicians seems like a fitting starting point.

Dallas Rogers, Research Fellow – Urban Research Centre, Western Sydney University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Trawling through registers of interests politicians are required to fill out – the failure to do so has led embarrassing moments for some, including employment minister Michaelia Cash and Labor’s David Feeney – the ABC concluded the Canberra’s elected representatives own 228 investment properties between them.

Earlier this year, former health minister Sussan Ley, resigned over a parliamentary travel expenses scandal in which she bought an $800,000 investment apartment on the Gold Coast, while on a taxpayer-funded trip. Another Coalition MP, the late Don Randall, paid back $5259 in expenses to “alleviate any ambiguity” following a 2012 trip to far north Queensland, with his wife on “electorate business”, during which the couple took possession of an investment property in Cairns.

The ABC included agricultural, commercial, industrial and residential properties, as well as properties jointly owned with spouses or family members or in trusts or companies where the parliamentarian is a beneficiary and they have declared their interest.

The ABC says “quite a few politicians have declared property investment companies or trusts but not the properties owned, so the real number of properties owned could be higher”.

Then there’s the issue of owning property in the national capital while claiming a $273 per night “travel allowance” from taxpayers to cover the costs of staying there, which led to accusations that politicians are “double dipping”. Nearly 40 MPs or their spouses own property in Canberra, including senior government ministers.

Former treasurer Joe Hockey’s wife owned a house she bought for $320,000 in 1997, which her husband used when in town. It sold last year for $1.5 million. During his time in parliament, it’s estimated that Hockey claimed around $184,000 in travel allowances over 18 years to stay there.

The $273 allowance is not counted as income. The ATO handed down a ruling saying MPs renting in Canberra from a spouse or family member are allowed to essentially negatively gear the property and claim income tax deductions on a range of costs, including mortgage interest, rates and power, on a second property. Even better, it’s capital gains tax free when sold.

Among the data analysed by the ABC, it revealed that 226 politicians owned 264 homes they listed as “residential”. Those second residential properties are based in Canberra.

Finance minister Mathias Cormann, who owns two residential and three investment properties.

A Queensland LNP senator, Barry O’Sullivan, a former police detective, grazier, and property developer, topped the list, with 33 properties, although that figure is well down on 2014’s 50 properties a year after he’d replaced the now Nationals leader Barnaby Joyce in the Senate.

O’Sullivan’s portfolio includes 11 agricultural, two residential, eight investment and seven commercial and five industrial investments properties.

NSW Nationals MP David Gillespie, the assistant minister for health, who took former independent Rob Oakeshott’s seat in 2013 is second with 18 places, including 10 commercial investment properties in Port Macquarie and six investment units in the same town.

Liberal Karen Andrews has 10 properties, including 9 investment properties in three states.

Prime minister Malcolm Turnbull’s portfolio is a modest four, including his home in Sydney’s Point Piper, a Canberra apartment, the Hunter Valley farm he inherited from his late father, and a commercial investment in Sydney’s Potts Point.

Opposition leader Bill Shorten only has his home in Moonee Ponds in Melbourne.

The ABC had compiled a full list of who owns what here.