The fair go has got up and gone

While the government reformed the system, it did not reform enough to take a picture of itself, making sure that no one who already had it felt anything. This is not courage. Professor Vince Hooper writes that this is a better form of passivity.

AUSTRALIA TELLS ITSELF A BEAUTIFUL STORY: friendship, fair dealing, no masters and no weather. This is a source of pride that the country never tires of. But Britain, for all its inherited titles, at least acknowledges that its hierarchy exists.

Australia does the opposite: It denies structure, even when that structure becomes something close to caste.

It is not caste in the formal sense. No scriptures, no barriers to marriages, no ordination rituals. But strip away the egalitarian branding and the architecture is clear: While young people and newcomers make the move, there is a pool of opportunity, wealth, and influence among those who arrive early and those who stay.

Start with the young Australian. They leave college each year with a debt indexed to their income, enter a marginalized job market, and find the only asset that once defined a settled life, a home, priced beyond any wage they could earn.

They pay full marginal tax on every dollar they work, while the group above them mostly gets a light tax on the wealth they own. First they delay the house, then the children, then the feeling of increased effort. Frugality no longer buys what it bought its parents. The staircase not only got longer; The lower steps have been cut.

The immigrant is no better off. Those who have the same qualifications, the same experience but have been here for two to six years earning one-tenth or less than similar localsFor highly educated women, this difference reaches one third; It takes the better part of fifteen years to catch up.

International student pays two, three, sometimes four times the domestic wage Equally, they work temporary shifts for a wage they cannot object to because their visas are secured. We import skill and refuse pricing; We charge a premium from the student and call it a guest.

What matters now is the frame. Housing.

In Australia, wealth is no longer primarily gained by earning. It is being edited. The older group bought land cheaply and spent four decades on a call option on the discretion taken by the policy itself: negative gearing, capital gains relief, retirement test-free family home, loans repaid in cash.

Young people sit on the other side of this trade. They do not have the same choice, they are forced to buy in strikes inflated by privileges that enrich the owners. A group collects the premium. The other one writes.

This is where the word “caste” makes its living. As young people age, the life cycle gap closes. A caste does not do this because the advantage is now inherited. The determining variable in whether a thirty-year-old becomes a homeowner is no longer income or savings. It’s whether a parent has it or not. The “bank of mom and dad” has become the hereditary principle that Australia has sworn to abolish, separating future generations from earning a penny.

And here the state reveals its hand. For a decade, Canberra left the concessions untouched. Finally moved in May, Narrowing negative gearing and reducing earnings relief from 2027.

Nerves evaporate when you read the fine print. Existing investors were grandfathered. New buildings protect a lot. The change won’t even begin until mid-2027, and the two biggest shelters, retirement and family home, untouched.

While the government reformed the system, it did not reform enough to take a picture of itself, making sure that no one who already had it felt anything. This is not courage. It is a better version of passivity: the politics of protecting the group that votes, deposits money in the bank, and donates; it masquerades as concern for the group that cannot yet afford to do any of these three.

It is the carriers who bear the tail risk. When the shock comes, whether it’s a rate hike, a recession or a pandemic, it’s day laborers, renters, temporary visa holders and leveraged first home buyers who bear the brunt of the losses. The protected group, supported by equality and privileges, barely feels this movement.

Justice is not just about the average. It’s about who bears the difference, and in Australia the difference lies almost entirely with those least able to bear it.

The solutions are not mysterious; Half the country knows about them and still hesitates. Start with scarcity, because underlying every tax argument is simple arithmetic: Australia promised 1.2 million homes by 2029 and will fall as short as the fifth, There is nothing going right.

The cheapest fix costs Canberra next to nothing: it just needs to stop banning construction. Density is effectively illegal on most land near where jobs are located; Legalize the missing middle, postpone planning until the deadline, and lay the pipes and cables that will turn the zoning map into a street. The blockade was never about money, but a level of government afraid of its own homeowners rezoning the next suburb.

So stop taxing wealth more than holding it.

Stamp duty penalizes the family who dares to move; Land tax penalizes the investor who sits on a block and waits for unearned profits. So replace one with the other, reform economists have insisted for a generation and politicians ran for just as long. Put an end to grandfathering. Bring retirement and family home; these two cover the carefully allocated budget above a reasonable threshold.

And give up on first home purchase grants and shared equity schemes: In a fixed market, every dollar given to the buyer is a dollar added to the price. They vote very well and sell kerosene as charity.

None of this is beyond us; levers have been made, a few already half-drawn. What is missing is the courage to make them reach the people who already have them. Therefore, ambitious newcomers and young strivers do what rational agents do when the payoff is bad: they leave or stop trying.

Australia can continue to tell itself that the fair movement is alive. But justice is not a slogan, it is a question, and the question is simple.

If we believed that, we’d ask why the people who climb the most are also the ones who carry the heaviest packs, and then we’d lighten the load a bit on their backs, rather than passing a law that would keep it exactly where it is.

Professor Vince Hooper is a proud Australian-British citizen and professor of finance and discipline at the SP Jain School of Global Management, which has campuses in London, Dubai, Mumbai, Singapore and Sydney.

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