Voting Green may be the greatest act of self-harm by a generation ever

Why would a party whose voters are younger and disproportionately likely to rent propose policies that could see rents increase on average by another $83 per week, as well as seeing as many as 450,000 homes disappearing from the rental market?

I'm talking about the Greens, and it's a pertinent question in the light of their policy demands which would require Labor to abolish negative gearing benefits, double capital gains tax and put a cap on rentals of zero for two years, and then 2% every year thereafter.

I can only think the answer is an ideological prejudice against private capital, otherwise the policies make no sense

Modelling the Australian Institute for Progress commissioned from Adept Economics finds the $83 average weekly rent increase will be on top of rent increases that are likely to happen anyway.

Rents have already increased by 24% over the last three years, just over twice as fast as inflation, and validating the perception that there is indeed a rental crisis.

In the past Greens policies might not have mattered, but facing an election where it is likely the winner will be a minority Labor government they might.

We know that Labor asked the Treasury to look at negative gearing and capital gains tax, has introduced a tax on unrealized capital gains in super, ACT Labor has capped rent rises, and various state Labor governments have regulated other restrictions to rent increases.

If the Greens ask for these changes as conditions of support, Labor is already temperamentally there. It would not take much to tip them over the edge. Again, it defies logic, but bad policy has no bounds.

So the Greens' demands need to be treated seriously.

Until recently the housing problem has been seen mainly through the prism of home ownership. In the first phase, there is around a 70% correlation between interest rates and house prices, so as rates fell, prices rose. Because rates were low servicing was similar to what it had been, but the time to save a deposit blew out.

Allowing home buyers to access their super for a deposit made sense. Australians were actually saving enough, they were just being forced to lock around half of their savings away until they retired.

A person who doesn't own their own home at retirement faces a dire situation, and the return on owner-occupied housing outstrips anything else legal, given the financial engineering and tax advantages available from the family home.