Keen says former prime minister Bob Hawke was the first to use a first-home buyers grant after he beat Malcom Fraser at the 1983 election, not to help first-home buyers but as a way of “reviving the housing market and perhaps the economy”.
He says it worked a treat, and allowed Paul Keating to claim the mantle of greatest treasurer ever.
But, Keen says, the grant also “supercharged house price rises”.
According to Keen, every time the government has introduced a first-home owner grant, the effect has been the same and can be observed by looking at house price before and after its introduction.
He says without government-injected stimulus, house prices have risen more or less in line with inflation, but have diverged noticeably to deliver real growth on the back of first-home owner grants.
“This is when the myth that house prices always rise took hold in the Australian psyche – without the awareness that this was not a natural phenomenon like sunrise, but took not only rising leverage from the banks, but also active intervention in the property market by both state and federal governments.
Keen is currently embroiled in a Fair Work Commission dispute with the University of Western Sydney over delays in processing his voluntary redundancy while at the same time facing a corruption watchdog enquiry after telling his economics students he could not fail any of them because they would not be able to re-sit exams due to the university no longer offering an Economics degree course.
A tribunal hearing involving Keen and UWS began yesterday in Sydney while UWS has already referred the matter to ICAC.
Keen tweeted that it was confidential hearing at the request of the university.
Keen explained what he told his students in an interview with ABC News Radio yesterday.
“I told the students that I would not fail anyone given the circumstances that their subject was quite possibly being abolished and they were told about it two weeks before the exam for that subject would take place and of course if they failed, there wouldn’t necessarily be a subject there for them to repeat the following year and I certainly wouldn’t be teaching it so in that situation I just couldn’t see how I could fail anybody.
He says he “probably overstepped the mark”, but claims UWS has “blown the matter out of proportion as part of a battle over the cuts to economics”.
Keen says he has been invited to two universities in London to apply for professorships and has also applied to his alma mater, the University of Sydney, for the professorship of political economy.
This article first appeared on Property Observer.
