Another election campaign launch, another demonstration of the utterly miserable choice facing NSW voters as the woeful alternative to the woeful government asks the electorate to decide if Peter Debnam is simply dishonest or honestly simple.

The centrepiece of the launch was a $100 million-a-year bribe for the landlord class – I’ll slash land tax, pledges Debnam.

That’s pretty much common-or-garden variety of pork barrelling you expect during elections, although it says something about the state of NSW and perhaps the nation that at least one of the major political parties believes the fate of marginal seats resides with property investors. But the line that betrays Debnam is this quote:

“If the entire land tax cut is passed on to tenants, rents could drop by up to $17 a week.”

And if every tenant picked the right number for this week’s Power Ball…

Debnam needs to be sent home to study Ross Gittens’ nice primer on how the rental market works. That’s if you’ve taken the kind option of thinking Dumbnut is just stupid.

As Gittens explains in very simple language, the rental market isn’t a cost-plus game. Landlords quite rightly charge what the market can bear – whether their land tax bill is up or down by a few hundred dollars doesn’t come into it.

Over the long term, there is a slight chance the suggested land tax cuts might have a marginal impact on supply, which would help. But it’s very marginal. I somehow doubt the mum-and-dad investors in the swinging seats will take out their calculators on the kitchen table and decide, yep, we’ll go ahead and buy that house because land tax is being reduced by $800.

So if Debnam isn’t so stupid as to believe trimming land tax will markedly cut rents, he must be dishonest to try to pass off that idea.

Personally, I think it’s more likely to be the stupid option – it fits with the rest of the Opposition’s performance.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey