Flat White

Your home is no longer your castle

29 September 2017

4:01 PM

29 September 2017

4:01 PM

You’d think that the beauty of an arrangement that allows anyone to rent their space to tourists in would be appreciated by a state government. You might also think that the New South Wales state Liberal government would have a degree of respect for private property rights.

After all, Liberals are supposed to be facilitate private enterprise – particularly when it brings jobs and growth into our state. Any move by the government to regulate an industry which would drive up costs for business and visitors and hurt working families would be ill-advised. But the online peer-to-peer short-term rental services that have transformed hospitality and tourism are now under threat in our most populous state.

These services operate precisely on the premise of promoting tourism – especially important for regional areas. They have offered a sensible way for working families to supplement their income that also boost business and commerce. In short, they have created an opportunity for NSW would be able to reap the rewards associated with a booming tourism and visitor industry in a state containing Australia’s largest city and some of our most important regional centres.

But alas! Maybe we’re expecting too much from the Berejiklian government.

What could be the purported rationale behind this policy proposal? The state government’s reasoning is outlined in a 32-page Options Paper “Short-Term Holiday Letting in NSW”, illustrated with a cheesy stock photo of an attractive middle-class couple with their two small children jumping on a bed merrily.

The document concedes that “rapid growth” has been occurring in “short-term holiday letting (STHL) both nationally and in NSW” and talks about the need to manage its “social and environmental impact”.


I’m no scientist, but I am fairly certain that the “social and environmental” problems plaguing the state of NSW can’t seriously be attributable to an industry that seeks to make use of current living spaces for tourism and profit. This is inherently less intrusive than having to build more and more hotels across the state.

Mind you, the government is very unclear on what they think STHL will do to NSW. Under “Social Impacts”, the paper warns it has the potential to generate impacts such as “noise, waste, traffic and parking” and talks about “the potential impact on housing and broader industry in general”. These are obviously not very well-thought-out excuses for government intervention. It’s regulation for the sake of regulation.

Rather than encouraging the growth of private enterprise and an ultimately more sustainable and practical model of tourism for NSW, it appears the state government wants to turn this into an opportunity to strip people of their income and private property rights.

Let’s be clear: once the ability of the state government to control how you use your private space becomes a statutory provision there is no limit to what the government will propose from there. Apparently our state government cares deeply about the waste generated from these arrangements: residents’ “perishable items” and potential ignorance of our waste laws is – apparently – a massive threat to NSW. Of course, the Department of Planning and Environment obviously needs to get involved!

We’re lucky this options paper is only that. A paper full of (terrible) options.  It is predicated on ignorant assumptions about visitors to NSW who wish to make use of existing dwellings – much less intrusive, one would think, than putting pressure on existing hotel chains to expand and re-build. The options paper reeks of desperation as it desperately tries to piece together a case why this industry needs to be regulated.

The government’s argument is elusive at best, but the economic effects would be substantial. Sydney is meant to be an international city. The visitor economy would struggle unnecessarily – as would working families and businesses.

STHLs have created over 40,000 full-time jobs in NSW. The state regional economy currently accounts for half of these. If the Liberals really are the party of jobs and growth and their coalition party the Nationals the representatives of the regions, they should seriously re-consider what they are doing with this proposed policy.

Holiday homes have long been part of the Australian way of life. Over the years thousands of families have been able to supplement their household incomes by leasing them out, mutually beneficial contract that has required no intervention by the state government.

STHL regulation has already been tried and failed, most notably in Berlin. There is simply no good reason for this policy. It has blatant disregard for a growing and essential aspect of the economy.

If NSW wants to remain the premier state for families, business, tourists and other visitors it should bin these policy proposals.

Marija Polic is a research associate for the Australian Taxpayers’ Alliance.

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