Millionaire Gary Stevenson's dire warning for Australian property market losing the 'fair go'
Gary Stevenson is on a speaking circuit in Australia, talking about reducing wealth inequality. (Supplied: Angel Parsons)
In short:
Inequality campaigner Gary Stevenson, who has more than 1.5 million YouTube followers, warns that living standards could decline if inequality continues to rise.
The British economist, who is touring Australia, says the country needs to address housing affordability through tax reform.
What's next?
The Albanese government has not ruled out raising taxes on property investors by changing capital gains tax rules.
British economist Gary Stevenson warns Australia is losing the concept of "a fair go".
"This is a country that tells people it believes in having a fair go.
"And it is a country which has, for a long time, provided affordable housing and good living conditions to ordinary working Australians.
"You're losing that," he told The Business.
Mr Stevenson is visiting Australia on a speaking circuit to drum up support for his global social cause of narrowing the inequality gap between the rich and the poor.
Key to this, he said, was restructuring the taxation systems of modern economies to take more money from the wealthy and less from lower-income earners.
Gary Stevenson says Australia is losing the concept of a "fair go". (ABC News: John Gunn)
He said he also saw higher wages and policies to improve housing affordability as key to improving living standards for low- and middle-income households.
"I want to come and show Australians what is happening in the UK, what is happening in Europe," Mr Stevenson said.
"Public services being shut down, poverty exploding.
"That will happen [in Australia] unless we deal with inequality."
A frustrating mission
But Mr Stevenson admitted to being frustrated.
Despite having more than 1.5 million YouTube followers, he conceded that getting his message heard and acted on in the corridors of power was challenging.
"I think they're scared," he said, referring to MPs in Britain.
"I think they're kind of stuck in, what we would call in the UK, the Westminster bubble — their little politicians' bubble.
"They're scared about their donors."
Gary Stevenson has spoken at rallies in the United Kingdom. (Getty Images: Wiktor Szymanowicz/Future Publishing)
Mr Stevenson believed there was no financial incentive for the rich and powerful to engage in taxation reform to reduce inequality.
"See, the problem with an inequality crisis is it feels good for rich people," he said.
"And most politicians are in that community of rich people.
"I think they're out of touch."
Stevenson's quest a highly personal one
Mr Stevenson knows a lot about both the working class and the elite, because the 40-year-old has lived in both worlds.
"I come from a very poor background in East London, which is the poorest part of London," he told the ABC last year.
His first degree was from the London School of Economics.
But he quickly realised that top grades were not going to be enough to land him a big-money job in a trading room, without the impressive extracurricular CVs and high-level connections many of his wealthy classmates possessed.
So, he put his maths skills and street smarts to use in a game that a global banking giant, Citi, ran each year to select one of its interns.
He won the game and went on to become a highly successful trader and multi-millionaire.
Practical solutions to tackle inequality
As Mr Stevenson tours the country, he wants to build his following and pressure local MPs to develop practical policies that will give more Australians access to housing.
"Holding the politician's feet to the fire, forcing this country to do something about inequality so that your kids and grandkids will have a fair go at having a family and buying a house," he said.
He said one solution might be to fund public research into how the taxation system could become more efficient and equitable.
"You need to have politicians who are willing to prepare in the long term to fix serious problems," he said.
"Nobody is dealing with this growing inequality.
"They're not even starting to deal with how we design the tax [system]."
The Albanese government is seeking a new policy to address housing and has not ruled out raising taxes on property investors by changing capital gains tax rules.
Mr Stevenson said Australia and the UK were not alone in dealing with economic systems that perpetually favoured the rich.
"If you look across the world, if you look across history, if you look in places where wealth is incredibly unequally distributed," he said.
"Go look at Mumbai, go look at Shanghai, and look at what house prices are relative to wages in those countries.
"The world will show you very clearly incredibly unequal countries have incredibly unaffordable housing which ordinary people cannot afford."
Loading...Ultimately, Mr Stevenson said, the solution to reducing economic inequality was painfully simple.
"If you want housing to be affordable, you need to deal with inequality, and you need to have a tax system that taxes the very wealthy more than ordinary working people," he said.
Mr Stevenson suggested policymakers look at the distribution of wealth and power in society, and make that fairer, rather than fixing economic inequality by "trying to mess around with the banking system".
"That doesn't mean don't buy a house, but do we want this country to be a country where the only way to buy a house is to take a $5 million bet?"
Policy jigsaw puzzle
As part of a suite of measures to improve housing affordability, Labor's First Homebuyer Guarantee kicked in last October.
The scheme allows first homebuyers to purchase a property with a 5 per cent deposit, without paying a lender mortgage insurance penalty, with the government assuring the remainder of the deposit in the case of a default.
Previous income limits on eligibility were also removed.
Treasury estimates an extra 20,000 guarantees will be issued in the first year after uncapping the scheme, and its modelling suggests that by reducing the time to save for a deposit and buy a home, those people will also save tens of thousands of dollars in rent.
Critics argue that while ensuring a cohort of Australians gets a foot onto the property ladder, it pushes housing further out of reach for others.
"I think the obvious consequence is that it's going to push up house prices," Mr Stevenson said.
"I think the only people that really benefit from that are the guys that are the mortgage lenders.
"They're not taking the risk."
Official modelling suggests the total impact on house prices will be about a half a per cent increase after six years, but some economists have warned it could fuel house prices further.
'Not ready' for big change
More broadly, Mr Stevenson admitted he was not hopeful that any policies would be proposed in the short term in his homeland to significantly reduce economic inequality.
"The frustration I get is, whenever I talk to politicians, they always say, 'Listen, that's too difficult, we're not ready for it, we don't have the tax policy in place, we're worried about the next budget.'
"And every year the same thing happens.
"The economy gets worse, living standards fall, house prices go up, housing gets less affordable," he said.
Mr Stevenson said he wanted "to try and light a fire here and get Australians fighting for a better future".
"Because the politicians are not going to give it to us, and I want the Australians fighting by my side."