Lord, what I would give to be “not rich” in the eyes of The Australian Financial Review.
After Premier Daniel Andrews announced on Wednesday that Victoria would impose a 7.5% levy on revenue from Airbnbs and other short-stay accommodation, the AFR’s next-day cover story featured Leanne Taylor, a “single mum of two teenagers who uses Airbnb to help her stay ahead of rising interest rates, higher energy bills and more expensive groceries”.
Taylor told the AFR she owns three properties she leases on Airbnb. Nonetheless, she claimed: “I’m not rich. If I was rich, I wouldn’t have to rent my properties out.” The article framed her as a victim of government overreach, rather than precisely the kind of person Andrews is incentivising to sell or lease their properties for longer terms.
Her claim of ordinariness, and thus victimhood, is ludicrous. Credit Suisse recently put the average net wealth of Australian individuals at $778,353. Even in the worst-case scenario, with all her properties heavily mortgaged, Taylor would be worth at least twice or three times that. And Airbnb revealed in 2021 that the average Melburnian host earns approximately $2,178 a month from the site, and Taylor has more properties listed than most.
Furthermore, Taylor’s AirBnb profile (listed on her website) lists seven properties, not three. Taylor told Crikey: “I do own three properties as stated. I also manage properties for clients who do not wish to do this themselves … It provides a small income stream in management fees for me.
On a recent episode of the Property Diaries podcast, Taylor notes she has leased at least one property from a friend, then sublet it on Airbnb. Using this strategy, she claimed, “in most cases you will double your income [that you invested in the lease]”.
Taylor is also an owner and director of Lux Linen Service (also listed on her website), a commercial laundry that services Airbnbs, holiday rentals and other businesses. These additional financial interests in the short-stay accommodation sector were not disclosed in the AFR story.
Despite having scant claim to relatability, Taylor’s foray set the tone for the ensuing backlash. Patrick Durkin, author of the first AFR piece, penned a subsequent op-ed claiming Andrews’ Airbnb “stinker […] will hit aspiring Victorians”. At a subsequent press conference, a journalist asked Andrews why he had not met with representatives of “mum and dad Victorians who want to rent out a property”. It’s not clear what Airbnb hosts’ hopes, dreams or procreation status bear on their relative privilege, nor the regulation of a lucrative industry they voluntarily invest in.
One could dismiss this incident if it didn’t typify a broad and growing genre of media coverage that presents objectively affluent individuals as just “ordinary” knockabout folk, skewing our perceptions of relative privilege and undermining reasonable policy changes that may inconvenience them. Some coverage has also omitted relevant details about the interviewees’ interests in legislative change.
Take, for instance, The Sydney Morning Herald piece from July on Fiona Martin, a “rent-vestor” with an investment property in Kew, Melbourne, (median price $2.8 million). A correction was issued after publication when it came to light that Martin wasn’t just a “typical landlord” but a committee member of the Australian Landlords Association.
“The fact that most of Australia’s landlords are working families, or middle-income earners doesn’t fit the political narrative that the ‘top end of town’ runs most of the rental market,” wrote the SMH’s Nigel Gladstone.
But one can still earn a middling income while owning lucrative assets. The piece also frequently invoked “taxable income” as a measure of investors’ middle-classness, despite later acknowledging it is calculated after deductions such as negative gearing, and is artificially low for retirees whose super withdrawals aren’t subject to income tax.
Individuals like Taylor and Martin, or hypothetical equivalents, are frequently invoked whenever governments consider taxing assets, often by obscenely wealthy individuals who can’t even pretend to be middle class. Such examples are usually unrepresentative, misleading, richer than they think, or all of the above.
When the Albanese government imposed a soft cap on superannuation accounts above $3 million, the AFR relayed concerns from the Self Managed Super Fund Association that such accounts “were not necessarily held by billionaires and Rich Listers”. Yet individuals with more than $3 million in super represent approximately 0.25-0.5% of Australians, and they collectively hold as much superannuation wealth as the 66% of account holders with balances below $100,000.
Beneficiaries of negative gearing similarly claimed to be “by no means […] wealthy” back when Labor had the concession in its crosshairs. And let’s not even start on the barrage of dubious “crying poor” from recipients of franking credits.
This is representative of a profound national confusion — most Aussies underestimate what qualifies one as well off. Last week a survey of 50,000 Australians by news.com.au asked respondents how much one needed to earn each year to be rich. The average response was $303,000. This wouldn’t just make you rich — it’d put you comfortably in the top 1% of taxpayers.
It might be fair enough for the public to get this wrong, but journalists shouldn’t. They ought to present stories which educate the public, not exacerbate their misapprehensions, let alone sow infertile soil for even the most modest tax changes.
Someone who is 1.9 metres tall might not be an Olympic basketballer, but they’re tall. And it matters little whether they think they’re 1.6 metres in spirit, aspire to grow even taller, or have children. The media claiming otherwise is, frankly, a bit rich.
What do you think of Dan Andrews’ 7.5% levy on short-stays? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
It really is past time that someone called out AirBnB for what it is (and has always been)………….
……….and attempt to create an unregulated, distributed Hotel Chain, run from a Tax-Haven, and like Uber, avoiding the necessity for any Capital Investment.
The original fantasy spruiked by AirBnB, “allowing people to rent out their spare room” was nonsense from day one.
Again, like Uber with their “allowing people who were already going somewhere to share the ride”.
Transparent bollocks, their medium term game plan was to create a world-wide unregulated Taxi service, again, avoiding any Capital Investment, as demonstrated by the speed of transition from being an owner-oriented service, to setting their own rules and regulations about what cars their drivers should own.
Their long-term game plan is even more disappointing for those who think it is some sort of career for people who can’t be bothered to pass a Taxi License Test.
As soon as self-driving vehicles are legalized, they will have no further use for drivers (and there are already cities in America where self-driving vehicles are legal).
Needless to say, Australia receives NO INCOME TAX from either of these American bloodsuckers………….
………..not even on Australian customers paying Australian property owners for an Australian rental.
The negative effects of AirBnB far outweigh any possible gains.
It should be abolished immediately.
AirBnBs are also often miserable stays, with petty rules set by hosts (often to reduce their operating expenses) making the stay, and in particular the departure, stressful as hell. I’ve used them a handful of times and never will again. I instead stay at a hotel, with staff to assist you, look after you, guide you to local hidden treasures, and perhaps even a bar to kick back in, and a restaurant to grab a quick bite and not have to cook and clean up. Sure it costs more, but it’s worth more. And the staff get a job, so I’m helping more than just myself.
Hotels are 100% more worthwhile than any airbnb stay I’ve had – and like uber, airbnbs are not as competitive on price as they used to be either.
There are scenarios where AirBnBs shine and hotels often suck: self-contained accommodation, families or large groups and relatively out of the way locations.
Well that would account for about five percent then…………
While I acknowledge the truth that there are awful Airbnb properties out there, I’ve never had anything but wonderful experiences in the dozens I’ve stayed at, including hosts who’ve provided free transport, given great insights into local experiences, even one who gave us a 90 minute tour of the local area. It’s brilliant for trips we’ve taken with extended family, sometimes 4 generations in the one house.
However since I became aware of the impact on inner-city areas, local long-term accommodation affordability and availability, etc, I’ve become extremely selective of the properties I rent, choosing single rooms in owner-occupied properties (ie traditional b&bs), farm-stay cottages, or specialised holiday accommodation and avoid apartments and houses that would normally be used for long term accommodation.
Great dose of overdue commonsense. Apart from people owning multiple properties claiming to be battlers, the other greatest source of economic b…s… that needs to be challenged is the self-righteousness with which people claiming every tax lurk under the sun call themselves “self-funded retirees” – if someone is being given tens of thousands of taxpayers money in franking credits that is in no way more virtuous than being on welfare, the difference being that welfare recipients actually need the money.
Just imagine how much ib franking credits goes each year to the individual with the biggest amount in their Super Fund………….
……….they have $450,000,000 in it.
It is quite easy to get a 5% return on those sort of funds (just stick it in Bank Shares, which are also fully franked), so say an income of $22,500,000 a year………….
………plus a franking credit of $6,750,000.
Now that’s “self-funded” on steroids………….
And yet, people garnering a miserable couple of thousand put themselves in league with the big earners and vote conservative! Foolish in the extreme.
Yet another example of confusing income with being rich. Many of the seriously wealthy have relatively little taxable income. They tend to concentrate on capital gains, family trusts and other such means which result in far lower tax bills than a plain income. For example when the media report how some proposed change in tax or whatever will hit ‘low-income retirees’, the obvious but often false implication is that these are all unfortunate folk who are not well off or may even be in serious poverty. Low-income retirees can just as easily be multi-millionaires.
Think like elsewhere g. UK, it’s been long term shape shifting of society, especially middle aged and older, to make them feel like victims, hence, oppose any progress (that threatens real ‘elites’ in some of the the latter); see how retirees or pensioners in UK represent the ‘working class’, but often the actual working age have no voice?
Well done Ben! Leanne Taylor has a bunch of other income streams as well listed on her website – including a car share service which she claims has generated 39k in passive income since 2019, sales advice service “Moving Millions”, and more!
https://www.leannetaylor.melbourne/
you know someone is doing it tough when they refer to their income as income streams
She’s seriously rich, in other words. What a fraud. How does she sleep at night?
“How does she sleep at night?” Very comfortably I’d guess, with a lot of options where. 🙂
“The fact that most of Australia’s landlords are working families, or middle-income earners doesn’t fit the political narrative that the ‘top end of town’ runs most of the rental market,” wrote the SMH’s Nigel Gladstone.
I was under the impression that both were true. Most landlords are working families etc, but most rental properties are owned by multiple property owners and businesses.
Only about 20% (off the top of my head, it’s in that ballpark) of people who own multiple properties, own three, and it tails off pretty quickly after that (about 5% own four).
Not all second properties are rentals, obviously, but it would seem safe to assume the majority of private rentals are owned by someone who only owns that and their primary residence.
In 2021-22, about 1.6 million individuals, or about 70% of all landlords, declared a rental interest in a single property. So it’s true most investors own just one property.
But the other 30% – about 650,000 landlords – declared an interest in two or more properties. Almost 20,000 declared an interest in at least six.
If you multiply the number of landlords declaring multiple interests by the number of properties they declare, this suggests investors with multiple properties own just over half of all rental dwellings.
Australia needs to end the mythology of ‘mum and dad’ property investors. Landlords are not a cottage industry | Peter Mares for the Conversation | The Guardian
Fair enough, if he’s done the maths and that’s how it works out.
Yes, from memory the ABS puts the total number of owners with rental properties at about 6% of the population. Whatever they think they are doing they are mostly speculating but somehow also feel entitled to a high return on their speculation, in contradiction to what speculation means. However, Australian policy settings are geared to feed that entitlement.