Welcome to Tim Harding’s blog of writings and talks about logic, rationality, philosophy and skepticism. There are also some reblogs of some of Tim’s favourite posts by other writers, plus some of his favourite quotations and videos This blog has a Facebook connection at The Logical Place.

There are over a thousand posts here about all sorts of topics – please have a good look around before leaving.

If you are looking for an article about the Birth of Experimental Science recently published in The Skeptic magazine titled ‘Out of the Dark’, it is available here.

If you are looking for an article about the Dark Ages recently published in The Skeptic magazine titled ‘In the Dark’, it is available here.

If you are looking for an article about the Traditional Chinese Medicine vs. Endangered Species recently published in The Skeptic magazine titled ‘Bad Medicine’, it is available here.

If you are looking for an article about the rejection of expertise published in The Skeptic magazine titled ‘Who needs to Know?’, it is available here.

If you are looking for an article about Charles Darwin published in The Skeptic magazine titled ‘Darwin’s Missing Link“, it is available here.

If you are looking for an article about the Astronomical Renaissance published in The Skeptic magazine titled ‘Rebirth of the Universe‘, it is available here.

If you are looking for an article about DNA and GM foods published in The Skeptic magazine titled ‘The Good Oil‘, it is available here.

If you are looking for an article about animal welfare published in The Skeptic magazine titled ‘Creature Features‘, it is available here.

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What is logic?

The word ‘logic‘ is not easy to define, because it has slightly different meanings in various applications ranging from philosophy, to mathematics to computer science. In philosophy, logic’s main concern is with the validity or cogency of arguments. The essential difference between informal logic and formal logic is that informal logic uses natural language, whereas formal logic (also known as symbolic logic) is more complex and uses mathematical symbols to overcome the frequent ambiguity or imprecision of natural language.

So what is an argument? In everyday life, we use the word ‘argument’ to mean a verbal dispute or disagreement (which is actually a clash between two or more arguments put forward by different people). This is not the way this word is usually used in philosophical logic, where arguments are those statements a person makes in the attempt to convince someone of something, or present reasons for accepting a given conclusion. In this sense, an argument consist of statements or propositions, called its premises, from which a conclusion is claimed to follow (in the case of a deductive argument) or be inferred (in the case of an inductive argument). Deductive conclusions usually begin with a word like ‘therefore’, ‘thus’, ‘so’ or ‘it follows that’.

A good argument is one that has two virtues: good form and all true premises. Arguments can be either deductiveinductive  or abductive. A deductive argument with valid form and true premises is said to be sound. An inductive argument based on strong evidence is said to be cogent. The term ‘good argument’ covers all three of these types of arguments.

Deductive arguments

A valid argument is a deductive argument where the conclusion necessarily follows from the premises, because of the logical structure of the argument. That is, if the premises are true, then the conclusion must also be true. Conversely, an invalid argument is one where the conclusion does not logically follow from the premises. However, the validity or invalidity of arguments must be clearly distinguished from the truth or falsity of its premises. It is possible for the conclusion of a valid argument to be true, even though one or more of its premises are false. For example, consider the following argument:

Premise 1: Napoleon was German
Premise 2: All Germans are Europeans
Conclusion: Therefore, Napoleon was European

The conclusion that Napoleon was European is true, even though Premise 1 is false. This argument is valid because of its logical structure, not because its premises and conclusion are all true (which they are not). Even if the premises and conclusion were all true, it wouldn’t necessarily mean that the argument was valid. If an argument has true premises and its form is valid, then its conclusion must be true.

Deductive logic is essentially about consistency. The rules of logic are not arbitrary, like the rules for a game of chess. They exist to avoid internal contradictions within an argument. For example, if we have an argument with the following premises:

Premise 1: Napoleon was either German or French
Premise 2: Napoleon was not German

The conclusion cannot logically be “Therefore, Napoleon was German” because that would directly contradict Premise 2. So the logical conclusion can only be: “Therefore, Napoleon was French”, not because we know that it happens to be true, but because it is the only possible conclusion if both the premises are true. This is admittedly a simple and self-evident example, but similar reasoning applies to more complex arguments where the rules of logic are not so self-evident. In summary, the rules of logic exist because breaking the rules would entail internal contradictions within the argument.

Inductive arguments

An inductive argument is one where the premises seek to supply strong evidence for (not absolute proof of) the truth of the conclusion. While the conclusion of a sound deductive argument is supposed to be certain, the conclusion of a cogent inductive argument is supposed to be probable, based upon the evidence given. An example of an inductive argument is: 

Premise 1: Almost all people are taller than 26 inches
Premise 2: George is a person
Conclusion: Therefore, George is almost certainly taller than 26 inches

Whilst an inductive argument based on strong evidence can be cogent, there is some dispute amongst philosophers as to the reliability of induction as a scientific method. For example, by the problem of induction, no number of confirming observations can verify a universal generalization, such as ‘All swans are white’, yet it is logically possible to falsify it by observing a single black swan.

Abductive arguments

Abduction may be described as an “inference to the best explanation”, and whilst not as reliable as deduction or induction, it can still be a useful form of reasoning. For example, a typical abductive reasoning process used by doctors in diagnosis might be: “this set of symptoms could be caused by illnesses X, Y or Z. If I ask some more questions or conduct some tests I can rule out X and Y, so it must be Z.

Incidentally, the doctor is the one who is doing the abduction here, not the patient. By accepting the doctor’s diagnosis, the patient is using inductive reasoning that the doctor has a sufficiently high probability of being right that it is rational to accept the diagnosis. This is actually an acceptable form of the Argument from Authority (only the deductive form is fallacious).


Hodges, W. (1977) Logic – an introduction to elementary logic (2nd ed. 2001) Penguin, London.
Lemmon, E.J. (1987) Beginning Logic. Hackett Publishing Company, Indianapolis.

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Rationality may be defined as as the quality of being consistent with or using reason, which is further defined as the mental ability to draw inferences or conclusions from premises (the ‘if – then’ connection). The application of reason is known as reasoning; the main categories of which are deductive and inductive reasoning. A deductive argument with valid form and true premises is said to be sound. An inductive argument based on strong evidence is said to be cogent. It is rational to accept the conclusions of arguments that are sound or cogent, unless and until they are effectively refuted.

A fallacy is an error of reasoning resulting in a misconception or false conclusion. A fallacious argument can be deductively invalid or one that has insufficient inductive strength. A deductively invalid argument is one where the conclusion does not logically follow from the premises. That is , the conclusion can be false even if the premises are true. An example of an inductively invalid argument is a conclusion that smoking does not cause cancer based on the anecdotal evidence of only one healthy smoker.

By accident or design, fallacies may exploit emotional triggers in the listener (e.g. appeal to emotion), or take advantage of social relationships between people (e.g. argument from authority). By definition, a belief arising from a logical fallacy is contrary to reason and is therefore irrational, even though a small number of such beliefs might possibly be true by coincidence.

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How French ‘intellectuals’ ruined the West: postmodernism and its impact, explained

by Helen Pluckrose Areo magazine, 27 March 2017.

Postmodernism presents a threat not only to liberal democracy but to modernity itself. That may sound like a bold or even hyperbolic claim, but the reality is that the cluster of ideas and values at the root of postmodernism have broken the bounds of academia and gained great cultural power in western society. The irrational and identitarian “symptoms” of postmodernism are easily recognizable and much criticized, but the ethos underlying them is not well understood. This is partly because postmodernists rarely explain themselves clearly and partly because of the inherent contradictions and inconsistencies of a way of thought which denies a stable reality or reliable knowledge to exist. However, there are consistent ideas at the root of postmodernism and understanding them is essential if we intend to counter them. They underlie the problems we see today in Social Justice Activism, undermine the credibility of the Left and threaten to return us to an irrational and tribal “pre-modern” culture.

Postmodernism, most simply, is an artistic and philosophical movement which began in France in the 1960s and produced bewildering art and even more bewildering  “theory.” It drew on avant-garde and surrealist art and earlier philosophical ideas, particularly those of Nietzsche and Heidegger, for its anti-realism and rejection of the concept of the unified and coherent individual. It reacted against the liberal humanism of the modernist artistic and intellectual movements, which its proponents saw as naïvely universalizing a western, middle-class and male experience.

It rejected philosophy which valued ethics, reason and clarity with the same accusation. Structuralism, a movement which (often over-confidently) attempted to analyze human culture and psychology according to consistent structures of relationships, came under attack. Marxism, with its understanding of society through class and economic structures was regarded as equally rigid and simplistic. Above all, postmodernists attacked science and its goal of attaining objective knowledge about a reality which exists independently of human perceptions which they saw as merely another form of constructed ideology dominated by bourgeois, western assumptions. Decidedly left-wing, postmodernism had both a nihilistic and a revolutionary ethos which resonated with a post-war, post-empire zeitgeist in the West. As postmodernism continued to develop and diversify, its initially stronger nihilistic deconstructive phase became secondary (but still fundamental) to its revolutionary “identity politics” phase.

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The fallacy fallacy: Reject the argument not the conclusion

The Logic of Science

Two weeks ago, I wrote a post on the importance of understanding logical fallacies, and in that post, I made the following claim, “anytime that an argument contains a fallacy, that argument must be rejected.” Much to my surprise, many people took issue with this and brought up the fallacy fallacy (that’s not a typo). Some of those comments were simply pointing out the existence of the fallacy fallacy (which I actually did in the aforementioned post as well), but many of them were arguing that I was wrong or at least on shaky ground because of the fallacy fallacy. For example, one person said, “of course simply pointing out that someone’s argument is a fallacy is a fallacy in and of itself,” another said that although I was not committing a fallacy fallacy I was, “flirting with encouraging individuals to commit ‘the fallacy fallacy’” (those are exact quotes…

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Philosophical counseling as pseudoscience?

Footnotes to Plato

Philosophical counseling (PC) is the idea that people may benefit from discussing their everyday problems or long-term goals within a framework offered by one or another philosophical approach. Although the term “philosophical counseling” has been in use only for a few decades, this is what (some) philosophers have been doing for literally millennia, from the ancient Stoics and Epicureans to modern Existentialists, from Buddhists to Confucians, both ancient and modern. It’s a philosophical genre that for good (according to some) and ill (according to others) has given us Boethius’ Consolations of Philosophy and Alain De Botton’s How Proust Can Change Your Life.

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Terror in London: Western cities will always be vulnerable to these attacks

The Conversation

Image 20170323 25768 1sv1rig
Five people are dead – including the perpetrator – following a terror attack in London. EPA/Andy Rain

Tony Walker, La Trobe University

Just when the Western world had absorbed the shock of a truck attack in Berlin in December that claimed 12 lives, it is reminded again of the dangers of “lone-wolf” attacks inspired by Islamic State (IS) that are almost impossible to guard against. The Conversation

When a sole attacker drove randomly across London’s Westminster Bridge towards the Houses of Parliament – one of the most trafficked thoroughfares in the Western world – killing and maiming innocent bystanders, it served as a reminder, if that were required, that open, global cities are vulnerable to such attacks.

These are moments that serve as a reality check for those in authority who are striving to maintain a balance between oppressive policing and surveillance and a free society. This is enormously challenging in an environment in which strains of fanaticism have been let loose.

Regrettably, the London terrorist attack leading to five deaths, including the perpetrator and a policeman, will find its way into a racially tinged political discourse – and not in a way that will be particularly edifying.

But there is also no point in pretending that mayhem in the Middle East can be separated from what takes place on the streets of London or Brussels or Berlin or Nice, or in other places that become victims of continuing upheaval in a crescent that stretches from the Mediterranean to South Asia.

Now that the weapon of choice for lone-wolf terrorists seems to have become a vehicle to mow down people innocently going about their business, a policing task becomes even more difficult.

Peter Bergen, a terrorism expert, noted in a post for CNN that as long ago as 2010, al Qaeda’s Yemen branch had encouraged its recruits in the West to use vehicles as weapons.

A headline on its webzine, Inspire, had described vehicles as “the ultimate mowing nachine” – not to “mow grass, but mow down the enemies of Allah”. He wrote:

These attacks are hard to defend against in free societies where crowds will gather, as was the case for Bastille Day in Nice, or the Christmas market in Berlin … and now throngs of tourists and visitors that typically crowd the sidewalks around the Houses of Parliament.

The utter cynicism and brutality of these random low-tech attacks pose enormous challenges for security.

This latest episode will not be the last such vehicle attack with the possibility that something much worse might eventuate, including the detonation of a truck packed with explosives and shards of shrapnel. Open Western cities will always be vulnerable to these sorts of attacks.

The threat of IS-inspired terrorism is now embedded in Western societies. It is no good pretending it is not.

Since 2014, when IS proclaimed its caliphate, there have been more than 70 terrorist attacks “conducted or inspired” by its followers in 20 countries (not including Syria and Iraq), according to a running total kept by CNN.

If Syria and Iraq were added, such terrorist attacks would number in the hundreds.

In 2014, CNN lists seven terrorist incidents, including the stabbing of two Australian police officers in New South Wales. Six died and 12 were injured in 2014, in Belgium, Australia, Canada, the US and France.

That was the beginning.

By 2016, the numbers of casualties from IS-inspired terrorism had risen sharply across the Middle East and in Europe. This included the Brussels bombings at a metro station and an airport, in which 32 people died and 340 were injured.

It is not least of macabre coincidences that the London terrorist attack occurred on the first anniversary to the day of the Brussels bombings.

So far this year, there have been five major incidents. Most, if not all, are linked to IS.

London was the first such episode in continental Europe. The others occurred in Turkey, Afghanistan, Pakistan and India.

Out of all this, it is a depressing conclusion, but as IS in its strongholds in Mosul in Iraq and Raqqa in Syria is further degraded, chances are it will step up its terrorist activities elsewhere.

In other words, risks to countries involved in the war against IS will rise as its fortunes in its so-called caliphate slide. IS is on the ropes in its Middle Eastern strongholds. This makes it more dangerous to Western interests.

In London, and among Britain’s allies, political leaders have hastened to express solidarity, but all would be aware that such ritualistic professions of support and concern will not provide a foolproof shield against the next Islamist-inspired terrorist attack.

The question is not if, but when and where.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

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Unearthed, the Aboriginal Tasmanians of Kangaroo Island, by Rebe Taylor

ANZ LitLovers LitBlog

Anew book is on my TBR: it’s called Into the Heart of Tasmania: A Search for Human Antiquity and it’s by historian Rebe Taylor.  But as soon as I started reading it, I knew I wanted to read her first book, so I reserved that at the library… and lo! it was available the very next day.  This promptness made me think I could read the book at my leisure and renew it if necessary, but no, *pout* somebody else wants it now and I’ve ended up having to dash through the last half of it because it’s due back tomorrow.  So Unearthed, the Aboriginal Tasmanians of Kangaroo Island is not going to get the review it deserves from me, because I now don’t have time to read it all.

(But actually what Unearthed really deserves is a proper review from a proper historian and there seems not to be one online, only an…

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Does demonizing Trump supporters help the Left?

Why Evolution Is True

As you will know from reading this site, I have no love for Donald Trump. I fear he’s going to destroy America, and that this comes from his narcissism—his caring more about being loved and admired than about the welfare of America (or anyone but himself).  But what I see now among the Left is playing right into his hands. While the “Nazi” trope should be used sparingly, it’s often applied willy-nilly by bloggers or people on Facebook to smear not only Trump, but his supporters.

Well, Trump is not a Nazi, nor are all his supporters racists, xenophobes, or misogynists.  The worst comment that Hillary Clinton made during the election, I think, was this:

You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables. Right? The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it. And unfortunately…

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“Obamacare is the law of the land”

Why Evolution Is True

. . . or so said Speaker of the House Paul Ryan after Republicans, unable to present a credible alternative to the Affordable Care Act, pretty much gave up. As CNN reports:

Repubicans were unable to muster enough GOP support to bring their health care bill to a vote.

“We came up short, Ryan said, a day after President Donald Trump delivered an ultimatum to House Republicans demanding an end to negotiations.

Trump thanked Ryan for working “very hard” on the failed effort. The real losers,the President said, were Democrats, who didn’t support the bill. They own it, he said. “Let Obamacare explode.”

Democrats gleefully accepted the charge. “Today’s a great day for our country,” House Minority Leader Nancy Pelosi said. “It’s pretty exciting for us.”

The only downside to this, I think, is that had Republicans passed their own healthcare act, many of those who voted for Trump would…

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Going on a Moral Diet

Ockham's Beard

It’s a well established fact that there is no such thing as a free lunch. This is particularly the case when that lunch consists of deep fried chicken followed by a couple of glazed doughnuts and a Coke.

We love sweet and fatty foods (although, as Dan Dennett points out, we don’t desire them because they taste good, they taste good because we desire them). And even though they’re contributing to an epidemic of obesity today, it’s a damn good thing that we do love the sweets and the fats. Because had we not vigorously pursued such energy-rich sources of nutrition throughout our evolutionary past we may not have made it to the point where today’s obesity epidemic was even an option.

hamburgerSimply put, an evolved taste for sweet and fatty stuffs – in the form of a strongly reinforcing sensation of pleasure in response to exposure to sweet and/or…

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How we edit science part 5: so what is science?

The Conversation

Image 20170323 13506 1ysdg65
The best scientists, such as Marie and Pierre Curie, are committed to the experimental method. Wikimedia

Tim Dean, The Conversation

We take science seriously at The Conversation and we work hard at reporting it accurately. This series of five posts is adapted from an internal presentation on how to understand and edit science by Australian Science & Technology Editor, Tim Dean. We thought you would also find it useful. The Conversation

The first four posts in this series covered the scientific method and practical tips on how to report it effectively. This post is more of a reflection on science and its origins. It’s not essential reading, but could be useful for those who want to situate their science reading or writing within a broader historical and conceptual context.

Fair warning: it’s going to get philosophical. That means you might find it frustratingly vague or complicated. If you find yourself getting infuriated at the inability to settle on clear definitions or provide clear answers to important questions, that’s a perfectly natural (and probably quite healthy) response.

These issues have been intensively debated for hundreds, if not thousands, of years, without resolution. We’d likely have given up on them by now, except that these concepts have an unfortunate tendency to influence the way we actually do things, and thus retain some importance.

The foundations of science

Explaining what science is, and entertaining all the debates about how it does or should work, would take up an entire book (such as this one, which I highly recommend). Rather than tackling such issues head-on, this section will give a broad overview of what science is.

While it doesn’t get mentioned often outside of scientific circles, the fact is there is no one simple definition of science, and no single definitive method for conducting it.

However, virtually all conceptions of science lean on a couple of underlying philosophical ideas.

Francis Bacon (not the artist) was one of the leading voices to reform ‘natural philosophy’ into an observation-led endeavour, which ultimately evolved into science.
richardhe51067/Flickr, CC BY

The first is a commitment to learning about the world through observation, or empiricism. This is in contrast to alternative approaches to knowledge, such as rationalism – the notion that we can derive knowledge about the world just by thinking about it hard enough – or revelation – that we can learn from intuition, insight, drug-induced hallucinations, or religious inspiration.

Another philosophical basis of science is a commitment to methodological naturalism, which is simply the idea that the best way to understand the natural world is to appeal to natural mechanisms, laws, causes or systems, rather than to supernatural forces, spirits, immaterial substances, invisible unicorns or other deities.

This is why scientists reject the claim that ideas like creationism or intelligent design fall within the purview of science. Because these ideas posit or imply supernatural forces, no matter how scientific they try to sound, they break methodological naturalism, so they aren’t science.

(As a side point, science doesn’t assume or imply the stronger claim of philosophical or ontological naturalism. This is the idea that only natural things exist – which usually means things that exist in spacetime – and that there are no supernatural entities at all.

This is a strictly philosophical rather than scientific claim, and one that is generally agreed to be beyond the ken of science to prove one way or the other. So, if cornered, most scientists would agree it’s possible that intangible unicorns might exist, but if they don’t exist in spacetime or causally interact with things that do, then they’re irrelevant to the practice of science and can be safely ignored. See Pierre Laplace’s apocryphal – but no less cheeky – response to Napoleon, who remarked that Laplace had produced a “huge book on the system of the world without once mentioning the author of the universe”, to which Laplace reputedly replied: “Sire, I had no need of that hypothesis.”)

This is where we come to the role of truth in science: there isn’t any. At least in the absolute sense.

Instead, science produces facts about the world that are only held to be true with a certainty proportional to the amount of evidence in support of them. And that evidence can never give 100% certainty.

There are logical reasons for this to be the case, namely that empiricism is necessarily based on inductive rather than deductive logic.

Another way to put it is that no matter how certain we are of a particular theory, and no matter how much evidence we’ve accrued to support it, we must leave open the possibility that tomorrow we will make an observation that contradicts it. And if the observation proves to be reliable (a high bar, perhaps, but never infinitely high), then it trumps the theory, no matter how dearly it’s held.

The Scottish philosopher David Hume couched the sceptical chink in empiricism’s armour of certainty like this: all we know about the world comes from observation, and all observation is of things that have happened in the past. But no observation of things in the past can guarantee that things in the future will operate in the same way.

This is the “problem of induction”, and to this day there is no decisive counter to its scepticism. It doesn’t entirely undermine science, though. But it does give us reason to stop short of saying we know things about the world with absolute certainty.

Scientific progress

The steady accumulation of evidence is one reason why many people believe that science is constantly and steadily progressing. However, in messy reality, science rarely progresses smoothly or steadily.

Rather, it often moves in fits and spurts. Sometimes a new discovery will not only change our best theories, it will change the way we ask questions about the world and formulate hypotheses to explain them.

Sometimes it means we can’t even integrate the old theories into the new ones. That’s what is often called a “paradigm shift” (another term to avoid when reporting science).

For instance, sometimes a new observation will come along that will cause us to throw out a lot of what we once thought we knew, like when the synthesis of urea, of all things, forced a rewrite of the contemporary understanding of what it means to be a living thing.

That’s progress of a sort, but it often involves throwing out a lot of old accepted facts, so it can also look regressive. In reality, it’s doing both. That’s just how science works.

Science also has its limits. For one, it can’t say much about inherently unobservable things, like some of the inner workings of our minds or invisible unicorns.

That doesn’t mean it can only talk about things we can directly observe at the macroscopic scale. Science can talk with authority about the microscopic, like the Higgs boson, and the distant, like the collision of two black holes, because it can scaffold those observations on other observations at our scale.

But science also has limits when it comes to discussing other kinds of things for which there is no fact of the matter, such as like questions of subjective preference. It’s not a scientific fact that Led Zeppelin is the greatest band ever, although I still think it’s a fact.

There are similar limits when it comes to moral values. Science can describe the world in detail, but it cannot by itself determine what is good or bad (someone please tell Sam Harris – oh, they have). To do that, it needs an injection of values, and they come from elsewhere. Some say they come from us, or from something we worship (which many people would argue means they still come from us) or from some other mysterious non-natural source. Arguments over which source is the right one are philosophical, not scientific (although they can be informed by science).

Science is also arguably not our only tool for producing knowledge. There are other approaches, as exemplified by the various non-scientific academic disciplines, like history, sociology and economics (the “dismal science”), as well as other domains like art, literature and religion.

That said, to the extent that anyone makes an empirical claim – whether that be about the movement of heavenly bodies, the age of Earth, or how species change over time – science has proven to be our best tool to scrutinise that claim.

Tim Dean, Editor, The Conversation

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

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The latest ideas to use super to buy homes are still bad ideas

The Conversation

John Daley, Grattan Institute and Brendan Coates, Grattan Institute

Treasurer Scott Morrison wants to use the May budget to ease growing community anxiety about housing affordability. Lots of ideas are being thrown about: the test for the Treasurer is to sort the good from the bad. Reports that the government was again considering using superannuation to help first homebuyers won’t inspire confidence. The Conversation

It’s not the first time a policy like this has been floated within government. While these latest ideas to use super to help first homebuyers are marginally less bad than proposals from 2015, our research shows they still wouldn’t make much difference to housing affordability.

A seductive idea with a long history

Allowing first homebuyers to cash out their super to buy a home is a seductive idea with a long history. Both sides of politics took proposals to the 1993 election, before Prime Minister Paul Keating scrapped it upon his re-election.

Former Treasurer Joe Hockey last raised the idea in 2015 and was roundly criticised, including by then Coalition frontbencher Malcolm Turnbull.

Politicians are understandably attracted to any policy that appears to help first homebuyers build a deposit. Unlike the various first homebuyers’ grants that cost billions each year, letting first homebuyers cash out their super would not hurt the budget bottom line – at least, not in the short term. But as we wrote in 2015, that change would push up house prices, leave many people with less to retire on, and cost taxpayers in the long run.

Having learned from that experience, the government has instead flagged two different ways to use super to help first homebuyers. Neither proposal would make the mistake of giving first homebuyers complete freedom to access to their super. But nor would they make much difference to housing affordability.

Using voluntary super savings for deposits

The first proposal reportedly supported by some in the Coalition, but now denied by the Treasurer, would allow first homebuyers to withdraw any voluntary super contributions they make to help purchase a home. Any compulsory Super Guarantee contributions, the bulk of Australians’ super savings, could not be touched.

Using super tax breaks to help first homebuyers build their deposit would level the playing field between the tax treatment of the savings of first homebuyers and existing property owners.

First homebuyers’ savings typically sit in bank term deposits, where both the initial amount saved and any interest earned is taxed at full marginal rates of personal income tax. In contrast, the nest eggs of existing property owners are taxed very lightly. For owner occupiers, any capital gain is tax free. For investors, capital gains are taxed at a 50% discount, and they get the benefit of negative gearing.

But even if there’s some merit in allowing first homebuyers to use super tax breaks to save for a home, it’s unlikely to make much difference. Few people are likely to take advantage of the scheme. Households are reluctant to give up access to their savings, especially when they’re already saving 9.5% of their income via compulsory super.

In fact the proposal works out to be very similar to the former Rudd government’s First Home Saver Accounts, and is likely to be just as ineffective. First Home Saver Accounts provided similar financial incentives to help first homebuyers build a deposit. Treasury expected A$6.5 billion to be held in First Home Saver Accounts by 2012. Instead only A$500 million had been saved by 2014, when Joe Hockey abolished the scheme, citing a lack of take up.

A “shared equity” scheme for super funds

The Turnbull government is reportedly also considering a “shared equity scheme” where workers’ super funds would own a portion of the property investment, and money would presumably be returned to the super fund when the property was sold.

Details are scarce, but the proposal raises several questions.

First, would the super fund use only the super savings of the co-investor to help buy the home, or would they add capital from the broader super fund pool?

Second, how would the super fund generate a return on the investment? A super fund that invests in rental housing gets the benefit of a rental income stream. A super fund co-investing in owner-occupied housing would not. The super fund could take a disproportionate share of any capital gains to compensate, but that hardly seems attractive for the funds in a world where interest rates are already at record lows.

Third, why involve super funds in a shared equity scheme in the first place? Australia’s super sector is already notoriously inefficient – total super fund fees equate to more than 1% of Australia’s GDP each year. A shared-equity scheme would inevitably add to super funds’ administration costs.

If the federal government is serious about super funds investing in housing, it needs to encourage wholesale reform of state land taxes, which levy a higher rate of land tax the more investment property a person owns. This discourages institutional investors such as super funds from owning large numbers of residential properties, because they pay much higher rates of land tax on any given property than a mum-and-dad investor.

Focus on what matters

If Scott Morrison really wants to tackle housing affordability, he can no longer ignore those policies that would make the biggest difference. That means addressing both the demand and the supply side of housing markets.

On the demand side, that means reducing government subsidies for housing investment which have simply added fuel to the fire. Abolishing negative gearing and cutting the capital gains tax discount to 25% would save the budget about A$5.3 billion a year, and reduce house prices a little – we estimate they would be about 2% lower than otherwise.

The government should also include the value of the family home above some threshold – such as A$500,000 – in the Age Pension assets test. This would encourage senior Australians to downsize to more appropriate housing,
while helping improve the budget bottom line.

At the same time the government should support policies that boost housing supply, especially in the inner and middle ring suburbs of our major cities where most of the new jobs are being created. Population density in the middle ring has hardly changed in the past 30 years.

The federal government has little control over planning rules, which are administered by state and local governments. But it can provide incentives to those tiers of government, if it is looking to do something that would really improve home ownership.

While there are plenty of ideas to improve affordability, only a few will make a real difference, and these are politically hard. In the meantime, the latest thought bubbles about using super savings for housing might be less bad than in the past, but they would be just as ineffective.

John Daley, Chief Executive Officer, Grattan Institute and Brendan Coates, Fellow, Grattan Institute

This article was originally published on The Conversation. (Reblogged by permission). Read the original article.

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