You may have recently heard the government is launching a “bold” and “ambitious” $10 billion housing package, intended to build 30,000 social and affordable homes over the next five years.
The fund seems intentionally designed to sound more significant than it is — hearing the government is investing $10 billion into anything sounds pretty good, right?
The Labor government is calling it a “landmark” plan — a “turning point” for housing. “Our plan is ambitious, because it has to be,” Housing Minister Julie Collins told Parliament.
As a welfare recipient on the public housing waiting list, I couldn’t help but tear my hair out watching the speeches and reading coverage. Again, empty rhetoric on inequality repeated unchallenged.
Tens of thousands of Australians are homeless, and huge numbers are experiencing housing stress. Some are being pushed into debt just to keep a roof over their heads, and others are forced to sleep in caravans, tents and cars. In the past four years, there was a 27% increase in people seeking help at homelessness services because they couldn’t afford rent.
I regularly assist people living well below the poverty line being asked to bear extraordinary rent rises, as I have. Some have seen increases of an eyewatering $140 a week — 30% in one hit for tenants surviving on JobSeeker payments.
Prime Minister Anthony Albanese trumpets his modest beginnings in public housing, yet as rents soar, he seems uninterested in meaningful action to address the shortfall of 500,000 public homes. That number could blow out to 750,000 in a decade.
Labor’s claim of 30,000 houses by 2029 is implausible when the details of the scheme are scrutinised — especially when considering it barely covers what we’re set to lose over the next few years as the National Rental Affordability Scheme ends. The upshot is that if the fund loses money, as the Future Fund did last year, there’ll be zero dollars for new homes in that year — and no ability to make up for it, thanks to the $500 million yearly cap.
This housing plan also doesn’t sufficiently cater for Australia’s population growth. As housing academic Dr Alistair Sisson has pointed out: “We built more than 30,000 public dwellings in every five-year period between 1945 and 1995. [The] population in 1950 was about 8 million and in 1980 around 15 million.”
There’s a reason the government is aiming so low. As with welfare payments, it simply doesn’t want to spend money to do what’s obvious and necessary — acquire and build public homes.
Labor can afford to do this, just as it can afford to increase Centrelink payments to the poverty line. There’s no rule that says policies have to be cost-neutral, and humans should be more important than numbers on a balance sheet. Even so, the government is choosing to give away $243 billion in tax cuts while leaving millions in poverty.
It has concocted a plan to take money from the budget, invest it in the sharemarket and use the interest (if there is any) for homes. The $10 billion it invests will never really leave government coffers, yet we send almost that much out the door every year for property investors. It’s effectively a savings scheme, not a housing spend.
At the same time, the Albanese government has ruled out desperately needed action to stop the cost of staying housed going up — rents in Sydney went up 29.6% in the past year alone. Handouts and tax breaks for property investors have pushed up rents and house prices for decades. The government has been clear: it will be keeping those handouts.
It’s hard not to see a link between the fact that 227 federal politicians are landlords and the refusal to adopt policies that would meaningfully improve costs for renters and buyers. Our political class has a property hoarding problem — and those of us who didn’t make it on to the ladder before the boom are paying dearly for it.
Imagine taking this approach to any other crisis. Imagine a budget-neutral plan to buy COVID vaccines, leading to massive shortages. A disaster response that didn’t actually save anyone from flooding because it had to balance the books.
The community wouldn’t fall for it. Nobody would say it’s “ambitious”. But when it comes to our basic need and right to a home, politicians have taught us to expect almost nothing. That this is called a “landmark” plan says more about rock-bottom expectations than it does about the government’s commitments.
The Albanese government is still new. It has time to leave a positive legacy. Instead it’s running in the opposite direction of anything that would help people on the lowest, and even modest, incomes, cynically pitching a “$10 billion plan” that doesn’t cost a cent.
Politicians know we’re in the midst of a crisis decades in the making. It will take truly ambitious action to fix it, and there are many options: eviction moratoriums for those who can’t keep up with rent; controls on rents, capping and licensing and Airbnbs; removing negative gearing and capital gains tax discounts; supporting cooperative housing models; capping the number of investment properties a person can own.
That’s just to name a few. But most importantly, the government needs to really invest. Not in the sharemarket but in acquiring and building quality homes at scale.
All these proposals will take time, but the crisis is now. The fastest and most effective thing the government can do is ensure those of us on the lowest incomes can make rent. We saw in 2020 how quickly and easily the government can lift Centrelink payments to the Henderson poverty line. It must do so again, but this time for good. The cost does not even amount to the stage three tax cuts.
But right now the Labor government is doing none of this.
Ensuring we have enough to survive for the immediate future is urgent. That will buy us breathing room while work is done to permanently solve the deep systemic problems in our housing system. The prime minister must take this challenge seriously, and rise to it.
Funnily enough, state governments used to do precisely that: use a seed fund to develop real estate and build houses. Some of these were provided as low rent for disadvantaged people, some were rented at more commercial rates (providing competition in the rental market) and some were sold into the market at reasonable prices for first home buyers (providing some competition to the developers of the time). The reasonable prices provided sufficient returns to both subsidise the low rents and provide money to continue the development and construction program in the following year. Public policy that was self funding after the initial seed money was provided.
All this seemed to wind down as a succession of governments were persuaded that private industry could do it better, cheaper, more sustainably, (insert favourite buzz phrase here but don’t mention “profitably”) etc etc. It’s not hard to work out who drove the persuasion to remove competition from the home sales and rental markets. The truly hard thing to work out is why politicians thought that paying a number of private organisations vast amounts of cash each year to provide public housing was a better idea than a self funding model owned by the government.
I’m willing to bet that the people screaming loudest about small government and less regulations were amongst the drivers of this change.
Most of northern Euroland follows the ‘old’ way described in your first paragraph.
The big difference is that renters throughout the EU (NOT, alas UK, even prior to Brexit) have legislated SECURITY of TENURE – the one, peaceful, way to deal with rip-off landlords – other options exist but tend to be messy.
Yes, I think your suspicions are well founded. The problem is the chant for “small government”, replacing publicly owned with private operations, which are supposed to be better at “progressive productivity improvement” and make our markets more “efficient” and “consumer focused”.
Labor has not outgrown this fantasy. It’s politicians with training in economics have imbued the fiction that current economics taught in universities are a “science” and this “science” claims that a mathematical theorem developed in the late 1950’s showed that in “perfectly competitive” markets Adam Smith’s view that seeking profits serves the public good best is true.
The fundamental problem is that the overwhelming majority do no better understand what is a science than economics academics do. Applied mathematics is not in itself a science. We can construct a complex, elegant mathematical model of a spherical universe but it is not a representation of what our universe is. The general proof of Adam Smith’s view that profit seeking in competitive markets serves the public good at least as well of policy aimed at the public good is a piece of complex, even elegant mathematics but it does not remotely represent our economies as they are in reality. Even the idea that it represents an “ideal” economy which we should shift our economy toward as much as we can can be disproven. When our economies are not ideal trying to make them more like the ideal can make things worse for the public. This has been proved conclusively by the last nearly ten years of “small government” striving by Coalition governments. After Morrison, the Federal Government role is so small that it cannot even distribute vitally needed medicines, hospitals and public housing has been shrunk so much that our medical system cannot provide adequate health services. Too over-privatised aged care providers cannot provide adequate care. Attempts to shrink our new NDIS program have threatened adequate care and wasted resources on Cory cases. Waste, inadequate service provision is aged care, meeting disability needs, inadequate health care, inadequate school for poorer children, inadequate access to University education for poorer students and inadequate housing for the average to poorer citizens is the outcome.
The ALP needs to wake up. It needs to stop trying to look good while keeping government small and really tackle the problems an era of misguided @small government” striving have left us facing.
“Court cases” not “Cory” cases.
“In aged care” not “is aged care”
“Inadequate schooling” not “inadequate school”
I’m in full agreement, Ian. Unfortunately, it seems that most Labor pollies are still beguiled by the Randian, Hyeckian nonsense that have killed our sense of society. Until our universities start teaching economics based on observed facts instead of what’s really a trendy cop-out and rip-off that in reality benefits only the wealthy, then we will continue along this path of obviously soul-destroying, society-destroying, venal oppression .
Ah, yes. The myth that private companies would do it better, cheaper and more efficiently.
In South Australia it was called the Housing Trust and it built thousands of modest housing for people to rent, after the war. We also had the Highways Department responsible for building decent roads and the E&WS which saw each house connected to public water supply and sewerage. And not forgetting ETSA connecting every house to publicly owned power.
Then came the scourge of privatisation.
Oh Albo, what a disappointment you are.
So true, and nobody should be surprised.
I, for one, am not surprised in the least Lethean. I would have been surprised if we had seen any sort of meaningful action.
Ditto, Robert. Labor are simply the lesser evil from where I’m standing, though I’m starting to reconsider. Perhaps just the expected out and out nastiness of the Nasty Party is preferable to four fifths of nothing much at all and the hopey/changey/Obama-ey air that always precedes a Labor government. At least when the Nasties are in, as they are most of the time, I find common ground easily with Labor rusted ons instead of finding myself in their gun sights as the enemy because I criticise their beloved (but patently useless, cowardly, nasty-lite) party.
Looking like they’re in power for power’s sake, the Albanese government, aren’t they? Doing a bit of tinkering, but not much else. Chalmers is setting himself up nicely for his intended career as a PM, I notice. Plausible. Personable. The ladies like the pretty face. Tinkering and not actually doing much. Not scaring the horses. Steady as she goes. Not ruling anything out, but not ruling anything IN, either. He’ll go far.
Or, put another way, ‘Labor’ is just the evil of two lessers – to paraphrase Arendt, “the evil of banality”.
That’s easy to say. What’s more difficult is to propose an alternative plan that is (a) fundable; and (b) politically viable.
In a democracy such as Australia, people vote for their interests. If the outcomes seem familiar, that may not be so much because of the personal failings of Albo, who is a skilled operator, but rather the inevitable outcome of our economic and electoral systems.
Would you like to change this?
How?
Umm perhaps use the $10billion to actually build housing rather than just invest in the stock market?
Which will always be depleted by the usual suspects – ticket clippers, agents, managers and consultants.
Several classes which society could lose or, more actively & effectively, abolish with prejudice, to the great acclaim & benefit of all.
I agree with you – it’s OK to have a whine like the other contributors here but what are the actual solutions that will be supported by the electorate? Because you can bet a 1 term ALP government policy will be undone by the greedy bastards in the LNP at the first opportunity. I agree with almost everything the author suggested – I just wish the Albanese government would start trying to change the minds of average voters in these policy areas.
Getting rid of the vast subsidirs we fork out to the miners would be a good start. Just do it .
Albo and Labor are very disappointing at the moment on both domestic and foreign policy, but we are still so far in front compared to the last lot….you have to be grateful for that much.
Milked the mother in public housing for all it was worth, and then quickly pulled the ladder up behind him. Rustedon voters are also a major disappointment. Our lives are not a football match.
A football match is a good analogy. Rusted ons make me feel like Oliver Twist with his bowl of gruel.
Yes. State based public houding was s very good thing. Then Thatcher happened creating the myth of private invester efficiency. All governments bought it and turned the housing market to poop. Time to get rid if negative gearing, tax concessions on asset appreciation and for the states get get back into public housing.
Especially weird plan, when stocks and shares aren’t even the only investment category available. They could just as easily invest their 10B in real estate. Actually build accommodation with it. Would have exactly the same impact on the bottom-line of the budget, likely just as good returns, and actually go some way to solving the nominal problem.
Agreed. Except it gives the Government (as investor) another reason to maintain policy settings that prop up property prices. The housing price levers are well known. 2/3rds of the population (home owners / mortgagees) benefit from house price increases (and seem to vote accordingly). Government investment in housing stocks (instead of the sharemarket) would add yet another influential stakeholder into the “keep prices high” cohort. (This is not an argument for the Government plan either)
And local government, especially including popular regional centres and towns subjected to much urban immigration, but little if any support for infrastructure, rezoning, permanent sites in public caravan parks etc.
You’d think councils were being advised by chambers of commerce and/or real estate sector, ratepayer/property owner obstruction, while scooping up rates…..
Good article. As a fellow renter, I wish you the best of luck. What I’d like to see in another article is some account of the number of vacant properties, Air B&B’s, and other potential rentals that are lying fallow. There is a lot of talk on the web that this situation has been deliberately manufactured, and I’d like to know how much truth is behind these claims. The fog of war is nothing to the smoke-screen behind our accommodation crisis.
See prosper.org.au
Whatever the number of rental dwellings is, there’s no way private owners can be forced to lower their rents. I constantly hear about ‘OUR’ housing stock, but of course 99.9% of it is in private hands. Even in Europe govts and councils can only dictate rental terms in dwellings where they have full or private/public ownership arrangements.