Under the current Coalition Government, provision of public housing has fallen to a nadir and house prices are soaring, as Alan Austin reports.
THE EXTRAORDINARY prices that houses in Australia are now fetching were unimaginable just six years ago. That was before Scott Morrison became treasurer and, later, prime minister. The values of most houses in Australia’s big cities and in some smaller cities and regional areas have more than doubled in that time. This has locked countless first home buyers out of the housing market, probably forever, while multiplying the profits of rich property speculators.
There are several contributing causes. Almost all are connected to the callousness, corruption and incompetence of the Morrison Government. Had this Administration wanted a fairer home buyers’ market, it could have done many things differently.
Public housing is central
Providing moderately-priced public or social housing has been a key government responsibility since the reconstruction period following World War I. Some administrations have achieved more than others. Few have failed as badly as the Coalition from 2015 onwards.
Last week the Bureau of Statistics (ABS) released data on housing starts in the private and public sectors, from 1983 to September 2021. Bob Hawke’s Government built an average of 12,563 houses for low-income Australians to rent or buy in each of its eight years. This collapsed to an appalling 4,399 per year through the hapless Howard period when the rich did very nicely while the poor were neglected. The Rudd Government almost doubled that to 8,615. It has been downhill from there.
Abject Coalition failure
The ABS home starts data and population records enable us to calculate the number of affordable houses built per year by each government. Comparing all prime ministerships over the last 30 years, we find the Coalition has consistently failed in this area, with the Turnbull and Morrison period by far the worst.
The Coalition Government could easily have alleviated the housing shortage which is the fundamental cause of the price hikes. Estimates of the sums the Coalition allowed wealthy enterprises to rort through the shonky JobKeeper scheme are now around $27 billion. That could have provided 300,000 low-cost homes and greatly boosted employment in the process.
Contributing causes to housing unaffordability
Besides the dominant issue of public housing, factors contributing to soaring house prices include:
- Natural population growth and migration increasing demand for housing;
- Low interest rates;
- Deregulation of the finance sector allowing borrowing with lower security;
- Zoning decisions limiting affordable land;
- Property developers limiting the supply of homes to maximise profits;
- First home buyer grants boosting demand without changing supply;
- Government subsidies such as negative gearing favouring investors over home occupiers; and
- Capital gains tax reductions favouring property investors over owner-occupiers.
Governments influence or directly control all eight of these. The Morrison Government has failed to take any effective action.
How do they get away with this?
The same way they get away with the other thirty “all-time most disastrous” or “worst-in-living-memory” economic outcomes IA has documented in recent months.
They get away with it because the Coalition serves first and foremost large corporations, local and foreign, which are the big donors to the Coalition parties. Serving the people of Australia is mere pretence. The heavy lifting in maintaining that pretence is done by the large private media corporations, which generate a huge chunk of their revenue through real estate advertising.
Thus they have a direct vested interest in the property market going up, up and up.
Hence, there is little negative coverage of the Coalition’s gross mismanagement of the housing market or of its economic failures overall.
ABC's Four Corners on the property crisis
The ABC’s Four Corners tried to analyse the ever-rising house prices last Monday, 1 November, in its program titled ‘Going, going, gone: What’s driving Australia’s property frenzy’.
It noted that house values have trebled in the last nine years in some regions. It identified all eight contributing factors listed above. But it did not mention public housing.
There was not a hint of a suggestion of a whisper of criticism of the Morrison Government. Not a trace of an intimation of a murmur. Coalition MP Jason Falinski was interviewed, but no one from Labor, the Greens or any other political party appeared.
The only direct political attack was against Labor, which took reform of those tax laws which favour investors over home occupiers to the last two elections. After losing both, Labor abandoned those policies.
This was to the dismay of the executive officer of National Shelter Adrian Pisarski:
“We are extremely disappointed in Labor for doing that. We don’t think you can do anything meaningful about rebalancing home ownership in Australia without addressing those tax settings.”
But Four Corners did not criticise the Coalition or the property industry or the business sector generally, which brutally attacked Labor’s meaningful rebalancing policies during the last two election campaigns.
Once again, the beginning of the solution here is the same as for many other problems afflicting the people of Australia: question the mainstream media's coverage and change the federal Government at the earliest opportunity.
Alan Austin’s defamation matter is nearly over. You can read the latest update here and support the crowd-funding here. Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
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