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(Image by Mark Moz via flickr.com)

The Turnbull Government's appeal to the States to address housing affordability is a tactic to divert attention from its own breathtaking inaction, writes Michael Clancy.

IT IS ABUNDANTLY CLEAR that the Coalition Government loses no sleep about housing affordability for the broader population of Australia.

Here is how and why the Coalition don’t care. The millions negatively affected have only two choices — to get over it, or to get politically active.

High and rising housing prices, particularly in the bubble markets of Sydney and Melbourne, impact on a broad range of Australians. I won’t repeat here the detailed facts and figures of inflated residential housing markets. This data is reported regularly in daily papers and is broadly understood. Suffice to say, ownership rates, especially among younger generations and lower-income earners are down, rental "stress” and inadequate and dysfunctional housing matches for families are worryingly high, and the number of homeless and those in insecure and transient shelter options continues to grow.

An unfortunate quip

A clue to the underlying indifference of the Coaliton to the issue of housing unaffordability was poorly hidden in a throwaway quip by the Liberal Party’s now elder statesman, former PM John Howard. When asked about rapidly escalating house prices in Sydney many years ago, in 2003, he triumphantly boasted that he was never stopped in the street by home owners complaining about the value of their house increasing.

Undoubtedly, Mr Howard was speaking the truth. With about 70 per cent of Australian householders owner-occupiers at the time, he was cynically dismissing the plight of those excluded from housing and parading his knowledge of the mathematical law of electoral success. It was unworthy, in-house humour (no pun intended) for those who could afford to laugh about it.

Time and circumstance have moved on. The housing bubble has dramatically expanded and the propertied class, high income earners and high net worth individuals remain well represented within the constituency of the Coalition. The Liberal Party itself is seen as having strong links to the property industry. Treasurer Morrison was formerly a research and policy officer for the Property Council of Australia, the national lobby group for property owners, investors and developers. Further, the New South Wales Branch of the Liberal Party recently attracted much unwanted publicity from the Independent Commission Against Corruption (ICAC) for being the beneficiary of unlawful political donations, circuitously channelled from those with property development interests.

Negative gearing and capital gains tax discount policy

The real objectives and intentions of the Coalition Government for housing in Australia are on full display in its current housing policy.

Excess demand from property investors has been a key driver in ramping up property prices over the last 15 years. This vigorous investor participation has come at great expense to aspiring owner-occupiers, particularly to the first home buyer.

To temper this unfair competition from investors, Labor took to the last election equitable and bold policies to eliminate (prospectively) negative gearing tax benefits on all established housing and to halve the generous capital gains tax discount on investment property, introduced by Howard in 1999-2000, from 50 per cent to 25 per cent. The fierce reaction by PM Turnbull and Treasurer Morrison to Labor’s proposals was to defend the status quo of these tax concessions for investors.

Purpose and function of housing

The message of this government's policy could not have been clearer. The Coalition's priority is not affordable housing for all citizens. Affordable housing is not fundamentally seen as essential community infrastructure to meet the needs of families for secure, functional and satisfying lives. Rather, housing is viewed as another wealth and investment chip. It is, first and foremost, an asset class for holding or trading. The social purpose of housing, to provide shelter and security for the population, has thus been subsumed by the Liberal Party under a “higher” purpose of a purely economic nature.

A Federal housing ministry

An even clearer sign the Turnbull Government cares minimally about unaffordable housing for its citizens is its ongoing refusal to re-establish a Federal ministry of housing. The highly symbolic refusal to appoint a housing minister is a stubborn denial of the reality that the Government controls many policy levers that shape the provision of housing across Australia. In effect, this Coalition Government is declaring that it will not be responsible, nor held accountable, for high-level planning, coordination or oversight of housing outcomes for its people.

When Treasurer Morrison addressed the Urban Development Institute of Australia in late October this year, he called upon State governments to address housing affordability by increasing the supply of land release and reforming land planning processes. His attention to this problem may have been welcome in itself but is only one part of a multifaceted phenomenon. His call was widely seen as a cynical tactic to divert attention from his own Government’s breathtaking inaction in housing areas it controls.

Proof positive of lack of interest

It is important to understand that unaffordability affecting much of the housing market becomes most visible and magnified at the less competitive, lower socio-economic levels of society. Proof positive of the Coalition's lack of interest in the housing affordability issue is to be found within their Federal Budgets from 2014 to 2016. Here we find savage funding cuts in Federal-State funding arrangements for social/public housing and the construction of low cost rental housing under the National Rental Affordability Scheme. National Partnership Funding for approximately 180 homelessness services serving more than 80,000 people also expires in June 2017, without any commitment to ongoing funding.

The LNP Government’s largely “hands-off” approach to the housing market, albeit with specific interventions of incentives to favour of the investor class, represents the same, tired, neoliberal model. This housing market approach will progressively fail for larger and larger sections of economically vulnerable Australians while the privileged classes will entrench their wealth and control over property, especially in the capital cities.

The universal dream of home ownership is fading as a permanent rental class expands. And those on the lowest economic rungs will face greater rental housing insecurity and the risk of homelessness.

The writing is on the wall for all those who wish to read it.

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