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30 pieces of social conscience

While Opposition Leader Peter Dutton didn’t have a wonderful budget week by all accounts, it must have given him some joy to see the government and Greens arguing over how to establish more social and affordable housing in Australia. It’s actually a shame that the federal parliament is even discussing how to fund housing that is affordable as many years ago each state and territory had a ‘housing commission’ or ‘housing trust’ that was constantly maintaining their existing housing stock and building more to cater for growth. In the era of economic privatisation, government wasn’t meant to compete with the private sector, the claim being it was seen to be ‘crowding out’ the private sector, which leads us to where we are now.

It’s not difficult to demonstrate that privatisation of rental housing has not worked – witness the rort that is negative gearing on multiple ‘investment properties’ and the cost of housing anywhere near services in our larger cities. Sadly, it seems that neither of the major political parties have the courage to even have a discussion about reining in the excesses. The housing rental subsidy increase in the last budget will be swallowed up very quickly by those that really only see their tenants as a business opportunity.

In regard to the housing affordability legislation currently before the Senate Albanese’s ALP and Bandt’s Greens are both as equally bad as each other. Harking back to the Constitution, the Senate is a house of review. In this case, the Senate has reviewed the ALP social and affordable housing legislation and given it a rating of ‘could do better’. By the same token, the Greens should have learnt over the years that perfection is usually unobtainable and a good percentage of something is better than everything of nothing.

For example, while the Greens might have had genuine issues with parts of Rudd’s original emissions reduction scheme and voted it down, Rudd then shelved the legislation rather than compromise. The net effect was that we didn’t have any sort of effective scheme for most of the past decade and a half. Regardless of the claims of the Greens or the ALP, they both made bad decisions and we are paying the consequences of their refusal to compromise in 2009 to this day. They would have had 15 years to ‘tweak’ the 2009 legislation to better meet the objective of emissions reduction had they have passed it.

Should the 2009 emission scheme been legislated, it would have had sufficient time to demonstrate that most of the then Opposition Leader Abbott’s subsequent claims regarding the Gillard Government carbon reductions legislation were the complete and utter fabrications they have since been shown to be. Don’t forget, even his former Chief of Staff and now Sky ‘after dark’ talking head Peta Credlin admitted years later that their claims the Gillard Government carbon reduction scheme legislation was a ‘carbon tax’ was ‘just brutal politics’ rather than in any way accurate.

The debate over the housing legislation is similar. Both parties are claiming their scheme is better for a whole lot of different reasons and they are both probably correct in their claims, while ignoring the benefits of the other parties proposals. However standing there and arguing their version of creation of affordable and social housing is the only version that should be considered is absolute bollocks. Arguing over how something is going to be done is not actually doing anything to fix the issue. There needs to be compromise. The Coalition won’t assist here – after all if they were at all concerned about affordable housing over the ‘rights’ of those that negative gear multiple ‘investment properties’ they had nearly a decade in power to do something, and didn’t. Instead their ‘enduring legacy’ is the tax reforms’ that gave a less than a take away coffee per day in tax cuts to those that earn the least and will give thousands to those that earn the most (assuming the Albanese Government doesn’t do something to change the legislation).

According to this ABC report, only one in four voters under 40 gave the Coalition their vote in the 2022 election. The rest are now looking for a return on their investment

Their message to the government was simple: you were elected off our backs, and now we’ve been forgotten.

“The government is taking a different view of young people than they should be,” President of the National Union of Students, Bailey Riley, told Hack.

“The reason there was a change of government from Liberals to Labor was because of young people.”

“We voted them in with this mandate for change and mandate for action, and they’re not realising that mandate still exists.”

And despite the government’s message that they budget was carefully configured to take pressure of the cost of living (from the same ABC report)

Unfortunately, not all young people are on board with that.

Young people want radical change, and whether you see that as a folly or a virtue largely depends on your age and political leaning.

Some economists agree with the ‘radical change’ approach

In her pre-budget speech to the National Press Club in Canberra, head of the Grattan Institute Danielle Wood, said now is the time for bold, radical change.

“Overall, the picture is a budget of incremental change. It will make some things a bit better and not too much worse. But ultimately it will only play footsies with the big social and fiscal challenges,” she said.

When Brisbane’s LNP Lord Mayor, Adrian Schrinner, is arguing that government in general need to do more for those that don’t have a secure roof over their head by suggesting the disused COVID isolation accommodation facilities at Pinkenba be used for homeless, the ALP has a problem. Schrinner is also playing politics here by announcing his Council will fund some bus and library services to the disused centre in the upcoming Council budget – but apparently is still going through the process of submitting a proposal to the federal government who own the facility.

While the Greens are claiming that Tasmanian Senator Jacquie Lambie has been ‘bought out’ by the government on this issue, the absolute frustration as recorded in this video link from The Guardian while saying

So please, for you people over here, that think you have a social conscience, do you really want to keep playing with people’s lives? Do you really?

to the Greens Senators in the Chamber says it all.

And she has a point.

 

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16 comments

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  1. Terence Mills

    Negative Gearing and the related concessions on capital gains tax act as an incentive for an investor to pay too much when buying an investment property frequently outbidding prospective owner occupiers.

    Negative Gearing does nothing to increase the national housing stock but merely creates a housing casino.

    Some years ago the Labor party under Bill Shorten proposed that Negative Gearing apply only to new builds thus actually creating an incentive for investors to ‘build to rent’ and increase the national housing stock and take the pressure off existing homes : this was howled down by the coalition.

    Labor should reintroduce this policy a a matter of urgency.

  2. margcal

    Almost spot-on article with spot-on comment from Terence Mills.

    My quibble with the article is re “social and affordable” housing. In Victoria at least, that description seems to apply to clients of government departments (social – eg mental health, other disabilities) and people who could afford to buy if prices were a few hundred thousand cheaper (affordable – and small dog boxes for the money).

    There doesn’t seem to be anything for those not able to save for a deposit but otherwise would be good, long-term tenants. The old Housing Commission in Vic did just that – provided a variety of both houses and flats for long-term rental. That is what is desperately needed and is missing from current arguments (unless I’ve missed something in a revised definition of terms).

  3. RomeoCharlie

    I have often felt there should be a way to pay back the politicians and public servants whose policies end up harming people. This is a petty attitude I know, but where are the penalties for those who despatched the Housing Commissions of old. There must be millions of people like Albo, and me, who grew up in housing commission houses and are saddened by the parlous state of homelessness being experienced by too many, not to mention the absurd cost of houses caused by Howard’s negative gearing/ capital gains rorts. Who, if anyone, will face any punishment for the robodebt debacle and the misery it inflicted on thousands. Yes the bickering between Labor and the Greens is unseemly but the principle is important and that is that real immediate action needs to begin now on a massive increase in housing stock. I have heard it said that there aren’t enough builders or not enough material to build the housing needed. I am of the view that if funding is provided, builders will appear…but, as we found with Pink batts — regulation will be needed to avoid the fly-by- nighters who inevitably rise from the scum to rip off government funded schemes, as we are seeing in the employment, NDIS, Aged Care and even the childcare sector. The winding back of regulatory bodies with teeth is another legacy of the Howard and Morrison governments for which, sadly, there is no penalty. But yes, count me among those who want the Greens to continue to demand real action on housing, not some gamble on the stock exchange.

  4. Baby Jewels

    Excuse me, shouldn’t your last comment have been said to Labor??

  5. Keitha Granville

    Fabulous article, spot on ! Especially about the Greens deciding not to support a bill that doesn’t give them all they want. The same is happening with the Referendum – the NO side wants more, so we’ll likely end up with nothing.

    Negative gearing is so easily fixed – ONE HOUSE only. That covers all those using property as a superannuation plan, and eliminates all the rest who should be called property developers. Unfortunately many MPs are in that basket and won’t vote themsleves out of free money.
    It’s a DISGRACE.

  6. Brett

    Terry, re negative gearing, what a rort, especially when weaponised by Interest-only loans. I agree, only apply NG to new land & homes and in the case of existing homes, only to the dwelling component. Dwellings which already exist, under the current legislation, can have NG claims against interest costs forever. In 1000 years time an ‘investor’ can come along and again claim interest costs for actually adding nothing to housing supply. How does that make any sense? Perhaps land, other than new release, needs to be treated as a separate taxable item at point of sale or death of the owner. In other words, there is no need for govt to give tax breaks for land upon which a dwelling already sits as nothing has been created. For the purposes of NG claims, it is easy enough to separate out the value of land and dwelling. One problem with the idea is the govt will have more taxes to waste.

  7. New England Cocky

    @ Romeo Charlie: I agree, there should be some recourse for Australian voters when elected politicians of any persuasion can be shown beyond reasonable doubt, to have committed a crime against the people, including the raiding of the Parliamentary Allowances Scheme, the regular milch cow of the representative of the NOtional$ in New England.

    So, that would put gg david hurley and his $18 MILLION Leadership scam directly in the spotlight for abuse of office at least, while Scummo could defend a plethora of charges commencing with treason for the USUKA subs fiasco and the subsequent ”jobs for the boys” future career with FRWNJs anywhere in the world. Anybody for a class action against Stewie Robodebt?? And the list goes on for too long …..

    The critical social housing situation was traced to the closure of various state Housing Commission departments, that could readily be re-introduced for the benefit of the too many homeless persons in Australia. Similarly, negative gearing and capital gains tax rorts being abolished by grandfathering would allow more properties onto the market in an orderly manner.

    In a capitalist society the underlying belief is that if a project cannot make money without a government subsidy then it should fail ….. unless you are a corporation in Australia where sucking the government purse is the preferred standard operating procedure for the monied classes since settlement in 1788.

  8. Clakka

    I agree with the comments but see the matters as complex, embedded throughout Oz’ history and now an abject disaster. The political yabber, yabber as described in the article, is just that; political yabber, yabber premised on the existence of some sort of framework of magic.

    For 100+ years Oz has always had a housing problem, particularly in remote and temperate zones and the south. Up until the late 1940s, the urban housing stock consisted of: In Melb; Victorian era row houses (built off the back of gold), post-WWI Art Deco and California Bungalows, and Sydney; a predominance of smaller Edwardian boxes, with some Art Deco and California Bungalows for the more wealthy. Both for the Victorian era and the Art Deco & California Bungalows, many of the doors, windows and decorative items were imported, as industry hadn’t developed sufficiently to avail local supply. In the urban fringes and regions the houses were mainly “Jack built” boxes.

    Of course, for significant periods up to the late 1940s, efforts to develop a reasonable housing stock was stymied by the labour and materials shortages arising from the World Wars.

    They all had one thing in common, to cite architect / builder / author, Robyn Boyd, these copies of foreign designs were utterly inappropriate for the very hot summers and relatively cold winters. To live in any form of comfort, they were fossil-fuel guzzling machines that were slowly choking us. The only real exception was the development of the wonderful Queenslander in the north – a different story.

    Post 1940s, the likes of A.V. Jennings developed and built new designs to utilise the green hardwoods of the south eastern forests, and also brought in hundreds of experienced European carpenters (and other trades) to facilitate post-war growth. Thus came the decades of our attachment to the “Triple-fronted Brick Veneer”. Yet still these uninsulated light weight structures, for comfort, were fossil-fuel guzzling edifices. Unlike Europe, there was no rebuilding, and development of further and better technologies. We were alright, Jack.

    Architects were sneered at as being snobby, for the elite, unaffordable and unnecessary. We had entered the era of the developer / builder, where you were glad to get something from the production line – even if it was on low-grade land in appallingly planned ‘heat-sink’ suburbs devoid of public transport and services. Nevertheless, from the 70s onward, the academics, scientists and technicians had been hard at work behind the scenes, innovating and developing world’s best practice Standards and Codes, which were largely ignored and sat on the shelf gathering dust.

    During the 80s environmental & OH&S laws came into play, which resulted in an increase of about 35% to the cost of development & building, although many still wriggled around them. The Howard era privatised apprentice and education schemes, which resulted in a stultifying of trades development, and setting profiteering as the sine qua non. The Rudd, Gillard, Ruddying era did next to nothing for construction industry reform, perhaps thinking it would look after itself. Albeit, in the latter part of that era the Building Code of Australia (BCA) became enfranchised by ever State as the NCC (National Construction Code) and was immutably tied to both environmental and OH&S laws – the cost of building skyrocketed. Something had to give – reduce block sizes and quality, building banal McMansions fence-to-fence, that is until it all became so expensive it virtually ground to a snails pace, barely keeping up with immigration through the early 2000s.

    Then with bags of money, under the blind-eye of lawyers and the FIRB, and the pump of the REA, came the frenzied onslaught of temporary foreign grafters, grifters and escapees buying up every established property they could lay their grubby hands on. Once were homes, were reverted to investment assets. The local profiteers, rent-seekers and politicians jumped on board, and the banks remained stum as they over-geared everyone that entered their web. No-one was interested in estate development, as you couldn’t pretend you lived there, and negative gearing and capital gains discounts would be too far away.

    Now with inevitable inflation countermeasures and interest rate growth extending the average mortgage by >$1,500 per month, supply chain shortages, foreign owned suppliers offering no innovation or alternatives, and a massive lack of trades people, new houses or refurbishment of any remaining old stock a dream become nightmare. The remaining stock continues to be dysfunctional fossil-fuel guzzling edifices. With Net-Zero and the climbing cost of energy, any notion of abatement of the tyrannies of climate change appear out of reach. Since 2018 dwellings sales price increased >50% and rental rates >40% all whilst wage rates remained static. With the mum&dad banks drained dry, ordinary folk cannot afford a home, let alone get one.

    In terms of numbers. Taking into account losses through bushfires & floods, homelessness and incoming international students, there’s a current shortfall of at least 140,000 dwellings, Airbnb and empty holiday homes account for at least 251,000 dwellings not in the market. On average the industry builds 120,000 dwellings per year, but given all the aforementioned economic imposts (like lack of trades and builders going broke, etc), that rate of building is falling.

    With immigration projected to be 1.5 million over 5 years, that equates to 117,600 new dwellings required per year. Add that to the current shortfall, and that’s 257,600 new dwellings required by end 2024 when we only build 120,000 …… ooops, the disaster unfolds.

    We better hope that immigration reverts from providing slave labour for agriculture and the food industry, to masses of skilled trades and builders with bag-loads of money or there’ll be a lot of sweltering or freezing in swags and tents in the lee of our EVs.

    In all our short history, but for a short purple patch between the 50s & early 70s, we’ve never really developed a functional housing stock, and since the 80s, via arrogant complacency, political skullduggery, profiteering and rent-seeking we’ve embedded a catastrophe and a mess that will likely take a decade or so to clean up, meanwhile wellness will remain in jeopardy.

  9. Michael Taylor

    GL, yet if Trump ever visits they’ll be sure to get out the sniffer dogs. (And I don’t mean the airport dogs sniffing for drugs.).

  10. Harry Lime

    Jesus Clakka,is there any good news?..Mind you, I agree with all of it.Most of our authorities have been half arsed and pissweak…on a good day.

  11. Fred

    Clakka: hear hear. We were so lucky to buy a house when interest rates hit 17% – the stress almost killed us. We had to negatively gear for 5 years before we could move in. Fortunately there was somewhere else we could rent. Since then we have been identified as living in a bushfire prone location so the insurance has risen to $7.5K. Still, we have friends that are both fire and flood prone. Why anybody is allowed to build on known floodplains leaves me scratching my head (but the same could be said about fire-prone places which with global warming appears to encompass most of Australia). Some of the things that really rankle are 1) there were 2 hardware stores within 4km and now the nearest is 15k courtesy of corporates carefully manipulating prices, 2) the development of building codes BCA/NCC are not driven by the consideration “value for money”, particularly for fire-rated and most importantly 3) lack of government involvement in developing local fledgling industries such as total manufacture of solar (panels, controllers, cables etc.), wind (towers, blades, turbines, controllers, etc.) and cheap housing with double glazing (modular pre-fab as per what Europe produces).

  12. Brett

    Does anyone believe Labor cares about affordable housing? The Libs never have and proved it time and again over the last 23 years I’ve been watching. Same with Labor. Paul Keating tried to undo some of the advantage given investors in 1985 when he made changes to negative gearing legislation. However, despite all the outrage and as shown in the ABC Fact Check Graph in this article https://www.abc.net.au/news/2015-05-06/hockey-negative-gearing/6431100 – ‘Real Rent Changes’ showed rents only substantially increased for Sydney. Fearing fairness might appear in markets, Keating was attacked by the media and RE lobby groups until he reversed course. Since that day the ‘parasite class’ has not considered legislating away advantages given to investors. If nothing else they are consistent in their selfishness and pig-headed arrogance.
    Good insights there Clakka btw.

  13. Clakka

    Good to see commenters getting to the grit. NEC, I like the contrast of your two links – the caravaners one is OK if yer fit and well and can find a spot to park it in the burbs where the jobs are. And where then do the bureaucratic controllers deem you live, so they can facilitate the provision to you of services (ha ha), and apply licenses and taxes? It’s been big in the USofA for generations, where it has tended to create a no-fixed-address “social fringe” put down by both the housos and the elite. Nevertheless, it will come to pass, so to contemporise it, what do we do .. put pontoons on our EVs and tack on a few bedrooms, a bathroom and kitchen and a roll-out play area for the kids?

    Back to the current political yabber, yabber, it gives me the pip. The complex issues re dwelling shortage is mostly not fiscal but structural and due to inappropriate privatisation etc made worse by the prevailing inflation and worldwide supply chain issues and labour / skill shortages – all will take quite some time to fix. There are many immediate measures made in the last year for affordable housing & rent, yet the Greens / LNP who have done nix, but now wolf-whistle whilst also blocking $10b Housing Fund. The LNP did nothing in the last 9 years except promote rent-seeking & gouging.

    There is no immediate finger-snapping cure for the housing problem. Negative gearing change is a very delicate issue and can work for and against reform unless done very carefully when the other structural reforms are underway. The govt has to be very careful with negative gearing and capital gains discounts, whilst working with the States on their structural matters and imposts is essential and underway. Then of course there’s the devilish matter of Stage 3 tax cuts – complete wrong-headedness.

    The (NEC) smh article nails it. The govt has to get their skates on with deep thinking, consultation, lateral thinking and innovation.

  14. andyfiftysix

    i dont think negative gearing on its own will sort out the housing dilema. We need all guns blazing to drive house prices down, even controlling money supply to banks for lending towards housing. We need to encourage, no mandate a higher density when redeveloping inner suburban blocks. I see in victoria, we are going to tax a second home, and i say about time. The “magic” of the market has stuffed us up big time, we need to take control. The way i see it, you cant turn a ship around with a cheap BCF anchor and chain.

    As for dutton, nobody i know listens to a word he says.

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