DOUG CAMERON. Commonwealth can, and must, do more on housing and homelessness

Feb 24, 2017

The failure of the market to provide housing for all who need it is compounded by several political failures.  

It is now widely accepted that Australia is in the grip of a housing affordability crisis. Home ownership is falling at the same time as rental stress and homelessness is rising.

While the policies of the Turnbull Government are contributing to this crisis, this is not a problem unique to Australia.

Worldwide, consistently low interest rates have benefited borrowers, driving up demand in cities as different as London, Auckland and Vancouver. Sluggish growth since the 2008 global recession, as well as favourable tax and regulatory treatment, make real estate an attractive investment. The real estate industry and banks actively encourage these investments, both from domestic and foreign investors.

The steady rise in real estate asset prices is contributing to the widening inequality that we see in Australia, as some benefit from rental income and asset price increases, while others are locked out by ever-rising prices and forced to compete for fewer available affordable rental properties.

Unaffordable housing is also a concern because our welfare system and housing sector interact. Owner occupied homes do not count in asset tests for determining eligibility for the age pension, encouraging people to invest in buying a home to secure their retirement.

The downside of this is that those excluded from home ownership are increasingly falling behind as their pension or superannuation is insufficient to pay for both housing and other living expenses. We see the effect of this particularly with older women who do not own their own home due to different patterns of work and lower superannuation balances. Previously, this was dealt with by providing public housing. As public housing has dropped from six percent to three percent of all housing stock, this safety net has started to fray and more people are experiencing bouts of homelessness.

The failure of the market to provide housing for all who need it is compounded by several political failures.

The Turnbull Government has painted itself into a corner on tax reform, as it has on so many other issues, due to the weakness of Prime Minister Turnbull. Treasurer Scott Morrison, who was reportedly rolled in Cabinet when he tried to curb what he called the ‘excesses’ in negative gearing, has also ruled out any changes to capital gains tax concessions, despite calls from his own backbench to do so.

In February 2016 Labor announced a policy to wind back negative gearing and capital gains tax concessions, in order to level the playing field between owner occupiers and ‘buy to let’ investors.

The debate on that has been both fierce and well documented. Federal Liberal backbenchers, State Liberal leaders, treasurers and planning ministers, have all broken ranks with the Turnbull government to call for some reform. The government has been criticised by conservative commentators, as well as independent economists and think tanks for its unwillingness to curb the distorting effects of these tax concessions. Perhaps most importantly, I believe that Labor has persuaded the community at large that tax reform is a necessary part of addressing housing affordability.

As Shadow Minister for Housing, I want to move the debate on to what else can be done, especially to help renters and people on low incomes to get decent, secure housing.

All reasonable policy options that will increase the supply of affordable rental housing have to be considered.

This includes a tax incentive scheme such as Labor’s National Rental Affordability Scheme, which has delivered over 38,000 affordable homes, and was on track to deliver over 50,000 before its funding was discontinued by the Coalition.

A finance model that can leverage large scale, institutional investment in affordable rental housing should also be considered.

The Turnbull Government is considering establishing a financial institution to act as a bond aggregator or financial intermediary to help bridge the finance gap in the provision of affordable rental housing.

I have been holding consultations on such an institution since I first became Shadow Minister for Housing and Homelessness last August and I will have more to say on it in the coming weeks and months.

There is no single, correct answer to increasing the supply of affordable rental housing.

If we recognise that even a moderation of property prices is not going to provide relief for hundreds of thousands of low income renters, Federal and State governments need to give serious consideration to inclusionary zoning regimes that would mandate affordable rental housing in new developments, particularly on high value sites close to employment and education opportunities.

Working to give practical effect to inclusionary zoning regimes, government can do more to identify surplus government-owned land and other property holdings that could be released for affordable housing.

We also must do better for the growing number of people that will rent for long periods, and may never buy their own home at all, especially as public housing falls as a percentage of all housing stock.

By international standards, Australia’s private rental markets perform particularly poorly when it comes to providing security of tenure and the ability of tenants to make a life with the full enjoyment of their homes.

Federal and state governments should adopt principles in relation to private rental leases that reflect the right of the growing number of households that rent long-term. This includes the right to access and remain in adequate, affordable and appropriate housing with appropriate protection of their rights as citizens and consumers.

There are some specific policy areas that I will be keen to address. We must do more for the increasing number of older women who find themselves at risk of homelessness, often due to unforeseen changes in circumstances which leaves them with few assets and little income to seek housing in the private rental market.

I also believe government can better help young people leaving home care at 18 years old, who too often end up on the street, subject to exploitation and abuse.

The Commonwealth has a unique coordinating and regulatory role. We need more accountability and transparency so we know what is working and what needs further change.

It is clear that the National Affordable Housing Agreement needs more accountability measures so that the States comprehensively account for expenditure.

As it stands, there are no specific performance measures relating to, for example, the impacts of NAHA expenditure on employment, education or health outcomes for social housing tenants or communities, or even whether expenditure leads to any new social housing stock.

NAHA needs reform but it should not be abolished, as was floated by the government via the Murdoch press. A new agreement needs to have adequate mechanisms to follow through on agreed outcomes. The Abbott Government’s ideological decision to abolish the Council of Australian Governments Reform Council, which oversaw reforms agreed to under instruments such as the National Affordable Housing Agreement, meant that ongoing improvements were curtailed.

The abolition of the National Housing Supply Council (NHSC) in November 2013 by the Abbott Government has also left the Commonwealth and the community with less comprehensive data and reliable research to inform policy decisions. The decision to scrap the NHSC was particularly ill-informed and regrettable, as its research and analysis was both important and unique. Labor in government will ensure that the research functions performed by the NHSC are reinstated.

So there is much that an active government can do to address housing affordability that the current government will not or cannot do without revisiting its previous decisions.

Housing affordability will continue to ignite debate across the community. There are some areas of competing interests that will need to be rebalanced in favour the thousands locked out of affordable, secure homes. I will always be unapologetic in advocating for the poorest and most disadvantaged, but housing is not a permanent zero-sum game. There are many policy areas where there are opportunities for the entire community to be better off. All it takes is a government willing to listen and act in the interests of all Australians.

Senator Doug Cameron is Shadow Minister for Housing and Homelessness. Senator for NSW. 


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