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A crisis in housing affordability

By Andrew Bartlett - posted Monday, 28 August 2006


In a 1993 Industry Commission Report, housing was described as a “basic human need”: I would go further and argue that it is basic human right. I also believe that it is a right which is consistently overlooked, when it should in fact be the starting point in any consideration of housing policy. It is sad that dry economic bodies like the Industry Commission and its successor the Productivity Commission seem to see this more instinctively than most politicians.

Australia is currently facing a situation where this basic right to affordable and adequate housing is not being met for a large and growing number of people. Whether it is the housing market or the private rental market, we are in the midst of an affordability crisis which impacts on other areas including health, education and employment. Access to affordable, appropriate and secure housing is fundamental. Without it, Australians are at risk of missing out on opportunities in all these other areas, no matter how much government funds are spent on them.

The serious impact of increased housing costs on lower income earners means that more must be done at state and federal levels of government to address the problem. Low income earners are increasingly being forced into poverty by high rental costs or ever increasing house prices and mortgage repayments. A national approach to housing affordability is as crucial as it is urgent.

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The crisis of housing affordability has long been treated by the federal government as an area of states’ responsibility. In reality, housing is a shared responsibility and the federal government cannot continue to wash its hands of the matter, by just pretending it does its bit to assist by providing funding for the Commonwealth-State Housing Agreement (CSHA) and providing rent assistance, while insisting that any failures are due to state and territory governments’ handling of the matter.

The 2004 Productivity Commission report, First Home Ownership, made a number of recommendations aimed at improving housing affordability. The federal Treasurer has recently publicly attacked the states for not adopting the recommendations from the Commission’s report, whilst shamelessly ignoring the fact that he rejected all the recommendations that were aimed specifically at the federal government.

This intellectually and morally bankrupt buck-passing has continued for years, while the affordability crisis has grown steadily worse. More and more Australian families are paying a high price for the Treasurer’s lack of courage and honesty.

A key recommendation of the Productivity Commission was the need for a review of tax arrangements which had encouraged excessive investment and speculation in the property market, including capital gains tax provisions and negative gearing. Other recommendations included a national public inquiry to examine how best to meet the housing needs of lower income households and better targeting of the Fist Home Owner Scheme, which disproportionately goes to high income earners and may well make its own small contribution to pushing house prices even higher.

Housing can only become affordable if all tiers of government take responsibility for the areas within their control and act to alleviate the problem. As it stands, the cost of negative gearing tax breaks is far in excess of expenditure each year on the CSHA which funds public and community housing. We provide more in tax breaks for higher income earners, who can afford to invest in housing than we provide in housing assistance to lower income earners. Even the welfare recipient targeted rent assistance, which indirectly subsidises landlords, now costs more than government puts into public housing.

The Industry Commission in 1993 found that the provision of public housing is a cost effective way to meet government housing objectives, yet this effective mechanism of alleviating housing affordability and availability problems has been pushed even lower down the political agenda in the years since then.

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Despite evidence that funding public housing is a more efficient way to deliver housing outcomes, we are seeing a decline nationally in the total number of dwellings.

There can be no doubt that there are many factors at play which affect the cost of housing but there is also no doubt that we are lacking a national housing strategy to develop the most effective and efficient way to address affordability. We can no longer afford to avoid examining the factors at a national level that add to the housing affordability crisis which is underpinning a growing wealth and opportunity divide in our community.

We urgently need action and leadership at a national level on this issue, otherwise more Australians will not be able to afford to access this most fundamental of human rights.

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About the Author

Andrew Bartlett has been active in politics for over 20 years, including as a Queensland Senator from 1997-2008. He graduated from University of Queensland with a degree in social work and has been involved in a wide range of community organisations and issues, including human rights, housing, immigration, Indigneous affairs, environment, animal rights and multiculturalism. He is a member of National Forum. He blogs at Bartlett's Blog.

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