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Out of touch, lost the plot and just plain dangerous

By Ross Elliott - posted Friday, 6 July 2012

Common sense reforms to housing policy which might make new homes more affordable for young families are under attack. That attack is coming from sections of academia and also the Labor Party, both of which are proving their fast diminishing value in public policy and confirming their colours as inner city elites, dismissive of the aspirations of working Australians in suburban environments.

"Just because the cost of the house itself is cheaper does not mean the property becomes more affordable." Now, which particular species of public policy commentator do you think was responsible for this little gem? It may not surprise you to learn it was a quote (AFR, 25 May) from RMIT planning professor Michael Buxton, arguing against reductions of infrastructure levies in Greenfield areas in Victoria.

The brilliant Professor Buxton's slim grasp on household economics 101 is a bit of a worry, especially if he's responsible for teaching and grading the next generation of university graduates. (His background "includes 12 years in senior management with [former] Victorian Government Planning and Environment agencies, and with the Victorian Environment Protection Authority. He formerly headed the intergovernmental process for developing Australia's National Greenhouse Strategy, and the group responsible for the development and implementation of environmental policy in Victoria.... He is former chairperson Premier's Green Wedge Working Party which advised the Victorian government on the introduction of a legislated urban growth boundary." Say no more).


To make such a blatantly silly statement highlights just how far from reality sections of the academic profession have drifted. Housing affordability is a chronic problem for a generation of young Australians. One third of the price of new homes is now tax and regulation. This wasn't the case when Mr Buxton was young (which was several decades ago judging by his pic) nor was there then a planning policy dogma which promoted centralised density over the suburban form, accompanied by a form of anti-suburban snobbery which views suburban family living in detached houses as an inferior life form.

But affordability is the reality now and as Liberal governments in Victoria and New South Wales announce significant and very welcome policy changes to address those problems, the chorus of criticisms from the elitists is getting louder.

In Victoria, the state government has announced the release of an additional 35,000 lots around the Melbourne fringe, to stimulate the supply and choice of new housing and to reduce price pressure from limited supply. In NSW, the government has announced a range of tax and planning measures which include increases in grants and reductions in stamp duty for first time buyers of new housing along with planning measures which will stimulate urban fringe supply. Similar announcements will hopefully also be in the minds of the new Queensland government, once it works out how to deal with the issue of the state's significant debt legacy.

The changes announced recently are long overdue and reveal a stark contrast between the policy approach of the Liberal governments which have introduced them, and their Labor predecessors who opposed them.

Victoria's Labor spokesperson for planning, Brian Tee, warned of 'semi rural ghettos on Melbourne's fringe' and trotted out the tired (and false) allegation it would lead to more congestion and 'parents stuck in traffic for longer rather than at home with their kids.' Well Mr Tee, there are two problems with your claim. First, is it at least preferable these families have homes they can afford to own? Second, with less than 10% of Melbourne's employment in the CBD, precisely how will your congestion nightmare eventuate? Do you envisage the majority of factory workers, shop assistants, tradies, teachers, suburban professionals and other jobs being arbitrarily relocated into the CBD?

Tee's ignorance of economic reality could be based on a paper by his Federal Labor colleague, the Hon Tony Burke – Minister for Population (a subject on which he's had precious little to say). According to Burke, families on the urban fringe risk psychological damage:


"Increased congestion and longer travel times place the populations in outer suburbs at clear disadvantage in terms of access to employment opportunities and services as well as having a detrimental impact on the psychological, social and cultural wellbeing of the populations" his Sustainable Australia-Sustainable Communities report says. (See AFR, 14 June for its excellent coverage of the issue).

What's so remarkable about these sorts of comments isn't just that they defy available evidence and consumer preference, or that they are based almost entirely on ideology, but that they also avoid any mention of their concerns for housing affordability. It would seem that it is now acceptable for Labor party spokespeople and ministers to parrot planning ideology which has demonstrably increased new housing costs, particularly in new suburban locales, and to disregard the impact this is having on a constituency which Labor once claimed as their heartland.

Housing costs on a professor's wage or on the income of a highly placed planning mandarin in a government department aren't really a problem. These people can afford detached homes in which to raise their families (yes, they invariably live in the type of housing form which is opposite to the density prescription they preach) and they can afford them even in established inner city areas. But if you're a school teacher, policeman, fireman, ambulance man, child care worker, retail assistant, factory worker or similar, and your average individual income is under $60,000 or under $80,000 combined, housing costs are an issue. This demographic still prefers the detached home in a suburban environment if they plan to raise a family but that choice has been increasingly demonised by elites.

Those elites, it seems, are now clearly also the Labor party, which is attacking the legitimate aspirations of young families by adhering blindly to policy mantras which are proven failures. One look at the dismal figures for new housing construction in many states of Australia ought to be sufficient reason to conclude that the policies which got us to this point simply don't work and have failed an entire generation.

What's been proposed in NSW and Victoria is nothing more than a fresh look at stimulating new home construction and making it easier for low to middle income workers to afford the types of homes they want, in locations they prefer. All that's been proposed is the return of choice and balance and equity to the housing markets in these states. It does nothing to prohibit high to medium density projects in established areas nor to deter them. It simply removes some of the heavy obstacles currently attached to the supply of detached housing and land, in newer suburban locations. This is hardly revolutionary stuff. It's certainly not worthy of the vehement criticism it has attracted from Labor spokepeople or from sections of the academic community.

Little wonder there has been such widespread change in political fortunes across the states in recent years. It is equally little wonder the community waits with such fervour to meter out the same punishment to a national Government which is completely out of touch with the people and which continues to draw comfort from policy mantra and irrational, illogical academics, social engineers and the inner city pseudo literati set.

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About the Author

Ross Elliott is an industry consultant and business advisor, currently working with property economists Macroplan and engineers Calibre, among others.

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