SPEECH TO THE AUSTRALIAN HOUSING AND URBAN RESEARCH INSTITUTE

I acknowledge the traditional owners of the land and pay my respects to their elders past and present. I also acknowledge the invaluable work being done by AHURI on housing and homelessness research.

Last Sunday morning, I attended a Uniting Church Community Housing Forum in Penrith, Western Sydney.

 

The forum was organised by the Uniting Church and the Sydney Alliance Coalition of more than 40 not-for-profit community, educational and union organisations.

 

Presentations on housing and homelessness were given by community organisations, Penrith Council, academics and political parties, unfortunately no one from the Coalition attended.

 

A report was given on the results of 628 face-to-face conversations on March 17, 2018 with Penrith residents and visitors.

 

131 volunteers conducted sampling by doorknocking selected interview areas throughout Penrith local government area including walk up interviews, sporting fields, shopping centres and market stalls.

 

Age distribution of the sample closely resembles that of the ABS 2016 Census for the Penrith LGA for people aged 18 and over. The key results were as follows:

 

 

Affordability, housing security, the need for more rental accommodation, and concern that the political class are not doing enough on housing affordability would, in my view, be replicated across the country.

Contributions from the floor of the forum identified the lack of public transport, lengthy commutes to jobs and concerns that young people in Western Sydney are being locked out of the housing market.

 

None of this would be alien to those attending this conference and these results could be replicated nationwide.

 

The 2016 census statistics are very concerning:

 

 

An Anglicare survey shows that less than 1% of homes for rent in greater Sydney are affordable for households on low incomes. In most of our capital cities, rental vacancy rates are below 2%.

 

While housing construction activity in 2016 and 2017 kept pace with population growth, this did not dampen pent-up demand generated by years of under building in the affordable housing sector.

 

Housing affordability continues to be a significant problem.

 

As Professor Duncan McLennan has said, housing is one of the largest contributors to intergenerational inequality.

 

Young Australians are finding it almost impossible to access the housing market. Many young Australians will spend most of their lives in the private rental sector.

 

The International Monetary Fund found Australia has one of the highest house price to income ratio in the world.

 

Prior to the 2017 budget Minister Sukkar told Sky News:

 

Well Minister, you got it wrong.

 

I can’t see any reason why this budget is going to make a discernible difference to housing affordability; a discernible difference on the number of younger people that buy a house” (ABC 7:30 Report, 10 May 2017)

 

“It’s a centrepiece without a centrepiece” (ABC News 24, 9 May 2017)

“But the biggest minus of all was the absence of any measure whatsoever to address negative gearing and capital gains tax exemptions for rental properties” (the Conversation, 9 May 2017)

First home buyer, Bree Marr, commenting on the salary sacrifice superannuation measure said:

“It wouldn’t even cover your stamp duty” (ABC 7:30, 10 May 2017)

 

This so-called extra ordinary large, far-reaching, housing package didn’t exactly knock the socks of community organisations, academics, or younger people trying to buy their first home.

 

When young people are lining up against housing investors in an attempt to buy their first home, it’s outrageous that investors are using government tax concessions to outbid them and leave their dreams shattered.

 

A housing package that fails to deal with negative gearing and capital gains tax exemptions is an ineffectual and inferior package.

 

It was reported last week that a number of Liberal politicians, including the Michaelia Cash, have penned essays eulogising Bob Menzies’ “forgotten people” speech.

 

I also note the former treasurer Peter Costello has described Australians who earn $200,000 as the “forgotten people”.

 

I have never been a fan of Peter Costello, a weak Treasurer who stood by while John Howard baked in an unsustainable structural deficit as a result of attempting to buy the votes of middle-class and wealthy Australians. We are still paying the price for this economic incompetence today.

 

Under Peter Costello the Coalition government showered financial largess on middle-class and wealthy Australians.

 

The real forgotten people in this country are indigenous Australians who have had government support in housing and health ripped away as part of the government’s unfair austerity programs.

 

The real forgotten people in this country are working-class households in rental and mortgage stress.

 

The real forgotten people in this country are the low income families who have lost their penalty rates and are struggling to put food on the table for their kids.

 

The real forgotten people are the young Australians who will never own their own home and will be hostage to a rental housing market that is not fit for purpose.

 

In his forgotten people speech, Menzies positioned home ownership as the basis of a stable society. He said:

 

He certainly did not think the rich and powerful needed a leg up. He said of them in the forgotten people speech:

So much for Peter Costello’s positioning of Australians earning $200,000 as the “forgotten people”.

 

The Prime Minister in his insensitive and arrogant comments to John Faine that he should just “shell out” and provide a bit of intergenerational equity in the Faine family so that his kids could enter the housing market shows how out of touch this Prime Minister and his government is.

 

Former treasurer Joe Hockey, who introduced the concept of “lifters and leaners” in his disastrous 2014-15 budget advised prospective homebuyers to get “a good job that pays good money, if you want to enter the property market”.

 

Not bad for a politician who retired in financial security due to the now-defunct and generous defined benefit superannuation scheme and moved seamlessly to enhance his retirement benefits with a stint as ambassador to the USA!

 

Coalition politicians are divorced from reality and the struggles of working-class Australians.

 

It’s over 12 months since the 2017 budget decision to establish a Bond aggregator through the National Housing Finance and Investment Corporation Bill 2018.

 

The Treasury Laws Amendment (National Housing and Homelessness Agreement) legislation has been passed however not one state government has signed on.

 

I expect that some state governments will sign off eventually, even though they are concerned with aspects of the NHHA.

 

Labor recognises the inequities in our taxation and housing systems.

 

Budgets and taxation are a demonstration of the priorities of a government.

 

Labor believes there are many priorities in housing, homelessness, health, education and infrastructure that should be addressed prior to costing the budget $80 billion to cut business tax for multinational corporations and giving $17 billion of tax relief to the banking sector.

 

Trickle-down economics does not work and this is a desperation tactic from a deflated, despondent and rudderless government.

 

This government’s economic “plans” have ranged from austerity budgets, increasing the GST, handing tax powers to the states and now trickle-down economics.

 

In contrast the Shorten opposition is united and focused on developing policies that balance the economic imperatives of the nation with the social needs of the community.

 

When last in government we took the following initiatives towards addressing housing affordability and homelessness:

 

In opposition we have announced:

 

Labor’s package would see the construction of over 55,000 new homes over three years, and boost employment by 25,000 new jobs per year.

 

Since this announcement, Shadow Treasurer Chris Bowen has announced two major tax initiatives in addition to our previously announced tax policy;

 

 

As Chris Bowen said on March 5, 2018:

The difficult taxation decisions that we have made will allow Labor to do more on social issues such as housing.

 

Labor has indicated that will have more to say on Housing and Homelessness policy.

 

We have conducted a number of Housing and Homelessness forums across the country.

 

We have engaged and consulted with faith-based groups in relation to assessing and accessing church land for low income housing. Labor believes that we can reach mutually beneficial agreements with church groups that provide increased housing stock and reliable income streams to religious organisations.

 

We have had a number of roundtables with industry superannuation funds designed to increase institutional investment in community housing.

 

This can be done while meeting the obligations of the sole purpose test.  Government has a role beyond the Bond Aggregator to ensure that lower income individuals and families can benefit from institutional investment in community housing.

 

Government can play a role with superannuation funds by working towards developing a risk-adjusted rate of return on affordable housing that encourages institutional investment.

 

This would improve outcomes and ensure industry fund members achieve a comfortable retirement with the superannuation funds helping deliver economic and social outcomes which maximise long-term retirement benefits.

 

The growing trend of workers retiring while still paying off a mortgage results in superannuation savings being used to pay the mortgage off. This diminishes the capacity for individuals to retire securely outside the government pension system.

 

Australian industry superannuation funds already invest in social housing in the US and UK and it is time government, the community housing sector and the superannuation funds work together to increase superannuation fund investment in low income housing stock for the benefit of fund members.

 

A government guaranteed asset class in community housing can deliver long-term stable returns to the funds with benefits to individual fund members and the community.

 

There is a growing recognition that failure to meet the challenge of housing and homelessness will result in increased intergenerational inequality, growing social unrest; increase in cost to government through the health and justice systems.

 

The Commonwealth cannot continue to blame state and territory governments and local councils for lack of supply of suitable and affordable housing.

 

A concerted effort to develop a national housing strategy that includes all levels of government, business, the finance sector and the superannuation industry is fundamental to addressing what for many are the unsurmountable challenges in accessing an affordable roof over their head.

 

All options should be on the table including inclusionary zoning, build to rent, shared ownership and increased rights for tenants.

 

Labor shares the concerns of excluding build to rent from managed investment trusts as there is a need to increase housing stock across the continuum.  

 

If we are serious about increasing housing supply, improving productivity and helping the disadvantaged in our community, then the Government must address the funding gap that still exists following the introduction of a bond aggregator.

 

Even Coalition Senators on the bond aggregator inquiry noted the submissions from the community housing sector on the need to fund the gap.

 

Labor will continue to develop our policies and priorities, however we do not believe an $80 billion handout to overseas corporations, big business and banks should be prioritised over the need to address affordable housing supply.