Michael Pascoe: Affordable housing – just Band-Aids and duct tape

Housing affordability is a major issue, but not for the major parties, Michael Pascoe writes.

Housing affordability is a major issue, but not for the major parties, Michael Pascoe writes. Photo: TND

Aside from dubious gaming machine posturing, the nearest attempt at a policy battle in New South Wales’ March election is housing. It’s not much of an attempt.

As with last year’s federal election, housing affordability is a major issue for the electorate, but not for the major parties. As long as one side doesn’t take it seriously, the other side doesn’t have to either.

There is nothing much beyond a little window dressing on offer for the real housing crisis – our affordable and social housing catastrophe as we reap the reward of decades of bipartisan under-investment in government housing, politicians preferring to outsource their shelter responsibilities to property developers and real estate spruikers.

The “market mechanism” solution has been tried and it has failed and will continue to fail and neither the Coalition or Labor cares enough to deal with that.

Stamp duty relief

As for the standard property headline grabber – first-home buyers (FHBs) – the low quality of NSW politics is on full display, with both sides touting forms of stamp duty relief that fall into the classic trap of seeming to help the individual while collectively doing nothing for the whole.

NSW Dominic Perrottet Teo Foundation

Dominic Perrottet wants to give first-time buyers in NSW the choice of paying stamp duty or land tax.

Yes, cutting stamp duty gives FHBs more money to bid at auctions, which can be an advantage for an individual but overall helps make prices higher than they otherwise would be, weakening the collective advantage.

The Coalition is pitching a choice for FHBs – pay fat, immediate once-off stamp duty or opt for a low annual land tax.

Switching from stamp duty to universal land tax has been on just about every economist’s wish list since forever.

It’s not quite as wonderful a problem solver as the strongest believers profess, but is a step in the rational tax reform direction and should happen if only in the name of equity.

It isn’t fair that people who move home subsidise those who can afford to sit pat.

The Liberal policy is a shadow of what Dominic Perrottet really wants – give every home buyer the same duty-or-annual-tax choice – but it is all our aversion to the “taxing the family home” scare allows.

Labor is offering a standard stamp duty break for FHBs, albeit a bigger one than usual, while playing politics over economics by employing the aforementioned scare.

Labor leader Chris Minns is failing to tackle the real issue. Photo: AAP

Meanwhile, back at the real crisis, Opposition Leader Chris Minns, desperate to be seen to be doing something not involving consultations with ClubsNSW, had a big announcement: He will amalgamate the various government bodies with fingers in the social and affordable housing pie.

Hey presto! There will be shelter for all!

And if you buy that …

It makes sense to enforce a single agency to focus on (and wear blame for) the problem, but it won’t solve the problem while the actual problem is not addressed: Government has to commit much more money and resources to building more affordable and social housing than either side is proposing. Having one agency or six doesn’t matter much otherwise.

Public-private folly

Whoever wins on March 25, it seems the NSW government will continue to expect the Land and Housing Corporation (LAHC) to pretty much pay its own way.

Thus we continue to see the LAHC doing deals with the private sector to redevelop public housing assets that yield a relatively small increase in the number of public housing units.

An ABC’s Four Corners program last year provided a clear example of this folly in Coffs Harbour: In a regional town with a desperate shortage of shelter, a public housing estate of actual houses is being demolished to be replaced with a mix of private and public housing but with only a handful of extra public homes.

The Guardian has previously reported on the Coalition selling off more than $3 billion worth of social housing during its decade in power while failing to meet its own targets for new properties.

That it happened to be the Coalition matters little – Labor’s record in living memory is no better. And much the same can be said about the rest of the country.

The neo-liberal infection of preferring to subsidise private developers and landlords both directly through rent subsidies and indirectly through a distorted tax system is universal.

Numbers game

Our population grew quickly over the past two decades; our public housing stagnated. As previously explained in these pages, the Albanese government’s ballyhooed housing “solutions” are risible – better than nothing, but not much better; tossing around what might look like big numbers that, when examined a little closely, are small beer.

Disappointingly, Labor is playing the old Coalition game of thinking of a decent-looking number and then adding up however many years are necessary to achieve it.

Headline: “30,000 new public housing units!” (Fine print: Over several years some time in the future.)

Right now the opportunity is growing for greater investment in public housing as private sector building approvals turn down. The shortage of materials and labour will ease as the RBA has its way with the economy – a fine time for a government program to fill an emerging void.

Bold policies needed

For Rent Real Estate Sign In Front of a Row of Apartment Condominiums Balconies and Garage Doors.

Large-scale investment in government-owned housing would relieve pressure on the private rental market.

Yet only one political party is taking public and affordable housing seriously: The Greens.

It’s easier for them as they are in no danger of forming government, but their housing policies are bold, brave and worthy.

Serious, large-scale investment in government-owned housing that, aside from providing a basic need, would relieve pressure on the private rental market. (Private landlords at the bottom of the market might not like that.)

Shelter as a basic right, not primarily as an asset class for investors.

Tax reform including progressive universal land tax – ah, that’s right, they are in no danger of forming government.

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter.
Copyright © 2024 The New Daily.
All rights reserved.