Michael Pascoe: Labor spins a housing policy that does nowhere near enough

In the game of politics, you should know you’ve bowled badly if Michaelia Cash scores off it.

As the Albanese Government settles down to the humdrum of politics this year, it has done just that in a small example of “whichever major party you vote for, you get politicians”.

Labor is attempting the same weak spin tricks as its predecessors.

I’ll come to Senator Cash’s brief moment in a moment as it only concerns the inane waffle of political staffers mistakenly thinking they’ve had a thought.

Much more important is the hash Labor is making of its credibility in trying to defend its third-rate Housing Australia Future Fund (HAFF) election stunt now that legislation for the thing is on its way to the Senate.

Details underwhelm

For people who didn’t read beyond the headline, the HAFF might have sounded impressive in the election campaign: $10 billion to fund 30,000 new affordable and social homes!

The fine print few people go on to read and that doesn’t make the TV sound bites is that those “30,000 homes” are a target, not a promise, apparently based on optimistic investment return forecasts and spread over five years not starting until next year.


Labor gave Michaelia Cash a free hit. And she took it. Photo: Getty

So really it’s an aspiration to provide an average of 5,000 extra homes a year over the next six years, which, given the extent of the housing crisis and shortage of affordable and social housing, is better than nothing, but not all that much better.

And the odds are that it won’t get near that goal.

Like a lot of Labor’s successful election campaign, its housing policy was designed to just be a little better than Scott Morrison’s – a low bar.

The fund is supposed to work by the $10 billion being invested and the annual profit on the fund becoming a reliable, long-term source of subsidies for community housing outfits.

It is not like the Future Fund

The HAFF has been pitched to sound like the Future Fund. It is not.

The Future Fund was established with the proceeds of privatising Telstra and some budget surplus at the time, so everything the fund earned was profit.

The HAFF’s $10 billion has to be borrowed. Current 20-year Australian Government bonds have a yield a bit over 4 per cent – so the HAFF effectively has to earn 4 per cent a year to break even.

In the long bull market of falling and low interest rates, the Future Fund outperformed its mandate – as did all manner of investors. You would be foolish to bet the house, so to speak, on such easy outperformance continuing.

Nobody has a crystal ball, but it looks like the HAFF would be doing very well indeed if it managed to earn 7 per cent gross on its $10 billion, just 3 per cent after interest costs – and 3 per cent is about what we hope inflation will eventually fall back to.

So, at best, it might be $300 million a year towards a multi-billion-dollar problem while the fund shrinks in real terms as it won’t keep pace with inflation.

Economist Cameron Murray’s skewering of the HAFF has been recorded in this space previously.

Prime Minister Anthony Albanese should not have used domestic violence victims to sell the policy. Photo: Getty

It makes more sense for the Commonwealth to directly spend the money investing in housing rather than going through a fund to raise money to invest in housing.

If establishing a fund to raise funds for housing is such a good idea, the logical conclusion would be to establish a fund to raise funds to fund the fund. Yes, it’s rather silly.

So silly, in fact, that even the federal Opposition can see it, preferring to have the money come straight from the budget for the good cause. (Not that the Coalition did anything much when it had the opportunity.)

The Greens want vastly more spent on social and affordable housing – they are the only party that is game to go near the size of the problem – and thus are threatening to join with the Coalition to oppose the HAFF in the Senate.

Cheap political spin

So, faced with the problem of the election stunt being seen to have holes in it, is Labor reconsidering its policy to come up with something better that will achieve more?

No. Instead, there’s the tired political standard of claiming the election gave Labor the mandate to carry out its policy, when we all know Labor was elected with the mandate not to be Scott Morrison and his gang of total incompetents.

And the Prime Minister tried to hit back with an emotional appeal based on tragedy.

“The Housing Australia Future Fund will not only produce increased social housing, 4000 of those homes are reserved for women and children escaping domestic violence,” he said.

“Because last night and tonight and the next night, women and children searching a safe haven from a circumstance not of their arising will be forced to sleep in their car or in a park – or, worse still, return to a dangerous situation.”

That sounds responsibly prime ministerial – but with just a little examination, it is actually cheap political spin exploiting bashed women and children.

It is an aspiration to provide 4,000 homes over the next six years – an average of just 666 more homes a year, if the investment markets are kind.

An embarrassment

That is an embarrassment given the size of the problem, as underlined by the latest Productivity Commission report on government housing and homelessness services.

In 2021-22, specialist homelessness services provided support to 272,694 Australians.

They were those fortunate enough to get support. The PC report found a third of clients with an identified need for accommodation did not have that need met.

The Productivity Commission reported just over half of the people seeking specialist homelessness services last financial year were doing so for “interpersonal and relationship issues”, of which 74 per cent “identified domestic and family violence”.

Let’s assume all those seeking shelter for “interpersonal and relationship issues” were prioritised and received support.

In round numbers, 75 per cent of 50 per cent means 102,260 people needing homelessness services last financial year had been subject to domestic and family violence.

And the government is pretending its hope of subsidising an extra 666 homes a year will solve the problem. That’s just embarrassing.

The fight over the HAFF is a distraction from the crisis, a crisis only partly of the federal government’s making.

Social housing is primarily a state government responsibility.

Inroads will only be made into this crisis by the federal and state governments together getting serious about it, both from the point of view of billions of immediate dollars and the policy failures that have led to the disaster of attempting to outsource social housing to private landlords and shrinking public housing.

Political stunts – thinking of a big number that sounds good but achieves little – won’t cut it.

Point scoring

And Senator Cash?

Last month and repeated since then, Mr Albanese tweeted that his government had “created” 230,000 jobs between May and November, the most by any new government in its first six months.

It’s the sort of silly “job creation” nonsense that the previous government liked to make claims about.

Mr Albanese’s attempt only set up Senator Cash’s reply that there had been 319,400 new jobs in the Coalition’s last six months of government.

And everyone should know employment is a lagging indicator.

Six runs for Senator Cash.

Now that the unemployment rate is rising, I guess we won’t be seeing more such meaningless tweets.

We don’t need the political spin, the theatre of the absurd that is Question Time, the games for the sake of point scoring.

We need our worst problems to be dealt with honestly.

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