Based on a speech by Renfrey Clarke at Anti-Poverty Network SA’s Cost-Of-Living Community Meeting in Kilburn, on Saturday June 1, 2024.
“Why can’t we all have housing?
Or even better, secure, affordable housing. Let’s start with the scope of the problem.
Early this year the organisation Anglicare released its 2024 Rental Affordability Snapshot, based on 46,000 rental listings around Australia. Affordability, the Snapshot noted, had “crashed to record lows”.1
Taking 30 per cent of household income as the maximum affordable rent, Anglicare’s researchers found that of the offerings on the national private rental market:
- 0% were affordable for someone on Youth Allowance or JobSeeker
- 0.2% for a person on the Age Pension
- 0.6% for a person earning the full-time minimum wage
- 0.9 % for a kindergarten teacher
- 1.5% for a nurse.
And it’s getting worse—fast. Nationally, rents for all dwellings rose by 8.5 per cent in the year to April2—far above either inflation or wage rises. In 1981 the median weekly rent (half above, half below) was less than 20 per cent of the average weekly income. Now, Anglicare reports, the figure is around 40 per cent.3
Here in Adelaide, the rental market is the tightest in the country.4 For a single person on parenting payment with one or two children, the number of affordable, appropriate rental properties is precisely zero.5
So who’s to blame?
It’s not migrants. In Australia since 2021, population growth (the important figure) has averaged just under 1 per cent annually—a historic low. Between 1950 and 1970, the figure was above 2 per cent.6 Migration was booming, as was dwelling contruction. Housing was affordable even for families on a single wage.
Remember the South Australian Housing Trust? In 1954 it built a staggering 47 per cent of all dwellings constructed in our state.7 Rents were low, set at a modest share of household incomes. Between rents and house sales, the Housing Trust over four decades was self-funding, and didn’t cost taxpayers a cent.8
That was in the days when expanding industries in South Australia were desperate for workers—and the employer class saw to it that cheap, abundant housing would be there to draw them from across the globe.
Then the boom decades ended. From the 1970s, public housing began to be sold off to fund government spending, and allow taxes to be kept low for businesses and the rich.
Welfare for the well-off
The job of providing housing was left to the market. For some years, prices remained fairly restrained. But except for a tiny, remnant public sector, house-building was now strictly for profit—and the big profits weren’t in providing affordable dwellings for working people.
Then the late 1990s saw the beginning of a strong upward trend in prices. This reflected deliberate policies of the Howard coalition government.
In a bribe to shore up the votes of the well-off, Howard brought in big tax cuts for property investors. Negative gearing, capital gains tax concessions—the result has been that one in six taxpayers now owns an investment property.9 But not, usually, a newly-built property—in recent months fewer than 1 in 4 loans to housing investors has been for new construction.10
Instead, “hot money” has flooded into the market for existing dwellings. Housing is less and less something that people buy for their own use. Instead, it’s being bought with a view to trading it for profit.
The result has been a crazy price spiral that is breaking the budgets of working people.
What to do?
Rents must be frozen, at least until inflation brings the burden on renters back to the levels of earlier decades.
The housing-price casino has to be shut down, starting with abolition of the tax rorts. Tax incentives should be available only for building new housing, that adds to existing stock.
Planning is needed to address the shortage of land for housing. Skilled construction workers must be trained, or recruited via immigration. Local councils have to be funded so as to cut building approval times.
And above all, governments must undercut the housing speculators by stepping in directly to increase supply. The story of the Housing Trust shows that governments, if it suits them, can provide affordable, quality housing for the population—in remarkably short time-frames.
Not only welfare recipients, but broad layers of the working population need a massive program to build public housing—properly planned, well appointed, and available at low rents.
But will capitalism ever do it?
Don’t hold your breath. Both major parties in Australia are welded onto the capitalist system, and defend the profiteering of a small minority.
The Labor Party is scared to offend the powerful bloc of property developers, real-estate speculators and wealthy homeowners who have done well out of skinning large parts of the population alive. The Liberals—well, they are the developers and speculators.
Renters, and most home-buyers, need a very different system—socialism, that puts the needs of the masses above the profits of the rich.”
1 https://www.anglicare.asn.au/wp-content/uploads/2024/04/Rental-Affordability-Snapshot-National-Report.pdf
2 https://www.corelogic.com.au/news-research/news/2024/rent-growth-picked-up-in-the-start-of-2024,-taking-rents-to-new-record-highs
3 https://www.anglicare.asn.au/wp-content/uploads/2024/04/Rental-Affordability-Snapshot-Regional-Reports.pdf
4 https://www.abc.net.au/news/2024-04-13/adelaide-cbd-adaptive-reuse-rental-market/103686714
5 https://www.anglicare.asn.au/wp-content/uploads/2024/04/Rental-Affordability-Snapshot-Regional-Reports.pdf
6 https://www.macrotrends.net/global-metrics/countries/AUS/australia/population-growth-rate
7 https://jacobin.com/2021/04/public-housing-south-australia-housing-trust-working-class-capitalism
8 https://jacobin.com/2021/04/public-housing-south-australia-housing-trust-working-class-capitalism
9 https://www.abc.net.au/news/2024-05-22/peter-dutton-makes-case-to-restrict-tax-breaks-for-landlords/103874694
10 https://theconversation.com/how-albanese-could-tweak-negative-gearing-to-build-more-new-homes-222739
Anti-Poverty Network SA 