Two housing policies, both alike in not addressing the root of the problem
It was another policy-driven day, with Labor’s campaign launch yesterday having given both the major parties five new policies to talk about. The Coalition has been more or less silent on Labor’s plan to close the gender pay gap – the first time that issues facing women have received much attention this campaign – but it has thankfully not rushed out, as it so often does, to talk up how great things are for women. In contrast, the government had plenty to say about Labor’s “Help to Buy” housing policy, with everyone from Housing Minister Michael Sukkar to Financial Services Minister Jane Hume eager to attack it, arguing that the government’s more modest First Home Guarantee scheme is superior. It’s good to see the nation’s housing crisis finally getting some airtime in this campaign. But, as both sides quibble over who has the better plan to “help” Australians buy a home, they are missing the point. If everyone acknowledges that it’s all but impossible for most people to enter the housing market without help, why does neither party have a real plan to address the root cause of the crisis?
It’s clear that the Coalition is rattled by Labor’s new housing policy, under which 10,000 lower-income earners will be able to buy a home with a smaller deposit and a smaller mortgage, with the government underwriting up to 40 per cent of each dwelling’s cost. (Under the Coalition’s policy, first-home buyers can secure a property on their own with only a 5 per cent deposit, though experts have warned that this is a risky amount of debt to take on.) Speaking on ABC’s News Breakfast and RN Breakfast this morning, Labor housing spokesperson Jason Clare said that the policy was targeted at those who were giving up on the idea of ever buying a home, noting that this policy would make it possible for older Australians going through a divorce to get back into the property market, not just first-home buyers.
The Coalition is trying to dismiss the scheme (never mind that the PM has previously supported similar concepts), focusing mainly on the idea that people don’t want “Mr Albanese at the kitchen table” – which misses the point that many people may otherwise never be able to own a kitchen at all. Scott Morrison has tried to argue that Labor will be “taking a cut” from prospective homebuyers when the house sells, and would be looking to “make money off of people” – again, failing to grasp that people may otherwise never be able to profit off home ownership at all. (It is also somewhat strange for the government to be arguing against a tax-free revenue-making opportunity.)
But the real issue with Labor’s policy isn’t that it “seeks to make money off of people” or that it is “enormously expensive to taxpayers” (two complaints that seem to contradict one another). It’s that it doesn’t go to the root cause of the housing crisis (“housing challenges”, Sukkar insisted on RN, when asked if there was a housing crisis). As University of Sydney architecture and design professor Nicole Gurran writes in her analysis, neither party’s plan is actually aimed at lowering prices, because neither actually wants them to fall. Both may in fact contribute to house price inflation, with the Coalition’s plan, in particular, fuelling demand without contributing to supply. (Labor’s at least encourages people to buy new homes.)
And they are both capped, with help on its way only for those lucky enough to grab one of the places in the scheme – though at least, as housing economist Louis Christopher notes, having a miserly 10,000 spots available per year means Labor’s policy probably won’t inflate prices.
It’s little surprise that the Coalition doesn’t want to ease prices (although how a conservative government could prefer a situation in which it must offer handouts to help constituents buy homes over one in which ownership is something individuals can attain on their own is beyond me). And it’s well known that Labor was utterly spooked by its rejection at the 2019 election, and unlikely to return to policies around negative gearing that could actually do something substantive to deflate prices. But it is nonetheless ludicrous for the parties to now be fighting over who can best help people get into the wildly overinflated market while steadfastly failing to do anything about that overinflation. As Sukkar said on 2GB this morning, as he sought to attack Labor over a lack of policy detail: “Quite frankly, it’s the sort of policy you put out, Ray, when you want to say to people ‘we want to help with housing’ when you really don’t want to do anything serious.”
Both sides want to be seen to be helping here, but it’s quite clear that neither is serious about the nation’s devastating property crisis.
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