Contributed by Jim Hayes
Forget the sensationalism over the spat in the federal parliament over the government’s Housing Australia Future Fund. The attention should be on the real content of the proposed legislation. The criticisms should be considered. Diverting attention from this by name calling is wrong.
The starting point is that there is a crisis in the availability of affordable housing across Australia, and the need to do enough to turn this around.
On offer in the bill presented by the government is the Housing Australia Future Fund and an investment of $10 billion in it. The public perception is that this is money to be mostly spent on new social housing. It isn’t. This is money to be invested into the fund, and only a portion of the interest gained, $500 million a year, will be used to construct new homes.
Photo by Rhett Wyman: Max Chandler-Mather presented the case for the Greens
The Greens suggest that this is not nearly enough to meet the need. It certainly won’t lead to the promised 30,000 new homes in 5 years. They say that $5 billion a year must be spent. Add that relying on money made from returns on interest is inherently unstable, and more so in an uncertain economy. There is no guarantee that the $500 million will be available in any year.
Under the proposed bill, the Housing Australia Future Fund sits under the Future Fund and will operate under the same terms. Time had shown the Future Fund to be open to misuse during the Morrison government’s time. Any government could in the future redirected this money to other uses.
The present argument is not about accepting or rejecting the bill. It is about whether there should be some more time for discussion to come up with a better plan. Everyone should be clear about this and not be side tracked by misrepresentation and name calling.
What is the Coalition’s stand? They want none of it, prefer to leave it all to the market, and label the construction of a single new home by the government as inflationary and to be avoided. Their ideological bent and friendship with developers is becoming more extreme, and their only intention on this issue is to be spoilers.
Tasmania’s Senator Jacqui Lambie weighed into the debate, pretty much agreeing with the Greens’ criticism, but opting to support the cutting of further debate. Motivating this is a government concession to add inflationary adjustments to the money spent. More importantly, an agreement to take “reasonable steps” to build at least 1,200 homes in every state and territory was reached. Lambie says this is a start hat can be built on.
Photo from The Guardian: Jacqui Lambie weighs in on the debate
The Greens want the government to take the additional step to work with the states to impose a freeze on rents, indicating that they believe building new homes is not enough on its own.
There remains the question of who is going to pay for this? It usually means those who hand over a part of their wages. This is a problem when it is getting harder to make ends meet, and even on the best scenario, it would still take time for the benefit of cheaper housing to get through. Some innovative thinking is called for.
Increasing the top marginal tax rate and not going ahead with the Third Stage Tax Cut for the same section of Australia would cover much of the cost. An end to negative gearing payment to multi property owners and using the money saved for this purpose would help. The investment of $5 billion per year on new homes will then become a realistic option. The same could be said for capital gains tax offsets.
Critics will insist that this would be a disincentive for the market to invest in housing. Isn’t already existing market failure the reason for government intervention is needed in the first place?
If the objectives are to take on the cost of living crisis, doing enough to generate sufficient affordable housing is critical to achieving it. Nothing less should be accepted. Surely, there can be some unity for this.