Treasurer fails to address real issues behind housing affordability crisis

The Treasurer’s highly-anticipated speech on housing affordability has succeeded in articulating the depth and breadth of Australia’s affordability crisis but failed to provide a comprehensive policy response.

It is a positive development that the Federal Government recognises that housing affordability, for both buyers and renters, is bad and getting worse. It is also positive that the struggles of low-income households, including families and retirees, is on the agenda.

The problem is in the solutions being put forward. The Treasurer sees lack of supply and private sector investment as the root of the problem and this is driving the policy approach.

They are leading with ideas like the bond aggregator and talk of other ‘innovative financing instruments’ rather than taking on negative gearing and capital gains tax reform or committing to greater government investment in public and community housing.

The result is a piecemeal approach rather than a comprehensive plan. We know from past experience that this won’t work. Without engaging all the available policy levers we will fall short.

The Treasurer also failed to end the uncertainty over the future of the National Affordable Housing Agreement (NAHA), which he has labelled as a ‘one-way ATM for the states’ and ‘a national disgrace.’

This $1.3 billion agreement delivers nearly all our federally funded homelessness and family violence support services across the country as well as supporting nearly half a million Australians living in public and community housing. These housing and support services are vital for vulnerable Australians and represent an essential social safety net alongside the public health, education and welfare systems.

The Federal Government’s failure to guarantee the future of this critical federal-state agreement is extremely concerning. For example, the Victorian Government has published data showing that 56,000 Victorians accessing support services and 170,000 in public and community housing are currently at risk in that state alone.

This comes hot on the heels of last year’s public fight over the $117 million National Partnership Agreement on Homelessness, which led to 200 community organisations writing to the Prime Minister seeking urgent intervention. That funding was extended, but only for 12 months.

Around 280,000 individuals accessed specialist homelessness support services last year, a number that has increased by 9 per cent in just 12 months. At the same time, over 70,000 people were turned away due to services not being able to meet current demand and over 200,000 Australians are on public housing waiting lists.

It doesn’t take much imagination to predict what will happen if either of these funding sources is reduced or re-directed into other areas.

Of further concern is the plan to allow first home buyers to dip into their superannuation funds to buy a house. Economists, including Saul Eslake, have said this would have an inflationary effect on house prices while leaving people with less to live on in retirement. Over-55s are already one of the fastest growing groups in housing stress and homelessness. This policy will only deepen this problem.

To coincide with the Treasurer’s address, Homelessness Australia unveiled its plan for improving housing affordability and reducing homelessness: 10 key areas that are critical to turning around this social and economic crisis. These were not addressed by the Treasurer.

These include the development of a new National Affordable Housing and Homelessness Strategy, investment in more short and medium-term accommodation options, renewed efforts to “close the homelessness gap” for Aboriginal and Torres Strait Islander people, action on negative gearing and capital gains tax concessions, and expanded investment in public and community housing.

These are all policy levers over which Scott Morrison has control. What is lacking is the political will to act decisively on behalf of all Australians, particularly those on the lowest-incomes and who are most vulnerable to housing crisis and homelessness.

Without the implementation of a new National Affordable Housing and Homelessness Strategy and real leadership from the federal government, we will continue to see the number of homeless Australians grow each year.