Opinion Renters like me are ignored by policymakers, and I think I know why Millie Muroi Reporter June 6, 2023 https://www.smh.com.au/business/the...s-and-i-think-i-know-why-20230605-p5ddvk.html My flatmate and I have a funny ritual to keep the rent down. It involves a sneeze-inducing chemical and kneeling before our shower drain every two weeks when it goes on strike. Nothing in our bathroom works as it should, but we don’t complain because we know it’s the reason our rent hasn’t skyrocketed (yet). Cold showers allegedly boost immunity, and it’s a far cry from being left out in the cold. The rental market is out of control and the lack of urgency from decision makers is compounding the problem.Credit: Peter Rae Of the 15 to 24-year-olds who live out of home, 84 per cent rent. Within that demographic, my flatmate and I have been lucky. I know because it’s a cohort I speak with every day. I’m almost certain that if more of the country’s top decision-makers were renters, the current crisis wouldn’t be rearing its head as much as it is. While some politicians are tuned into the issues affecting young people, that’s not always the case. Most federal politicians own homes. Many are also landlords. Together, the 151 MPs and 76 senators in federal parliament own about 237 houses or apartments – and they have interests in 210 “other properties” including holiday homes and investment properties. Add to that the fact that voters aged 35 and over – the age groups more likely to own a home – account for more than 80 per cent of voters. So it’s fair to say easing rental pressures or seeing property prices fall may not be seen as a political priority for many of those in power. They have skin in the game. But the longer it’s left, the more that renters, who are disproportionately younger people, suffer and the more likely it becomes that the pressures will manifest in problems like mental ill-health, homelessness and unemployment down the line. While the most recent federal budget took some steps to ease rental pressures, the extent of the problem hasn’t been reflected in the ambition or speed of policy changes. Illustration by John Shakespeare.Credit: The maximum rate of Commonwealth rent assistance – a welfare payment for those renting and already on government income support – is set to be lifted by $31 a fortnight from September (less than the treasurer’s own economic inclusion advisory committee recommended). Given rent on apartments has increased by $200 a fortnight in the past 12 months alone, you’d need to be sharing a unit with at least six other flatmates on rent assistance to avoid feeling the squeeze. My flatmate and I have discussed charging our cockroaches rent. While rent assistance covered about 50 per cent of a low-income renter’s housing costs in 2000, it covered just 30 per cent by 2022, and it doesn’t stop landlords from lifting rents or tenants from bidding them up over time, if housing remains scarce. At the moment, the national vacancy rate remains near a historical low at 0.9 per cent. The Greens have suggested a rent freeze. That would provide temporary relief for some tenants, but when you force rents to stay down, it can discourage investment in rentals and reduce rent supply. It’s also not targeted to those struggling the most. That’s not to say some limits can’t be placed. The ACT has had a cap on rent increases since 2015 preventing rents from being increased by more than 10 per cent above the rent component of inflation in Canberra. The city has the highest vacancy rate of Australia’s capitals. What we really need, though, is increased supply. The more of something there is, the cheaper it tends to become. Zoning, which discourages development and worsens inequality by placing density limits, needs to be wound back to allow higher-density developments. State or federal governments could encourage this by discounting land tax for communities that allow higher density or providing cash incentives to local councils to do so. The government recently announced a $10 billion Housing Australia Future Fund to finance 30,000 affordable and social housing homes. But that’s over the next five years and only if the fund generates profit. Given the social housing stock has barely grown in two decades, there’s room for more ambition. And although Treasurer Jim Chalmers also threw in tax breaks for investment into build-to-rent housing in the recent budget, that will take time to see more houses on the market. The truth is, like many supply side policies, we are playing catch up. Policy changes should have happened years ago. The construction industry is now crumbling under pressure from cost increases and enormous stimulus-fuelled demand during the pandemic. Housing takes years to build at the best of times. But as I’ve learnt in my own overpriced shoebox flat, no matter how unpleasant, it’s better to begin unclogging the drain late than never. There’s also quicker ways to boost supply. About 250,000 short-term rentals were registered across the country in September last year. The government could incentivise at least some of that housing to accommodate longer-term tenants. In Sedona, Arizona, for example, the city council approved $240,000 in funding for a pilot program offering stipends to short-term rental owners who lease their properties for at least one year to a local worker. It might not shift the dial dramatically, but a similar policy here could make a difference. And lastly, while a move away from stamp duty towards land tax is supported almost universally by economists, we’ve tended to shy away from it or backtrack on it. It’s a move that would help allocate the limited housing that we do have more efficiently, encouraging people who don’t need as much as space to downsize, while also reducing inequality. We need immediate (if inconvenient) drain-cleaner fixes like providing higher rent assistance and incentives to bring existing housing stock onto the rental market. And although it might take time and money, our housing market needs longer-term changes, starting with loosening zoning restrictions and moving away from stamp duty. I’m optimistic politicians will find the courage to act now and with ambition – and that some of these things will happen before our drain gets fixed. Millie Muroi is a business reporter for the Sydney Morning Herald and The Age.
OPINION If politicians can’t fix the housing crisis, can the people do it for them? Peter Hartcher Political and international editor June 10, 2023 https://www.smh.com.au/national/if-...he-people-do-it-for-them-20230607-p5der4.html has hit a brick wall. That wall is political intransigence. Specifically, it’s the Coalition and the Greens. They’ve combined to block the Albanese government’s housing fund bill in the Senate. It’s the only one of the government’s major legislative initiatives that has been frustrated by the parliament. As usual, the Coalition objects that the government is doing too much. And as usual, the Greens complain that the government is doing too little. Illustration: John Shakespeare.CREDIT: So why is this bill meeting a different fate from the government’s other big bills? Because the Greens have proved to be pragmatic on the others – carbon emissions targets, workplace relations, the manufacturing investment fund. The housing bill is unique in the life of this parliament because the Greens have proved inflexible. What happens when an urgent government priority meets a brick wall in the Senate? Usually, absolutely nothing. The wall wins. The government will try once more next week. When the bill fails a second time, as seems likely, the government will set it aside as a potential trigger for a double dissolution election in case it wants one in future. And that’s it. So a group of independent MPs is proposing a new way. One of the teals elected last year, Allegra Spender, wants to break the impasse by holding a citizens’ assembly. Wentworth MP Allegra Spender.CREDIT:ALEX ELLINGHAUSEN “This is actually an opportunity to strengthen our democracy,” says Spender, the member for Sydney’s eastern suburbs seat of Wentworth. “The political parties are playing games at the expense of the community’s lives. “I trust that the Australian people can come together, listen to each other, and come up with solutions that balance the different interests – mortgage holders, renters, homeowners. My challenge to the prime minister is that he talked about doing politics differently, and this is a way to do politics differently.” Curiously, Spender is agitating on affordability, but her electorate has the highest incomes in the country. Why? “I talk to many people who own their homes, but they’re afraid their kids will never be able to afford their own homes.” One way or another, housing affordability is a problem for everyone. Other independent MPs are rallying around the idea, such as Dai Le, representing the western Sydney seat of Fowler: “Bickering back and forth, politicising back and forth, is not going to address the housing shortage and the 12 interest rate rises. How do people deal with this?” Dai Le says 5000 people in her electorate of Fowler are on a waiting list for social housing.CREDIT:LOUIE DOUVIS Le points out that there are 5000 people in her electorate who are on the waiting list for social housing. The government’s proposed Housing Australia Future Fund would aim to build 30,000 social and affordable homes over five years, and that’s for the entire country. Le says 30,000 is inadequate now, but worries that delays will make it even more inadequate as the population grows and pressure builds. Reserve Bank governor Philip Lowe suggested that one solution would be for more people to share a home. Says Le: “I don’t know whether Philip Lowe has experienced 10 people sharing a three-bedroom house, but we have that here. A citizens’ assembly is a good start to get the conversation going on how to provide affordable housing, rather than complaining.” Australia has an experienced convenor of people’s assemblies, the non-partisan, not-for-profit research group New Democracy Foundation. It’s conducted 31 for state governments and others over the last dozen years, but none at a national level. It has written a proposal for a citizens’ assembly on housing affordability. “I’ve heard politicians call for a ‘national conversation’ more times than I can count,” says its head, Iain Walker. “Their next thought should be: ‘And a citizens’ assembly is the way to do it.′ Because it starts with regular people getting the best democratic opportunity; it shouldn’t start with polarised positions.” Peoples’ assemblies have been used by many countries to tackle big problems. Especially ones that politicians won’t touch or can’t agree on.The standout is the case of Ireland. It used citizens’ assemblies to deal with the white-hot questions of same-sex marriage and abortion. Both were illegal a decade ago. Both are now legal, and it happened with a minimum of rancour. This year, Ireland has commissioned another on drug use. A citizens’ assembly doesn’t displace a country’s parliament. It doesn’t have the power to make laws or allocate budgets. But it does seek to guide a legislature. Some, like the one that New Democracy convened on South Australia’s potential as a site for global nuclear waste, failed. Others, like the one on how the City of Melbourne could cut its chronic deficits, succeeded. How does it work? A representative sample of about 100 citizens is chosen to meet on weekends, over a number of months, supported by a secretariat, to study an issue closely. They are given objective briefings on the subject and then presented with the arguments from advocates on all sides of an issue. The group then discusses the problem and reports its recommendations. The attraction? This approach removes the political partisanship, entrenched positions and vested-interest lobbying from the deliberative process. It turns out that a well-run citizens’ assembly can not only add to public understanding of an issue but also to public trust in any eventual government action. “Critically,” says the New Democracy brief, “a citizens’ assembly asks people to confront trade-offs, and it puts homeowners and renters in the same room and gives them the task of finding agreement.” Iain Walker anticipates a stock criticism – that “I would never fly in a plane designed by a random sample of the public”. His rejoinder: “Neither would I. But if you got a citizens’ assembly to weigh the trade-offs between an aircraft’s speed versus safety versus cost versus carbon emissions, and pass that information to professional designers, you’d probably end up with a better product.” And he dismisses the comparison with opinion polls. “Newspoll measures people’s five-second opinions; we measure people’s 40-hour views.” When Spender’s group of crossbench MPs proposes the idea, which they currently plan to do on Wednesday, they will call on the Albanese government to pay for the citizens’ assembly. But the prime minister’s first response is likely to be “no”. The government has a range of housing policies already in place. The Housing Australia Future Fund was the big one it took to the election, and the only one that needs to be legislated – it would invest $10 billion into an account and the annual earnings of up to $500 million would be used to build new social and affordable homes. But even with the plan blocked in the Senate, the government could find ways to achieve the same outcome. It could allocate an extra $500 million to the Commonwealth-State housing accord, for instance. And, in the meantime, it would derive some political pleasure in blaming the Coalition and the Greens for their political intransigence – with the bonus of having the bill as a possible double dissolution trigger, an option that every prime minister likes to have, just in case. Besides, Julia Gillard gave citizens’ assemblies a bad name. In her retreat from Kevin Rudd’s emissions trading scheme, she threw up the idea of acitizens’ assembly on climate changeas a fig leaf for her government’s policy vacuum. It became a laughingstock and Gillard canned the idea. It would take a great deal of political maturity for Albanese to agree to a citizens’ assembly. Why? Because it would grant the independents a moment of relevance. And because it would challenge the traditional bravado and machismo of the two-party political culture. But, as Walker points out, “the government would not be bound or constrained by this, it would simply have more options”. If the government won’t fund a citizens’ assembly, Spender says she’ll look for other ways to find the $1.7 million. Which is, incidentally, only as much as the cost of two Australian houses at the current median price. “Listening to the people doesn’t diminish the government,” says Spender. “I think it adds to the conversation we should be having.” Yet this is the ultimate vulnerability of the idea. Even if Spender finds the money to pay for a citizens’ assembly, it’s impotent so long as the government pays no heed. The independents want a conversation, but what if the government prefers a monologue? Peter Hartcher is political editor.
Opinion Australia is finally waking up to the 'Big Con' Hearings on PwC's leakage of tax plans have uncovered shocking web of conflicts Chris Wallace June 11, 2023 https://asia.nikkei.com/Opinion/Australia-is-finally-waking-up-to-the-Big-Con Andrew Yates, CEO of KPMG Australia, testifies in Canberra on June 7 at a Senate hearing related to the PwC tax scandal. (AAP) Chris Wallace is a professor of political history at the University of Canberra and author of the new book "Political Lives: Australian prime ministers and their biographers." When former general Dwight D. Eisenhower was wrapping up his final term as U.S. president in 1961, he warned Americans to guard against the influence of the "military-industrial complex." Across the Pacific, Australians are now learning of the perils of what could be called the consulting-industrial complex as Senate hearings reveal just how deeply the country's "Big Seven" accounting and advisory companies are enmeshed with the federal government. For months the story now crystallizing concern was a slow-burning affair but in recent weeks it has become a conflagration, highlighting the risks created by confidential consultations with, and the bulk outsourcing of traditional public service functions to, commercial advisories. The scandal edged just barely into public view two days before Christmas last year, a time when many Australians go on long beach vacations. The obscure Tax Practitioners Board quietly posted online its decision to deregister PwC tax partner Peter Collins for two years. Collins, the agency said, had used "confidential knowledge he gained from consultations with Treasury" which PwC then "leveraged to market PwC to a new client base." The timing of the announcement made clear that it was not intended to be noticed. It also omitted key details, namely that Collins in 2015 had shared specifics of government plans to get multinationals to pay their fair share of tax with more than 50 PwC colleagues and that the firm then aggressively marketed tax avoidance advice to exactly the kinds of companies the government was targeting. So far, only one consultant who has since left PwC has been punished in the scandal over the use of government secrets to help clients avoid tax. PwC itself has not been. © Reuters In late January, a small article by a journalist who happened upon the board notice made barely a ripple at first. But as others followed, Sen. Deborah O'Neill began to ask pointed questions of the Australian Taxation Office, the Treasury and the Tax Practitioners Board. Greens Sen. Barbara Pocock, a former academic like O'Neill, joined in the questioning at committee hearings. Before long, both the public service and PwC were reeling as O'Neill and Pocock uncovered a vast and shocking web of conflicted interests arising from years of government and the consulting industry metaphorically getting into bed with each other. It is a seemingly textbook case of what British academics Mariana Mazzucato and Rosie Collington wrote about in their recent book, "The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies." "Because what we've got here is a company which took government secrets, provided in good faith in the interests of consultation, and sold that to clients," Treasurer Jim Chalmers said of the scandal. He declared himself "absolutely filthy" about PwC's behavior -- Australian slang for very unhappy indeed. The Senate investigation has highlighted the audacity of PwC's wrongdoing, how many government agencies knew about it, how confident PwC was about escaping punishment, and how little, how late and how hidden the sanction was. So far, only Collins, who has since left PwC, has been punished. To date, PwC itself has not been. The Tax Practitioners Board that banned Collins for a mere two years includes two ex-PwC consultants whose pensions are tied to PwC's profitability. The pair, though, recused themselves from direct involvement in the Collins decision. In the wake of the Senate's hearings, a resident of Bondi Beach wrote a letter to the editor about the disclosure that the Reserve Bank of Australia had hired PwC at a cost of 300,000 to 400,000 Australian dollars ($202,000 to $267,000) to help it calculate underpayments owed to central bank staff. "Humiliating empirical evidence of just how beholden to the consultants the public sector has become," wrote the complainant, noting that the RBA is full of numerate Ph.D.s who in the past could have "put a recent graduate on such a task, with some direction." PwC, by the way, is on retainer as an auditor for both the RBA and the Australian Treasury. But its name is now tainted in Canberra, and some government departments, newly authorized to take character and past behavior into account when awarding contracts, are shunning the firm while it is under a cloud. The Reserve Bank of Australia hired PwC at a cost of 300,000 to 400,000 Australian dollars to help it calculate underpayments owed to central bank staff. © Reuters The brand damage for PwC is spilling over into the private sector. Three major Australian pension funds have said they will not engage the firm in the future. PwC's betrayal could well have cost taxpayers hundreds of millions of dollars in revenue that would otherwise have been collected under the 2015 Multinational Anti-Avoidance Law. The urgent question in Canberra now is how government can reverse out of its pervasive enmeshment with consultants, who are more expensive than public service employees and, as the PwC case shows, always come with dubious entanglements since generating ever more consulting income is a permanent commercial imperative. The unwinding is not going to be easy. The previous Liberal-National coalition government that left office last year boasted of capping the size of the civil service but concealed how a vast shadow workforce from the consulting firms was doing the work of public servants and often sitting alongside them in government offices. A freshly released government audit calculated this shadow workforce at 53,911 for the fiscal year that ended in June 2021, compared to an official public service workforce of 144,271. The revolving door by which departing ministers and other public servants move to consulting firms to work on topics for which they were recently responsible is notorious but now routine. It also works in the other direction, with several former consultants now serving in parliament. This too will add to the challenge of finding a way through the conflicts and ethical compromises that the Big Seven's massive inroads into core public functions of Australian government represent. Australia's National Anti-Corruption Commission, which starts work next month, has a lot of catching up to do.
There's yet another con perpetrated by governments; "If you FIRSTLY look after the rich, the benefits flow onto the poor". Well it doesn't work like that in real life, when you first look after the rich, they get greedier.
Interest rates RBA boss should lose job after interest rate hikes, but Australians expect more to come By David Crowe June 14, 2023 https://www.smh.com.au/politics/fed...ians-expect-more-to-come-20230613-p5dg37.html Australians are bracing for another interest rate hike and are holding the federal government responsible for the hit to their households, while 52 per cent believe Reserve Bank governor Phil Lowe should lose his job. The nation’s economic slowdown has slashed voter confidence in their personal fortunes, with 64 per cent expecting their wages to fall in real terms, amid an escalating political row over who is to blame for high inflation. RBA governor Philip Lowe.Credit: Alex Ellinghausen An exclusive survey shows that 33 per cent of voters believe the Reserve Bank has the greatest responsibility for keeping inflation down, but that 44 per cent think it is primarily the task of the federal government. The findings in the Resolve Political Monitor highlight the dispute over the central bank’s decisions to lift rates 12 times over the past 13 months when Prime Minister Anthony Albanese and Treasurer Jim Chalmers insist their fiscal policy is not fuelling inflation. With union leaders and some Labor backbenchers taking swipes at Lowe over the rate hikes, only 26 per cent of voters believe the central bank and its governor are doing a good job, while 56 per cent think they are doing a poor job. Albanese expressed his frustration with the bank last week when asked why the May budget assumed the central bank’s cash rate would remain at 3.85 per cent – a forecast proven wrong within weeks when the bank lifted the rate to 4.1 per cent. “It’s not as incorrect as the one saying there’d be no increases till 2024,” the prime minister replied. Lowe apologised to Australians last November for signalling as late as the end of 2021 that he was likely to hold the cash rate steady until 2024 but shifted his stance and began a series of rate hikes in May 2022, after the Russian invasion of Ukraine triggered a surge in energy prices. The Resolve Political Monitor, conducted for this masthead by Resolve Strategic, surveyed 1606 eligible voters from Tuesday to Sunday, a period that included media coverage of the prime minister’s remark. The results have a margin of error of 2.4 percentage points. Lowe was appointed Reserve Bank governor in September 2016 and his term expires in September, but his predecessors Glenn Stevens and Ian Macfarlane were both reappointed and served 10 years each. Asked if Lowe should keep his job, 17 per cent said his appointment should be extended and 52 per cent said the government should choose someone else, with others undecided. ACTU national secretary Sally McManus criticised Lowe last week by suggesting he should tell supermarkets to “share the pain” and drop their prices, while the Australian Services Union has circulated a TikTok video lampooning Lowe with a claim that he said people needed to spend less and work more. Lowe has warned about the nation’s poor productivity and the threat this presents to wages, and he has predicted that people may choose to share housing to reduce their expenses, but he has not told people to spend less and work more. “Philip Lowe is doing his job, which is to fight inflation,” said Liberal senator Andrew Bragg, adding the government should do more to help by cutting spending. “It is so obvious that the government is lining up the ducks to sack him as a political sacrifice. The government thinks it can shift the blame for persistent inflation to Lowe. “Removing a governor during a tightening cycle would be bad for the institutional framework and won’t fix inflation anyway, so the government should reappoint Lowe to show their commitment to the independence of the Reserve Bank.” Last week’s interest rate hike is tipped to add about $100 to monthly repayments on the average $600,000 mortgage, with Lowe signalling further increases due to high inflation, which was 6.8 per cent over the year to April. The Resolve Political Monitor found that 82 per cent of voters expected more interest rate increases this year and 67 per cent expected inflation to get worse this year. Only 15 per cent said their income had kept pace with inflation over the past year. Wages have grown in nominal terms but have not kept up with the consumer price index, with real wages down by 3.2 per cent over the past year. Resolve director Jim Reed said the latest survey showed a downward trend in the national and personal outlook for voters, with a clear correlation with the interest rate increases. “Most people aren’t economists, but it looks as though they assign blame to both the RBA and the government,” he said. “The bank may be raising interest rates, but there’s a feeling that it’s in reaction to inflationary pressures since the last election, some of which could be sheeted home to government. Chalmers and Albanese are certainly not getting off scot-free here.”
Australia needs a national strategy to fix decades of poor housing policies, researchers say By business reporter Gareth Hutchens Posted 11 hours ago Researchers say decades of poor housing policies have made the current housing crisis worse.(ABC News: John Gunn) Australia needs a genuine national housing strategy to make adequate housing available for everyone in the country, researchers have argued. Key points: We need an ambitious national project to fix Australia's housing, researchers say Housing Australia should be the lead agency driving the national strategy The goal is to provide adequate housing for everyone We need an ambitious national project that deals with every area of housing policy as a coherent whole, and which ends the fragmentation of responsibilities between different levels of government, and across different agencies. It should acknowledge that the Australian government has a special capacity to finance public projects and use money for the public good. And it needs to drive the construction of 950,000 social and affordable rental dwellings by 2041, which, at 50,000 new dwellings every year, is far higher than current government target of 8,000 dwellings a year over the next five years. In a new report published today by the Australian Housing and Urban Research Institute (AHURI), researchers say a national strategy is needed to overcome decades of accumulated policy errors that have contributed to our current housing crisis. They say it will require new federal legislation, new federal agencies, and a new appreciation that people in a civilised society have a right to adequate housing. "To meet that challenge, it is useful to think of governments and stakeholders being engaged in a mission that requires government leadership in the deliberate shaping of markets and direction of economic activity," they say. It has been co-authored by six academics: Chris Martin, UNSW Sydney; Julie Lawson, RMIT University; Vivienne Milligan, UNSW Sydney; Chris Hartley, UNSW Sydney; Hal Pawson, UNSW Sydney; and Jago Dodson, RMIT University. They argue Australia's incoherent and fragmented housing policies have become so unworkable a circuit-breaker is needed. They say in the years after World War II, widespread home-ownership in Australia was regarded as a means for having stable housing during one's working life and in low-income retirement, and it was encouraged by an array of preferential policies by governments. Those housing policies included exemption from income tax (on imputed rent), land tax and the Age Pension assets test; concessional sales of public housing; war service home loans; building society subsidies; first home buyer grants; and rent controls that repressed competition from landlords. But, they say, in recent decades housing has taken on additional financial features that have changed the landscape for younger generations and low-income households. Housing is now seen as an asset for leveraging into consumption, as an investment (especially in additional housing assets), and financial assistance to children (especially in accessing home ownership themselves). They say over time many of those supportive post-war policies were dropped (such as public housing sales and rent controls), while new policies were added (such as exemption from capital gain tax, and finance liberalisation), and the modern array of preferential treatment for housing no longer supports home ownership so much as existing home owners. "The tax expenditures represented by these special treatments make owner-occupation the most subsidised sector in the housing system, and the wealthiest the most subsidised cohort, through a capitalisation of tax benefits in house prices that compounds barriers to home ownership access for those lacking familial housing wealth," they say. This has changed the face of Australian society in a number of ways, they say. What's the solution? The researchers say Australia needs a national housing and homelessness strategy with big ambition. They say the strategy should be enshrined in new legislation — they call it the Australian Housing and Homelessness Strategy Act — that places an obligation on the Housing Minister to make a national strategy and stick to it. They say the National Housing Finance and Investment Corporation — or "Housing Australia," as the Albanese Government proposes to rebrand it — should become the lead agency that drives the housing strategy over coming years. They say the new Act should create two new statutory offices to advise and keep the government to account on the conduct of the strategy and the pursuit of its mission. They say the two offices could be called the Australian National Housing Consumer Council (representing the interests of homebuyers, tenants and the homeless), and the Australian National Housing Advocate (with the power to inquire independently in to the conduct of the strategy). The researchers say the mission of the national strategy should be clear: everyone in Australia must have adequate housing. And they've produced the below diagram to illustrate what they have in mind. AHURI Final Report No. 401 (2023), "Towards an Australian Housing and Homelessness Strategy: understanding national approaches in contemporary policy," page 5. When looking at the diagram, start in the bottom left-hand corner. They say a national strategy would have — at its core — the two grey-blue boxes in the bottom left: social housing and homelessness. Then, moving up and out, the strategy would add housing assistance, residential tenancy law reform, and building quality as three new core policy areas for a national housing plan. Then, moving up and out again, you would align housing-related taxation, housing finance, and planning and development laws with those five core policies areas to create the foundation of the strategy as a coherent whole, covering all levels of government. The researchers say the expanding nature of the strategy implies it will take time to put into place. But once it's in place, you would eventually have macroeconomic policy, immigration and settlement policy, welfare and retirement income policy, and employment policies, among others, adjusting over time with the mission of the national strategy, to ensure adequate housing is always available for whoever needs it. The researchers say it would be a vast improvement on what currently exists, where institutions like the Reserve Bank often seem to have their own housing policies. They say our major economic institutions need to work together on housing policy, rather than at cross-purposes. "Within the Australian Government, responsibility for housing and homelessness policy is divided. No one agency has overall responsibility for housing outcomes and for forming a strategic view of the housing system. Most intergovernmental activity has been around housing and homelessness conceived of as residualised welfare issues," they say. "Meanwhile, the Australian Government's financial regulators, the Reserve Bank of Australia and the Australian Prudential Regulatory Authority, are arguably conducting housing policy of their own," they say. The research report also lists some of the major ways in which our modern housing policies have failed millions of Australians. Problems with the private rental sector They say the private rental sector now houses 26 per cent of Australian households and has been growing at the expense of both owner-occupation and social housing since the 1980s. "For growing numbers of Australians, private renting has become a long-term or even perpetual prospect," they say. "The private rental sector is also the site of the worst affordability outcomes in the Australian housing system. "The median low-income private renter household spent 36 per cent of its income on rent in 2019-20, with some 20 per cent of this cohort spending over half their income on rent. "Moreover, as a source of low-cost accommodation, the sector has become increasingly deficient, with the national deficit of private tenancies affordable to low-income private renters growing from 48,000 to 212,000 in the two decades to 2016." They say private rental dwellings are largely owned by other households, with more than half owned by landlords who own a single dwelling. But properties and owners churn in and out of the sector rapidly, making housing in the private rental sector structurally insecure. Residential tenancy law biased against tenants They say modern residential tenancy legislation in Australia is light on regulation when compared internationally, and it's "highly accommodative of landlords dealing with their properties as they see fit". They say states and territories have residential tenancy legislation that is based on a broadly common model of prescribed standard terms, with the outlines of the model first set out in reports from the mid-1970s (which were more protective of tenants than they are today). But states and territories have repeatedly reviewed and reformed their laws over the decades in a largely uncoordinated way, and it has resulted is increasingly divergent positions on significant issues for renters (such as security of tenure). They say there are obvious gaps in reform. For example, little attention has been given to regulating affordable rent increases, and significant aspects of the law regarding landlord obligations for the condition of properties are uncertain. And they say contrary to claims by the real estate sector, past reforms have not caused landlords to disinvest around the country. "As households rent longer into their lives, the degree of accommodation the law affords landlords, at the expense of tenants' security and autonomy, makes the model increasingly unfit," they say. Social housing inadequate The researchers say Australia's supply of social housing needs to be dramatically increased. They say in its post-war heyday, public housing (the only social housing form at the time) was funded by Commonwealth-State Housing Agreements to be a significant force in the planning and construction of Australian cities and towns, and ancillary both to industrial development and to home ownership. In the quarter century to 1970, public housing authorities built just under 250,000 dwellings mainly for low-income working families and the aged, and had sold 100,000 of them on favourable terms. But funding for the Commonwealth-State Housing Agreements was drastically reduced by the Howard government in the mid-1990s, and funding has largely continued at starvation ration levels since then. And the sector's income from rents is also increasingly constrained. They say social housing landlords charge income-related rents and after increasing the proportion of income charged over the 1990s and 2000s, the low incomes of their target cohort — 98 per cent of whom are in the lowest 10 per cent of incomes — are now "tapped out". They say Australia's social rental sector — public housing, community housing and Indigenous controlled housing — now houses just 4 per cent of all households, down from over 6 per cent in the mid-1990s. But for the minority it assists, social housing nevertheless provides a degree of affordability and security unavailable to low-income households in the private rental market, which helps them realise other benefits. "Social housing tenants report improved school attendance by their children, improved access to doctors, eating healthier food, and feeling less stress," they say. "According to a wider analysis, social housing investment generates a return 'comparable to, or better than' major infrastructure projects. "Looked at the other way — the cost of not providing social housing, given its benefits, research by Professor Christian Nygaard concludes that the 'large, but avoidable, annual social and economic costs' of Australia's affordable housing shortage will top $1 billion annually by 2036," they say. Homelessness linked to poor housing policies They researchers say 120,000 Australians were homeless on the night of the 2021 Census, and it's a growing problem. They say homelessness is inextricably linked to housing policy, as the Productivity Commission argued last year: "If governments want to reduce homelessness, they need to address the structural factors that lead to housing unaffordability. Otherwise, more people will become homeless and services will continue to face barriers to supporting people out of homelessness. Governments need to make social housing more accessible to people who need it, increase the supply of housing, and help people to pay for housing when needed." The researchers say for many, homelessness is triggered by personal crises related to finances, relationships or health. The most cited reason for persons seeking specialist homelessness services assistance is "financial difficulties" (39 per cent), followed closely by family and domestic violence (37 per cent). Equally prevalent is "housing crisis" (37 per cent) — a synonym for eviction — while 26 per cent cite "inadequate/inappropriate home condition," according to the Australian Institute of Health and Welfare. Both these reasons link homelessness strongly with housing system problems, consistent with the statistical relationship between housing affordability and homelessness in Australian research.
https://asia.nikkei.com/Business/Ma...fordability-crisis-shakes-Albanese-government Property Australia's housing affordability crisis shakes Albanese government With election on horizon, many in country struggling to buy homes or pay rent Australian Prime Minister Anthony Albanese has suffered a major setback after his centerpiece policy to deal with one of the world's most unaffordable housing markets was put on the back burner. (Source photos by AP and Reuters) MITCH RYAN, Contributing writerJune 21, 2023 MELBOURNE -- A watershed election brought a seismic shift to Australia's political landscape last year. Now, a housing affordability crisis may deliver another parliamentary shake-up. On Monday, Prime Minister Anthony Albanese suffered a major setback after his centerpiece policy to deal with one of the world's most unaffordable housing markets was put on the back burner. Political experts believe a failure to tackle housing affordability could prove costly for Albanese in the same way that climate change was for his predecessor, Scott Morrison. The 2022 federal election saw Morrison's center-right Liberals lose several traditional heartland seats to climate-focused independents amid frustration over the party's emission reduction efforts. Almost one-in-three voters cast their ballot for minor parties or independents at that election. "It was the lowest two-party vote in decades, and I think we will see a continuation of that [at the next election]," said Kosmos Samaras, a political strategist and pollster who is a director at the Redbridge Group. "The problem most political parties are going to face is that it just takes so long to build homes, so by the next election, not much has moved or changed." Albanese's center-left Labor government has pledged to invest 10 billion Australian dollars ($6.8 billion) into the country's sovereign wealth fund and use the returns to pump AU$500 million a year into social and affordable housing. Separately, Albanese over the weekend offered an extra AU$2 billion to be spent directly on social housing in a bid to secure support from the Greens, who Labor relies on to pass bills in parliament's upper house. But the Greens, who sit to the political left of Labor, have rejected the housing bill in its current iteration. The party argues not enough attention has been paid to renters, who make up one third of all Australian households. However, it also senses an opportunity and believes it can capture several Labor-held seats over the issue. It is already door-knocking in areas around the country where it thinks the government is vulnerable at the next election, which is expected to be held sometime in 2025. On Monday, a Greens-led motion called for the bill to be delayed until October after the government rebuffed their calls for a nationwide freeze on rents. "It's up to Labor to act on soaring rent increases if they want to get their housing legislation through," said Greens leader Adam Bandt. Homeownership has long been considered "the great Australian dream," but it has increasingly been slipping out of reach for younger generations. In 1971, 64% of Australians between the ages of 30 and 34 owned their own home. In 2021, the homeownership rate plummeted to just 50% among that same demographic, according to the country's last census. Two of Australia's most populated cities, Sydney and Melbourne, rank among the five most unaffordable housing markets in the world. Only Hong Kong was found to be more expensive than Sydney, the latest Demographia International Housing Affordability report showed. There is no easy way to fix the problem, according to AMP Deputy Chief Economist Diana Mousina, who said the crisis is being fueled by generous tax concessions for property investors, building approval delays and "NIMBYism" -- a reference to the "not in my backyard" attitude some residents hold toward new property developments. Record levels of migration post-pandemic are also pushing up rental costs, she said. "The social housing policy the government is trying to push through is generally positive for housing supply, but I don't think it will solve the issue on its own," Mousina continued. "We need to address all the different facets of it to have a real impact on affordability, and unfortunately it will take a long time to achieve." Homeowners are also seeing their incomes being consumed by mortgage repayments after 12 increases to Australia's cash rate (now sitting at 4.1%) since May 2022. Australian households are the second most indebted in the world after Switzerland, according to the International Monetary Fund. Samaras, formerly a campaign strategist for Labor for almost 15 years, said major political problems are on the horizon for the government when over 600,000 homeowners move from fixed interest rate mortgages to a higher variable rate over the next three months. He said the rise in mortgage delinquency rates could trigger an electoral backlash from renters who will bear much of the extra costs. Further delays in government action will also erode Labor's support. "If rental prices continue to exponentially increase and rental accessibility is going to continue to be a problem, [housing affordability] will be a flashpoint within those electorates," Samaras said. "Labor will have to convince those voters that they are trying to fix the problem." Voters don't expect miracles, he added, "but they want to see the government in their corner."
Australians’ personal debt surpasses $70bn as inflation forces people onto credit cards and loans Catie McLeodNCA NewsWire June 24, 2023 https://www.perthnow.com.au/news/au...people-onto-credit-cards-and-loans-c-11074878 Australians now owe more than $70bn combined as the cost of living crisis propels an explosion in personal debts, comprehensive new polling shows. Millions of people have turned to loans and credit cards to make ends meet over the past 12 months while inflation drove up household bills and the price of groceries and other consumer goods. With inflation running at 7 per cent, research by finance comparison website Finder has found the average Australian now has $20,238 in debts spread across consumer loans and credit cards. That’s an increase of 11 per cent from a year earlier, when the average person had $18,301 worth of credit card and consumer loan debt, according to the study. Finder’s data showed some 10.9 million Australians — about 54 per cent of the adult population — were using a credit card last month. And about 2.8 million Australians, or one-in-seven people, have a personal loan. The same proportion of the population has a car loan. On average, each Australian now holds $1,948 in credit card debt, $6,920 in personal loans and a car loan with a balance of $11,370, according to Finder’s consumer sentiment tracker. About 54 per cent of the population were using a credit card in May, according to Finder. NCA NewsWire / Nicholas Eagar Credit: NCA NewsWire Conducted by pollster Qualtrics, the survey aims to comprehensively chart consumer sentiment in Australia on an ongoing basis. Finder says the survey covers a nationally-representative, growing sample of more than 51,000 people, with 1,000 people being added to the poll each month. People surveyed are asked how they are faring in a range of areas including wealth, happiness, financial sentiment and environmental awareness. The survey found credit card debts have risen to $18.6bn altogether while personal and car loans are now worth an estimated $19.6bn and $32.3bn respectively. Personal debts across have soared to $70.5bn in total. While government and Reserve Bank officials believe inflation has started to moderate after peaking at the end of last year, consumer prices remain high and aren’t expected to return to more normal levels until late 2024. Separate research from Finder has found 6.1 million or 30 per cent of Australians are extremely stressed about their current financial situation, an increase of 22 per cent compared to a year ago. Consumer prices remain high in Australia. NCA Newswire / Gaye Gerard. Credit: News Corp Australia Finder’s personal finance expert, Amy Bradney-George, said the spiralling cost of living had forced many people to borrow money simply to pay for essentials. “Many people are having to turn to credit cards and personal loans just to cover day-to-day expenses such as food and electricity,” she said. “Debt is making it even more stressful for people to put food on their tables.” Urging Australians to protect their “financial health”, Ms Bradney-George pointed to the so-called debt snowball method as one way to regain control. “If you start by paying off your smallest debt first, you see quick wins that help build momentum,” she said. She also recommended people contact their lenders to see if they can set up payment plans that fit with their income. “If your circumstances have changed, you can also talk to your bank’s hardship support team about different options such as payment pauses,” she said. “You could also shop around for better rates or consider debt consolidation to help manage repayments.” Australians have been accumulating a mountain of personal debt at the same time as mortgage-holders grapple with higher repayments driven by rising interest rates. In addition, health insurance premiums, HELP debts and energy bills for some households and small businesses have all either grown or are about to grow. The cost of electricity will soon rise again for certain households and small businesses in some parts of the country, with the Australian Energy Regulator confirming prices will increase by between 20 and 25 per cent from July 1 in NSW, South Australia southeast Queensland. Despite the federal government’s intervention in the energy market and wholesale power prices being lower than they were this time last year, customers on the default energy offer face significant price hikes over the 2023-2024 financial year. About 9 per cent of customers or 600,000 people are on a default market rate, which acts as a safety net or benchmark to ensure users aren’t overcharged. Prime Minister Anthony Albanese has promised power bill relief, but not everyone stands to benefit. NCA NewsWire / Martin Ollman Credit: News Corp Australia However, Anthony Albanese told parliament on Thursday that five million Australian families and one million small businesses would soon get relief on their power bills. Under the policy announced at the end of last year in response to soaring electricity prices propelled in part by the war in Ukraine, the federal government will give money to the states and territories to take money off people’s energy bills this winter. But not everyone will benefit from the rebates, because they will only flow to households on income support and to small businesses that meet certain eligibility criteria. Speaking in the parliament on the final sitting day before politicians flew home for their winter break, the Prime Minister also rattled off a list of some of Labor’s other cost of living measures. “More than 1 million Australians will pay less for childcare next month; 11 million Australians will pay less to see a doctor. Because of our budget, another six million Australians will pay less for their medicines.”
PURE INSANITY! ‘Too much for me’: Sydney unit rents soar $145 a week in a year By Kate Burke, Elizabeth Redman and Jim Malo July 6, 2023 Key points Sydney’s median unit rent has jumped by $145 over the past year to $670 per week. House rent reached a median of $700, increasing by $80 annually. Sharp rent increases are forcing some tenants to leave their community behind. Sydney unit rents have soared by $145 a week over the past year, putting pressure on household budgets already stretched by other rising costs. Asking rent for the median apartment reached a record $670 a week after an increase of 8.1 per cent over the June quarter alone and 27.6 per cent over the past year, the latest Domain Rent Report released on Thursday shows. Renters such as Raelene Gutierrez are being forced to leave their communities behind to find an affordable rental property.Credit: Rhett Wyman It marks the steepest jump on Domain records, dating to 2004, and the longest stretch of unit rent rises – now at eight consecutive quarters. House rents also reached new highs, increasing 6.1 per cent over the quarter to a median asking rent of $700, up 12.9 per cent over the year. Domain’s chief of research and economics Dr Nicola Powell said rent increases gained pace over the quarter despite an uptick in the rental vacancy rate, which reached 1.2 per cent in June – up from a low of 0.9 per cent. “It hasn’t been enough to ease the tight conditions caused by the mismatch between supply and demand,” Powell said. Rental demand increased as the number of people per household declined, overseas migration and international students returned, and home ownership became unreachable for more Australians, Powell said. Planning and construction industry pain points slowed new housing and investor activity had been sluggish. Apartment rents were up 36.4 per cent annually in the inner south-west, 33.3 per cent in the Parramatta region and city and inner south, and 30.8 per cent in the inner west. House rents were up 29.2 per cent – or $350 a week – in the eastern suburbs, though prices stabilised over the quarter, which Powell said could indicate affordability constraints. “Rents in a couple of areas flatlined over the quarter … if people are priced out they shift property type or location … the ceiling [for asking rents] is being reached,” she said. “What we might see is a consolidation of households, and we’re probably starting to see that in certain pockets.” Corporate travel agent Raelene Gutierrez moved further west this year after her landlord raised the rent on her Parramatta unit by $50 a week despite its mould issues during Sydney’s rainy spell. “I remember getting the email and I cried. And it wasn’t that big of an increase, but it was too much for me,” she said, adding neighbours in the same block received increases as high as $200. Raelene Gutierrez, with daughter Sophia and son Leo, moved from Parramatta to Toongabbie after her rent increased.Credit: Rhett Wyman Gutierrez, 38, has rented in Sydney for about 15 years, mostly in Parramatta, but moved to Toongabbie after spending months looking at about 50 rental properties. She also asked her partner to move in to share costs. “They were all either too expensive or not maintained or just completely not suitable for two children, myself and a partner,” she said. Hight rents made it impossible to save enough for a home deposit, she said. “You needed to have done that a decade ago or two decades ago when the rental market was OK, and the price of housing was OK, and the salaries you were earning were appropriate for the market. It’s just not possible now,” she said. “We just hope to god that in 12 months’ time the rent doesn’t increase that much.” ANZ senior economist Adelaide Timbrell said the combination of strong population growth and sluggish housing supply had resulted in low vacancies, enabling investors to charge more for rentals. Higher mortgage rates may be a trigger for some increases, as landlords passed on increased costs, but were not the main factor. Timbrell expected rent rises could slow as households made changes to cope with deteriorating housing affordability. “If people use less space or share homes among more people for affordability reasons, this will offset some of the increase in demand which is pushing rents up.” Centre for Independent Studies chief economist Dr Peter Tulip said there was little to suggest rent growth would slow or reverse short-term given the forecast high migration and low housing completions. He said the record rise in rents was troubling, as it would lead to a higher rate of homelessness. “This is just another reason why we need better housing policy on state and federal levels to make housing more affordable, which will especially benefit those at the bottom of the market.” Tulip said increasing new housing supply, by removing planning red tape, was the key to addressing the rental crisis.