Monday, July 4, 2016

Australia can't decide - or can we?

In years to come, we might think back on the 2016 federal election with the fondest of memories. How we all rolled up to our local meeting points, grabbed a sausage or haloumi roll and a pastry, posted a quick selfie and took a cheeky punt on whether Malcolm or Bill would win the day. Waved a few pleasant hellos to neighbours and friends as we made our way back home again. Then quietly went on with our business, on a glorious winters' day.

Has the 2016 federal election offered up a treat?
Then came the surreal finish - no clear result, and nothing for the politicians or journalists to talk about for the rest of the weekend, other than themselves. Of course, they diligently set about doing that, with much early commentary focusing on the major parties' low primary count amid the seemingly relentless rise of minors, micros and independents. What does this mean for the future of Australia's democracy? Who could have seen it coming? Who's to blame? What will happen next?

It makes sense for the media to spend all its time looking at the parties and the politicians, because that's where the personalities are. That's the drama. That's what makes federal election coverage such wonderful entertainment. But we grow a little tired of it here on the Brown Couch, so we've decided to look at some of the policy implications of the election instead. And we think there are two take-home messages that, if read correctly, could mark the 2016 federal election as an extremely important moment in whatever's currently left of Australia's housing policy landscape.

The first is that Australians were asked to run screaming from changes to negative gearing and the capital gains tax discount, and we did not. The time, effort and expense put in by several real estate agents and other interested groups, who sought to paint a picture of certain disaster if tax breaks for landlords are wound back, has gone unrewarded. This is a good sign. Politicians and policy-makers of all persuasions should take note - Australians have swung towards housing affordability instead.

The second key message is that Australians were expected to turn their backs on higher budget deficits to pay for health and education over the next few years, and we did not. Perhaps there is recognition across Australia, after all, that economic growth can come from putting money into services that matter, rather than another tax cut. Of course tax cuts would result in growth for some, but there's no guarantee it would flow on to much of what the country desperately needs.

This brings us back to affordable housing. Australia needs that as much as everything else right now. And it's been shown, even within the last decade, that government investment in housing creates jobs and growth. When the Rudd Government responded to the Global Financial Crisis with the Nation Building Economic Stimulus plan in 2009, it included the Social Housing Initiative. Under the program, the nation poured more than $5billion into the construction and repair of its social housing portfolios. The program was evaluated by KPMG in 2013, and was found to have a strong economic impact as well as a social one. It resulted in the creation of 9,000 full-time and 14,000 part-time jobs in construction and trades. KPMG estimated that for every one dollar spent in the program, an extra thirty cents in turnover was generated in the economy, amounting to around $1.5billion per year over the course of the program.

While addressing housing advocates about the Social Housing Initiative at its outset, then Minister for Housing Tanya Plibersek hailed it as a "once in a lifetime opportunity" to grow the portfolio. While that may be true of a $5billion+ injection of funds, it needn't be true of the policy in principle.

This election, Australians have demonstrated a tolerance for government spending on key social services and projects. We've also shown the importance of housing affordability as a national goal. Whoever finally wins the day should take note of this, and implement a national housing strategy that includes both tax reform to fix the private rental market, and a plan to invest in new affordable rental housing across Australia.

If the politicians and journalists stop talking about themselves for long enough to notice this, the 2016 federal election might just become the stuff of legend.

2 comments:

  1. I was pleasantly surprised at how fellow Australians stirred every pot of the election, that they could. This morning, rifling through a major newspaper that did its best to give biased information before the election, I felt a warm glow for Aussies. We are not dumb. We are hurting though and the polies have not been listening. They may want to now.

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  2. I think it's ironic that the libs promote trickle down economics instead of investing in the middle class when our economy seems absolutely dependant on a socialist country I.e China.

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