Ever the forgotten people

It's been some time since we marked an anniversary on the Brown Couch, and clearly this won't do. We can remedy this today, as it is the seventy-fifth anniversary of Sir Robert Menzies' delivery of the Forgotten People speech. On 22 May 1942 Robert Menzies broadcast his speech over the wireless, as part of a series of "fireside chats".

The speech remains an important touchstone for Australia's political and cultural narrative, because of the role it played in establishing the dominance of the two major parties in our parliamentary system. It preceded the formation of the Liberal Party of Australia that Menzies himself would lead, and it summarised the political philosophy that has more or less captured the centre of Australian politics ever since. At its heart was a forgotten middle class - "those people who are constantly in danger of being ground between the upper and the nether millstones of the false [class] war; the middle class who, properly regarded represent the backbone of this country."

Menzies' and the Liberal Party would go on to win government in 1949. He remained the Prime Minister of Australia until 1966, making him the country's longest serving leader. Those who seek to reach similar heights within the Liberal Party often pay tribute to his rhetoric, as Joe Hockey did when he referenced "lifters and leaners" in the 2014 Federal Budget; or his legacy, as Julie Bishop did when she joined Prime Minister Turnbull in challenging Tony Abbott for the party's leadership in 2015. But perhaps more importantly Menzies' rhetoric of the "forgotten middle class" continues to set the tone for politicians, journalists and commentators who wish to occupy and define the politically fertile middle ground. "John Howard's battlers" and even "Tony's tradies" come straight out of the Forgotten Peoples' playbook, while the Australian Labor Party puts its focus on "values" and the dignity of work, rather than its origins in late nineteenth century class consciousness and historical links to organised labour, as it strives for middle-ground appeal.

The Brown Couch took an in-depth look at the Forgotten People speech back in 2012. We discussed how the text of the speech - particularly as it concerns the notion of "home" - might be interpreted through a housing policy lens. We saw how Menzies' conception of "homes material" was a precursor to the 1956 Commonwealth State Housing Agreement, under which fewer public housing dwellings would be built or retained and more funds were provided to building societies and state banks to aide "the habits of frugality and saving "for a home of our own."" In this way, the post-war experiment of public housing for Australia's returned soldiers and working families began its drawn-out end. Australian homes would no longer be built by governments but by the forgotten middle class.

We explored Menzies' notion of "homes human", in which the home is construed not by its four walls and hollow rooms but by the people and relationships emerging from within. Noting that Menzies seems to have excluded renter households from his ideal here, we examined the history of Australian home-ownership, and the policies and economic conditions that have supported it over a number of generations. In particular we saw how the continuing political interest in supporting home-ownership gradually morphed into support for homeowners. We might now say this has shifted further still to support home values, given so much of the nation's economic wellbeing is tied up in our homes' worth as financial assets. Whether or not they are owned by the people who make them their home should now seem immaterial to this idea.

Finally, we looked in on Menzies' "homes spiritual", where one's sacrifice, frugality and saving to make a home is the very expression of a "fierce independence of spirit". Here we noted that, as far as housing is concerned, saving and frugality had long since given way to borrowing with the expectation of accelerated capital gains. We might now also say that drawing on said gains to fund high levels of consumption not only ensures a home-owner's independence is spiritually rewarding, but financially so as well. And not just for the individual - it could prop up an entire economy if everything else falls apart.

All the more concerning, then, is the exclusion of long-term renters in Menzies' conception of the middle class - those forgotten people he implores us still to forget. The steady decline of first home-buyers and the rise of second, third, fourth and fifth home-buyers must be eroding the very soul of this nation of once fiercely independent folk. More concerning still, from an economic point of view, is the likely concentration of wealth into fewer and fewer sets of hands, and the loss of a key driver of confidence and consumption, if current housing trends continue.

When we looked at the Forgotten People speech five years ago, the Australian property market was going through something of a wobble. It appeared at the time that house prices might have started to peak, and a correction about to begin, so we questioned the very idea that purchasing homes for capital gains amounted to savings. We all know how that turned out. But in our conclusion, we proposed that those with the best claim to live in Menzies' "home spiritual" of responsibility, savings and frugality are tenants. Capital gains in housing may not since have fallen away, but we're inclined to stand by this conclusion. For tenants, that fierce independence of spirit comes from scrimping and saving each week to make the rent, from constructing the best possible home even though it could all come to an end with a simple notice in the mail. From living a full life while making do, staying under the radar to keep that roof over one's head, and moving on with good grace when the time sadly does come.

Whether or not you're in a well paid job - or any job at all - there is deep satisfaction in knowing your home is something you work hard for. Homeowners must feel this, too. No doubt they feel it even as they pass the point where their home's value starts spitting out two or three times more than what goes into it each week, or as prices start to gain more in a year than one can earn doing most ordinary jobs. Sure, there's risk in borrowing against the family home, but as long as you can service the debt and the property's value keeps going up it will more pay for itself in the end. Who wouldn't be satisfied by that?

But taking some of that hard-earned free money and investing it in more housing, where it can work towards the accumulation of more free money? That's not hard work. That's just skimming off someone else's hard work, which is why we don't think Menzies had landlords in mind any more than he did tenants when making his point about "homes spiritual".

Here we might stop to mark some other important anniversaries. It is precisely 219 days since Bernard Salt had a short article published in the Weekend Australian, in which he lamented that young people are eating too much smashed avocado on toast in expensive cafes when they should be putting their money towards home loan deposits instead. And it is now eight days since Tim Gurton said on 60 Minutes that he didn't turn his inheritance into a rich property portfolio by spending $40 a day on smashed avocados and coffee, and not working.

As we have seen, the idea that a home is built on sacrifice is a theme that runs deep throughout Australia, but the reaction to this characterisation of stupid and improvident youngsters not doing enough to get on the housing ladder suggests that, at least in its current form, its time might soon be up. Menzies' forgotten people could put nice things on hold in order to save and acquire a first home; so too their children and many of their grandchildren. Millenials suspect that when it comes to housing they've already missed out. Their future already sacrificed, they're having nice things instead. They needn't give up on "homes spiritual" or "homes human" in the meantime.

Far from spurring the hapless youngsters of Australia on, comments like Salt's and Gurton's may be just what's needed to galvanise another emerging class - that of the long-term renter. This takes us right back to the opening passages of Menzies' speech, and the idea of a forgotten middle class that occupies a space between opponents in a fictional class war. Perhaps its time this middle class was redefined, its challenges reassessed? As we reflect upon this anniversary of the Forgotten People who continue to influence our nation, it's worth asking - who among our political leaders would be brave enough to do that today?