Reform of the Federation and housing

Fun Federation fact! The 'Father of Federation', Henry Parkes, was a tenant.

In his final years, Parkes rented 'Kenilworth', one of the 'Witches' Houses' on Johnston Street Annandale.

Now, almost 120 years after Parkes' death, and 115 years after the federation of the colonies as States in a new Commonwealth of Australia, the Federal Government is preparing a White Paper on the Reform of the Federation. As part of the process, an issues paper on 'Roles and Responsibilities in Housing and Homelessness' has been produced – it is well worth a read.

The stated objective of the White Paper is to make the Federation more efficient and effective, simpler and clearer, supportive of increased productivity and economic growth.... and 'to ensure that, as far as possible, the States and Territories are sovereign in their own sphere.'

And that, the Government explains, means 'limiting Commonwealth policies and funding to core national interest matters, as typified by the matters in section 51 of the Constitution.'

Which really is begging the question. Should we assume that making States 'sovereign in their sphere', and limiting the Federal policies and funding to section 51 matters, will actually lead to more efficient, effective government and economic growth?

It strains common sense to treat section 51 as a timeless touchstone of good federalism. There's some very important matters on the section 51 list – for example, taxation (s 51(1)(ii), defence (s 51(1)(vi)), currency (s 51(1)(xii)), banking (s 51(1)(xiii) – and some arguably less important ones too (lighthouses (s 51(1)(vii); astronomical observations (s 51(1)(viii)). And some very important matters are not specifically named on the list: in particular, housing.

Parkes's fellow founding fathers drafted section 51 without the benefit of any special insights into housing policies for the 21st century, or even the 20th century. For what it's worth, Parkes's own ideas about housing policy were indicated in the 1860 report of the Select Committee of Inquiry into the Conditions of Working Classes of the Metropolis, where he recommended that the construction of model dwellings by private capital should be encouraged, by awards of 'medals or diplomas of distinction' – not subsidies.

When section 51 was first drafted, there was no social housing anywhere in Australia, and very little anywhere in the world. What there was a lot of was truly awful housing.

For the first half of the 20th century, State and local governments in Australia made a few stabs at housing reform, but enduring, systemic improvements in the design, construction and provision of housing to households on low-moderate incomes, were achieved only after 1945, when the Federal Government committed funds to State housing authorities through the Commonwealth-State Housing Agreement.

Of course, funding for social housing isn't the only thing the Federal Government does that affects our housing system. As we've often discussed – and the issues paper makes this point too – the Federal Government's tax settings impact hugely on the housing system. In particular, the exemption of owner-occupied housing from capital gains tax, the discounted rate of capital gains tax on other assets (including rental housing), and generous treatment of negative gearing, all operate to direct a lot of private money into the housing system, where it has pushed up prices and distorted the composition of the rental market, to the benefit of those who have already paid for their housing, and to the disadvantage of those who have not.

Now, this is something that the Federal Government does not propose to change, and in terms of the Reform of the Federation process, it passes the section 51 test (being taxation – subsection (1)(ii)).

So one's left with the impression that 'reform' on these terms would really mean the Federal Government continuing policies that benefit people who are wealthy in housing, and pulling out of programs that deliver some assistance to the housing poor.

Could States 'sovereign in their sphere' step up to funding these programs themselves? What if, as the reform process contemplates, there was also a move to address what it calls the 'vertical fiscal imbalance' between the Federal Government and State Governments?

That's a false hope. The difference in the fiscal powers of the Federal Government and State Governments is not one of mere degree (as 'vertical fiscal imbalance' implies), but a difference in kind.

As the issuer of the Australian currency (section 51(1)(xii)), the Federal Government is not fiscally constrained: it can buy anything that is for sale in the currency, can pay any liability that is due in the currency, and never run out of money. Its power to tax is vital to ensuring the acceptance and use of the currency, and the way it taxes is very important to the economic decisions of citizens, but Federal tax revenues don't actually fund Federal spending.

State Governments are categorically different: they are currency users, and as such face financial constraints that really do not apply to the Federal Government.

In our Federation, the Federal Government has, through its position as issuer of the Australian currency, a unique ability to mobilise labour and other economic resources and put them to work for the purposes of public policy. Those purposes should include the provision of housing, homeless services, and other support services and community activities that improve people's lives – and not merely defence forces, lighthouses, astronomical observances and those other matters about which legislative power was allocated to the Federal Government all those years ago.

Farewell, Animal

A public housing tenant died recently. When his friends went to sort through his flat, they found boxes and boxes of gifts. Christmas gifts, for children, hospital patients and others in the local area. This wasn't surprising, as this tenant was well known for giving gifts. He'd been doing it every year for decades.

Animal OAM, also known as Randall Nelson, or the Kings Cross Santa, thoroughly deserves all the praise that will be heaped upon him at his funeral tomorrow in Kings Cross. He made an enormous impact on the lives of people around him.
To us, he represents the big heart, the resilience and the generosity of thousands of public housing tenants in the state who give back to their communities.
The unkempt hair, browning teeth and deafening motorcycle roar were part of Animal's package, but to dismiss a person merely on how they present themselves, or where they live, is foolish in the extreme. In his case, you would have missed out on humour, spirit and an unrelenting dedication to his cause.
In the case of other public housing tenants around the state you would be dismissing mums, brothers, lunch ladies, cleaners, community workers, politicians, entertainers, and sportspeople. Their contributions aren't always as visible as Animal's have been, but they do make a difference in the lives of people around them.

Well done Frances Abbott, tenant

The Tenants' Union of NSW congratulates Frances Abbott on asserting her rights as a tenant.

Ms Abbott, formerly resident of Sydney, now of Melbourne, had entered into a tenancy agreement for a flat in Prahran but ended the agreement early because the premises were not secure – amongst other things, the flat had windows that did not lock.

Ms Abbott's landlord claimed instead that the agreement was ended unlawfully, and sued for compensation for loss of rent. Ms Abbott defended the landlord's claim in the Victorian Civil and Administrative by giving evidence as to the poor security of the premises and establishing the grounds for her termination of the agreement.

The Tribunal has not published its decision on the matter, but according to the media reports Ms Abbott was successful (and the landlord is sore about it).

Good on Frances Abbott. All Australian States and Territories have residential tenancy laws that place obligations on landlords in relation to the security of rented premises. The obligations vary between jurisdictions – in Victoria, landlords are specifically required to provide locks on external doors and windows; in New South Wales, the obligation is stated more generally so that landlords must provide locks and security devices to ensure that the premises are reasonably secure – but nowhere can landlords rely on the old principle of caveat emptor to let insecure and unsafe premises.

If you are concerned about the security of your home, seek advice about how you can assert your rights.

Congratulations to tenants William and Catherine

The Brown Couch congratulates tenants William and Catherine, the Duke and Duchess of Cambridge, on the birth of their son and future Australian monarch, George.

Their Royal Highnesses rent their home, a farm house on the Isle of Anglesea, off the coast of Wales. (Although, according to reports, the young family is shortly to move to new digs, with some help from William's gran.)

As a renting family, their Highnesses are in good company amongst subjects in New South Wales too: here about 40 per cent of rented houses are homes to children.

In fact, about a quarter of all people living in rented houses in New South Wales are children under the age of 14 – and almost half of all Aboriginal people living in rented houses in New South Wales are kids.

Best wishes and good luck to William, Catherine and George, and all the other parents and kids trying to make a home in rental housing.

Happy 255th birthday, Maximilien Robespierre

The Institute of Tenancy Culture Studies sends its regards to French Revolutionary and birthday boy Maximilien Robespierre.

(Maximilien Robespierre, 1758-1794) 

As a member of the Committee for Public Safety and leader of the Jacobin Club, Robespierre was the principal figure in the phase of the Revolution known as the Reign of Terror (1793-94), during which the young republic, beset by invading forces on all sides, widespread internal revolt, and economic chaos, executed some 17 000 French men and women in the name of revolutionary virtue. The Terror ended when Robespierre himself went under the guillotine... by which time the republic had repelled the invaders, put down the insurgents, stabilised its economy, raised an army that would go on to dominate Europe for the next two decades, and created a political program that would inspire revolutionaries and reformers for the next two centuries.

And ever since, the prim, dandyish figure of Robespierre has been an object of scholarly fascination – sometimes admiring, more often horrified. He gets our attention because of one curious, if apparently minor fact: he was a tenant. In all his admittedly-not-very-long life, Robespierre never owned his own house.

In fact, for the most significant part of his career, Robespierre was a boarder. In an earlier phase of the Revolution, when the Paris mob and their Jacobin leaders were violently repressed at the massacre on the Champ de Mars, Robespierre was given shelter in the home of a cabinet-maker and fellow Jacobin, Maurice Duplay. Robespierre's room above the workshop and courtyard would be his home for the rest of his life (except for short period when he moved out to rent an apartment with his sister – which Maximilien instantly regretted and soon ended to move back in with the Duplays).

It was not, it should be said, an ordinary boarder-landlord relationship. Robespierre was doted on by Duplay and his family, with not-strictly-virtuous treats of coffee, white bread and oranges (Robespierre would later return the favour, if in a dubious way, by nominating Duplay to a seat on the Revolutionary Tribunal). Visitors to Robespierre's room came away and reported the extraordinary way in which the Duplays' house was decorated, with a proliferation of little portraits and busts of their boarder peeping from the walls.

That's those who got in to visit; others record that the Duplays enjoyed keeping their guest to themselves and their own circle, and that Robespierre became inaccessible to a wider group of (former) friends and revolutionary colleagues after moving in to the Duplays'. One can only speculate as to whether the power of the boarder's 'master of the house' may have shaped the complex power-plays of the French Revolution, and the course of history.

Congratulations, Murdochs

Double congratulations from the Brown Couch to glamorous Sydney couple, Lachlan and Sarah Murdoch.

(The Murdochs)

Congratulations first on the announcement today of the birth of their third child... and secondly on the news that they have entered into a two-year fixed term agreement for Coolong, the handsome Vaucluse pile. The Murdochs are tenants.

(Coolong)

Better do the condition report very carefully.

The Murdochs are one of the 40 per cent of New South Wales renting households with dependent children. In fact, at the 2006 Census, 16 per cent of all New South Wales residents living in rental housing were children aged under ten.