Morrison’s UK housing junket descends into farce

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By Leith van Onselen

You’ve gotta love the ineptness of Australia’s real estate treasurer, Scott Morrison, who has just arrived home from an all expenses paid taxpayer junket to London to get tips on housing affordability from policy makers in one of the world’s most expensive markets.

Already, a London housing project hailed by Morrison has been criticised for driving-up rents. From The ABC:

When Treasurer Scott Morrison visited London last week, he suggested Australia could learn off the Brits when it came to housing affordability.

He toured a new housing redevelopment based on a partnership between Australian company Lend Lease and the Labour-controlled Southwark council.

Mr Morrison described the project as “exciting” and suggested it be replicated back home.

“To see it lived out here on the streets of London, gosh I’d love to see it lived out on the streets of Australia,” he said.

But the housing project has proved controversial in the United Kingdom. The multi-billion-dollar redevelopment of the old Heygate Estate has led to protests and so far delivered less affordable housing than was previously on the site.

Jerry Flynn, who grew up on the Heygate Estate, agitated against the redevelopment and runs a blog that exposes some of the secrets behind the deal.

He says housing affordability in the area has declined since the demolition and that working class people have been driven out of the neighbourhood.

“There was 1,200 council homes there, that’s social rented homes.

“Now there’s going to be over 2,500 new homes and nearly 2,000 of those are going to be free market. We’re losing all our council housing here.”

The council estate at Elephant and Castle was once 100 per cent socially rented homes. Under the deal struck between Lend Lease and Southwark council the area will now have 25 per cent affordable homes.

Some of the old residents have not only had to move out of the neighbourhood, but London itself.

Let’s be crystal clear: Scott Morrison’s London visit was never about finding out ways to deliver affordable housing. If he was genuinely interested in that, he would have visited policy makers in markets that actually have affordable housing – like Houston, Dallas or Germany – rather than visit one of the few cities in the world that has a similar problem to Sydney to seek a “solution”.

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Rather, Scott Morrison’s London junket was about three things: 1) creating a smokescreen to divert public attention away from the fundamental issues; 2) giving the impression that the Coalition cares about housing affordability; and 3) creating a new angle to defend the Coalition’s negative gearing lies.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.