This year has seen a renewed push to reform Australian housing policy.
A few months back, Saul Eslake gave his 50 Years of Housing Policy Failure presentation at the Prosper annual dinner, which summarised in great detail many of the afflictions affecting the Australian housing market and prescribed a range of policy reforms. The presentation was well attended and the subsequent reporting on MacroBusiness received huge traffic, suggesting the issues raised gained some traction across the population.
Then yesterday, the Grattan Institute released its Renovating Housing Policy report, which highlighted many of the same issues as Eslake but this time received widespread and positive media coverage across all media channels: print, radio and television.
Yet, despite the nascent calls for reform, the new Federal Government has so far refused to even acknowledge that there are problems with Australia’s housing system, instead supporting the current policy distortions.
Take the new Treasurer, Joe Hockey, who last week effectively endorsed a housing quango, whereby the Federal Government pumps demand via maintaining high rates of immigration (in addition to generous tax policies), while the states work to choke supply.
And then there’s the new Prime Minister, Tony Abbott, who has explicitly endorsed higher house prices and the “wealth effect” it bestows on home owners.
Now compare this approach to the conservative National Government in New Zealand, which is taking concrete measures to address the constipated land/housing supply system that is working to push-up New Zealand home values and make homes unaffordable.
Late last week, New Zealand’s Prime Minister, John Key, also gave the above address to Kiwi citizens outlining his Government’s plans on housing, and why they are necessary to fix New Zealand’s housing problems:
“A lot’s been said about housing affordability, and now it’s time for action.
The Housing Minister, Nick Smith, and Auckland’s Mayor Len Brown recently announced the first batch of 11 Special Housing Areas that will see 6000 new homes being built in Auckland.
This is a significant step towards our target of consenting 39,000 new homes in Auckland over three years – which is far more than the current average of fewer than 4000 a year.
And that’s just the beginning.
We all know that our housing market is not working as well as it could be. Too many families are having to spend too much of their income on housing…
National values home ownership and we want to help more Kiwis into their own home.
One of the biggest contributors to the housing affordability problem is actually very basic. There isn’t enough land being supplied for housing.
That’s why we’re working with local councils to free up land.
We passed a new law which will see councils enter into Housing Accords with the Government. They’ll be able to create Special Housing Areas, like the ones just agreed in Auckland.
Developments in these areas will be fast-tracked, so new homes can be consented and built faster.
It’s one part of our wide-ranging package of measures to improve affordability.
We’re seeing the start of some real momentum.
I feel encouraged that National is helping more people to achieve the Kiwi dream of owning their own home.”
Could anyone seriously imagine Tony Abbott ever giving such an address?
Sure, some people might consider Key’s statement as just another politician that promises action, but will deliver little. While the proof will always be in the pudding, the first step in any reform effort is to first acknowledge that there are problems. New Zealand has already moved a long way down this path, whereas Australia’s politicians, policy makers, and central bank refuses to even acknowledge that problems exist in the Australian housing market.
I have said it before and I will say it again: New Zealand is leaving Australia for dead when it comes to housing policy.
unconventionaleconomist@hotmail.com
