In the lead-up to the 2013 Australian federal election, the issue of housing affordability received zero attention from Australia’s major political parties, and no public debate.
For example, of the 48 discussion papers outlining the Coalition’s policies on just about everything – including such useless topics as “creating a green army”- there was no policy on the single biggest purchase anyone will make and by far the biggest asset class in Australia.
I was hopeful that with Malcolm Turnbull’s rise to Prime Minister there would be a greater focus on housing policy. However, in the latest ministerial list, which includes 40-odd ministerial positions, a dedicated “Minister for Housing” is conspicuously absent. Sure, there’s a Minister for Cities and the Built Environment, occupied by The Hon Jamie Briggs MP, but this has been consigned to the “outer ministry”, which shows just how much importance the Turnbull Government ascribes to housing policy in Australia.
Now compare Australia’s neglect of housing policy against our friends across the pond. In the lead-up to last year’s New Zealand election, housing policy was front-and-centre. There was even a dedicated debate on housing policy that was aired on Prime Time in the weeks leading-up to the poll.
New Zealand also has a dedicated housing minister, National’s Nick Smith, who has embarked on policy reforms to housing aimed at boosting supply, and has set an ambitious target to improve the affordability of New Zealand housing back to its long-run average of four times household incomes from around seven times currently.
New Zealand’s shadow minister for housing, Labor’s Phil Twyford, is even more impressive, delivering brilliant sermons on how unaffordable housing is destroying the New Zealand economy, increasing inequality, and damaging the younger generations (see here and here). Twyford has also called for reform to the way that housing-related infrastructure is funded, so that its cost is not lumped onto the initial purchase price of a new home.
Whether you agree with the individual policy prescriptions or not, at least the issue of housing is being vigorously debated at the highest levels of the New Zealand political system. This is far more than can be said for Australia, where housing policy is avoided altogether by both major parties.
The sad thing is that there is a lot the Australian Federal Government could do to help restore housing affordability. Whether by amending the tax system to limit negative gearing (which inflates housing prices without boosting supply) and removing the capital gains tax discount on investment homes, coordinating infrastructure and land release, or providing fiscal incentives/dis-incentives to states and territories on housing supply, there is a clear role for the Federal Government.
In the end, perhaps we Australians have ourselves to blame. Governments are inherently reactive and they tend to respond only when community pressure becomes too big to ignore. As long as Australian’s remain silent about housing policy, so to will our politicians.
