Page 676 - Week 02 - Thursday, 6 March 2008
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The government’s best efforts—and I think we saw some today—to spin bad news about housing affordability by using average income and average mortgage repayment figures cannot disguise the fact that for many Canberra households rent and mortgage repayments are crippling and growing. Average figures have their place but they do hide the real hurt being suffered by many Canberra households behind the gloss provided by Canberra’s high average incomes.
This government does bear some responsibility for the housing affordability problem—and we cannot lay it all at the feet of the federal government—as its land release policy has been either unable or unwilling in the past to keep ahead of demand. It appears that the government has now recognised that it is more important to address the housing crisis than it is to maximise revenue by restraining supply. No doubt there will always be a tension between those two objectives.
The Chief Minister has on numerous occasions expressed his commitment to tackling the housing problem. I welcome his commitment and recognise that we have seen a number of legislative responses which seek to put those words into actions. Of course, words and intentions do not of themselves produce results. As with the government’s climate change and ethical investment commitments, the Canberra community looks forward to seeing quantifiable evidence to prove that the government’s commitment is genuine and its response has been effective.
The minister took the opportunity in his speech to talk up measures that the government has taken to address housing affordability. Of course, there are other measures that government could take, such as investing superannuation funds in local bricks and mortar, overseeing a massive increase in community housing projects, perhaps exploring the cooperative model which provides 50 per cent of Sweden’s housing or perhaps by allowing renters to accrue tradable equity in some form of communal or cooperative housing stock as they pay their weekly rent to a government authority set up to manage a community housing investment portfolio. There are many ideas out there if we decide to look at the world, to look at those older cities and older countries that have dealt with this problem and that would offer us some solutions.
Sadly, governments which have adopted an ideological aversion to playing a proactive role and taking responsibility for social outcomes do have trouble in implementing effective policy in areas like housing affordability. They are left with tinkering around the edges, with minor changes to policy settings, which may or may not actually push up the price of housing. This was the main effect of the flawed first home buyers grant. I do not think that even the totality of the government’s stated programs to address housing affordability will have any major or significant effect on the problem, but they all are welcome.
Of course, the flip side of the affordable housing problem is the windfall capital gains being enjoyed by those babyboomers who managed to buy their own house or investment property before the housing bubble really got going. Many of them will not look kindly on any attempt by the government to lower the cost of housing because that will impact adversely on their housing investments. Of course, many of
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