Page 3586 - Week 10 - Wednesday, 18 September 2019
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This is not unique to the ACT. These figures reflect a national trend highlighted by the Anglicare report, and that is the problem with this motion. It incorrectly draws a straight line between housing affordability and the ACT government’s tax, planning and land supply policies. If it is all the ACT government’s fault, how do you explain the situation in Sydney, Melbourne and Hobart? Across Australia hundreds of thousands of people are priced out of the housing market. The housing affordability crisis is instead a textbook example of market failure made worse by over two decades of federal government policy failure.
Australia has had chronic house price inflation since 1999. That was the year the Howard federal Liberal government introduced the 50 per cent capital gains tax discount which, coupled with negative gearing, turned housing into a speculative investment rather than a necessity of life. The sad and frustrating thing is that in 1999 groups like the Australian Council of Social Service and the Greens said the result of the capital gains tax change would be rapid house price inflation that priced out lower income people. That is exactly what has happened over the 20 years since.
There is also the fact that federal governments over the last three decades have let down low income Australians on funding for public housing. A proportion of Australians have never been able to afford decent housing on the private market. From World War II state and territory housing commissions around the country were mostly funded by the commonwealth. This funding built housing for those most in need, housing for working families and infrastructure for housing development.
Sadly, this federal funding is now much less generous. The 1984 agreement provided $1.1 billion to state and territory governments. The Howard government decreased this funding to $926 million in 1996 and $898 million in 1988. The agreement which incorporates what used to be the supported accommodation assistance program is currently at $1.6 billion a year. However, once inflation and population growth are accounted for, that is far less per capita than in 1989.
Then there is the historic housing debt. Some federal funding was in the form of low cost loans. In recent decades this debt has been packaged up in a way that means interest payments by state and territory governments will greatly exceed the principal repayment.
The ACT pays $5 million a year in interest on these historic housing debts from before self-government and will do so until 2048. There is no option for us to pay it off early, even though it would be much cheaper to refinance the loans on the market. These historic housing debts are no longer low cost loans and should be either cancelled by the federal government or at least changed to allow refinancing, as was discussed in estimates extensively in a discussion led by Mr Coe. It is disappointing that this was not part of his motion.
Income support and rent assistance have also been whittled away by federal governments year after year. Indexation of most benefits, including Newstart, youth allowance and rent assistance, has been well below the costs actually faced by low income people. The result is that recipients of these benefits are unable to meet basic
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