Housing Crisis, Australian Style

It has taken a decade for Federal and State governments to realise that Australia is in the midst of a housing crisis. Only 33% of Australians own their own home; another 35% are paying off soaring mortgages, while 28% live in rental accommodation (mainly in the private sector). Public housing is now only available to people in dire straits, people on low and modest incomes are expected to find housing in the private rental market. It is not unusual for people renting in Australia to have to pay over 50% of their income on rent.

Increasing population growth (mainly due to immigration) and a property market that rewards speculators through the taxation system, has seen the price of housing soar. In 2007, people are spending more of their income to pay off mortgages than they were when interest rates hit 18% in the 1980's. Faced with a housing crisis, the Federal government has continued to pursue policies that have rewarded speculators, and have punished first home buyers. In what other country, but Australia, are property investors able to write off their interest payments under generous taxation laws, but first home buyers cannot claim their interest payments under the current laws.

9% of Australian workers wages are compulsorily invested in superannuation schemes. These schemes cannot be accessed by first home buyers to help them to purchase their own home. Although speculators interest payments are tax deductible, first home buyers do not receive any tax breaks. It is now virtually impossible for a couple earning less then $100,000 a year to service a mortgage on a home. Nothing in the Coalition policies makes any allowance for the plight of first home buyers or people renting in the private sector.

Escalating rents, no tax breaks for first home buyers and a refusal by the Federal government to invest in public housing for purely ideological reasons, has created the current crisis. There is nothing in any of the Coalition's policies (apart from a very modest up front payment for first home buyers) that assist them. As far as the Howard government is concerned, the only people they are concerned about are property speculators. Nothing is too good for them. Everybody else is forced to deal with the vagaries of the private market.

If the Federal government was interested in the plight of those Australians who are having increasing difficulties accessing accommodation, they would invest heavily in public housing and provide significant tax breaks for first home buyers, not speculators. It is time Australians pointed the finger at the Howard government for implementing policies that have decreased home ownership rates and increased rents in Australia during the last decade.

Joseph Toscano
Libertarian Workers For A Self-Managed Society
Published in the Anarchist Age Weekly Review No 745
http://anarchistmedia.org/weekly.html