Peter Van Onselen: The one issue that will shape the next election
The housing crisis will be front and centre at the next election, and both major parties are clamouring over themselves to present ‘solutions’ to the problems Australians are facing.
One very senior Labor strategist told me that housing will be the policy debate that wins or loses the election – that is how important they think the issue is shaping up to be.
But the problems Australians face vary widely depending on their personal circumstances.
If you own your home, you’re worried about interest rates and inflation. The former making your mortgage repayments harder to make, the latter putting more pressure on the cost of living.
Then there are concerns that the economy might slow, putting downward pressure on house prices. This could see hundreds of thousands of Australians owning a mortgage which costs more than their property is worth.
Housing stocks are in short supply as rents go up and rising immigration increases demand
Naturally, many Australians are also worried about keeping their jobs to be able to continue paying for everything.
If you rent, a number of these factors are impacting you too, with higher interest rates forcing investment property owners to put rents up to satisfy their own self-interests.
Of course people who rent are also struggling with cost-of-living pressures. But the situation is even worse for many renters than it is for property owners due to the lack of available housing stock to service demand.
This situation is made worse by sky-high immigration, at rates now well above the natural average in decades gone by. And Australia has long been a high immigration nation.
This is where the new industrial relations laws introduced by Labor are having a negative impact on housing. According to research conducted by the Master Builders Association, the laws are creating a ‘productivity maelstrom’ and discouraging more building right when the nation needs it most.
New dwellings aren’t being constructed at the rate they should be because Labor IR laws are holding back the construction sector. The research predicts that the laws will erode up to 80 per cent of the promised new housing stock Labor is committed to.
In other words, it is shaping up as another broken promise.
That will make it harder for Australians to rent or buy in what is already a tight and difficult market. It might also see Labor miss its target of 1.2million new homes – an election promise the PM pledged to achieve by mid 2029.
Of course it is a commitment Albanese won’t admit failing to reach by the time of the next election, even if the projections make clear that Labor is falling short. Labor will simply claim the bulk of the new builds will happen closer to the deadline.
Nearly 250,000 new dwellings must be built annually to get to this target. That already isn’t happening, and the full impact of the new IR laws hasn’t even taken effect yet.
If you don’t believe the Master Builders then listen to the National Housing Supply and Affordability Council, which reports to government. In its State of the Housing System report for this year, it says Australian housing is in crisis, is ‘far from healthy’ and predicts that the situation is only going to worsen.
The Master Builders Association blames Labor’s new industrial relations laws for not enough construction to meet demand
Like the Master Builders, it believes construction targets won’t be achieved, despite government protests that they will get there.
The Coalition wants to address housing affordability by allowing people to access their superannuation savings when buying a first home. But this does nothing for supply shortages, and doesn’t directly answer the challenges posed by high immigration, for example.
It also mortgages off people’s retirement savings they are supposed to live on to service short term home ownership needs. Many experts have rejected the Coalition’s idea, as did voters when they ousted Scott Morrison at the last election when he campaigned on introducing just such a policy change.
Labor bitterly opposed it at the time and still does now.
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