Late-Stage Capitalism & Housing Supply in Australia
Late-stage capitalism is destroying a basic human right - being able to live in a house - as housing affordability for renting and buying across Australia has been smashed in recent years.
A report produced by Anglicare Australia highlights with cold hard facts something that is already clear in the community: Australian housing is unaffordable. I note a few quotes from ABC News’ story covering the release of the paper that highlight the challenge facing our nation.
There is not a single property across Australia – or even a room in a shared house – that’s affordable for someone on youth allowance, according to a new report from support organisation Anglicare Australia.
Not one property! Not even a crappy place in a crappy suburb. Nothing. And good luck convincing a renter to let you rent their property and establish a share house. That isn’t going to happen. You’re stuffed.
In Western Australia, the housing market has lost all dynamism. It has ground to a halt, with just a couple of thousand properties on the market in a city of around 1.8 million people. If people can’t be certain of being able to find a house to buy a house, they’re not going to try to sell the one they’re in. So we end up with a malfunctioning market. Just as the employment market needs dynamism to ensure productivity—people leaving old jobs and entering new ones—so the housing market needs a pipeline of properties on a continual basis.
Housing unaffordability has killed the market, and is leaving a wake of homelessness as a result.
The solution isn’t unknown. It has been known for a long while. But conservatism and vested interest holds back change, which is hardly a surprising situation.
“an overhaul of the tax regime” is needed – including the capital gains tax discount being phased out over a period of 10 years and negative gearing deductions to be phased out for new investors in the private market.
It has been evident for many years that the ‘investor class’ are leveraging what is not a loophole, but designed policy, in the form of negative gearing and the capital gains tax discount to profit from housing. Buying and owning multiple homes has become an investment game for those who can afford it, pushing up prices and pushing out people who need a home to simply live in. The increasing price pressure means rents go up in lockstep, further punishing those who can’t afford a ride on this particular gravy train.
A previous Federal Election saw Bill Shorten as Opposition Leader run an aggressive campaign to end the current negative gearing tax policies. Confronted with a scare campaign from the conservative side of politics, he lost the election. That’s scared away current politicians from making changes that are necessary for the greater good, never mind the wake of economic and social destruction that might be left in its wake.