House party

Labor’s position on housing shows the party has learned nothing from the errors of the Rudd and Gillard governments. By Nick Cater.

If the Labor Party is ready for government, Anthony Albanese succeeded in hiding it last Thursday evening when he delivered his budget reply.

His speech contained neither substance nor rhetorical flair, leaving the distinct impression of a man unconvinced that there was likely to be a change of government in coming months, much less that he might lead it.

The difficulties for oppositions in general during the pandemic offer only part of the explanation for Albanese’s lacklustre delivery and the cursory nature of his policy. When you find yourself walking a narrow ledge between outworn technocratic socialism and the ideology of wokeness, it is probably safest to say nothing much at all.

He told us enough, however, to show Labor has learned nothing from the errors of the Rudd and Gillard governments. The party remains convinced that the genesis of a good society springs from a whiteboard in Canberra, rather than through the spirit of independent citizens. Albanese’s social housing policy is predicated on the flawed assumption that the government can build and distribute homes more fairly than the private sector, despite all experience to the contrary.

Kevin Rudd promised to halve the ranks of the homeless by the year 2020. In fact, the number of homeless rose by 23 per cent between the 2006 and 2016 censuses. Rudd promised to subsidise 50,000 new affordable homes by the middle of 2012. By the time Labor lost office in 2013, Labor was 35,425 homes short of Rudd’s target and the National Rental Affordability Scheme was a shambles. Universities had used it to build accommodation, much of which had been let cheaply to foreign students and it had been rorted by an Indian Ponzi scheme. The National Auditor found the program had been rushed, poorly planned and inexpertly managed.

None of this deterred Albanese from promising to have another bash at the social housing caper, albeit with the slightly more modest target of 30,000 homes for disadvantaged Australians and essential service workers. Of these, 4000 were promised to victims of domestic violence, which gave him a headline but strangely served to underline the superficiality of the announcement. In the unlikely event that the total program is ever completed, it will provide accommodation for less than a sixth of the number currently on the social housing waiting list. Domestic violence victims obviously need special help, but they are not the only ones. Where will the help come from for the chronically mentally ill, for example, who make up a disproportionate number of patients in emergency wards and inmates in jails?

There was enough in Albanese’s speech to say with certainty that it will fail in its objectives and have unintended consequences. It will be run by the government after all, and the commonwealth government at that, an entity that rarely performs well at delivering services the Constitution considered matters for the states. The history of government social housing in Australia amounts to a long list of public policy failures dating back to the 1930s. While governments can put roofs over people’s heads, it cannot create homes, in any meaningful sense, places of comfort and support that serve as the building blocks for a stable society.

The comparative success of social housing schemes run by charitable trusts suggests the heavy hand of government is the problem rather than the solution. The best homes, however, will rarely be the ones that are rented. They are the product of self-sacrifice, frugality and saving, and will, for the most part, be occupied by owners or those who one day hope to claw back ownership from their bank.

The rise in home ownership between the 1949 election and the mid 60s from 50 to 70 per cent was one of the greatest triumphs of Robert Menzies’ government. He bequeathed his successors with the largest and most prosperous middle class in the world, justifying Menzies’ claim in his Forgotten People talk that homes were the foundation of sanity and sobriety, and determined the health of society as a whole.

The difference between a Labor and a Liberal budget was a matter for much debate among conservatives last week. Yet the contrast could not have been greater between the Treasurer’s speech and Albanese’s reply, in particular with reference to housing policy.

The government’s proposal to underwrite part of the loan for single mothers to overcome the hurdle of a deposit is philosophically grounded in Menzian principles. While social housing frequently leaves citizens with no choice but a lifetime as renters, Scott Morrison’s scheme increases the opportunities for ownership.

What’s more, it puts filling the housing shortage firmly in the hands of the private sector, which is infinitely better skilled at managing the process than clunky bureaucracies. Last year, the federal government introduced the HomeBuilder program, offering $25,000 in support to people who wanted to build homes to kick-start the home-building industry during the pandemic. A $2.7bn government investment has so far leveraged $39bn of home-building activity. The Master Builders Association reports that 100,000 new homes have been completed or are under construction.

Together with a modest investment in smaller-scale public housing through the National Housing Finance and Investment Corporation, the Morrison government can fairly claim to have enabled the building of four new homes for people entering the property market for every one rental home Labor plans to build. And it has done so for two-thirds of the budget Labor plans to spend.

All of which suggests the philosophy underpinning public policy actually matters. The key lesson from the last Labor government is that success of government programs requires more than good intentions and a multibillion-dollar spend. It requires the pragmatism and worldliness sadly lacking in Albanese’s speech.