While this budget provides some relief from the worst rental crisis in living memory, the underlying causes of our housing strife remain and will only get worse without fundamental reform.
The increase in jobSeeker, youth allowance, and commonwealth rent assistance, and other income support measures for single parents and over 55s are welcome measures that will ease some of the strain.
But the fault lines in our housing market have become so deep, and the number of Australians plunging over the financial cliff into homelessness so numerous, that it is time for a fundamental shift, not just incremental change.
Labor’s housing and homelessness policy platform was developed two years ago, in an entirely different environment. Since then, rents have skyrocketed, and the vacancy rate has plummeted to record lows. Covid saw household sizes shrink, explaining part of the phenomenon. However, we are also seeing the inevitable consequence of decades of housing policy failure.
Housing taxation measures that stimulate speculative housing investment, including the capital gains tax discount and negative gearing, have fuelled years and years of house price inflation, dwarfing incomes which have stagnated in real terms.
Prior to Covid, these policy settings had already created fractures in the housing market for people on the lowest incomes.
However, the previous government supercharged the crisis. It simultaneously cancelled investment in affordable rental housing, while also driving up the cost of construction by churning taxpayer funds into home renovations and new home construction for homeowners.
These efforts have created our present housing emergency, where the cost of housing is so high that there is no longer a private market incentive to deliver new rental housing at prices ordinary low paid workers can afford.
This is not a small problem for a small cohort of Australians.
This is a huge structural problem for our nation that will drive a rapid widening of poverty and inequality and undo old truths.
When prime minister Anthony Albanese was a child it was possible for a single mother, medically prevented from working, to manage on income support payments. With the added security of a public housing home, she could raise a son who could reach the pinnacle of power.
Today, this is implausible. A mother in this situation today would not have access to public housing and would be unable to compete in the rental market. If by a miracle, she could secure a tenancy, there wouldn’t be money available for decent food, or medical bills, or school books. There would be spells of homelessness, moving around, and a mother under so much pressure she would likely struggle with her mental health.
The pattern of lives shattered by grinding poverty is devastating for the people whose bright futures are ground to dust.
But as it becomes commonplace, as it is now, and the pattern is repeated over and again in families across the nation, it is a shackle on our shared future.
Our national wellbeing and productivity relies on children gaining skills, growing up, and becoming the next generation of leaders and workers.
Children who carry the trauma of growing up with poverty, homelessness, and parents ground down by stress, become workers whose full potential is unlikely to be realised.
As a nation this is a pathway to mediocrity and sluggish productivity, and to huge sections of the population feeling deeply disfranchised and excluded: the exact formula that drives civil and political instability and crime.
Widening inequality and growing homelessness will only add to an overburdened health system, pressure on homelessness services, mental health, and justice services. These costs will grow and grow until they eclipse our fiscal capacity to change course.
We are on a trajectory to social desperation.
The budget had some good initiatives that will slow the trajectory. But we need to bend it in an entirely different direction, where families have what they need to be strong, children thrive and become the best they can be, and our communities are exciting, vibrant and healthy.
The market for rental housing that low paid workers can afford is broken.
We need government intervention to deliver enough public housing and community housing to house at least one in ten households – so ordinary people have access to affordable, secure and decent homes, available without the discrimination that is endemic in the private market
And our systems of support, to provide the community with quality education, decent health care, support for families and children, and people struggling with trauma, need to be there for when they are needed.
This is the path to the bright future we not only aspire to, but deserve.
Kate Colvin is CEO of Homelessness Australia
