Peter Van Onselen: The one issue that will shape the next election – and why Albanese AND Dutton should be worried
The housing crisis will be front and center at the next election, with both major parties clamoring over themselves to present ‘solutions’ to the problems facing Australia.
A very senior Labor strategist told me that housing will be the policy debate that wins or loses the election – that’s how important they think the issue will become.
But the issues Australians face vary widely depending on their personal circumstances.
If you own your home, you worry about interest rates and inflation. The first makes it more difficult to pay off your mortgage, the second puts further pressure on living costs.
Then there are concerns that the economy could slow, putting downward pressure on home prices. This could result in hundreds of thousands of Australians owning a mortgage that costs more than their property is worth.
There is a shortage of housing as rents rise and increasing immigration increases demand
Of course, many Australians are also concerned about keeping their jobs so they can continue to pay for everything.
If you rent, some of these factors affect you too, with higher interest rates forcing investment property owners to increase rental prices to satisfy their self-interest.
Of course, people who rent also face pressure on the cost of living. But the situation is even worse for many renters than for property owners, as there is no housing stock available to meet demand.
This situation is further exacerbated by skyrocketing immigration, which is now well above the natural average of recent decades. And Australia has long been a high-immigration country.
Anthony Albanese (above) marches towards failure on his promise of 1.2 million new homes by 2029
The coalition wants you to be able to use your super savings to buy your first home, which many experts have rejected (leader Peter Dutton pictured)
This is where the new industrial relations laws introduced by Labor are having a negative impact on housing. According to research from the Master Builders Association, the laws create a “productivity maelstrom” and discourage more building at a time when the country needs it most.
New homes are not being built at the pace they should be because Labor Inspectorate laws are holding back the construction industry. The research predicts the laws will erode up to 80 percent of the promised new housing stock that Labor is committed to.
In other words, it will be yet another broken promise.
That will make it harder for Australians to rent or buy in an already tight and difficult market. It could also prevent Labor from meeting its target of 1.2 million new homes – an election promise the Prime Minister pledged to achieve by mid-2029.
Of course, this is a promise that Albanians will not admit they have failed to deliver at the next election, even if the projections make it clear that Labor is falling short. Labor will simply argue that most of the new construction will take place closer to the deadline.
To achieve this target, almost 250,000 new homes must be built every year. That’s not happening yet, and the full impact of the new IR laws hasn’t even come into effect yet.
If you don’t believe the Master Builders, listen to the National Housing Supply and Affordability Council, which reports to the government. This year’s State of the Housing System report says Australian housing is in crisis, ‘far from healthy’ and the situation will only worsen.
The Master Builders Association blames Labour’s new industrial relations laws for not building enough to meet demand
Like the Master Builders, she believes construction targets will not be met, despite government protests that they will be achieved.
The coalition wants to tackle housing affordability by giving people access to their retirement savings when they buy a first home. But this does nothing to combat supply shortages and does not directly provide an answer to the challenges caused by, for example, high immigration.
It also mortgages people’s retirement savings they are expected to live on to meet short-term homeownership needs. Many pundits have rejected the idea of the Coalition, as did voters when they ousted Scott Morrison at the last election when he campaigned on making just such a policy change.
Labor was strongly against it at the time and still is.