I’ve written a few earlier posts about the Senate Inquiry into Housing Affordability that was set up earlier this year. The Committee brought down its report yesterday – you can access it by clicking here. Whilst both I and the Greens’ Senator Rachel Siewert added some additional comments, the report has 32 recommendations which had the unanimous support of Liberal and Labor Senators.
I think it’s a very good report in the circumstances, which reflects well on the Liberal’s Marise Payne, who was the Committee Chair. The terms of reference were such that the Inquiry could easily have restricted itself mostly to bashing the Labor states and nitpicking about a few of the recent initiatives from the federal Labor government. Instead, the report provides a fairly broad sweep of the many issues involved in housing affordability.
I was especially pleased that it recognised the need for more money to be immediately put into social (i.e. public and community) housing. Another good recommendation called for the federal government’s panel conducting the review of the tax system to consider the implications for housing affordability, as well as the overall fairness, of the negative gearing provisions, the capital gains tax discount on investor housing and the exemption from land taxation of owner-occupied housing.
I think they should also look at the impacts of the capital gains tax exemption for the family home. This tax break, which is clearly regressive, is estimated to cost around $20 billion a year. If it was wound back in some way, it could free up some money to be redirected into affordable housing.
I know this sort of thing would be hugely controversial, so I can’t really blame major party senators for not going near it, but I still think it is rational policy and should be thrown into the debate. I had a few extra suggestions in my additional comments, like means testing the First Home Owners Grant and strengthening tenancy laws to provide more protection for tenants.
The big test now will be whether the federal government takes the Committee report seriously and engages with it, or whether it follows its predecessor and basically ignores all suggestions from Senate reports and the public who contribute to them.
ELSEWHERE: More on this topic in this piece by Ben Eltham at Crikey.
Are there any solutions? Yes, actually. The Federal Government can start to wind back the huge tax breaks for wealthier property investors and homeowners, and use the money saved to invest more in public housing and rental assistance. State and local governments can continue to plan for denser cities, despite the opposition of lobby groups like the Property Council. All governments can invest more in urban infrastructure — particularly public transport. Government departments could be moved out to regional towns. And, as citizens, we can also aspire to live in smaller homes. At the same time as housing affordability is worsening, the number of Australians living in each dwelling is falling.