House Rules

Labor clearly hasn’t thought through its ‘no-brainer’ housing policy commitment. By James Mathias.

Anthony Albanese’s promise to inject $500 million into creating new, and repairing existing social housing across Australia received barely a mention in the coverage of his Budget-in-Reply speech.

He and his Shadow Minister, Jason Clare, declared this one of the fastest ways to get money into the economy and ‘tradies back on the tools’.

Clare described this policy a ‘no brainer’, a description that rings alarm bells coming from the party that spent so poorly during the global financial crisis.

His breeziness might have given the Australian people the distinct impression that to be able to deliver on this policy commitment is as easy as one, two, three. Nothing could be further from the truth.

A non-insignificant hurdle to its implementation is the Constitution itself.

States and territories hold the legislative pen on social housing across Australia. Direct federal government investment in new and existing social housing would require nothing short of a referendum or possibly the compulsory acquisition of state government land. Albanese would need to negotiate a National Partnership Agreement with each state and territory government.

A further difficulty for him is in the fine print of the limited detail Labor released on the policy – that the states and territories would need to match his $500 million commitment. Albanese of course forgets the comment of Paul Keating: “Never get between a premier and a bucket of money.”

Further, far from being quick to put in place, National Partnership Agreements have a long history of taking months if not years to be negotiated between the states and territories and are made even more complicated when it involves the states matching the Commonwealth’s dollar.

An example is the Skilling Australians Fund National Partnership Agreement, which committed to getting an additional 300,000 apprentices over the four years from May 2017 when it was announced. The states were asked to match funding towards projects to achieve this outcome, which meant that it was more than one year before the first signed up and now in 2020 (three years later) there are still some jurisdictions who refuse to sign.

Albanese said that the Government had no plan for social housing, a claim that if the ABC fact checker bothered to assess would come up with false. Where does the $1.5 billion per year that the Morrison Government provides to the state and territories to achieve more affordable and more social housing fit in?

Where does the $4.6 billion given to 1.3 million Australians for rental assistance in 2019-20 fit into the not having a plan part?

And let’s not forget the National Rental Affordability Scheme delivered in partnership with the states and territory governments that provide 64,258 low- and middle-income tenants with more affordable rental properties.

Past performance is never a good indicator of future performance; however, it should be noted exactly what Labor did when it was last in office in housing policy.

The Rudd Government, of which Albanese was a senior minister, introduced the National Rental Affordability Scheme (NRAS). The intent of the scheme was to help build new and subsidise existing housing available to rent for a single earning less than $50,000 and for a couple earning less than $70,000 (2019 income figures).

The Grattan Institute concluded that it was poor value for money, not directed at most in need, provided no extra housing and was no useful stimulus. Not exactly a glowing endorsement.

The program was so poorly developed that instead of subsidising developers the true cost of the required subsidy to reduce the rent costs per house of $4,000, they were instead paid $11,000. Further, Labor delivered this policy in 2008 as a much needed boost to economic growth but only approved the first properties in 2013.

Will it be that if Anthony Albanese wins the next election, his grand social housing policy would have to wait five years for the first house to be delivered?

You be the judge.