Modern Australia faces a heart-breaking paradox. We continued our world record growth streak in May – with 26 recession free years. But many aren’t benefiting from it, writes Andrew Cairns.
At the heart of the problem is housing affordability. Most of the time Australia was racking up record growth, housing affordability was declining.
Our politicians are digging in over corporate tax cuts. If they aimed a little bigger they could solve our country’s housing crisis. Serious tax reforms can put us on the path to a future with more affordable housing – a fairer future for everyone.
But tax reform is hard. Politicians and vested interests make it a fight between rich and poor.
The most frustrating thing is, this fight is a lie. Our tax system can be reformed to benefit all Australians – if we invest in solving the housing crisis, we can all reap rewards of stronger communities, local economies, and healthier, happier people.
Sound like a pipe dream? It’s not.
As the Australian dream of home ownership spiralled into a nightmare of debt, more people gave up on the dream and started renting. But today’s rental market offers little relief. Our May Rental Affordability Index showed extreme pockets of rental stress across the nation.
The housing crisis is undermining Australia’s economy. Housing stress is making it hard for people to make ends meet – they’re being forced to choose between paying rent and essentials, like groceries or medicine. That’s the reality of what housing stress means for people. Do you think those who go without food and healthcare are healthy productive workers? Can they benefit from our economic growth?
What can be done? All politicians need to be brave and aim bigger.
We need serious tax reform with bipartisan and long-term funding commitments to a national plan to build more affordable homes.
Politicians need to wind back capital gains tax exemptions and only apply negative gearing to new builds. After years of declining housing affordability and property stock concentrating in fewer and fewer hands in Australia, this will put us on the path to a fairer future – a more affordable future.
We need to encourage innovation in financing not only to build more social and affordable housing – but also to enable those of us who are disadvantaged to realise the Australian dream. Innovation like Community Sector Banking’s recently launched Unpack For Good pilot, which allows community housing residents to purchase their own home. The program allows residents to co-own their home with their housing provider – sharing ownership lowers the cost of purchasing the home for residents, meaning they can buy a home that would otherwise be unaffordable.
We need to change planning laws to enable the construction of supported community infrastructure – and we need to build more social housing.
The towering problem of housing is a key driver of Australia’s crushing inequality, amid record growth. It’s a big problem but not too big to fix.
Politicians need to be brave and make serious tax reforms – to make our future fairer for everyone.
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