According to Alan Kohler, it’s been downhill for housing in Australia since Bob Menzies took office in 1949. Believing that renters were more likely than homeowners to vote Labor, Australia’s longest-serving prime minister set out to turn Australia into a nation of “little capitalists,” each with a house and a garden to call their own. In the process, Kohler writes in the latest Quarterly Essay, he “destroyed” public housing.
Initially, Menzies’s options were limited by the ten-year Commonwealth State Housing Agreement he inherited from Chifley. The 1945 agreement granted the states long-term loans to build homes for low-income families on the understanding that “a dwelling of good standard and equipment is not only the need, but the right of every citizen.” Its focus was on rental housing, with an option for sitting tenants to purchase their homes on favourable terms.
When the agreement came up for renegotiation, Menzies undermined its intent by encouraging middle-class families to buy public housing too, even though they didn’t live in it. Social affairs minister Bill Spooner argued that it was not “fair” to sell homes to working-class families with “no culture of thrift or sense of community obligation.” Not fair, it seems, to Menzies’s “forgotten people.”
To his credit, Menzies at least built lots of dwellings. Between 1947 and 1961, a period of mass migration, Australia’s housing stock grew about 10 per cent more than its population, with governments responsible for almost a quarter of new construction. Menzies also recognised that the state could play a fundamental role in stabilising a construction industry plagued by booms and busts. As he said in his 1949 campaign speech — the same “little capitalists” speech Kohler quotes — governments could plan public works “for periods when private building falls off.” Subsequent governments have forgotten this insight.
Home ownership rates jumped dramatically under Menzies — rising from about 50 per cent at the end of the war to over 70 per cent in 1966, largely due, claims Kohler, to the aggressive selling of public housing stock forced on the states. With their partisan bias towards home ownership, Menzies and Spooner “set the scene for decades of mistakes by their successors in the Coalition.”
Not that Labor hasn’t made its fair share of housing mistakes. It too failed to invest sufficiently in public housing: prior to the 1983 election, the party promised to double the proportion of public housing stock, but when Bob Hawke replaced Bill Hayden as leader the pledge was dropped.
Equally significant was Labor’s failure to stick to its guns on negative gearing. Treasurer Paul Keating eliminated negative gearing in 1985, arguing that allowing high-income earners to claim interest costs so they could trade forty-year-old Bondi flats “was not adding to the stock of housing or to the stock rental accommodation.” Keating was right, but the Hawke government buckled to the property industry and reinstated negative gearing two years later. If it had followed Keating’s logic and only restored the tax concession for new builds, then the trajectory of Australia’s housing might have been different. Nearly three decades later, having taken such a policy to election defeats in 2016 and 2019, Labor has abandoned it altogether.
Labor has also failed to restore housing to the political and administrative status it enjoyed federally in the postwar years. Chifley had a separate department for works and housing, but Menzies shifted housing to social services, where it sits today. The current deeply flawed development of the Albanese government’s promised national housing and homelessness plan is evidence for Kohler’s view that housing doesn’t belong in the Department of Social Services. Government comes at housing “as a welfare issue rather than an economic one,” he writes, yet housing is “almost everything” in the Australian economy.
Over the past two decades, rocketing real estate prices have taken household debt from 40 per cent to 120 per cent of GDP, tying up capital that could be used for far more productive purposes. Excessive housing costs dampen consumer spending and force families to delay having children. Long commutes in sprawling cities hamper productivity, harm health and worsen the climate catastrophe.
The Reserve Bank “manages the economy mainly through housing”— that is, by changing interest rates — which Kohler labels “a policy of cruelty” because the burden of economic adjustment is borne by those “who are already living on the edge.” Worst of all, Australia’s excessive housing costs drive inequality and erode social mobility. “Education and hard work are no longer the main social determinants of how wealthy you are; now it comes down to where you live and what sort of house you inherit from your parents.”
The most notable policy mistakes that made housing the driver of inequality were Coalition tax concessions. The first was the abolition of inheritance taxes in the 1970s and the second was the halving of the capital gains tax by treasurer Peter Costello in 1999. This was “kerosene on the smouldering coals of negative gearing and the lack of an inheritance tax, and turned property investment from a niche activity into the leaping flame of everybody’s tax avoidance scheme.”
This sets Australia apart: “whereas in the rest of the world investing in real estate is all about getting rental income from tenants, in Australia it’s about getting an income tax deduction and then a capital gain.” It helps explain why Australia’s rental market is dominated by small-scale landlords rather than institutional investors — it is small investors, not big ones, who benefit from tax concessions. Australia has virtually no “build to rent” projects because tax settings encourage developers to build to sell to “individual negative gearers” instead.
Coinciding with Costello’s halving of capital gains tax, which spurred real estate speculation, was a new migration boom that added to supply shortages. Unlike his hero Menzies, though, prime minister John Howard failed to use public investment to help housing keep pace with demand. The result was a two-decade-long price boom that saw the cost of housing diverge sharply from wages. Prior to 2000, the average home cost three or four times average annual earnings; now the multiple is seven or eight.
Kohler also has plenty to say about planning and zoning. He laments that Australia didn’t follow Britain’s postwar lead and standardise development controls across the nation, instead leaving them in the hands of state and local governments. This has created a fragmented, complicated system that not only impedes private construction but also hobbles public projects because state authorities must compete with developers to buy land at market rates. As a result, efforts to address housing need through the planning system are “piecemeal, local initiatives.”
Kohler identifies “two tribes” that dominate housing debates in Australia: “One tribe says the problem is tax breaks that boost demand too much and the other says it’s zoning and planning that restrict supply.”
He avoids taking sides, making clear that the fix for our housing mess will require action on a range of fronts — including not just tax reform and streamlined planning and zoning but also mechanisms to consolidate land in established suburbs. Consolidation would encourage the redevelopment of separate blocks with detached single houses as high-quality European-style medium-density apartments, along with a new vision for urban public transport.
But Kohler is not optimistic about the prospects for change. The politics of housing is “both simple and difficult,” he says. Australia is a “bankocracy” and thanks to Menzies’s legacy housing is “a cartel of the majority.” The most powerful players have good reason to want the cost of housing to keep going up. Those with less clout, like renters in the private market, have the odds stacked against them and will lose out. Ultimately, we’ll all be worse off. •
The Great Divide: Australia’s Housing Mess and How to Fix It
By Alan Kohler | Quarterly Essay | Black Inc. | $27.99 | 144 pages
Alan Kohler anasema kuwa Australia imekuwa na matatizo makubwa ya ukosefu wa makazi tangu Rais Bob Menzies alipochukua madaraka mwaka 1949. Kwa kuamini kwamba wapangaji walikuwa na uwezekano mkubwa zaidi kuliko wamiliki wa nyumba kupiga kura kwa Labour, waziri mkuu wa Australia aliyehudumu kwa muda mrefu zaidi aliamua kugeuza Australia kuwa taifa la "wakuu wa mtaji wadogo", kila mmoja akiwa na nyumba na bustani ya kuita yao wenyewe. Katika mchakato huo, Kohler anaandika katika insha ya hivi karibuni ya kila robo mwaka, yeye <unk>aliharibu<unk> makazi ya umma. Mwanzoni, chaguzi za Menzies zilikuwa zimepunguzwa na Mkataba wa Nyumba ya Jimbo la Jumuiya ya Madola wa miaka kumi aliyoirithi kutoka kwa Chifley. Mkataba wa 1945 uliwapa majimbo mikopo ya muda mrefu ya kujenga nyumba kwa ajili ya familia zenye mapato ya chini kwa uelewa kwamba nyumba ya kiwango cha juu na vifaa si tu haja, lakini haki ya kila raia. Wakati makubaliano yalikuja kwa ajili ya kujadiliwa tena, Menzies alidhoofisha nia yake kwa kuhamasisha familia za tabaka la kati kununua nyumba za umma pia, hata ingawa hawakuishi ndani yake. Waziri wa masuala ya kijamii Bill Spooner alidai kwamba haikuwa "wa haki" kuuza nyumba kwa familia za wafanyakazi bila "utamaduni wa ukarimu au hisia ya wajibu wa jamii". Haikuwa haki, inaonekana, kwa "watu waliosahaulika" wa Menzies. Kwa sifa yake, Menzies angalau alijenga nyumba nyingi. Kati ya mwaka wa 1947 na 1961, wakati wa uhamiaji wa wingi, hisa za nyumba za Australia ziliongezeka kwa asilimia 10 zaidi ya idadi ya watu, na serikali zilihusika na karibu robo ya ujenzi mpya. Menzies pia alitambua kwamba serikali inaweza kucheza jukumu la msingi katika kuimarisha sekta ya ujenzi inayokumbwa na mafanikio na mapumziko. "Kama alivyosema katika hotuba yake ya kampeni ya 1949 - hotuba ileile ya ""mwenyeji wa fedha wadogo"" ambayo Kohler ananukuu - "" Serikali zinaweza kupanga kazi za umma kwa vipindi wakati ujenzi wa kibinafsi unaposhuka. "" Serikali zilizofuata zimesahau ufahamu huu." Kiwango cha umiliki wa nyumba kilipanda sana chini ya Menzies, kutoka karibu asilimia 50 mwishoni mwa vita hadi zaidi ya asilimia 70 mwaka 1966, kwa sababu kubwa, Kohler anadai, ya uuzaji mkali wa hisa za makazi ya umma zilizolazimishwa kwa majimbo. Kwa upendeleo wao wa upendeleo kuelekea umiliki wa nyumba, Menzies na Spooner <unk>walitengeneza mandhari kwa miongo kadhaa ya makosa na wafuasi wao katika Muungano.<unk> Si kwamba Kazi haijafanya sehemu yake ya haki ya makosa ya makazi. Chama hicho kilishindwa kuwekeza kiasi cha kutosha katika ujenzi wa nyumba za umma: kabla ya uchaguzi wa 1983, chama hicho kilitoa ahadi ya kuongeza mara mbili idadi ya nyumba za umma, lakini wakati Bob Hawke alipochukua nafasi ya Bill Hayden kama kiongozi, ahadi hiyo iliondolewa. Vivyo hivyo muhimu ilikuwa kushindwa kwa Kazi kushikamana na bunduki zake juu ya gearing hasi. "Mwanasheria Paul Keating alikataza ""negative gearing"" mwaka 1985 akisema kwamba kuruhusu watu wenye mapato ya juu kudai gharama za riba ili waweze kuuza nyumba za Bondi za miaka 40 ""haikuwa kuongeza hisa za nyumba au nyumba za kukodisha hisa.""" Kama ingekuwa imefuata mantiki ya Keating na tu kurudisha msamaha wa kodi kwa ajili ya ujenzi mpya, basi trajectory ya Australia ya makazi inaweza kuwa tofauti. Baada ya miaka 30 hivi, baada ya kuongoza sera hiyo hadi kushindwa katika uchaguzi wa 2016 na 2019, chama cha Labour kimeacha kabisa. Kazi pia imeshindwa kurudisha makazi kwa hadhi ya kisiasa na kiutawala ilifurahia shirikisho katika miaka ya baada ya vita. Chifley alikuwa na idara tofauti kwa ajili ya kazi na makazi, lakini Menzies kuhamishwa makazi kwa huduma za kijamii, ambapo anakaa leo. Maendeleo ya sasa yenye kasoro kubwa ya mpango wa kitaifa wa makazi na ukosefu wa makazi ulioahidiwa na serikali ya Albania ni ushahidi wa maoni ya Kohler kwamba makazi hayana mahali katika Idara ya Huduma za Jamii. Serikali inakuja kwenye makazi "kama suala la ustawi badala ya moja ya kiuchumi", anaandika, bado makazi ni "karibu kila kitu" katika uchumi wa Australia. Katika miongo miwili iliyopita, kuongezeka kwa bei ya mali isiyohamishika kumesababisha madeni ya kaya ya nchi hiyo kutoka asilimia 40 hadi 120 ya Pato la Taifa, na hivyo kuunganisha fedha ambazo zingeweza kutumiwa kwa madhumuni ya uzalishaji zaidi. Gharama kubwa sana za nyumba hupunguza matumizi ya watumiaji na kulazimisha familia kuchelewesha kupata watoto. Safari ndefu katika miji mikubwa huzuia uzalishaji, huharibu afya na kuharibu janga la hali ya hewa. Benki ya Hifadhi <unk> inasimamia uchumi hasa kupitia makazi <unk> ambayo ni, kwa kubadilisha viwango vya riba <unk> ambayo Kohler labels <unk> sera ya ukatili <unk> kwa sababu mzigo wa marekebisho ya kiuchumi ni kubeba na wale <unk> ambao tayari wanaishi kwenye ukingo.<unk> Mbaya zaidi ya yote, gharama za juu za makazi ya Australia <unk> gari usawa na kuharibu uhamaji wa kijamii. """Elimu na kazi ngumu si tena sababu kuu za kijamii za jinsi unavyo tajiri; sasa inakuja chini ya mahali unapoishi na aina gani ya nyumba unayorithi kutoka kwa wazazi wako."" - Coalition Tax Concessions" Mfano wa kwanza ni kuondolewa kwa kodi ya urithi katika miaka ya 1970 na pili ni kupunguzwa kwa nusu ya kodi ya faida ya mtaji na hazina Peter Costello katika 1999. Hii ilikuwa "keroseni kwenye makaa ya mawe ya kuwaka ya gearing hasi na ukosefu wa kodi ya urithi, na kugeuka uwekezaji wa mali kutoka kwa shughuli ya niche katika moto wa kuruka wa mpango wa kuepuka kodi ya kila mtu." Hii inatofautisha Australia: "Wakati katika ulimwengu mwingine uwekezaji katika mali isiyohamishika ni wote kuhusu kupata mapato ya kukodisha kutoka kwa wapangaji, huko Australia ni kuhusu kupata punguzo la kodi ya mapato na kisha faida ya mtaji." Australia ina karibu hakuna "kujenga kukodisha" miradi kwa sababu mipangilio ya kodi kuhamasisha watengenezaji kujenga kuuza kwa "watu binafsi hasi gearers" badala yake. Kwa wakati mmoja na kupunguzwa kwa nusu kwa kodi ya faida ya mtaji ya Costello, ambayo ilichochea uvumi wa mali isiyohamishika, kulikuwa na kuongezeka kwa uhamiaji mpya ambao uliongeza upungufu wa usambazaji. Hata hivyo, tofauti na Menzies, waziri mkuu John Howard alishindwa kutumia uwekezaji wa umma kusaidia ujenzi wa nyumba uendelee kulingana na mahitaji. Matokeo yakawa ongezeko kubwa la bei kwa miongo miwili ambalo liliona gharama ya nyumba ikitofautiana sana na mishahara. Kabla ya mwaka 2000, nyumba ya wastani iligharimu mara tatu au nne ya mapato ya wastani wa kila mwaka; sasa mara hiyo ni saba au nane. Kohler pia ana mengi ya kusema kuhusu upangaji-mwendo na ugawaji-maeneo. Analalamika kwamba Australia haikufuata uongozi wa Uingereza baada ya vita na kuimarisha udhibiti wa maendeleo katika taifa lote, badala yake kuwaacha mikononi mwa serikali za serikali na serikali za mitaa. Hii imesababisha mfumo uliogawanyika na mgumu ambao sio tu unazuia ujenzi wa kibinafsi, lakini pia unazuia miradi ya umma kwa sababu mamlaka za serikali lazima zishindane na watengenezaji kununua ardhi kwa viwango vya soko. "Kohler anatambua ""makabila mawili"" ambayo yanatawala mjadala wa makazi nchini Australia: ""Kabila moja linasema tatizo ni mapumziko ya kodi ambayo huongeza mahitaji sana na nyingine inasema ni zoning na mipango ambayo hupunguza usambazaji.""" Kuunganisha kutachochea maendeleo ya majengo tofauti na nyumba za kujitenga kama vyumba vya ubora wa hali ya juu vya Ulaya, pamoja na maono mapya ya usafiri wa umma wa mijini. Lakini Kohler hana matumaini kuhusu matarajio ya mabadiliko. Siasa ya makazi ni "sawa na ngumu", anasema. Australia ni "bankocracy" na shukrani kwa urithi wa Menzies nyumba ni "kartel ya wengi". Wachezaji wenye nguvu zaidi wana sababu nzuri ya kutaka gharama ya nyumba kuendelea kupanda. Wale wenye ushawishi mdogo, kama wapangaji katika soko la kibinafsi, wana uwezekano mkubwa dhidi yao na watapoteza. Hatimaye, sisi sote tutakuwa katika hali mbaya zaidi. • The Great Divide: Australia's Housing Mess and How to Fix It - Alan Kohler, mwandishi wa kitabu The Great Divide: Australia's Housing Mess and How to Fix It, aliandika hivi: