5 Jan. 2007

Tanya Plibersek, widely-regarded as the most left-wing sitting ALP federal MP, and now Rudd's housing spokesperson, this morning criticised federal policy in failing to address the unaffordability of housing.

Her suggestions are predictably vacuous. At least as reported, Plibersek is claiming that financial aid must be given to homebuyers in such a way as to avoid putting upward pressure on prices. This seems clearly absurd, since any stimulation to demand will increase prices. The only way to prevent this is to directly control prices, something she would clearly not advocate as a representative of Rudd's post-socialist ALP.

Her suggestion that we need more houses, increasing supply to lower prices, is plausible, and obvious, but has a number of problems with it, primarily environmental, that are well known. Essentially there are two problems with this, the first being the destruction of important areas of farmland, recreational sites and wildlife to provide housing, the second being the pressure on clearly-inadequate existing infrastruture, primarily transport and water.

The latter problems are of course the province of state ALP governments, whose neoliberal policies are giving us expanding cities without the necessary expansions in infrastructure. But there is also a state infrastructural issue which is directly contributing to the unaffordability of housing: the failure of neoliberal state Labor governments to invest in new public housing stock. Public housing, subsidised, serves to significantly restrict the increase in private rents and house prices, since it reduces demand. At present, most people on low incomes – primarily meaning those in receipt of federal government welfare benefits – are being forced to rent privately, spending their federal benefits as a direct subsidy to the burgeoning class of private 'investment' landlords. This is completely iniquitous, and clearly leading to massive growth in disparity of income by redirecting tax dollars to existing property-owners. Government action to buy up housing stock and rent it affordably would undercut this traffic in human emiseration.