By all means, policy relating to housing is complex.
At a state level, areas which impact upon housing include planning and infrastructure, taxation (such as stamp duty, land tax and the like) and public housing management.
Federally, housing is affected by monetary policy, taxation, infrastructure and social services. Departments and agencies which manage issues which affect housing include the Department of Social Services (social housing assistance, home ownership), Treasury (housing supply), the Reserve Bank (monetary policy/financial stability), the Australian Prudential and Regulatory Authority (macroprudential regulation), the Australian Tax Office (administering tax concessions) and the Department of Infrastructure & Regional Development.
Yet the importance of housing should not be underestimated. From an economic perspective, property economics firm CoreLogic RP Data in 2015 put the net value of national housing worth at $6 trillion. Socially, permanent shelter sits alongside food/drink and healthcare as a basic human need.
Consequently, calls for better coordination of housing policy at a federal level are growing. Following a report they compiled for the Australian Housing and Urban Research Institute, RMIT urban planning and economic researchers Professor Jago Dodson, Professor Tony Dalton and Dr Sarah Sinclair called for a federal minister for housing, a dedicated housing portfolio and an agency which would be responsible for conceptualising and co-ordinating housing policy.
Dodson said the role of the new portfolio and agency would not so much revolve around the delivery of programs (most of which are state based at any rate) but rather serving as a point of coordination for housing policy delivery.
First, it would look across the whole of government and the entirely of the housing system and tease out how the system operates and how – if at all – it facilitates productivity and enables a more inclusive and cohesive society. Any points of contradiction or tension within these areas would be looked at as would areas of potential improvement.
Second, the new portfolio and agency would identify points within government which interact with the housing system and look at how the operation of these mechanisms could be improved.
Dodson said the case for this was clear.
“First, the total value of our housing pool of everyone living in Australia is $6 trillion – which far exceeds the value of our total superannuation pool and the total value of our share market assets,” he said. “Housing is the largest asset that Australia holds. Therefore we need federal government oversight with respect to how it is managed to ensure that we are getting the best for the country out of that very large asset.
“The second point I would make is that you have to have been hiding under a rock over the last few years to not be aware that we are facing some very serious issues in Australia around housing affordability. The federal government has not been sufficiently capable in grappling with these affordability issues. One might say that part of the reason for that is that there is no agency within government which is dedicated to specifically looking at housing issues, nor is there any minister within government whose job it is to consider housing overall within the Australian economy and society.”
Whilst initially, the new ministry and agency would operate entirely at a federal level, Dodson says there would be potential for it to extend this to work with state-based agencies to drive better coordination in service delivery across the entire system – albeit with improvements in policy among and between the federal and state governments most likely being better delivered through COAG.
Other commentators are broadly supportive of the idea.
Renowned economist and former National Housing Supply Council member Saul Eslake cautioned that it would not be feasible to have a full-time minister responsible for housing and nothing else but expressed support for the idea of a minister who had housing as one of several portfolio responsibilities.
Such a minister, Eslake said, would advocate for housing and would raise important implications of the impact of proposed policy in other areas upon the housing system. Core responsibilities relating to areas such as taxation and Commonwealth Rent Assistance would remain with the Treasurer and the Minister for Social Services respectively, but the minister who had housing as part of their portfolio would act as a ‘voice’ for housing around the table..
“I guess my position on this is that there is some merit on having someone speak for housing around the cabinet table and when issues come up that have housing implications that there is someone there who thinks about the implications of what government decisions for housing might be,” Eslake said.
“But given that most of the things which the federal government can do which influence housing are always going to be the responsibility of some other minister, it’s hard to see that it would be feasible to have a full-time housing minister who had no responsibilities other than housing.”
As for the idea of a separate agency with a coordination role, Eslake would like to see this incorporated within the Treasury, which he says has more clout compared with that which would be the case under a separate body.
He would also like to see the restoration of the National Housing Supply Council – the abolition of which he says represented a loss to the sector.
Cameron Murray, an economist at the University of Queensland, adopts a more cynical view. Whilst better policy coordination made theoretical sense, Murray warned that unless the objectives of any new ministry were clearly defined, vested interests would exploit the new ministry to their own ends.
Solutions to housing affordability, Murray said, include removing tax breaks on residential investment, restricting foreign investment in local real estate, beefing up public housing investment and providing greater security to tenants within the private rental market.
Yet he warns there is no political appetite for such measures. For this reason, he says, it is likely that any new housing ministry/agency would simply deliver more giveaways to the development industry.
“I would say the answer to that is no unless you have a clear objective as to what their purpose is,” Murray said, referring to Dodson’s aforementioned call. “If you create (a new ministry) without an objective, they are going to create the objective of looking after their mates in the development industry – the land bankers and so on.
“There is no point in doing it unless you know what you want. There is no political appetite for radical expansion of public housing. That’s not going to be the objective. The objective, given political circumstances, is going to be something like ‘assisting correcting market failures and government failures around housing supply’ – something wishy washy like that. All that is going to mean is a few minor tweaks and tax breaks and giveaways to developers with no obligation upon them to actually build any housing.
“In principle, it’s a good idea to have a national coordinating body who can push for construction of public housing, do funding arrangements with states to get them up to speed with the national objective. But without the national objective, you are just going to end up with a gift to mates.”
Finally, Dodson dismisses arguments that a new ministry and agency would simply add to more bureaucracy.
Since the new agency would not run programs in and of itself, Dodson says it would have more of a coordination role and would not be a large portfolio.
Moreover, he said it would elevate housing to be afforded its due consideration as a policy area. Given that Australia has national strategies for dealing with other areas such as narcotics and biosecurity, he says we should also have a national strategy for housing.
“Whether a national drugs policy is more significant and important than a national housing policy I think is debatable, but it would be hard to argue that housing is not worth more to the economy than the impacts of drug use on the population,” Dodson said.
“Yet we have a national strategy for dealing with drugs. Why do we not have a national strategy in dealing with housing?
“It’s very hard to sustain an argument that it adds complexity and policy confusion and so forth when we are able to do that in other areas of policy.”