“What really broke me was knowing they could get away with it. That knowledge makes you feel quite isolated and alone.” Sophie Cameron’s landlord had just jacked up her rent by $200 a week. For this single mother, who recently fled family violence with her young son, it means moving again. And she is not alone. Increasing rents are forcing a lot of her son’s classmates out of his school, many out of the city.
But reasonable rent, anywhere, is scarce. Just one percent of properties are affordable for full-time workers on the minimum wage. According to Rental and Housing Union delegate Harry Millward, this scarcity forces so many tenants “to put up with more and more just to keep a mouldy roof over their head.” As a queer, low-waged, part-time retail worker, Millward says he couldn’t afford a rent increase. “My only hope for my own future is my connection with my union and community.”
As rents and mortgages spiral upward so does housing insecurity. Record numbers are experiencing “housing stress,” defined as paying 30% or more of income on housing. Many are forced to sacrifice other needs like healthy food, medical treatments or heating.
Australia’s housing indebtedness is among the highest in the world. The Reserve Bank of Australia (RBA) is complicit in this. Payment on a $500,000 home loan has shot up around $1,134 per month since the RBA started boosting interest rates in May 2022.
Homelessness is surging. The 2021 census registered nearly 123,000 people with nowhere to live — a 5.2% rise over five years. The Australian Council of Social Service explains, “The number one thing that people identify when they come into our emergency services is housing.”
Tent cities are appearing, inhabited by full-time workers and those who are jobless. Some campgrounds, like Moruya’s in New South Wales, are now closed to tourists in order to accommodate homeless families. Fifty-six percent of Australia’s unhoused people are women and children.
Nailing the cause. The RBA blames unmet demand and immigration for skyrocketing house prices. Regurgitated by politicians and media, this unsubstantiated drivel has become popularised as “fact.” It’s not only misleading, it’s dangerous.
The day after right-wing Liberal Party leader, Peter Dutton, warned that “unplanned” migration would worsen the housing and inflation crises, the National Socialist Network demonstrated outside Parliament House with a huge banner, “Living space for white Australians.” Living Space, or Lebensraum, was Hitler’s policy to expand eastward, driving out Jewish and Slavic peoples from their resource-rich lands.
And while excess demand contributes to the crisis, it’s not the cause.
In The Housing Question, written a century-and-a-half ago, Friedrich Engels described working-class life in England as gruelling wage labour, environmental pollution, unhygienic housing, anxiety, demoralisation, poor diet, and illness. This is eerily familiar, but most striking is Engels’ argument that capitalism keeps workers in a perpetual state of housing and employment insecurity.
Through its punitive interest hikes, the Reserve Bank of Australia shows how this is done today. The RBA blames wage rises for galloping inflation. By restraining workers’ spending, it says, inflation will be reined in.
Yet meticulous research published in 2022 by the Australia Institute shows that profits, not wages, are the main contributor to today’s inflation. In fact, wages, which consistently trail behind inflation, have been falling. This is in stark contrast to corporate CEOs’ 15% salary rise after last year’s colossal profits!
Government also lavishes subsidies on property investors. Negative gearing — which allows the offsetting of property losses against other types of income, such as wage or business income — costs taxpayers nearly $4 billion a year. For instance, landlords record interest on a home loan, an expense, as exceeding rent, an income, and claim a tax deduction.
Through a similar mechanism of overestimating “losses,” the capital gains tax concession is another bonanza — costing another $40 billion per year in lost taxes.
Their solutions and ours. The RBA counsels working people to tough it out. In the meantime, the Reserve Bank of Australia suggests folks share housing as a possible answer.
The federal government proposes an investment fund plus $2 billion for the states to build up to 50,000 homes over the next five years. But missing from the entire debate is public housing. Through decades of government neglect, this low-cost, guaranteed housing — once considered a right — has been overtaken by so-called “social” housing run by not-for-profit bodies along market principles.
Tenants’ advocates demand rent caps and a massive expansion of public housing. Winning these demands would certainly relieve housing distress for many people.
Why stop there? Scrap speculation incentives like negative gearing and capital gains tax concessions. Enforce steep taxes on property investment, and give the tax breaks to working-class renters and mortgage borrowers.
We could release another $243 billion for public housing by dumping the stage three tax cuts for the rich. Cancelling the AUKUS submarine contract would free up another $368 billion. Another $5 billion per year could go to public housing by ending tax-funded private prison contracts.
Housing is becoming an openly anti-capitalist fight. A crisis as harrowing as this requires bold measures by workers to lift ourselves out of this perpetual state of insecurity. Ultimately, it means creating a new economy based on cooperation and solidarity, providing generously for everyone’s needs.
