- by Denis Doherty
- The Guardian
- Issue #2168
The soon to be demolished public housing building which is only 30 years old, Glebe, Sydney.
The local Federal ALP member for the Sydney Electorate has put out this wonderful sounding advertisement in local papers. Under the heading ‘5% housing deposits’ it reads:
“The Albanese Labor government is helping more Australians realise their dream of home ownership with our Home Guarantee Scheme … we are preparing to help all first home buyers. From 1 October 2025 there will be no income limits, no caps on place and property price caps will be lifted. In Sydney you will be able to buy a property worth up to $1.5 million with the help of the Home Guarantee Scheme.
“The scheme means you can purchase property with a lower deposit without the requirement of paying lenders’ mortgage insurance meaning you can move into your own home sooner.”
Nobody should believe that the stars are aligning for first home buyers and that the housing problem will soon be solved in Australia although that is what they want us to believe. The 5% scheme is a variation on ‘first home buyers scheme.’
Alan Kohler, in an essay on housing in Australia called ‘The Great Divide – Australia’s housing mess and how to fix it, quotes Saul Eslake, “It’s hard to think of any government policy that has been pursued for so long, in the face of such incontrovertible evidence that it doesn’t work, than the policy of giving cash to first home buyers in the belief that the doing will promote home ownership.”
Kohler completes his destruction of first home buyers grants by concluding, “Cash grants to first home buyers are political attempts to appear to be doing something while making things worse. They do help some individuals, of course, but at a macro level they achieve the opposite of helping. As Eslake pointed out, assistance to first-time home buyers has “served to simply exacerbate the already substantial imbalance between the underlying demand for housing and the supply of it.”
The head of the Reserve Bank of Australia Michele Bullock, asked at a Senate hearing about the 5% plan said, “the plan could push house prices higher.” Bullock is very cautious but other economists are predicting a 10% increase. At the launch of the scheme, the PM was quizzed about what a bonanza the scheme will be for the banks. He replied, “at least it means we not are propping up another person’s super.”
Individual home buyers will be worse off as they will find their home costing 10% more. This directly affects the affordability of housing. Individuals will be tempted to buy more expensive homes, meaning the length of time to pay back the loan will increase massively and the risk of default will be higher.
However, the banks will be significantly better off. In total the scheme will pay banks $24 billion in the first five years of its existence.
It should not come as a surprise that Labor is spending public money to intensify the financialisaton of housing – a system designed to enrich banks.
After spending many years of lobbying ALP state and federal governments to divert funding into public housing, one cannot avoid seeing that the antagonism against public housing is palpable from the ALP, despite the PM constantly boasting about his upbringing in public housing.
The Communist Party of Australia argues that public housing should be defended and extended rather than being allowed to gradually decline. Recently Unions NSW sponsored a talk by independent member for Sydney Alex Greenwich about the essential worker housing. Greenwich revealed that the NSW government had no minister responsible for looking after essential workers housing. The ALP housing policies are part of the worst features of capitalism. ALP policies favour banks, real estate agents and the wealthy at the expense of all. As far as housing types are concerned, ALP policy favours private housing.
Anglicare in Sydney has reported that there are 108 affordable rental properties houses for teachers in the greater Sydney area, while hospitality workers can only afford 22. The CPA urges that public housing has its top threshold extended so that more workers can be incorporated into public housing.
In many parts of the country CPA branches are running housing campaigns. Get in touch with us and find out more.
