ACT Fabians Lunchtime Address – Australian National University, Canberra
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I would like to pay my respects to the Ngunnawal people on whose land we are meeting, and to their elders past and present.
It is great to speak at this Fabian Society event – we in the Labor Party greatly value your role as one of our critical friends.
The Fabian Society in Australia began in 1947 – at a time when Labor was in power.
Ben Chifley was Prime Minister, and always had at the forefront of his mind, the common good.
It was Chifley who said:
‘I try to think of the labour movement, not as putting an extra sixpence into somebody’s pocket, or making somebody Prime Minister or Premier, but as a movement bringing something better to the people, better standards of living, greater happiness to the mass of the people.
‘We have a great objective — the light on the hill — which we aim to reach by working for the betterment of mankind not only here but anywhere we may give a helping hand. If it were not for that, the Labor movement would not be worth fighting for.’
At the time – just after the Second World War – 53 per cent of people owned their own home, either mortgaged or outright.
Fourteen years later, in 1961, the rate of home ownership was over 70 per cent.
Today, 50 years later, the rate remains largely unchanged.
What the figures do not tell us is how much harder it now is for young Australians and their families to buy their first home compared to 50 years ago.
Whereas land was once cheap and construction costs made up most of the cost of a house – now land is expensive and supply scarce.
The impact on young people wanting to pursue the Australian dream of owning their own home has been significant.
It is housing affordability that shapes the typical housing cycle.
In the normal course of events, people move through the housing cycle in a way that matches the stage of life that they are at.
That is, they move out of the family home in their late teens or early twenties.
They rent, they save for a home either on their own or as part of a couple, they buy a home they can afford, they may upgrade when they have a family.
And in their middle age they are likely to have paid off the mortgage – all of which means they have housing security in their old age.
In today’s housing market – that cycle is changing.
Young people generally live at home for much longer.
They generally rent for longer.
And they will be saddled with a mortgage well into their middle age, if not beyond.
In fact in 2006 nearly 65,000 retiree households were still paying off the mortgage.
Affordable rental accommodation is also elusive.
Low vacancy rates and high turnover as landlords seek to maximise their rental income means that lifelong rental is a less acceptable option in Australia compared to many European countries.
Throughout the world shelter is recognised as a basic human right – a critical component of individual wellbeing and a ticket out of poverty.
As a Government, we feel very strongly that all Australians should enjoy that right.
The strength of our commitment can be seen in the figures — we have dedicated almost $20 billion to housing programs since being elected.
Toby Hall, the Chief Executive Officer of Mission Australia, said:
‘I don’t think there’s any question the Federal Government is committed to tackling the problem.
‘The Rudd Government is the first administration that’s shown the courage to tackle an issue that has remained untouched for decades.’1
I recently released the National Housing Supply Council’s 2010 State of Supply report.
The report is a stark reminder to us all that housing supply is simply not keeping up with housing demand.
The report found that demand for housing began to exceed housing starts ten years ago and has continued every year since.
The result is that in June 2009 Australia was 178,400 homes short of meeting underlying demand.
Compounding this frightening housing shortage was the fact that within a year of the Rudd Government taking office – our economy was confronted with the worst global economic circumstances since the Depression in the 1930s.
Housing was a core part of our response – initially with the First Home Owners Boost and then with an historic investment in new social housing.
The Boost resulted in an immediate increase in traffic through display villages and new developments; in total it helped 246,000 first home buyers into homes of their own.
The proportion of first home buyers in the market peaked at 28.5 per cent in May 2009.2
Yet even before the First Home Owners Boost – the Government was aiming to reverse the decline in the number of first home buyers in the market through First Home Saver Accounts.
As house prices rose – first home buyers were finding it harder to get a big enough deposit to enter the market.
We established First Home Savers Accounts to help aspiring first home buyers to save a bigger deposit.
The Government provides a 17 per cent contribution on the first $5,000 (indexed) of individual contributions each year.
This means that anyone who contributes $5,000 to their account will receive an $850 deposit from the Government.
Changes announced in the Budget will make it easier to access the savings that a potential first home buyer accrues.
Couples will be able to pool their First Home Saver Accounts to buy a home together.
It is all about affordability – for home ownership and for those who may never be able to own their own home.
If families have to pay more than they can afford for housing, they end up with too little left over for other necessities such as food, clothing and health care.
They may not be able to afford travel costs and child care, making it impossible to go to work and school each day – a vicious cycle.
Under the Stimulus our approach was not only to make it more possible for people to own their own home, but also to provide for the disadvantaged and vulnerable.
We made the single largest investment in social housing ever undertaken in this country — $5.6 billion.
Around Australia, that translates into nearly 20,000 new homes and repairs on more than 70,000 others.
More than 2,000 individual social housing projects across the country are giving local builders an alternative business line while the economy recovers.
So far around 14,200 new homes have commenced construction – with over 1,400 homes completed.
Here in the ACT we are investing nearly $76 million to build over 380 new homes, and $6 million to repair 205 others.
This new housing will have a substantial impact on homelessness in Australia, which the Government aims to halve by 2020.
On an average night around Australia, there are 105,000 people without a roof over their heads. In the ACT – there are 1,364 people who are homeless every night, with 78 of these sleeping rough.3
And while the rate might be lower than the rest of Australia, the profile of the ACT’s homeless people is much younger.
Over 60 per cent are under 25, compared with just 45 per cent in the rest of the country.
This includes 296 children under the age of 12 years old – or 22 per cent of the homeless population in Canberra.4
This is a tragedy that the Rudd Government is determined to address.
In the ACT – the Commonwealth and Territory Governments are investing more than $20 million to address homelessness through the National Partnership Agreement on Homelessness.
The A Place to Call Home program is an important part of our new approach – in the ACT, this program will deliver 20 new homes for homeless families.
Earlier this month my colleague Senator Kate Lundy and ACT Minister for Housing Joy Burch opened the first of these new homes – for a mother and her three children – in Dunlop.
In March we launched the ACT’s ‘Street to Home’ program.
Under this program, St Vincent de Paul will receive $1 million to assist homeless Canberrans to re-engage with support services which will help them keep a roof over their head.
People experiencing chronic homelessness, particularly rough sleepers and at-risk young people will be assisted by the program, which works to address mental health, drug and alcohol issues.
The Government is also providing $2 million to help fund HOME in Queanbeyan – to develop 20 self contained units for people with chronic mental illness who cannot live independently or are homeless.
Across all of our housing programs we are also building 40 new specialist homelessness projects across the country.
The new projects will provide over 1,600 new homes for people who are homeless or at risk of homelessness linked to services.
I am delighted that many of these new projects are innovative forms of accommodation which combine permanent accommodation with intensive support to meet their often complex needs.
The Government is also helping those Australians in the rental market.
We established the National Rental Affordability Scheme which boosts private investment in residential property.
The Scheme puts an incentive on the table to encourage the housing industry to invest in affordable rental homes.
With our commitment of more than $1 billion over the next four years to the Scheme we expect it to deliver 50,000 new affordable homes across the nation.
Through the Scheme we are bringing affordable rental housing on line for people on low to moderate incomes, especially key workers and their families, like our police, nurses and teachers.
Rents are at least 20 per cent below market rates – a considerable saving for tenants.
This should make it easier for them to pay their bills, and potentially save for a home of their own.
Here in the ACT, investors have been allocated 157 incentives under the first two rounds of the Scheme.
They are in great areas and reflect the important criteria for the Scheme’s housing – amenity, sustainability and location.
They are close to shops, cares, restaurants, community facilities, sporting fields, parks and public transport.
In the new suburb of Crace for example, 22 of the new home are funded through the National Rental Affordability Scheme.
A further 24 new homes are in Holt – which Jon Stanhope and I officially opened in February.
The houses are modern and minimise energy and water use, which has the added advantage of helping keep down utilities bills.
Certainly sustainable housing and appropriate housing is of paramount importance these days.
It is another important part of making homes more affordable for young people.
I have been suggesting that developers should build a greater variety of housing types, in recognition of the problems young people face finding an affordable home.
There are a lot more single people entering the housing market than in the past, and developers need to build the type of homes that younger people want, and can afford.
The State of Supply report says that demand for smaller homes will increase – in marked contrast to the trend of recent years.
In the 30 years to 2006, the average number of people per household declined from 3.1 to 2.6.
Yet over the same period, the proportion of houses with four or more bedrooms increased by 11 per cent.
The challenge to business and urban planners is to address these mismatches through quality building and urban design.
Clearly if we are to achieve our dream of making home ownership achievable, of making housing affordable and of halving homelessness, there is still much work to be done.
In his book, Postcode, Treasurer Wayne Swan put it this way:
‘We need to renew our commitment to housing policy … to address growing polarisation of incomes and opportunity in our community. Good housing policy is an antidote to poverty and inequality.’5
This is why the left should support increased housing supply as a priority.
We cannot hope to address the polarisation of opportunity in our community if we cannot get our housing policy settings right.
Even with the Rudd Government’s historic new investments in social housing and homelessness – we must remember that most Australians still subscribe to the dream of home ownership.
And without increased housing supply – affordable home ownership and affordable rental housing are impossible goals.
- Mission Australia website
- Australian Bureau of Statistics, Housing Finance, Cat. No. 5609.0
- Chamberlain and McKenzie (2009), Counting the Homeless 2006: Australian Capital Territory, Australian Institute of Health and Welfare
- Swan (2005), Postcode: the splintering of a nation, Pluto Press