Given our Prime Minister’s famously well-honed skill of tapping into the public mood, as well as his claims to an economically hard-headed approach to policymaking, you would surely expect a social housing stimulus plan to be front and centre of his upcoming financial plan.

‘Top economists back boosts to JobSeeker and social housing over tax cuts in pre-budget poll’ was The Conversation’s Monday headline this week. But not only was social housing (followed by higher JobSeeker payments) the most popular urgent investment choice of 49 top economists, it was far and away more widely favoured than accelerated income tax reductions. While the former was a top four pick from 13 options for 54% of those involved, only 20% chose the latter.
This is not to say that income tax cuts are supported by only a fifth of panellists. The point is that few leading economic thinkers are convinced by ministerial claims that this is a credible priority when it comes to boosting national recovery. Social housing, by contrast, is backed as the number one stimulus pitch.
Unlike tax cuts, all of the funds invested in social housing construction are directly absorbed in creating a ‘nation building’ asset. Unlike major infrastructure projects, construction work of this type can be rapidly rolled out in a geographically diverse program with near-instant employment effects. More than 6,000 units could be initiated within six months, using ‘shovel ready’ sites already-identified by not-for-profit community housing providers and state/territory governments.
Modelling by highly respected consultancy, SGS, shows that the 4-year program to build 30,000 social housing units advocated by affordable housing industry bodies would create on average up to 18,000 full-time equivalent jobs annually. And the employment effect would be focused on one of the very industries likely to be hardest hit by the pandemic – thanks to currently collapsing demand for market housing.
But this not only a matter of an effective ‘bang for buck’ on employment creation, it’s a chance to make a start in redressing a social housing famine that has seen effective supply cut in half since the 1990s. The 52,000 public and community housing lettings made in 1991 equated to 30 for every 10,000 Australians. The 35,000 lettings in 2017 equated to 14 per 10,000.
For decades after World War 2, public housing made up around one dwelling in every six built in Australia. In most years since John Howard effectively ended the national program in 1996, social housebuilding has barely exceeded one in 50 units built.
And the private sector has not stepped in to provide the low cost rental housing needed by millions of low earning Australians. Far from it: the national deficit in private rental units affordable to low income renters has ballooned from 138,000 to 212,000 since 2006. Is it any wonder that homelessness rose by 30% in the past 10 years?
As in its stellar pandemic management, Australia should look to New Zealand for inspiration on how to take decisive action here. In her 2020 budget Jacinda Ardern pledged investment in 8,000 social housing dwellings – a number which might sound modest on the face of it, but scaled to population would imply a program of 40,000 for this country.
An initiative on this scale would make at least modest inroads into our huge backlog of accumulated unmet housing need. The next advocacy challenge would be making the case for the value of an ongoing social housebuilding program as an economic stabiliser and generator of a social good – not just an emergency employment-creating lever to be pulled at a time of national crisis.
But, in the current crisis situation, the Conversation Economist Panel’s stimulus spending priorities are not just an ‘expert perspective’. As revealed by recent polling evidence the public’s economic recovery preferences appear uncannily close to those of the panellists in this respect.
Last week’s Essential Media report showed that ‘building more affordable housing’ was likewise the most popular measure among a range of stimulus options posed by the pollster to a cross-section of Australians. Asked to choose their top three Federal Budget priorities, 56% (54% of Coalition voters) opted for ‘build more affordable housing’, while ‘fast track tax cuts for higher income earners’ was backed by just 21%.
Given our Prime Minister’s famously well-honed skill of tapping into the public mood, as well as his claims to an economically hard-headed approach to policymaking, you would surely expect a social housing stimulus plan to be front and centre of his upcoming financial plan. If it isn’t, the ever-expanding coalition of social housing stimulus backers will need to ratchet up the argument still further.
Hal Pawson is Professor Housing Research and Policy, and Associate Director of the City Futures Research Centre, UNSW.
Comments
5 responses to “Why a social housing stimulus is a measure Morrison cannot ignore.”
It is a reflection on the priorities of this government that is necessary to point any of this out. But there must always be minority to marginalise.
There is another aspect to this proposal which needs to be raised. We should all be bracing for the forthcoming run of horror stories about “ruined lives” of people who lose their houses because they cannot continue to pay the mortgage. Without wanting to deny the catastrophic impact on people who have their principal asset foreclosed by lenders, I would like to note that it should not be necessary for their lives to be so dependent on ownership of the dwelling they live in. An adequate supply of social housing would reduce the need for people to put all their eggs in one basket. It would remove the mortgage/rental stress on peoples incomes and provide the basis for removal of that major stress factor in so many people’s lives – housing insecurity.
All this whilst stimulating the economy!
Where is the Labor Party?
It was the Labor parties failure to leave the speculative structure of the Australian housing market in place as it had become under Howard. They had several years to fix this but instead added fuel to the fire and let it rip. I say this as a life time Labor supporter. We know what the LNP do and how they do it but Labor had no excuse. At least Mr Shorten was going to do something but made the mistake of telling us all about it giving the LNPs massive propaganda machine time to get every aged pensioner so frightened that they would be taxed on their aged pension and small savings accounts that we lost out and of course every other younger person was wondering how they would ever become rich if they did away with neg gearing etc (as my nephew pointed out to me).
Ha ha. Helping the undeserving poor would be the last thing on the mind of this government
Or even the deserving poor instead of the plethora of undeserving rich who they have helped for decades.