The federal Labor government’s budget on May 12 outlined some small housing tax changes.
But will it alleviate the homelessness crisis, reduce the national waiting list for public housing, cap astronomical rents and give the 750,000 people living in housing stress genuine relief?
No, it won’t. It trimmed back a fraction of the negative gearing and capital gains tax concessions, which costs a staggering $20 billion a year to the public purse. But Treasurer Jim Chalmers described it as the “largest and most comprehensive housing plan Australia has seen in generations”.
Labor argues it will make inroads into intergenerational wealth inequality and help young people jump on to the property ladder. However, the details show the investor class will not take much of a hit.
Negative gearing concessions allow landlords to claim significant costs of their residential investment against tax due on their other income — a public subsidy for expanding their property portfolios.
Liberal Prime Minister John Howard introduced the 50% capital gains tax discount in 1999. It allows owners to pay only half the capital gains tax when selling investment properties they have held for at least 12 months.
With encouragement from these tax perks for the rich, median national house prices over the past 26 years rose by 400–560%.
The latest budget replaces the 50% capital gains tax discount with one that taxes only real capital gains with inflation taken into account and a 30% minimum tax on gains, from July 1, 2027.
Investors will only be able to claim negative gearing concessions on new builds. But they can still claim it on any properties they held before May 12.
The Australia Institute argues that Labor’s changes will help young people buy a home. The budget estimates that it will help 75,000 additional people to become home owners over the next decade. However, for the 30% of the population who rent and the 918,000 people considered “extremely at risk” of defaulting on their mortgage, these capital gains changes are meaningless. This is because rents and house prices will still rise, according to the Commonwealth Bank and Treasury estimates.
Just in budget week, a homeless First Nations mother lost one of her twins on the banks of the Murrumbidgee River in NSW. She was living in an encampment, 15 minutes’ walk from the nearest public toilets or running water.
In the same week Aboriginal mother Mary Anne Miller died from sepsis in Western Australia after being thrown out of her public housing.
Homelessness in an advanced, wealthy country (for some) is particularly hard to swallow when there are up to 1 million homes empty.
Property investors, including Airbnb merchants, are not compelled to house people, or pay a tax to help house others if their investments lie empty.
Liberal Party Opposition Leader Angus Taylor is putting a dog-whistle spin on Labor’s refrain about the housing crisis being all about supply. His latest policy proposal is to solve the housing crisis by coupling migration to new builds. His racist fear-mongering is deliberate, as the Pauline Hanson One Nation Party rises in the polls.
TAI data, however, shows that “population growth” has had little impact on house prices. Over the past 10 years the number of new dwellings has “significantly” outpaced population growth.
Labor is way behind on its 2023 Housing Australia Future Fund (HAFF) target of 20,000 new social homes by 2029 and 20,000 affordable homes. Only 18,650 social and affordable homes have been built or acquired.
A Greens-initiated Senate inquiry on intergenerational housing inequity has revealed that 640,000 people need social housing.
Even if Labor manages to deliver on its 40,000 promised social and affordable houses, it will only be 6% of what is needed.
To solve the housing crisis, we need to make housing a human right. Vienna houses almost 60% of its population in beautiful public housing.
It can be done here too.
Meanwhile, socially and environmentally irresponsible public housing demolitions must stop. Dilapidated estates and homes can be renovated for a fraction of the price and, importantly, maintain public housing. OFFICE architects have even drawn up alternative plans for the estates slated for demolition in Victoria and NSW.
Socialist Alliance (SA) says quality public housing can be made, rents can be capped and landlords, after a set period, can be obliged to fill empty dwellings.
But this can only be done if the grassroots campaigns become stronger.
SA members are active in the push to save the 44 housing towers in Naarm/Melbourne, which has just won another reprieve from the High Court. We are also trying to stop public housing in Waterloo, Gadigal Country/Sydney, from being demolished and privatised. NSW Homes are threatening to send demolition teams at the end of May.
Join the housing justice movement and SA to help us win a housing policy that puts people and the ecology before profit.
[Rachel Evans is a member of the Socialist Alliance National Executive. Evans is the SA candidate in Heffron for the March 2027 NSW election.]