Greens MP Max Chandler-Mather: Three policies to tackle the housing crisis

May 20, 2024
Max Chandler-Mather addresses the media after Labor's budget. Still from video on Max Chandler-Mather, Federal MP for Griffith/Facebook

Green Left’s Federico Fuentes sat down with Australian Greens housing spokesperson Max Chandler-Mather to discuss the implications of Labor’s 2024–25 budget for renters and prospective homeowners, as well as his party’s strategy for tackling the country’s housing crisis.

Could you tell us your views about Labor’s budget, particularly on housing?

On housing, what this budget did is lock-in the status quo. The government has tried to dress it up as some sort of shift but, at the end of the day, the biggest line item when it comes to housing is tax handouts for property investors.

Over the next four years, property investors are going to get $175 billion in tax handouts and concessions. Yet there is no new spending for public housing.

And the only thing the government has touted for renters is a $9-a-week increase for those receiving Commonwealth Rent Assistance.

But only 16% of renters will benefit from this and $9 a week is an insult when average rents in capital cities went up by $56 a week over the past year.

More generally, this budget is shockingly bad.

I had assumed Labor was going to offer something more substantial to deal with the cost-of-living and cost-of-housing crisis in the lead-up to an election.

Instead, it has locked in the revamped Stage 3 tax cuts — which means $84 billion over the next 10 years in tax cuts to those earning over $180,000 a year — and $50 billion in fossil fuel subsidies for the next 4–5 years.

This is the kind of budget that a centre-right, if not right-wing, government hands down.

It demonstrates Labor has completely exuded any last vestige of progressive Laborism.

Unfortunately, a lot of people are going to hurt over the next 12 months.

In releasing Parliamentary Library figures that show rents will continue to spiral, you once again raised the need for a rent freeze. Why do the Greens believe that is so important?

A rent freeze is a crucial component of any housing policy.

Effectively, what we currently have is unlimited rent increases. At the end of every lease, the landlord can put up rent by as much as they want.

That is crazy when you think about it. The current setting means that the one-third of the country that rents has no idea what their rent is going to be at the end of their lease: it could be $100 or $200 more a week.

Over the past 2-3 years, we have seen some astronomical rent increases — the biggest in generations and well in excess of wage increases.

The Reserve Bank of Australia is predicting rents will again collectively rise by another $5.3 billion over the next 12 months, about $2400 per household.

So, a two-year rent freeze is about giving renters a breather and wages a chance to catch up.

It would protect those who are just one rent increase away from eviction — and stem the bleeding of this massive housing crisis.

Following that two-year freeze, our proposal is to cap rent increases at 2% every two years. This would replicate rent caps in other countries, while encouraging longer leases.

So, there are concrete examples of rent freezes and caps being implemented and their positive impacts?

The government’s own National Supply and Affordability Council has produced a housing report comparing rent increases in several regions over the past few years. It found that Europe had the lowest rent increases, while Australia had the second highest.

Europe has used a wide range of rental regulations: The Netherlands, France, Austria and parts of Germany all have forms of rent freezes or caps in place.

So, the government’s own data shows rental regulations have succeeded in slowing down rent increases.

Of course, this is not the entire solution to the housing crisis. For instance, in the city of Vienna, close to 60% of people live in some form of rent-controlled apartment. But this is because they have built up a huge stock of public and social housing.

Speaking of building public housing, could you elaborate on the Greens proposal for a public housing developer?

The proposal is for the federal government to establish a standalone Department of Housing and, within that, a public housing developer that would, in short, build good quality homes to rent or sell at well below market prices.

Under our proposal, rents would be capped at 25% of a household’s income and homes sold at just over the cost of construction, with buyers only able to sell them back to the government.

The Parliamentary Budget Office (PBO), an arm of the Treasury, has put the cost of building 610,000 homes over the next decade at about $27.9 billion.

By comparison, the federal government will spend $27 billion in tax handouts to property developers this year alone.

Part of the reason this is so affordable is because the policy is universal and has no income or means testing.

That means the public housing developer is building enough homes to clear the public housing waitlist and ensure low-income people can buy a home.

But it also means a doctor, teacher, nurse or some other middle or upper-income person can live some place where their rent is capped too.

PBO figures show how they would pay back into the system, making it financially viable.

The public housing developer would end up generating billions of dollars of income, which it could put back into building more good quality homes.

That is important too: many property developers are building really low-quality apartments to maximise profits. But, because the public developer would not have profits in mind, it can focus on building high-quality housing.

The private development down the road is going to see this happening and think: “Christ, I’m going to have to compete with that.”

Ultimately, its role would be to aggressively compete with private developers, push down prices and improve the quality of apartments.

Again, on its own, this is not going to solve the housing crisis. But it would fundamentally transform the lives of millions of people.

As to its feasibility, the proposal envisages building 360,000 homes in the first five years. That is about 30% of Australia’s construction capacity over those next five years.

By way of comparison, public housing construction constituted 26% of construction capacity in the first year after World War II.

Australia has actually done this before. It is entirely possible.

Have you considered where the labour would come from to build these homes?

The nature of our construction market at the moment is boom and bust. You have some years where there is a huge spike in construction, then other years where there is a huge crash.

Often tradies and day labourers operate as subcontractors, are not paid if the developer falls over and do not know if they will have a job in three to four years. All this makes their employment uncertain and the idea of staying in the industry undesirable for many.

What a public housing developer could do is say how many homes it is going to finance the construction of — not just over the next 5–10 years but in perpetuity. This would guarantee a supply of work, create certainty for the construction industry and lead to the expansion of a more permanent construction workforce.

We are also looking into the feasibility of setting up a public builder. Rather than paying apprentices poverty wages, this public builder would pay everyone the sort of rates paid on union worksites and employ workers as permanent employees, with sick and holiday pay.

How would you ensure against any future privatisation of these homes?

I think part of the way you ensure that is by setting the public developer up as its own statutory authority, capable of generating its own income. From the legislative perspective, this would mean ensuring the entity retained ownership over homes to sustain an income stream.

But, more broadly, the social and political aspect of the proposal is crucial.

If the public housing developer ends up building 610,000 homes, and we assume that two people live in each home — the average household in Australia is 2.1 persons — then we are talking about 1.2 million people who would have an enormous social stake in retaining and expanding this scheme.

And, if a doctor knows they have just as much possibility of getting into one of these homes as a teacher, nurse or cleaner, you get broad social buy-in into the policy and a broad social cohort willing to defend it.

That puts a lot of political pressure on every major party not to touch it.

That is why you do not see [opposition leader Peter] Dutton saying he is going to abolish Medicare, imperfect as it is. As with any universal policy, it is the principle of universalism that protects Medicare.

Are there any other components to the Greens’ vision for fixing Australia’s housing crisis?

The other crucial component is ending tax handouts for property developers.

Over the next five years, these are going to cost the federal government $175 billion which is, in effect, a $175 billion stimulus payment to turbocharge the financialisation of housing.

Ultimately, that money flows through to Australian banks which profit the most from our broken housing system.

How do we know that?

Well, in the 1990s, 20% of the money banks lent — which is how banks make money — went to housing, with the rest basically going to small and big businesses. 

Then three things happened: huge financial deregulation; Labor cut funding from public housing; and the expansion of tax handouts. These turbocharged house prices and bank lending to housing.

Today, 60% of the money Australian banks lend goes to housing — the highest percentage for any country in the OECD. 

In other words, Australia’s banking system — which is among the most profitable in the world — relies on the financialisation of housing and massive tax handouts to property investors, which drives up house prices and maintains what is in effect a Ponzi scheme.

Phasing out these tax handouts would do two things: free up this enormous amount of revenue to establish a public housing developer and take the heat out of the property market. That is why tax reform is just as crucial as a rent freeze and a public property developer.

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