PASSWORD RESET

Magazine of the Socialist Party, Australian section of the CWI

Chinese investors not main cause of housing stress

Last month, a racist campaign targeting Chinese nationals angered many Sydney residents. Leaflets were distributed in some suburbs describing the buying of properties by Chinese investors as an “invasion”. Residents were also encouraged to protest outside the Chinese consulate.

By Tim Tran, Socialist Party

The far right “Party for Freedom” was behind the campaign. This small right-wing populist party is modelled on Geert Wilders’ group in the Netherlands of the same name. Taking advantage of the housing stress that many ordinary people suffer, this group is trying to stoke up racism to further their virulent political agenda.

There is no doubt that housing is largely unaffordable in Australia today, especially in the capital cities. The spotlight has recently been focused on comments made by Tony Abbott who said that he wants to see house prices continue to increase, and Joe Hockey who suggested that people should just “get a good job” if they wanted to buy a house.

These comments angered many as mortgage and rent stress is major issue. A survey conducted by Anglicare Australia found that only 2% of houses advertised on the market are affordable for people working on minimum wage. Renting is only really an option if you are willing to spend more than 30% of your income on rent.

House prices across Australia are now around five times the average annual income. Australian homes are amongst the most unaffordable in the developed world. The housing crisis is very real but it has not been caused by Chinese buyers.

In the context of a slowing economy the Reserve Bank of Australia cut the official interest rate in May to a new historic low of 2%. Low interest rates have made borrowing extremely cheap and have encouraged speculation in the property market.

Combined with government policies like negative gearing, which allows investors and landlords to write down interest costs against other income to reduce their tax, this has helped to push house prices out of reach.

The core problem is that the government has facilitated profiteering in the sector at the expense of ordinary people. People from all backgrounds have taken advantage of this, not just Chinese investors. In fact more than 80% of investment in the property sector comes from places other than China.

Far from having any real concern about people suffering from housing stress, the Party for Freedom is merely taking advantage of the insecurity that exists to try and build a nationalist and racist movement in Australia. In many ways they mimic other racist groups like Reclaim Australia who falsely assert that Muslims are the source of all our problems.

Far from attempting to tackle the real cause of the problems these people only serve to divert people’s attention from the culprits in big business and the major parties. They actually make matters worse by dividing ordinary people rather than uniting them in a struggle to make things like housing a right and not a privilege.

It is vital to stand opposed to racist campaigns and groups like the Party for Freedom and Reclaim Australia. Rather than focusing on Chinese investors we need to focus on campaigning for more public housing, for caps on private rents, and for an end to government policies that facilitate property speculation.

Ultimately it is the profit-driven system of capitalism that causes housing stress. That is why side by side with fighting for reforms in the housing sector socialists fight for a society that puts people’s needs before profits.

A system that used society’s wealth to create jobs, homes and services for all would have no use for the divide and rule tactic of racism to preserve itself.