Magazine of the Socialist Party, Australian section of the CWI

Severe rental crisis highlighted in new report

Time for renters to fightback!

While most young people, welfare recipients and low-income earners know just how difficult it is to find an affordable rental property, a new report has highlighted how severe the crisis is.

Each year Anglicare Australia publish a ‘Rental Affordability Snapshot’. The charity searches rental adverts and then compares the prices with what welfare recipients and minimum wage earners can afford. With one in three Australians renting, the report gives a good picture of the situation facing millions of people.

Astonishingly, across the whole of Australia – out of 67,365 properties listed – only three were affordable or appropriate for a single person on Newstart Allowance! As for how they measure affordability, the report says “For most people on a low income, rent needs to be no more than 30% of a household budget for it not to cause financial stress and difficult choices.”

The report says “Sydney stands out for the extraordinary crisis in affordability revealed in this year’s data – there were no affordable and suitable properties for any household type, with the exception of a couple where both are earning minimum wage, and for them, there was just 4% of properties available.”

The document continues: “We know that many people on low incomes are avoiding becoming homeless by sacrificing other basic living needs to pay the rent – things like eating enough, using public transport, heating or cooling their home, or seeing a doctor when they need to. Many approach Anglicare agencies for help with emergency food relief, financial counselling and emergency assistance to pay essential bills such as electricity.”

The situation really is desperate for the almost 1.9 million people who are on some type of welfare payment or the aged pension, as well as millions more stuck in low paid and insecure jobs.

As for the causes of the crisis, the report is clear, “Simply put, current government policies mean that billions of dollars more of public funding goes towards supporting housing investors, rather than ensuring everybody, including people on low incomes, has a home.”

The report explains, that “negative gearing and capital gains tax concessions cost the federal budget a staggering $14.85 billion per year, and overwhelmingly favour the richest.” In comparison the “federal government currently invests just $1.7 billion per year in public and social housing, and homelessness services.”

The document suggests a number of reforms. “The solution is for governments to invest in low-cost social and public housing specifically aimed at people on low incomes. This can be achieved through a combination of direct purchase or head-leasing of existing properties from the private market and re-leasing of such properties to people on low income, and the construction of more public and community housing where it is needed in particular areas, such as regional and remote Aboriginal communities.”

While there are problems with head leasing arrangements, especially when unaccountable “community” housing organisations are involved, there is an urgent need for the government to buy and construct more public housing stock.

They say, “Anglicare Australia strongly supports the call by Everybody’s Home for the purchase, lease and construction of an additional 500,000 homes by government that meet the needs of people on low incomes over the next 10 years.” This would equate to about 100,000 new public homes in a city like Melbourne.

The addition of half a million extra public houses across the country would be a huge step forward and would begin to help undermine the dominant profit motive in the sector. Scrapping tax concessions would immediately free up billions of dollars to spend on public housing. Billions more could be raised by increasing taxes on big business.

The report correctly urges the government to increase welfare payments. While socialists support an immediate increase of at least $100 per week, we warn that increases to rent assistance payments, without a corresponding imposition of rent caps, would be exploited by landlords who would see it as a way of financing their private investments with public funds.

In addition to greatly improved renter’s rights, socialists call for private rents to be capped at no more than 20% of people’s income. The system could be overseen by a public agency that both regulated rents and the quality of housing on offer. This agency should be answerable to an elected body of tenants.

These are just some of the steps we need to take to ensure housing is a basic right for all. But improvements will not be won without a fight. Renters need to get organised. A fight needs to be waged against landlords and governments, as well as the profit-driven system they represent.

By Socialist Party reporters

Visit the page of the Renters Fightback campaign here.

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