Once again, in 2025, housing seems certain to be a key flashpoint of the coming federal election.

Testament to the electoral importance of housing is not only its prominence in four of the past six national polls, but also its “late pledge” appearance in the past two federal contests.

These saw Scott Morrison trumpeting new “last week of campaign” initiatives on low-deposit mortgages in 2019 and on access to super accounts for mortgage downpayments in 2022.

Such attention indicates a policy area beset by profound challenges.

Not everyone cares deeply about the housing crises. Many among that large body of homeowners with mortgages largely or fully repaid are unphased by recent concerns. Yet even within this cohort some will be hosting adult children pushed back to the family home by unaffordable rents.

For highly mortgaged owners – especially recent first homebuyers – these pressures will be all too real and direct. This is also true for private renters exposed to market forces. Together, that’s probably around half of all Australian households, weighted towards outer suburban electorates where new homeowners and low income renters are largely concentrated.

The Albanese government’s apparent impotence in the face of housing cost pressures has played into wider public frustration on consumer price rises.

Recent housing cost spikes are, of course, only the latest manifestations of an increasingly under-performing housing system exerting a growing drag on economic productivity as well as on population welfare. As Alan Kohler has persuasively argued, this is a story with roots at least a quarter of a century old, a story of mistaken policy choices and complacent policy neglect by all Australian governments, but especially at the federal level.

Admittedly, Australia is far from alone in experiencing rising rates of housing stress, which have been building over decades. Familiar benchmark nations such as the UK, US and Canada have been battling similar issues of declining housing affordability and rising homelessness. Even in countries like the Netherlands, historically well-reputed on housing policy, acute pressures are nowadays evident.

To be fair to commonwealth governments in our own country, housing is a wickedly complex policy area made even more challenging by the division of relevant powers across the federal and state divide. On top of that, is the curse of the three-year electoral term and the absence of any federal department of housing.

All of that said, however, it is a sad fact that few federal administrations since the 1990s have even attempted to address Australia’s housing policy challenges in any comprehensive way. Despite holding crucially influential housing powers, through control over property taxation, financial regulation, social security and migration, Coalition governments have uniformly shied away from any responsibility for national housing policy leadership.

The Rudd and Albanese governments have attempted to interrupt this status quo, but only partially.

Last year, I was among a group of 117 senior academics and housing industry figures who signed an open letter calling for a national housing and homelessness plan, embedded in law.

Proponents acknowledged the potentially useful contribution that may eventuate from the non-statutory national plan already pledged by the Albanese government, an endeavour that currently remains in development. However, we argued that underpinning legislation could entrench and build upon the advances in national housing policy leadership already achieved under the current government.

Drawing inspiration from equivalent 2019 Canadian legislation, a private member’s bill obliging the government of the day to develop, maintain and implement a national housing and homelessness plan was introduced into Parliament by David Pocock and Kylea Tink in June 2024.

The bill, which remains in the Senate in early 2025, specifies the plan’s overarching objective as “ensuring that everyone in Australia has adequate housing”. Other consensus housing policy objectives the plan would be required to fulfil include “preventing and ending homelessness”, “improving choice in the housing system”, “improving housing supply” and “improving housing quality”. The bill also defines accountability mechanisms.

Above all, it asserts the central principle that access to adequate housing is a fundamental human right affirmed in international law. Allied to this is the contention that the main priority for housing policymakers should be to facilitate population welfare not private wealth accumulation. A plan compliant with this analysis would, for example, stipulate that the prime consideration in private rental regulation should be the role of housing as a home rather than housing as an asset.

Advocacy for a well-founded National Plan also stems from an understanding that a complex policy challenge such as housing affordability can be meaningfully addressed only by a coherent, multi-pronged, long-term strategy. It must propose actions using powers of taxation and regulation as well as expenditure. It must also recognise the need to deflate demand while maximising supply.

This, of course, is where things start to get controversial. It is an unfortunate irony that almost the only instance of current housing policy bi-partisanship is the claim, voiced by both major parties and by many media pundits, that the prime cause of over-expensive housing is “inadequate supply” due to over-restrictive land-use planning.

This is a convenient position for federal politicians because it shifts blame for unaffordable housing to the state and territory governments responsible for development approval. For the current government, it is also appealing because it deflects attention from continuing timidity on winding back regressive private landlord tax breaks that encourage speculative behaviour and therefore inflate prices.

It also rests on a failure to recognise the reality that, as described in research for the Australian Housing and Urban Research Institute, “while the planning system can create opportunities for development by zoning land and ensuring that zoning and development controls allow for a range of housing types, decisions about whether and when to develop are ultimately made by the development industry and reflect market factors”.

While viability limitations have been the prime cause of recently slowed construction rates, simplifying planning procedures and liberalising planning restrictions as far as possible are always worthy objectives. At the margin, such actions may help enable some additional construction, with the result that future house prices and rents are slightly lower than otherwise.

The Albanese government’s target for construction of 1.2 million new homes by 2029 seems certain to prove a hostage to fortune, but as a vehicle to encourage planning system review by states and territories it is well-motivated. The problem is the overriding faith placed in the policy, to the exclusion of a parallel focus on demand deflation.

In fact, beyond the agreed case for curbing landlord tax breaks on the demand side, and modernising landuse planning systems on the supply side, there is arguably also a fair degree of consensus among housing economists and industry experts on a range of other mainstream policy reforms and initiatives needed to ease national housing woes.

The following list, mainly federal responsibilities, but also including some state/territory issues where the commonwealth could provide support or encouragement, is a place to start:

• To counter the growing exclusion of aspirant first home buyers without access to parental subsidies, there is a continuing case for targeted demand-side assistance programs. However, like the government’s newly legislated Help to Buy initiative, and unlike traditionally dominant cash grants and tax breaks, these should be designed to minimise inflationary impacts and to incur minimal net expenditure.
• Australia should revisit mid-twentieth century practices of pro-first home buyer mortgage regulation and government-built homes for cost-price sale.
• To curb speculative behaviour that fuels inflation and to encourage more efficient use of existing housing, stamp duty should be replaced, over time, by broad-based land taxes.
• To enhance the experience of renting from a private provider, the Commonwealth should advocate for tenants’ rights being levelled-up to the standards of the leading jurisdictions, namely the ACT and Victoria.
• To expand the availability of good quality private rental housing with substantial tenure security, governments should be open to further tax and other reforms that encourage ongoing growth of Build to Rent housing – institutionally-funded apartment blocks designed for long term rental occupancy and retained in single ownership.
• To reverse the damaging contraction of social and affordable housing of the past 30 years, governments should commit to expanding and extending recent investment programs such as Victoria’s Big Housing Build and the Commonwealth’s Housing Australia Future Fund. At least some of the associated costs could and should be met by the additional tax revenue from reduced private landlord tax breaks.
• To mitigate the impact of unaffordable rents in pushing private tenants into poverty, and to remedy decades of under-indexation, further increases in Commonwealth Rent Assistance are needed.

To the Albanese government’s credit, actions of the past three years have already made contributions under several of these headings. As an initial phase of recovery from a decade of national neglect, this is all well and good. What remains to be revealed in Labor’s 2025 platform is whether the party recognises the need to expand, extend and transcend these initiatives. We are also waiting to see whether it can craft these into a coherent package that is appealing to voters.

This story was originally published in The Saturday Paper. Read the original article here.