The Guardian 14 November, 2007
Government policies worsen housing crisis
As expected, the Reserve Bank of Australia (RBA) last week handed down another interest rate rise, bringing the official rate to 6.75 per cent. Six successive rises under a government that promised record low interest rates and with more predicted for December and next year. All the Howard Government could do was repeat its pathetic boast that the rise reflects the strength of the economy, which in turn is underpinned by the Coalition’s superior economic management credentials!
That is all the government can come up with at a time when thousands of families face another hike in interest repayments of $30, $40, $50, $60 or more a month. Household budgets and credit card debts are already stretched beyond the limit. Rents are also set to rise to prohibitive heights.
The banks are moving in, greedier than ever. Having just declared record profits they are now claiming they need a far larger rise than the RBA’s 0.25 percent. At the same time petrol prices are heading towards $1.50 a litre, possibly $2 later next year. The experts are warning of a financial tsunami. The government’s response is that it should be re-elected because it would manage an economic crisis better than Labor — a de facto recognition of the likelihood of crisis.
For many working people the crisis is here already, and more face crisis with the latest interest rate rise. If this is what the Prime Minister and Treasurer describe as good economic management, then the working people of Australia want and desperately need a new type of economic management, where "sound", "good", "strong" and all the other terms refer to the outcomes for working people, of pensioners, students and unemployed. Big business applies those terms to their profits and ability to stand over workers. With WorkChoices, things have never been better for the big end of town.
Housing is unaffordable for a large and growing sector of the population, but the government has no solutions. Instead of increasing the stock of public housing, it is selling it off, privatising it, and paving the way for even higher private sector rents.
Mortgage repayments are consuming 30 percent or more of many families’ gross income. Those who do not manage to meet the financial institutions’, at times quite lax, income requirements are languishing on long waiting lists for public housing. Meanwhile they are forced onto the rental market and into other, often substandard, accommodation.
The cruel irony in all of this is that the lower their income the larger the percentage of their income being consumed by basic accommodation. Housing subsidies only scratch the surface. Thousands of families in private rental accommodation are paying closer to 50 per cent of their income for a roof over their head. Tragically, the number of homeless people, many of them young families, is on the rise and each new interest rate increase or rental rise sees banks and landlords throw more out onto the streets.
Housing is a basic human right. A government which cannot house its people has no right to make any claims to sound economic management. It should be thrown out and replaced by one which supports housing and sees the needs of people as more important than bank profits.
Neither major party is offering such a policy. The Greens have a far superior housing policy which supports the public sector and which deserves support. A strong vote for the Greens has the potential to break the Coalition’s control of the Senate and enable the passage of any progressive legislation. For these and a range of other reasons, the Communist Party of Australia is supporting the Greens in the forthcoming Federal Elections.