The federal government has faced fresh criticism for using the Reserve Bank as a “scapegoat” for its economic management, as federal Housing Minister Clare O’Neil acknowledged the “total despair” of Australians trying to secure affordable housing.
Shadow Housing Minister Michael Sukkar used a debate on the ABC’s Q+A on Monday to call out the government’s “unedifying” commentary around interest rate decisions.
Last week, Treasurer Jim Chalmers said successive rare rates were “smashing the economy” ahead of new data showing barely any growth in the June quarter.
“I think it’s been a pretty unedifying display, seeing the government criticising the Reserve Bank governor — who they appointed,” Mr Sukkar said.
“It’s very clear that the government’s mismanagement of the economy, they’re now trying to find a scapegoat for.
“The truth is that interest rates are going to be higher for longer because of a suite of policies this government has put in place.”
Veteran business journalist and ABC finance presenter Alan Kohler told Q+A that “it’s the government that’s slowing the economy more than the Reserve Bank”.
Mr Kohler said tax increases through bracket creep have “taken more out of family incomes than interest [rates]”.
“The aggregate number shows that the increase in taxes has been greater than the impact of interest,” he said.
“And so it’s the government that’s been doing more to slow the economy.”
The government has rejected suggestions its economic management — including increased spending on welfare and care workers — is responsible for stubbornly high inflation, which the Reserve Bank remains determined to push down by keeping interest rates high.
On Q+A, Housing Minister Clare O’Neil did not buy into commentary around rate decisions, rejecting one audience member’s opinion that the RBA was now “out of touch with the community”.
“I don’t agree with those comments,” she said. “I can be really clear about that.
“It is a really difficult environment for us here in Australia at the moment … and an important time for governments to be able to balance things.”
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‘Deep concerns’ for young people
Claire O’Neil sparred with her opposite number on solutions to the critical shortage of housing and the financial strain of entering the market, accusing the opposition of neglecting the issue during its time in power.
Ms O’Neil has only been in the housing portfolio for six weeks, after a July cabinet reshuffle dumped her as home affairs minister amid heavy criticism of the handling of a High Court decision forcing the release of 150 immigration detainees.
“We have a significant housing crisis in our country today that has been building really for more than 25 years,” the Minister told Q+A.
“Our plan is to build, build, build.”
Ms O’Neil said affordability “deeply concerns” her and she was worried that “the bank of mum and dad has become almost a normalised part of the experience of buying a home”.
And she acknowledged the “total despair for a lot of renters in Australia that they feel that home ownership is just getting further and further away from them”.
“The thing that scares me most is when I look at how the housing prospects for young people in our country have changed since the 1980s,” she said.
“If you look at a low-income young person in 1980, at the time, 60 per cent of young people owned their own home. Today that figure is about 20 per cent.
“This tells us that the life experience of being a low-income person in our country today has radically shifted over a 40-year period just because of housing.”
Mr Sukkar said the government must take responsibility for the stress on households in finding and affording a home.
“Clare has only been in the role for a few weeks admittedly but her government on every single metric has seen things get worse,” he said.
Immigration blame game
Mr Sukkar and Ms O’Neil also heard from a migrant Australian who said he felt he had been blamed for the housing crunch.
Both sides of politics have vowed to slash immigration, arguing it has contributed to shortages of housing stock.
The government has also announced a cap on international students, angering major universities.
Hammad Ali told Q+A he and his wife had “worked 60-hour weeks to save for a down payment on our only home”.
“As a proud Australian, I take every opportunity to actively participate in community events that help me integrate within Australian society,” he said.
“How have I created a housing crisis in Australia?”
Michael Sukkar said, “we don’t blame individuals” but “it’s the duty of government to make sure that we have a planned migration program that ensures that we can build the number of homes needed”.
“We’re not helping the migrants and we’re not helping those who are already here if we have a migration program that’s out of step with what I consider the most important infrastructure … a roof over people’s heads,” he said.
But Mr Ali said he was hearing “populist and simplistic statements” on immigration.
Grattan Institute CEO Aruna Sathanapally said immigration — particularly discussion around student visas — had become “a hyped-up debate”.
“The bigger driver of our shortage of housing on the demand side is Australians’ demand for space,” she said.
“That’s a bigger impact than the impact of migration. It’s really important to lay the facts out here.”
Ms Sathanapally warned of the impact of cutting back skilled migration — which is also crucial for trades involved in housing construction.
“So even a reduction such as what the Coalition has proposed of 25,000 in terms of our skilled migration, we’ve calculated that would cost us more than $200 billion over 30 years,” she said.
“Migrants pay more in tax than they take in services.
“So we can do it and cut migration but we shouldn’t pretend that isn’t a costly way to go about solving a housing problem when the source of the problem is our failure to build enough houses for the population we always knew we were going to have by this point.”
Watch the full episode of Q+A on ABC iview. Follow Q+A on YouTube and Facebook.
