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Labor has delivered for working families — if they have their own home

Labor has delivered a very positive economic environment for working families — but only if they can afford their own home. It’s a different experience for the renters and those trying to buy.

Listen to a Julia Gillard speech or a Wayne Swan answer in question time and chances are some variant of the phrase “managing the economy for working families” will get a run.

While Labor continues to trail the Coalition significantly in voters’ perceptions of economic competence, it’s much more competitive when it comes to perceptions of economic management in the interests of workers and what it likes to call “working families”.

It’s a key theme for Labor and one it will be hammering between now and the election. The Labor brains trust understands that while the Coalition are perceived as better economic managers, voters think the Coalition also tends to look after companies and the wealthy ahead of workers, while Labor will look after the interests of workers.

Reinforcing Labor’s obsession with the theme is that — partly by design, partly by accident — this government has delivered for working families who have their own homes. Labor is presiding over a low-inflation, low-interest rate, low-unemployment economy, in which wage growth has been broadly maintained (at about the same level as throughout the last decade, says the Reserve Bank of Australia). It has also made a significant dent on housing affordability, which has improved for seven straight quarters.

The strong dollar has also made major expenditures, like new cars and foreign travel, more affordable. And the government’s superannuation reforms, once they take hold, will ensure today’s generation of workers will retire with more money in their super accounts than they otherwise would have.

From the perspective of the government’s much-vaunted working families, it’s hard to identify how things could be better. The federal government is even trying to address the continuing state government-driven problem of rising utilities costs. Some might prefer the late Howard era of mining boom-fuelled tax cuts, a lower dollar and middle class welfare, but only if they didn’t have mortgage interest payments gobbling up their income due to high interest rates.

Not all of this is down to the government’s economic management, of course. The low inflation environment might be in part because the government’s fiscal contraction is ripping billions of dollars in demand out of the economy, but a higher household savings rate, more cautious consumers, the high dollar and greater competition via the internet have all played a role. Low interest rates partly reflect the extended period of global economic uncertainty and Europe’s depression though, again, Wayne Swan’s fiscal contraction has provided the RBA with greater scope to cut rates. Then there’s the mining boom and Chinese demand for our minerals.

But if you cast your mind back to the issues then-Opposition Leader Kevin Rudd was seeking to exploit in the lead-up to the 2007 election, you’ll notice that, almost by accident, this government has addressed two of the big issues on which Rudd differentiated himself from Howard: housing affordability and cost of living pressures.

Moreover, it has done so without the gimmicky, pointless mechanisms Rudd campaigned on — the First Home Savers Account, and consumer watchdog sites like FuelWatch and Grocery Choice, half-baked pseudo-schemes from a party that wanted to empathise with voters over (wildly overhyped) cost of living pressures but unwilling to actually do anything to regulate markets.

But where Labor has failed is in taking advantage of the benefits for housing affordability of low interest rates to take a long-term approach to that issue. For a time, the Rudd government appeared committed to taking a long-term approach by putting the issue of housing supply front and centre on the COAG agenda, complete with Treasury reports and commitments to intergovernmental action as part of “a housing supply and affordability reform agenda”. After Rudd was removed, the issue dropped off the COAG agenda as if it had never existed. Since then, only Joe Hockey has occasionally displayed some interest in it.

As a consequence, the biggest improvement on housing supply in recent years has been the election of the O’Farrell government in NSW, which breathed some desperately-needed life into the country’s largest property development market, one that was virtually killed off by NSW Labor.

The overall result is that, while housing affordability has improved significantly, renters are up against it in metropolitan areas. Working families who rent their accommodation have thus struggled to enjoy the full benefits of a low-inflation, low-interest rate, low-unemployment environment.

It’s a significant blot on Labor’s otherwise very strong record of managing the economy for working people, especially given it was actually on the government’s radar until Rudd’s demise. And it’s one it could still seek to address before it goes to the polls.

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  • 1
    Ginas new vajazzle
    Posted Thursday, 24 January 2013 at 2:33 pm | Permalink

    Geez, that reads like a real estate lobby spruik for housing mate.

    Housing affordability may have improved at the margins for people, but only at the margins. We are still asking FHBuyers in particular to take out circa 300K mortgages for ordinary accomodation a zillion miles from anywhere outside most capitals.

    ALP is unpopular because their improvements in housing affordability have taken second place supporting the Boomer investment property frenzy, and the general Boomer need to get a payoff for pension purposes, holding the non owning punters access to housing to ransom in order to get it.

    Whether the Government looks to boost Australias insane land supply (in the most sparsely populated nation going) or builds the houses themselves, or brings in land tax on unused housing/land, or whatever the current government has put in the short steps.

  • 2
    Cyndi
    Posted Thursday, 24 January 2013 at 3:16 pm | Permalink

    What Gina said. The only dent in housing affordability is the one in my (empty) wallet.

  • 3
    zut alors
    Posted Thursday, 24 January 2013 at 3:18 pm | Permalink

    Labor has delivered a very positive economic environment for working families — but only if they can afford their own home.’

    This point is too general, many can’t afford their own home - but the banks can. Currently bank loans are at remarkably low interest rates. People who can afford their homes (ie: they own the property mortgage-free) are struggling to make a viable return on any cash deposits they may have.

  • 4
    Zjonn
    Posted Thursday, 24 January 2013 at 3:35 pm | Permalink

    Just how has Labor looked after workers? I was attempting to check out the wages that my nephew is entitled to as a qualified cook, or chef as these blokes like to describe themselves.
    What with Work Choices, Fair Work Australia’s user friendly web site, etc I would have thought it to be a breeze but I now know why so many workers are underpaid. It is impossible to work out with any confidence what anyone should be earning in any particular job.
    This is some of the information needed to be known which, at the end of the chase may end you up with the right information, than again it may not.
    What State or territory do you work in.
    From when do you want the pay rates.
    I am select (adult, junior, apprentice, trainee).
    What is your occupation. (Put in “chef” and you are given a number of choices many of which pertain to status but which are non-credentialed such as the terms Chef de partie, Commis-chef, Demi-chef,etc.
    Are you full time, part time or casual.
    Did your workplace employ staff before 27th of March 2006. For this one the answer must be yes or no, unless you do a company search I don’t know how you would find this out and even than you can only find out when the business was first registered, not when they first started employing people.
    This information should, but doesn’t necessarily indicate whether you are covered by a MA (Modern Award) or PMA, (Pre-Modern Award)
    This will lead you to a summary of three modern award from which to pick and the “Finder” will then prompt for you to proceed to Pre-Modern Awards which will give you several spread sheets to download from which you may be able to determine the PMA’s you may be covered under.
    If you can’t work it out from that they suggest their hot-line (13 1394) and this number’s waiting time starts off at 30 minutes (my recent experience for this exercise was somewhat longer.
    The thing is, the information given may or may not be right, they can’t even guarantee that the information given over the phone is actually correct because of the variables.
    The IR system as it is for a wage earner trying to work out what he should be being paid is a mess and a total disgrace. Labor should hang their collective heads in shame.

  • 5
    Ralf Kluin
    Posted Friday, 25 January 2013 at 2:53 am | Permalink

    Paul Keating once said, “We can only play a part in [the region] if we go to the world as one nation, as a nation united and not a nation in any way divided…” And John Howard once said, “National identity develops in an organic way over time. It may be changed by cataclysmic events like Gallipoli. But government and their social engineers should not try to manipulate it …” I think that Keating was deeply concerned with our sense of values as a nation of people sticking together. I think that John Howard was deeply concerned about questioning our sense of values as a nation of people, based upon times past. Will position our nation with new ideas as we debate our values going into the next federal election sometime in 2013? Is it all about people from other nations seeking asylum in ours? Or should we talk about values like equality, equality of opportunity and how we manage our environment, our water and air, the quality of our sense of place, caring for each other in sickness and building a secure place that every Australian can call home.

  • 6
    Adam Smith
    Posted Friday, 25 January 2013 at 4:00 am | Permalink

    The real problem an ALP government, representing mainly people who’ve only their labour to sell (people who do not control or own capital) revolves around intelligent economic forward planning policies. The way in which the ALP managed the GFC is a case in point. By carefully directing taxes toward public infrastructure building the many small business contractors were kept working. After all, the great majority of small business contractors are only really self employed workers with very limited personal capital often securing their liquid finance by mortgaging their homes. At the root of a market economy is the ability for an individual to sell their “educated” labour which is always an order-bestowing force. In my opinion, the ALP has historically been better at bestowing order in Australia when compared to the Liberal Coalition.

  • 7
    Damien
    Posted Friday, 25 January 2013 at 10:04 am | Permalink

    Zjonn - I agree. These guys are not the workers’ friends Bernard claims for them. The Government’s IR reforms, deliver for unions, rather than for unionists. The result is employers, particularly those employing kids on a casual basis can pretty much pay as they please and “catch me if you can”. The power structure of the IR system has not changed substantially from WorkChoices. Also, the working families slogan has a Thatcherite ring, doesn’t it? Just goes to show how far the centre if the the political spectrum has moved.

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