On Tuesday we finally learnt what Wayne Swan and his state counterparts have been doing for the past few months on the crucial issue of housing: preparing a review.
Forehead, meet palm. Slap. Of course — a review.
Back in December, COAG agreed to “the development of a housing supply and affordability reform agenda lead by treasurers, through the Ministerial Council on Federal Financial Relations, for consideration in the first half of 2010”.
Housing was already on the COAG agenda before that, but this looked like a welcome ramping up of activity on an issue that was rapidly emerging as a key economic reform challenge. By that stage, Glenn Stevens had already identified housing under-supply as an issue troubling the Reserve Bank.
When Swan released the Intergenerational Report at the Press Club on February 1, several journalists (and I) specifically asked him about housing and infrastructure issues. He deftly offered non-answers to all of them and appeared to get crankier each time the issue was raised. I assumed that was cover for the fact that he wasn’t willing to pre-empt the COAG work under way.
Well Tuesday’s COAG meeting revealed that work. The “housing supply and affordability reform agenda” is at Attachment B of the communique from Tuesday. The guts of the reform agenda is a series of reviews of the housing supply pipeline and government policies that constrain supply or stimulate demand. The reviews include whether the first home owners grant stimulates demand (really? you think?), whether environmental and energy efficiency requirements are constraining supply, the impact of tax settings and whether approval and planning processes can be improved. The impact of the banking oligopoly’s unwillingness to invest in property development, however, is outside the remit of the “reform agenda”.
A couple of the reviews are due by the middle of the year; the bulk aren’t due until the end of this year or mid-way through 2011.
Typically of COAG, there’s a strong emphasis on greater cross-border harmonisation, in areas such as housing development infrastructure charges and approval processes. But differing regulatory requirements aren’t the main problem, which centres on co-ordinating and funding infrastructure planning and provision in a way that complements the development of housing stock and encouraging investment in property development.
No one suggests housing supply is quick-fix issue. The problem has been decades in the making. But it might have reasonably been expected that COAG’s “reform agenda” consisted of more than a request for officials to go away and do some more reviews. It’s not at all clear that politicians have grasped the level of concern that key stakeholders and the RBA are showing about the problem.
Meanwhile, as tends to happen with long-term structural problems, the growing pressure to do something will manifest itself in short-term, populist solutions. The presence of foreign buyers in the property market is constantly growing as an issue, and threatens to get away from the government. Even as sane a voice as the AFR’s Alan Mitchell this week was suggesting the government move to address the issue. The problem is, no one is sure whether there’s actually a problem there or not. Perhaps another review might help.
And the excellent Lenore Taylor reported last week that the coalition was running a scare campaign on the social housing component of the stimulus package. This started life in the right-wing press that went, seemingly overnight, from complaining about the slow rate of roll-out of social housing to encouraging protesters objecting to having poor people living near them in communities where social housing projects were being built.
There’s an overlap between this sort of NIMBYism and deeply unpleasant, sub-Hansonist bigotry that echoes in the use of the word “ghetto” and criticism of “migrants”, whom protesters seem to assume will occupy social housing. It just confirms that xenophobia is an all-purpose tool — foreigners can be criticised for buying top-of-the-market properties and living in social housing.
If housing bursts out and starts seriously damaging this government and its state Labor counterparts, it might look back on the COAG “reform agenda” as the equivalent of fiddling while its political stocks burnt.