Unleash the power of public banking on housing crisis

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Lead Editorial

22 May 2024
Vol. 26 No. 21

Contrast the housing policy Jim Chalmers announced in last week’s federal budget with Ben Chifley’s 1944 Commonwealth Housing Commission inquiry into Australia’s housing requirements, which declared:

“We consider that a dwelling of good standard and equipment is not only the need but the right of every citizen— whether the dwelling is to be rented or purchased, no tenant or purchaser should be exploited by excessive profit”.

At least 300,000 dwellings would be required to make this possible, stated the report, which provided a detailed blueprint for how it could be done. The plan was based on cheap federal government loans to the states to establish and operate public housing under the 1945 Commonwealth State Housing Agreement (CSHA, p. 7). Some states, particularly South Australia and Victoria, had already established effective public housing schemes, with Victoria’s run by its State Bank.

Sadly, without such an effective infrastructure to carry out an expansion of housing today, the extra money Jim Chalmers allocated in his budget will only serve to further inflate the housing bubble. Labor’s plans for a National Housing Accord, announced in 2022, and its stalled plans for a Housing Australia Future Fund, not only fall drastically short of those of its forbears, they push forward economic tenets that were anathema to Curtin and Chifley. The Albanese government’s plans focus on “incentivising” private financiers by guaranteeing them returns on investment at going market rates. They are incentivising the “excessive profit” outlawed by their predecessors.

Following Chifley, the Menzies government moved to outlaw public banking and heed the international call for governments to yield to competitive markets, and began to strip the Labor housing plan. Amendments to the CSHA saw a dramatic reduction in resources for public housing construction and a lowering of public housing standards. Housing increasingly moved into the domain of the private sector, inflating costs of development. By the 1970s the notion of “market rents” was introduced. This all contributed to building inflation into the housing market, setting up the inflationary housing trap of today.

Having travelled lightyears down the neoliberal road which fantasises that the “market” and the private sector will cure all ills, we know Treasurer Chalmers is doomed to fail when, in his 14 May budget, he says he will:

• Provide an additional $1 billion to states and territories to “deliver new housing” and “enable” new infrastructure such as water, power, sewerage and roads to “unlock” the capacity for new homes. (Witness the infrastructure record of every government since Whitlam!)
• Increase the maximum rates of Commonwealth Rent Assistance by 10 per cent with an additional $1.9 billion investment. (To receive the maximum rate of rent assistance renters must pay at least 40.93 per cent of their income on rent!)
• Budget an additional measly $423 million for the National Agreement on Social Housing and Homelessness with the states and territories. This is targeted at “vulnerable” Australians but, like rent assistance, doesn’t actually apply to the increasing majority of vulnerable Aussie citizens.

Funding a real, non-inflationary housing expansion is just one more reason why the report of the Senate inquiry into regional bank closures—due out on Friday 24 May after it was delayed last Thursday—should recommend a return to public banking. By mobilising public credit and making it accessible to elected bodies, governments will have the most effective tool to solve the problems citizens face.

This represents true transparency and accountability of government of, by and for the people. On the other crucial battleground for that cause comes the news that the British High Court has ruled that Julian Assange may appeal his extradition to the USA for revealing its war crimes, on the grounds that as a foreigner he may not be entitled to first amendment (free speech) protections during his trial. The WikiLeaks model for exposing truth must be protected, and Julian freed, not least to help prevent new wars.

In this issue:

• Support Dan Duggan—demand Mark Dreyfus uphold Australian law and sovereignty
• Government withheld report vindicating David McBride
• ABC has no credibility on strangely timed Chinese ‘spy’ stories
• Australian housing crisis: We need a Ben Chifley
• Public banks and housing: ‘mandatory’ for a growing nation
• Bombshell! NYT exposes Israel’s fostering of deadly Jewish extremism, brutal repression of Palestinians
• Disruption of BRICS agenda entering wet ops phase?
• Xi and Putin consolidate BRICS mission
• Saudi 9/11 case at a judicial crossroad
• ACP exposes more hypocrisy!
• Asian-Chinese Studies: a glance back at more hopeful days
• ALMANAC: NATO careens towards nuclear war with Russia (Part II)

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