Over the weekend, Labor and the Coalition both announced new housing policies designed to make it easier for first home buyers to get into home ownership. The policies are designed to court favour with young people, who are the biggest cohort of voters at the upcoming election.
Labor’s commitments include $10bn to build 100,000 new homes across the country, which would be reserved for first home buyers, and measures to help first home buyers with a five per cent deposit to avoid lender’s mortgage insurance, which can add tens of thousands to the average mortgage. Given that the median house price in Australia is close to $1m, buyers might still need to save $50,000 for their deposit.
The Coalition’s policy would allow first-time buyers of new-build homes (which are generally more expensive) to deduct their mortgage payments from their income taxes for the first five years after purchase. This policy would not change how much buyers would have to save to purchase their homes. For a million-dollar house, a buyer would still need a $200,000 deposit to avoid Lender’s Mortgage Insurance.
While 100,000 new homes would be welcome, neither Labor or the Coalition’s policies would bring down house prices, which have more than doubled in some places over the last decade. In fact, the Coalition’s policy could lead to an increase in house prices.
So, what do these policies do for women?
Here’s what we know: because of the gender pay gap, young women are less likely than young men to own homes, and when they do eventually buy, they face higher debts for longer. Women are more likely than men to cite affordability as a significant barrier to entering the housing market.
Only a third of women who separate from their partner and lose the house manage to purchase another home within five years. Three in four single women retirees who rent privately, live in poverty. Women are more likely than men to rely on Commonwealth Rent Assistance payments and three in five people in social housing are women.
Is it any wonder that women are the fastest growing cohort of people experiencing homelessness and two in three homelessness service clients are now women? The situation is especially bad for single mothers, who experience homelessness and marginal housing at nearly four times the national average.
For these women, these freshly announced policies will do very little.
Labor’s policy could allow women to enter the housing market earlier, but they would be doing so with larger loans and higher levels of risk. For older women, or single women with dependents – the most likely to be living in precarious housing –banks are already wary about taking on that risk.
The Coalition’s policy would primarily benefit those able to save large deposits – or those who can rely on the bank of mum and dad to contribute to that deposit. Not only does this policy contribute to inequality, women are less likely than men to receive support from parents for housing. The policy will also disproportionately benefit those on higher incomes – it’s only means tested for the year of purchase – who are more likely to be men.
Neither policy would address the cost of renting privately, when we know that women, on average, pay a larger proportion of their salaries on rent. This is especially true for women who work in undervalued female-dominated industries, such as childcare, who are paying 68 per cent of their income on rent.
What would make a difference?
As they developed their housing policies, both Labor and the Coalition decided to avoid addressing the elephant in the room: the capital gains tax discount and negative gearing.
Since the introduction of the capital gains tax discount – which lessens the amount of tax people have to pay when they sell their houses, house prices have skyrocketed. This is because housing is now seen as a way to make money, rather than a safe and secure place to live.
For women, these policies are especially egregious. The benefits overwhelmingly go to men: for every dollar of the capital gains tax discount that goes to women, men get more than $1.50. For every dollar of benefit from negative gearing that goes to women, men get $2.35. When women are increasingly at the coal face of the housing crisis in Australia, why are we continuing to support policies that primarily benefit men?
The capital gains tax discount, coupled with negative gearing, costs the federal budget $20 billion each year – more than double the amount Labor has pledged for building 100,000 new homes across the country. It’s also more than 34 times the welcomed funding package for women’s health announced in February, and almost five times as much as the funding for the National Plan to End Violence Against Women and Children. It’s three times the cost of the Coalition’s centrepiece cost-of-living fuel-excise policy.
It’s time to stop tinkering around the edges
We urgently need to address the affordability of housing in Australia, and to ensure that we can provide enough social and affordable housing for women in need. The Government’s commitment to build 100,000 new houses is certainly welcome, but it comes after a significant decline in investment for public housing. Between 1945-1970, government builds accounted for 16 per cent of national residential construction. From the 1990s, that number dropped to 3 per cent and continues to decline. In the meantime, the cost of housing ballooned.
Neither Labor nor the Coalition’s recently announced policies do much to address the unaffordability of housing in Australia, or to increase the supply of social housing or crisis and transitional accommodation, and they certainly do not benefit the women staring down homelessness as they age.
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