Australia Is A Nation Of Landlords, We’re Just Living In It

Here’s the hard-to-swallow truth: Australia is a nation of landlords.

We’ve been backed into a corner over decades to a place where a significant section of of the population has been handed massive concessions which they will probably never vote to get rid of. But this isn’t necessarily the fault of selfish voters, as easy as it is to rip on boomers defending their eye-watering entitlements to the death. It’s the fault of generations of politicians who put us – deliberately or otherwise – in a place where people are reliant on the property investment casino or their franking credits handout.

For many young Australians, the election result is particularly galling. It’s obviously very common for there to be a visible progressive/conservative divide across generations, but this time around that distinction was keenly felt. In some ways it felt like a middle finger from older Australians who want to keep the economy exactly how it is, and know they’ll be gone before the climate crisis hits its zenith.

That’s backed up by the fact that early suggestions are that the most profound swings to the Coalition came from over-65s. Perhaps no surprises there.

Aside from the conversation around coal mining and disappearing blue collar jobs in regional Australia, the two Labor policies being pointed to as election-losers are franking credits and changes to home ownership, including negative gearing. These were also the policies, interestingly, I saw some of the most passion for in the PEDESTRIAN.TV comments section. It was obvious that they resonated with our audience, which is young people.

Back in 2016, Richard Cooke wrote a lengthy and astute piece for The Monthly about how Australia’s politics structurally benefit property-owning boomers:

But the sheer numbers, wealth and cultural influence of the boomers have kept policies such as these in place long after their calamitous effects should have been recognised. Negative gearing – allowing losses on rental properties to be tax deductible against an investor’s other income – has been the engine through which Australian property has become some of the most expensive in the world. It has been retained for decades, under the fig leaf that an attempt to wind it back in the 1980s led to increased rents. That was in Sydney and Perth only, and was likely the result of other factors. But this flimsy excuse has made it immovable. In reality, the policy is just popular with the investor class, allowing property owners to avoid tax and push their equity higher at the same time. It has never meant lower rents or an increase in housing stock. Multiple properties have become the norm.

The weirdness of this situation is reflected in one of the great unspoken truths of Australian politics: no one in power wants to admit that ‘housing affordability’ and ‘housing prices’ are literally the same conversation. Someone like Scott Morrison can talk about making housing more affordable and accessible to first-home buyers, while also promising existing homeowners that he will do everything to protect the value of their properties. These are two fundamentally incompatible goals, but no one in power likes saying so. Instead of addressing it, the Libs instead announced a confused scheme to subsidise first home buyer loans, which Labor quickly copied. That’s much easier than admitting there are two very clear sides to the housing prices equation.

Ditto franking credits. As I explained here, any objective analysis of the dividend imputation program finds that Labor is basically right: it’s an obvious (and in some cases substantial) government handout to self-funded retirees. The Liberal messaging around it – calling it a “retiree tax” – clearly cut through, and spooked a number of older Australians into sticking with the Coalition.

It was a solid bit of marketing, using the word ‘tax’ to imply something you earned being taken away. The hollowness of that characterisation was on display on ABC’s Insiders, where Treasurer Josh Frydenberg seemed completely unable to articulate how it was a tax at all:

The answer is much more simple: when the country’s politics has been entirely engineered to benefit a certain group – in this case, self-funded retirees – it’s very easy to convince them their concessions are actually God-given rights. The Coalition didn’t have to work very hard, and the results are plain.

People are generally inclined to vote in line with their material interests. Sometimes – like in the case of mining jobs up north – it’s something progressives need to understand and realign their tactics and policy to address. As many have pointed out, the climate debate sometimes looks like elite city-dwellers telling poor people they’re bad people.

Where it all causes serious problems is when we think about the broader implications of the Coalition’s policy platform and the vulnerable people it either deliberately hurts or largely ignores: First Australians, the unemployed, refugees, ethnic minorities and LGBTQ people.

It’s entirely possible that many of those who pulled the trigger for the Coalition on the weekend don’t support the immiseration of those groups. But when the economy is designed around their hip pocket, and that economy is protected by the Liberals, they’re going to end up voting Liberal.

That’s a reality we need to tackle if we want progressive results.