Blakeway receives a lot of complaints. More than one in six people in England live in social rentals (compared to fewer than one in twenty in Australia). That’s about four million households, and Blakeway’s office is the place to go if they have a beef with their landlords, whether those institutions are not-for profit housing associations or local councils.

In 2022–23, the ombudsman made 6590 orders and recommendations designed to make things right for residents, including £1.1 million (A$2.1 million) in compensation. The call on Blakeway’s services is escalating at a phenomenal rate. “This financial year we’re up 91 per cent for formal investigations,” he tells me in an online interview. “We’re trending towards 10,000 formal investigations a year.”

Demand will grow even faster if the ombudsman is empowered to extend its services to another 4.4 million households in the private rental market, a change Blakeway would welcome. Most private tenants can’t currently access the free, independent, impartial redress his office provides, but a Renters Reform Bill could make his office the single venue for managing conflicts without the need to go to court.

Blakeway took up his role in 2019. His previous experience included serving as London’s deputy mayor for housing (when Boris Johnson was mayor) and as a director of the government housing agency, Homes England. Answering my questions, he is thoughtful and considered, and not prone to strong statements. In official verdicts on the failures of social housing providers, though, he is more direct.

Last July, for instance, he delivered a scathing judgement on the consistent failings of London’s largest social landlord, L&Q, which provides homes to a quarter of a million people. He found L&Q demonstrated little empathy in responding to residents’ complaints and in some cases was overtly dismissive, heavy-handed and lacking in respect. He ordered the organisation to pay £142,000 in compensation and apply 500 remedies including apologies and repairs. He has been equally critical of other big housing providers.

Resolving individual cases, though, only achieves so much. In a new report analysing complaints by vulnerable tenants, the ombudsman identifies patterns of landlord failure around attitudes, respect and rights. A fundamental reset is needed, he writes, and a royal commission into housing and health is the way to do it.

Remarkably, the ombudsman reaches back to the 1880s for inspiration. The Royal Commission on Housing of the Working Classes was, he writes, the “only inquiry of its kind to explore the relationship between housing and public health.” The commission was set up in 1884 by Conservative prime minister Lord Salisbury, who appointed himself — along with the Prince of Wales, former union leader Henry Broadhurst and several others — as one of its its members.

Salisbury believed that government-sponsored housing initiatives were vital to improve morality and health — a view criticised by the Manchester Guardian, among others, which described it as “state socialism pure and simple.” Despite the critics, the commission’s report produced “an explosion of transformative government-backed interventions, from council homes to garden suburbs.”

Britain’s subsequent tradition of regarding housing as a health issue saw significant housing developments led by health ministries. The ambitious 1919 Housing Act, for instance, which made housing a national responsibility, is generally called the Addison Act in reference to Dr Christopher Addison, the health minister who introduced it. After the second world war, Labour’s health minister Anuerin Bevan not only created the National Health Service but also, as minister responsible for housing, oversaw the construction of more than a million new dwellings in five years.

Public inquiries like Britain’s 1884 commission have also played an important role in Australia. Most notable is the Commonwealth Housing Commission initiated by postwar reconstruction minister Ben Chifley in 1943. Its report concluded that “a dwelling of good standard and equipment is not only the need, but the right of every citizen” and recommended that the national government “sponsor a government-financed housing programme.”

Up to that point, federal engagement in what was seen as a state issue had been limited. The commission provided the impetus for Commonwealth–state housing agreements over subsequent decades. While the scale of its ambition was never realised, more than 14 per cent of dwellings completed nationally between the end of the war and 1956 were built as public housing.

Richard Blakeway’s call for a royal commission “to reimagine the future of social housing” in the twenty-first century echoes similar calls in Australia. A 2021 report by the UNSW City Futures Research Centre argued for a royal commission to tackle “the scale and complexity” of the housing problem. More recently, the Centre for Equitable Housing urged the federal government to review its many and disparate housing-related outlays and bring them together in a single portfolio with clear objectives.

But both England and Australia are awash in reports from a succession of inquiries and housing research. Is the problem really a lack of data? Or is it a lack of political will?

One barrier in both countries is a basic disagreement about how to move forward. Proponents of the supply side argument say planning restrictions are limiting home building, driving up prices and rents. For them, the solution lies in looser planning and zoning rules to free up private development. Build more housing and rents will fall.

The contrary position is that market players have no incentive to build the type of homes that low-income earners can afford, especially when the tax system encourages investment in housing as an asset rather than a public good. The corollary of this critique is that government must reform taxation to reduce speculation and invest more public funds in low-rent housing.

These views are not mutually contradictory, and some action is happening on both fronts, but the supply-side argument seems to hold more sway with governments in both countries. In its 2019 election manifesto, Britain’s Conservative Party promised that it would lift residential construction to make sure 300,000 new homes are built annually in England. As parliament approaches the end of its term, completions are falling short of that figure, with about 234,000 new dwellings added to the housing stock in each of last two financial years. In a new initiative, secretary of state Michael Gove hopes to turbocharge development by compelling councils to speed up approvals for home building on former industrial or “brownfield” sites.

In Australia, the Albanese government aspires to deliver 1.2 million homes over five years, spurred by incentives to streamline planning and zoning rules at state and local levels. To hit this target developers would need to increase construction from 40,000 to 60,000 dwellings per quarter. Expert observers like Alan Kohler doubt the industry can build at such an unprecedented rate, particularly in current market conditions.

Investment in social housing has surged in Australia thanks to federal Labor’s Housing Australia Future Fund, or HAFF, and renewed state government initiatives. But after decades of neglect these projects won’t be enough to put roofs over the heads of Australians with unmet housing needs, including the 175,000 households on state and territory waiting lists for social housing.

In England, almost 1.3 million households are waiting for social housing, a dire statistic that manifests in clusters of tents pitched on the pavements of central London. In some parts of the city, more than one in ten children and teenagers live in temporary accommodation and are effectively homeless.

The Tory government says it has invested £11.5 billion since being elected to fund an affordable homes programme. It has just doubled a low-cost loan scheme from £3 billion to £6 billion to enable providers to build an extra 20,000 dwellings.

Historically, though, these numbers appear modest. In the thirty-five years after the second world war, local authorities and housing associations built 4.4 million dwellings; by 1981 almost a third of the English population lived in social housing. The share has halved in the decades since, not because demand has fallen but because there are far fewer socially provided homes. This month, the magazine Inside Housing reported that the number sold or demolished in England last year was nearly three times greater than the number completed.

An alliance of England’s largest housing associations has urged Michael Gove to invest £15 billion annually over the next decade to build 90,000 homes a year, a third of them in London. But having just lost two seats to Labour in recent by-elections and facing a wipe-out at the next election, prime minister Rishi Sunak is more inclined to woo voters by cutting taxes than by investing billions in public services.

Labour, meanwhile, is playing a cautious hand. It has promised the “biggest boost to affordable housing for a generation” but not the funding to match. Anxious to appear economically responsible, Labour has just scaled back the £28 billion green investment plan that was to be a central plank of its election manifesto. If Keir Starmer becomes prime minister, a big spend on housing looks unlikely.

As waiting lists for social housing grow, tenants lucky enough to have a subsidised roof over their heads can still find themselves in dire circumstances, reminiscent of the conditions that gave rise to Britain’s first housing inquiry in the 1880s.

In December 2020, in a case that’s become emblematic of the problem, two-year old Awaab Ishak died from a severe respiratory condition caused by persistent mould in the council home his family rented in Rochdale north of Manchester. Mould — one of the systemic problems identified in the ombudsman’s files — is also recognised as a major health threat to tenants in Australia.

Awaab’s parents had been complaining about the mould since 2017 but the local authority failed to act, saying the problem was caused by the family’s “lifestyle.” The ombudsman found many cases of social landlords adopting an accusatory approach rather than investigating other possible causes.

“Health and housing are closely aligned,” says Blakeway, “but the system doesn’t necessarily respond in that integrated way. There’s a real risk that complaints are treated in a kind of transactional way or become personalised. The risk is that they are treated in isolation, and you lose thematic qualities that complaints have, or you don’t do a root cause analysis.”

One housing worker told the ombudsman that tenants who challenge providers are “seen as troublemakers to be quashed.” This view gels with management’s dismissive response to Grenfell Tower residents who warned of urgent fire safety problems ahead of the 2017 inferno that killed seventy-two people.

Community outrage at Awaab’s death has prompted Michael Gove, the minister responsible for housing, to include Awaab’s Law in a new Social Housing Regulation Act. Landlords will now be required “to investigate and fix reported health hazards within specified timeframe.” But whether local authorities and housing associations have the resources to make quick repairs is another question.

More than one in ten dwellings in the social rented sector fail to live up to the Decent Homes Standard, the government benchmark for minimum housing conditions. And the English Housing Survey found that almost two-thirds of tenants who complain to their landlords are not happy with the response.

Tenants told the ombudsman that social landlords were quick to inform them about increased rents and service charges but poor in communicating about all other matters. Not surprisingly, this created a perception that social housing providers are “only interested in money, rather than the condition of their homes or the landlord/tenant relationship.”

An expert panel concluded that communication between tenants and their social landlords is hampered by the high turnover of stressed frontline housing workers. The panel’s Better Housing Review also found that tenants lack a strong voice and face-to-face contact with staff. Blakeway’s research confirms this finding: residents told his office that a simple knock at the door can help to maintain and improve the landlord/tenant relationship.

Funding shortfalls undoubtedly underpin these problems, and the housing crisis has been compounded by the perfect storm of Covid, Brexit, higher interest rates, labour shortages and supply chain bottlenecks. But Blakeway sees other factors at play too.

With around 2000 councils and not-for-profit associations providing social housing in England, a great variability is inevitable. Understandably, the providers’ focus has been on increasing housing supply, but Blakeway says that’s rarely balanced by consideration of what to do about ageing houses and flats in urgent need of upgrades.

He believes that providers hold to a fixed view that social housing is better than any alternative on offer to low-income tenants in the private rental market, which leads them to neglect residents’ needs.

Then there are long-term societal shifts. “If nothing else had changed,” says Blakeway, “the current population in social housing would have got older, above the national average.” That means more vulnerable residents, often concentrated coastal and rural areas.

Housing providers need to think about how to respond says Blakeway: “What does that mean for our services, for adaptations, for understanding of issues like dementia?”

This demographic transition has coincided with residents’ growing understanding of what they can demand under recent human rights, equality and care legislation. The ombudsman says housing providers haven’t done enough to modify residents’ homes in line with these laws. This has been exacerbated by cuts to other government supports. “Social landlords will very clearly say that they feel like they become a surrogate for social and health services,” says Blakeway. “That’s because they are one of the most visible and immediate touch points.”

To survive financially, housing associations are also compelled to become savvy commercial operators. Torus, for instance, claims not only to be the largest affordable housing provider in northwest England, but also “one of its biggest and fastest-growing developers and commercial contractors.” One Housing describes itself as “a group of complementary businesses driven by a clear social purpose, with a charitable housing association at its core.” Alongside social and affordable housing, it offers homes for private rent and private sale.

A lack of funding has forced providers to sweat their assets, a strategy the Better Housing Review panel said “is fast reaching its limits.” The expert panel worried that commercial considerations are distracting providers from their core purpose of providing “decent, safe homes for those who can’t afford the market.” It warns that mergers to achieve economies of scale run the risk of “working to KPIs more related to business efficiency” rather than “complex indicators such as tenant experience and satisfaction.”

Blakeway says consolidation in the social housing sector is driven by noble ambitions but notes organisations become more reliant on processes and systems as they grow. “If a resident doesn’t fit into the neat box or their issues are more complex than the system can cope with, that’s where we can see things being fractured and people through falling through gaps.”

In a 1942 pamphlet, Housing the Australian Nation, prominent Melbourne social reformers F. Oswald Barnett and W.O. Burt surveyed the appalling housing conditions experienced by Australia’s working classes and called for much greater government investment than previously imagined. Health was at the top of their concerns. Without better housing, they worried, efforts to improve health would be “seriously retarded.”

Today, the evidence is even more compelling. In England, the research group BRE calculates that it costs the National Health Service an annual £1.4 billion to treat people made sick by poor housing. Yet there are relatively inexpensive and cost-effective ways of dealing with the major risks: insulation to counter excessive cold, hard-wired smoke detectors to alert residents to fires, handrails to cut the risk of falls, ventilation to minimise mould and damp.

BRE estimates that spending to reduce these hazards would quickly pay for itself in savings to the NHS. In the private rental sector, the payback time would be between eight and nine years; in the social housing sector it would be twelve to thirteen years. (Social housing tales longer to generate a positive return because overcrowding is a major hazard and is more expensive to fix.)

The costs of poor housing go beyond healthcare to include such things as lost earnings for those who fall ill and those who must care for them. BRE calculates that total annual cost to society of leaving people living in poor housing is around £18.5 billion. As well as generating NHS savings, fixing housing hazards would create jobs, reduce energy costs, lower carbon emissions and improve property values.

Looked at this way, public investment in housing seems like a no-brainer, whether as a way of improving lives or as a prudent fiscal move. As the housing crisis deepens, the social and economic price we pay further outstrips the cost of action.

Australia is moving down a similar path to England where, in the 1980s, not-for-profit housing associations began taking on a role traditionally played by local government. Since 2006, the number of dwellings owned or managed by Australia’s not-for-profit providers has more than tripled, mostly thanks to stock being transfers from public housing authorities.

Funding from the HAFF and state programs to build new dwellings will increase the size of the not-for-profit sector and raise pressure on providers to consolidate to achieve efficiencies.But as in England, there is a risk that commercial imperatives could distract from the core business of providing decent homes for Australians priced out of the private market. This is more likely to happen in the absence of consistent public funding and clear government direction.

England has also had sixteen housing minsters in the fourteen years since the Conservatives took office. As the Better Housing Review panel commented, this revolving door means “a lack of consistent and strategic thinking and action.”  Yet the panel insists that government cannot outsources its obligations and must remain “fully accountable for the provision of decent housing nationally,” just as it remains responsible for health and education.

Like England, Australia lacks a coherent housing strategy and consultations to develop one have proved disappointing. For almost a decade, Coalition governments in Canberra insisted that housing was a state matter. While this has changed under Labor, we still have a housing minister with no housing department. As the Centre for Equitable Housing argues, the lack of a dedicated department or a consolidated housing budget statement makes impossible to properly shape or evaluate public policy.

Housing ombudsman Richard Blakeway thinks a royal commission could help solve England’s housing challenge and revive understanding of the close connection between decent homes and good health. Housing, he says, is a complex problem where solutions must be built on expertise, impartiality, independence and a long-term perspective — all things that a royal commission has the potential to deliver. Australia’s problems might be different, but they are just as serious. Perhaps here, too, it’s worth considering a public inquiry with the capacity to probe, publicise and make recommendations. •

The post Lord Salisbury’s message for the housing ombudsman appeared first on Inside Story.

There was no fraud. The postmasters’ lives were destroyed because of faults in the Post Office’s Horizon computer network. But much like Australia’s robodebt system, Horizon was regarded as infallible. Attempts to raise the alarm were ignored; people who sought help were hounded for non-existent debts. As in Australia, those whose lives were turned upside down struggled to gain the attention of established media outlets; it was individual journalists and smaller publications that kept digging and probing, and refused to accept Post Office spin.

It wasn’t until January this year that prime minister Rishi Sunak conceded it was one of Britain’s greatest-ever miscarriages of justice. He has committed his government to a “blanket exoneration” of hundreds of wrongfully convicted individuals and promised them “at least £600,000 in compensation to rebuild their lives.”

Three compensation schemes have already been set up and around one hundred convictions overturned by appeal courts. A public inquiry led by a retired High Court judge began hearings in February 2021 and is likely to continue at least until September this year. In the meantime, many former postmasters remain destitute or seriously out of pocket. They are waiting not only for redress but also for the full truth about what went wrong in the executive ranks of the Post Office.

While details continue to dribble out, so far no senior managers have been held to account, though former Post Office chief executive Paula Vennells has offered to hand back the CBE she was awarded in 2019.

Vennells said she was “truly sorry for the devastation caused to the subpostmasters and their families, whose lives were torn apart by being wrongly accused and wrongly prosecuted.” Whether or not Vennells loses her gong is up to King Charles. The union representing Post Office employees reckons if she were truly remorseful then she’d offer to repay her performance bonuses as well.

Solicitor Neil Hudgell told a January hearing before the parliament’s business and trade committee that the Post Office spent £100 million “defending the indefensible” through the courts yet he has clients who are still waiting on reimbursements of a few hundred pounds. He said the contest between postmasters and Post Office was characterised from the start by an inequality of arms. “You are facing this big beast in the Post Office, with all the machinery that sits behind it,” he added. “You have some poor person who is being accused of doing something hideous who does not have that.”

On top of the financial losses comes the psychological toll. Hudgell says his firm has more than a hundred psychiatric reports for clients diagnosed with depressive illnesses, including post-traumatic stress disorder and paranoia. At least four former postmasters are thought to have committed suicide, and more than thirty have passed away while awaiting justice in their cases.

The saga goes back to 1999, when the Post Office began rolling out a new computerised accounting system to its thousands of branches and sub-branches, many of which operate as franchises run by subpostmasters. Essentially, the subpostmasters are independent contractors delivering services under an agreement with the Post Office. Many also operate a shop, cafe or other small business on the side.

As in Australia, people go to their local post office for much more than stamps and parcels. Branches offer banking and bill payment services, and handle applications for passports and other critical official documents. Subpostmasters play a central role in villages and small towns. They are often trusted as advisers and confidants, especially for older, less digitally connected citizens. To be accused of putting their hands in the till was a mortifying experience.

The new Horizon computer system, developed by Fujitsu, was meant to make it easier for postmasters to balance their books. But problems were evident from the start. In 1998, Alan Bates invested around £60,000 to buy a shop with a post counter in the town of Llandudno, in north Wales. After Horizon was introduced, discrepancies quickly appeared in his accounts, and Bates found himself £6000 short.

“I managed to track that down after a huge amount of effort through a whole batch of duplicated transactions,” he recalled. Meticulous record keeping enabled Bates to show that the problem lay with the computer system and was not the result of carelessness or fraud. Still, in 2003, the Post Office terminated his contract, saying £1200 was unaccounted for.

Unlike other postmasters, Bates was not prosecuted or forced into bankruptcy, but the injustice and the lost investment cut deep. Post Office investigators insisted that he was the only subpostmaster reporting glitches with the computer system, but Bates was certain that there must be others. He was right. RAF veteran Lee Castleton challenged the Post Office in court after it suspended him over an alleged debt of almost £23,000. In the first instance, the Post Office failed to show up at court and he won. Months later, the Post Office raised the case to the High Court. Castleton represented himself, lost, had costs awarded against him and was rendered bankrupt.

Castleton managed to convince a young journalist at the trade publication Computer Weekly to investigate. Rebecca Thomson found six other examples of people who’d been accused of stealing from the Post Office, including Alan Bates, who had tried a few years earlier to interest the same magazine in his case.

National newspapers and broadcasters failed to pick up Thomson’s 2009 story. “It really did go out to a clanging silence,” Thomson told the Sunday Times in 2022. “I was super-ambitious, and I was disappointed and a bit confused about the fact that there had been so little reaction to the story, because I still continue to feel like it was incredibly strong.”

What Thomson achieved, though, was to confirm Alan Bates’s hunch that he was not alone. Bates reached out to other subpostmasters in Thomson’s story and discovered they’d been told the same thing as him: no one else has had a problem with Horizon, you’re the only one. This Post Office mantra was a bare-faced lie.

Bates and his newfound allies founded the Justice for Subpostmasters Alliance with the aim of “exposing the failures of Post Office, its Board, its management and its Horizon computer system.” Their campaign for truth and justice is the subject of the four-part television drama Mr Bates vs the Post Office, starring Toby Jones as Alan Bates, that aired on British TV in January.

The series put the scandal and the ongoing public inquiry firmly back in the headlines (Rishi Sunak’s belated response to years of revelations came a few days later) but it would not have been possible without fourteen years of dogged, dedicated journalism. Since Thomson broke the story in 2009, Computer Weekly has published about 350 follow-up articles on the issue. Separately, freelance journalist Nick Wallis has pursued the story since 2010, at times relying on crowdfunding to finance his work.

In 2010, Wallis was working at a local BBC radio station when a flippant response to a tweet put him in contact with Davinder Misra, the owner of a local cab company, who told him his pregnant wife had been sent to prison for a crime she didn’t commit. Seema Misra had been convicted of theft and false accounting and sentenced to fifteen months jail. The Post Office claimed she had misappropriated almost £75,000 from her branch in West Byfleet in Surrey.

With roots stretching back to 1660 and the reign of Charles II, the Post Office is in many respects a law unto itself. It doesn’t have to jump through the hurdles of police investigations or case reviews by a public prosecutor to launch prosecutions. It has huge resources to employ top silks to represent it. Against its might, people like Seema Misra didn’t stand a chance.

Unaware at the time of Thomson’s article in Computer World, Wallis decided to investigate. He has been writing and broadcasting about the Post Office scandal ever since. He has been a producer, presenter or consultant on three episodes of Panorama, the BBC’s equivalent of the ABC’s Four Corners, he has written a book, The Great Post Office Scandal, he made a podcast series, and he maintains a website dedicated to continuing coverage of the story.

Wallis also acted as a consultant on Mr Bates vs the Post Office. He told the Press Gazette he was “blown away” by the program and what it had achieved. Yet he stressed that it is Bates and the other postmasters who should take the credit for getting the scandal into the open and convictions overturned.

Seven screens Mr Bates vs the Post Office in Australia this week. If you can put up with the ad breaks, the series is well worth watching. It’s an engaging, heartwarming story of decent, ordinary folk standing up against the powerful and the entitled and eventually winning against the odds. If you want to understand the story more fully, though, and to hear directly from those most affected — people like Alan Bates, Seema Misra and Lee Castleton — then I’d recommend The Great Post Office Trial, Nick Wallis’s podcast for BBC Radio 4. It’s a compelling tale that shows what good journalism can achieve. •

The post Lost in the post appeared first on Inside Story.

The result of all that consulting has just been summarised in a thirteen-page report that shows respondents want governments to do much more than just “manage” homelessness. They want them to prevent and eliminate it by making sure “all Australians have access to safe and adequate housing.”

The summary identifies twelve principles to guide the plan towards this worthy outcome. The principles are sound, and include recognising housing as a basic human right, ensuring housing is accessible and sustainable, and engaging people who have experienced homelessness in designing programs and services. They also propose a “housing first” approach to homelessness that gives people a home before helping them to deal with challenges like mental illness, addiction and unemployment.

The report lists a few practical suggestions too, including stronger tenants’ rights and inclusionary zoning rules to guarantee new residential developments incorporate social and affordable housing.

Many of its key proposals, though, come down to money: building more social housing where it is most needed, for example, and providing sufficient homelessness services to meet demand.

Such aims can’t be achieved without a much higher level of dedicated, consistent government funding. Indeed, the report includes “secure funding and support” as one of its twelve guiding principles. Yet it offers no guidance as to how the necessary revenue might be raised. This is not because people engaged in the consultations failed to put forward ideas; rather, it’s because the most obvious way to secure funding for housing initiatives is to change the way housing is taxed and that’s something the government doesn’t want to talk about. Right from the start the consultation was framed to bracket out any such discussion.

Two new pieces of research reinforce just how glaring and regrettable this exclusion is.

The Centre for Equitable Housing has drawn together current and historical budget data from across different government portfolios to provide a comprehensive picture of federal housing expenditure over time. It found that tax concessions like negative gearing and the capital gains tax discount are eclipsing expenditure on other housing programs. The combined annual value of these tax breaks is more than ten times the sum Canberra disburses each year to the states and territories to build social housing and tackle homelessness. As a result, 43 per cent of federal government housing support is flowing to the top fifth of income earners, while just 23 per cent goes to the bottom fifth.

The report also found that the numerous but disparate housing-related measures in the federal budget lack clearly articulated objectives. In their absence, negative gearing and the capital gains tax discount operate as “a shadow housing policy” driving up prices by encouraging speculative investment in existing housing stock rather than new construction.

The Everybody’s Home campaign, meanwhile, has calculated that the revenue lost to investor tax breaks over the coming decade could fund 550,000 new homes for low-income households. That would be more than enough to eliminate social housing waiting lists around the country.

The single mention of tax in DSS’s summary of its consultations comes in this sentence: “Private investors and landlords need incentives like tax breaks and subsidies to provide more social and affordable housing.” It’s as if negative gearing and the capital gains tax discount are invisible, or don’t exist, and we’re being asked to invent a set of new industry supports to build affordable homes without any reference to the multibillion-dollar concessions already in place.

Again, this isn’t because participants in DSS’s consultations forgot to mention negative gearing and the capital gains discount. Both were raised at the “community conversation forum” I attended in Geelong (and not just by me). While DSS has yet to upload all 517 submissions to its Engage platform, many of those that are available raise tax reform as an essential consideration in the development of the national housing plan. These include submissions by local governments such as the City of Melbourne and Brimbank City Council, by housing providers and support services such as Mission Australia and the Western Homelessness Network, and by expert organisations such as RMIT’s Centre for Urban Research and SGS Economics and Planning.

In a joint submission, the peak industry bodies National Shelter and the Community Housing Industry Association state the problem clearly:

Currently the ability for housing markets to supply enough homes to meet the population’s needs is distorted by settings for capital gains tax and negative gearing that prioritise speculative housing acquisition for capital return over strategies that aim to ensure every household is able to meet their need for affordable housing. A key goal for the Plan should be to explore opportunities to apply taxation settings that support achievement of long-term housing outcomes over speculative investment returns.

True, statements like this go beyond the narrow focus areas offered up for discussion in the original DSS issues paper, and every page of the summary report includes a disclaimer that it “may not include all views presented by stakeholders.” Yet the same disclaimer says that the document doesn’t represent the views of the Australian government. So even though Labor finds it politically inconvenient to talk about negative gearing and capital gains tax, that’s no reason for the report to shy away from such topics.

To invite community members, housing practitioners and experts to engage in a national dialogue and then to ignore what they have to say makes a mockery of the process of consultation. The Albanese government said it wanted to hear ideas on how to tackle one of the most pressing social and economic issues confronting the nation. Many of us took that invitation at face value and went to considerable lengths to contribute. We can only feel let down. •

The post On housing, is Labor listening? appeared first on Inside Story.

Then there was the unexpected jump in numbers. Net overseas migration for the 2022–23 financial year hit a record 510,000 people, more than 25 per cent above the 400,000 anticipated in the May budget and more than double the October 2022 forecast of 235,000. Not only are more people arriving but fewer are leaving, especially students; the catch-up after Covid means many international students are still in the early stages of their courses and won’t return home for two or three more years.

Combined with the shenanigans of sacked former home affairs secretary Mike Pezzullo, these developments have made it easy for the opposition to conjure up an image of out-of-control migration and link this to housing shortages and other pressing issues. Immigration isn’t the cause of a housing crisis decades in the making, but the surge in arrivals does make a tight rental market even worse.

Arrival numbers would have been no lower under a Coalition government and Australia’s population would be higher if not for Covid. But facts count for little in an overheated debate. Migration is now Labor’s problem and it would be easy to construe the release of its new strategy as an attempt to wrest back the initiative on this fraught topic.

But the strategy is no knee-jerk response. It is the product of months of work, building on an expert panel’s finding that the migration program is “broken” and a report by former Victorian police commissioner Christine Nixon confirming widespread abuse of Australia’s visa system.

The strategy adds detail to the government’s early responses to those two reviews and affirms its commitment to keeping both unions and business onside. It shows a government aspiring to wholesale reform rather than bolting yet more fixes onto an already unwieldly, overloaded and outdated migration machine.

In its existing form, the system satisfies no one. Employers and migrants complain about high costs, slow processing and uncertain outcomes, while the public questions the scale and integrity of the program. In their joint foreword to the strategy, the responsible ministers, Clare O’Neil and Andrew Giles, recognise the need to restore migration’s “social license.”

The strategy articulates four policy objectives, and while they are not ranked, the tone and content of the strategy indicate a descending order of priority. Migration, it says, should first, raise living standards; second, ensure a fair go in the workplace; third, build stronger communities; and fourth, strengthen international relationships.

To achieve the primary aim of higher living standards the government wants to refine migration to boost productivity, counter the perceived impacts of an ageing population, fill skills gaps and expand exports.

One step is to reform the points test, which scores and ranks applicants for permanent skilled migration according to their age, qualifications, experience and English language proficiency. A discussion paper will canvass options that are likely to give greater weight to the skills and qualifications of an applicant’s partner and downgrade factors that are “poor predictors” of labour market success, such as studying in a regional area and fluency in a community language. The aim is to reward skill over “perseverance” so that international student graduates working in their professional fields have a faster route to settlement while graduates stuck in lower-level jobs are screened out and leave Australia.

Another measure introduces a “skills in demand” visa to replace the “temporary skills shortage” visa. This is more than a name change. The government had already lifted the threshold wage for temporary skilled migrants from $53,900 to $70,000 to ensure that these visas are not used to recruit cheap labour. (The threshold, frozen since 2013, will now be indexed annually.) New rules allow temporary migrants to switch employers and sectors more easily, which should improve productivity as these workers move to jobs where their skills are more highly valued.

Labour market testing will be simplified, employers can pay sponsorship fees periodically instead of up front, and visas will be issued more swiftly, with the government committing to a median processing time of just seven days for applicants in the top “specialist skills pathway.” This applies to workers earning at least $135,000, who will no longer have to match one of the occupations in demand identified by Jobs and Skills Australia (though the category is closed to trade workers, machinery operators, drivers and labourers).

Workers paid between $70,000 and $135,000 are on the “core skills pathway” and must still have an occupation identified as being in shortage, with a promise that these lists will be updated more frequently to better reflect rapidly changing labour market needs. Both the core and specialist pathways will offer a route to permanent residency.

The details of a third “essential skills” pathway are yet to be worked out. This option will apply to lower-paid, hard-to-fill jobs with a focus on the care economy. The government says it will “further consult” on lower-wage migration next year, but any arrangements will be sector-specific, capped in size, closely regulated and designed to maintain the primacy of Australia’s relationship to the Pacific as “a guiding principle.”

The latter is a reference to objective four of the strategy — strengthening international relationships — and we can expect further development of PALM, the Pacific Australia Labour Mobility scheme, which has its genesis in a seasonal labour program for workers from Pacific island nations and Timor-Leste. Only 3000 Pacific islanders were working seasonally in Australia in 2016, but by October 2023 there were more than 38,000 PALM participants. The original scheme was broadened from horticulture to meat processing and other agricultural industries, and then extended to encompass tourism, hospitality, retail and care. It is mostly limited to regional and rural areas, but is no longer just seasonal, with workers granted visas for between one and four years.

But the scheme remains purely temporary, with no path to permanent residency. Pacific workers can bid for one of 3000 new Pacific Engagement Visas offered annually, but success is a matter of luck. Former top immigration official Abul Rizvi has highlighted a sharp rise in PALM workers applying for protection as refugees and attributes this to dissatisfaction with their treatment in Australia. He says the “silliness” of the Pacific visa lottery will just add to PALM workers’ frustrations and suggests the government should instead help them “develop higher level skills as a pathway to permanent residence, especially skills relevant to the regional communities in which they are currently working.”

Rizvi’s sensible suggestion points to an enduring dilemma of low-skilled migration. Once workers secure permanent residency they tend to quit poorly paid jobs in remote locations and move to better-paid positions in cities. Keeping migrants on temporary visas limits their labour market mobility and ensures they stay put, but it’s a recipe for disaffection and exploitation.

The structure of the PALM scheme runs counter to the second major policy objective in the new migration strategy, “ensuring a fair go in the workplace.” By allowing temporary skilled migrants to shift jobs more easily, the government has increased their power to challenge underpayment and resist unreasonable demands. Temporary skilled migrants who suffer abuse will have six months instead of two to find an alternative sponsor and be less reliant on any single employer to support their applications for permanent residence. The contrast with the purely temporary PALM scheme that ties workers to specific employers and regions is stark.

To tackle abuse, the government has introduced a bill to make it a criminal offence for employers to misuse visa programs to exploit temporary migrant workers. This recommendation by Allan Fels’s 2019 Migrant Workers’ Taskforce was ignored by the previous government.

The idea of a “fair go” also has a domestic element. The government wants to ensure that migrants don’t displace local workers or bring down their wages. Its primary move here is to tighten entry requirements for international students to ensure that their main intention is to study, not work. The strategy erroneously calls this closing “back doors and side doors” when, in reality, Australia opened the front door wide to support the growth of education for export; unsurprisingly, international students walked through in large numbers.

New barriers are being erected. International students must pass a higher English language test and prove they have significantly more savings. They will find it harder to switch from one course to another, especially if they appear to be going backwards — by, for example, swapping from a degree to a certificate-level course. The government will prioritise visa processing based on the “risk level” of educational institutions. Applications to study at top-tier universities will sail through while visas to attend private colleges languish in the bureaucratic pipeline.

The Australian Skills Quality Authority will also have extra funding to crack down on ghost colleges, those dodgy providers that are shopfronts for obtaining a visa with work rights.

Evidence of a more stringent approach is already apparent. In 2018–19, the last full year of Coalition government before Covid, only 13 per cent of student visa applications lodged outside Australia were rejected. In 2022–23 (the first full year of a Labor administration) 20 per cent were knocked back. The change was especially pronounced in offshore VET applications, where average rejection rates grew from 38 per cent under the Coalition to 46 per cent under Labor. The perception that Dutton was tougher on border control than his successor as home affairs minister doesn’t match reality.

Labor is also winding back generous post-study work visas, which the Morrison government made even more attractive in late 2021 to help international education “roar back” after Covid. Visas will be shorter: three years instead of four for a PhD and two years instead of three for coursework masters. The eligible age limit will be reduced from fifty to thirty-five years.

When the Gillard government introduced the 485 post-study work visa a decade ago, some of us warned that it would produce a large new cohort of “permanently temporary” graduates — migrants living and working in Australia for years without any prospect of settling. This has come to pass. Of the almost 200,000 temporary graduate visa holders in Australia, most are stuck in limbo. They struggle to find jobs in line with their qualifications and do low-skill work that will never enable them to amass the points needed to qualify as skilled migrants. It makes sense to rein the scheme in.

Over time, these measures could see international student and graduate numbers decline further than they would have, which may reduce the pool of casualised and precarious labour staffing kitchens and delivering meals. On the other hand, the government has reinstated restrictions on working hours lifted during the pandemic. Students can work a maximum of forty-eight hours each fortnight, up from forty hours pre-Covid. Some will need to work more “off the books” to make ends meet, making them vulnerable to ruthless employers.

The government will also evaluate another visa category rife with wage theft, poor working conditions and sexual harassment — working holiday visas — which have morphed from a cultural exchange program into a low-wage labour scheme, especially for agriculture. The scale of abuse has repeatedly been documented over the past decade, and it’s hard to see how the program can be rehabilitated short of scrapping the second and third visas backpackers can acquire if they complete three or six months of “specified work” in regional Australia. As with the PALM scheme, linking work and visas makes young travellers beholden to employers, often in remote towns and isolated workplaces. The PALM scheme is, at least, more closely regulated.

Improved conditions for student workers and backpackers would be a significant achievement and help to restore public faith in the migration program, even if we had to pay more for our food and collect our own takeaway. Whether the proposed measures can achieve this is an open question, but Labor is at least demonstrating a level of intent that was absent under the Coalition. In the words of former senior public servant Martin Parkinson, who chaired the expert review, the migration system has suffered “a decade of almost wilful neglect.”

The government hopes to meet the third objective of the migration strategy, “building stronger communities,” by shifting the emphasis from temporary to permanent migration and providing greater clarity about who can (or can’t) hope to settle here.

The commonsense implication is that permanent migration is more conducive to building “a cohesive multicultural society.” But the strategy is silent on family migration, apart from the strange formulation that the government will support “relationships with family abroad.” That doesn’t sound promising for overseas-born Australians who want to bring parents here to live with them. Parent migration could build stronger communities but clearly runs counter to the higher-priority goals of boosting productivity, filling skills shortages and slowing demographic ageing.

The conundrum of parent visas has been left to fester so long that the shocking blow-out in applications and waiting times means many parents are likely to die before they get a visa. This is causing distress and anxiety for tens of thousands of families.

One immediate option would be to suspend new applications pending a review of the system, just as Canada did in 2011. This would halt the growth in the waiting list and buy time to figure out what to do while working through the backlog. It is cruel to keep applications open and foster false hopes.

The migration strategy draws quite a clear outline of the government’s vision for skilled migration, even if there is lots of colouring in to do. When it comes to family migration, though, the page remains virtually blank, and the government is still “exploring” what visa settings are “appropriate.”

To support all four objectives, the migration strategy promises to make the system easier to navigate and administer. This entails, among other things, merging or closing some of the one hundred “visa products” to simplify offerings, as well as adding extra staff and upgrading IT systems.

The challenge will be to find a balance between the clear regulations and procedures needed to process a high volume of visas efficiently, on the one hand, and retaining enough flexibility to fit individual circumstances, especially in compassionate cases, on the other. Whenever the migration system re-gears, some people get chewed up, including many with compelling reasons to stay in Australia. Foreign parents of Australian-citizen children, for example, will often cycle through a series of temporary visas in a desperate bid to stay close to their sons or daughters. This will get harder as visa rules tighten. It would be ironic and disappointing if attempts to streamline migration mean even more decisions landing in the lap of the immigration minister in the form of last-ditch appeals for him to exercise discretion under various “god powers.”

The strategy is pitched as a bid to get migration working for the nation: “For workers. For businesses. For all Australians.” Noticeably absent from this top-line list is a desire to get migration working for migrants. The strategy (and the ministers’ language promoting it) tends to present migrants, especially student visa holders, as highly calculating and instrumental — as people who use “back doors and side doors” to milk the system for whatever they can get or even engage in outright rorts.

What gets forgotten is that circumstances and aspirations change, especially for young adults at a formative stage of life. Students may come to Australia with every intention of leaving when they complete their courses but then discover new freedoms and possibilities that were not previously available to them. Perhaps they can openly express their sexuality, their creativity or their politics for the first time. Perhaps they find a new vocation or meet the love of their life.

Yet the strategy essentially tells young temporary migrants: please come to Australia for a few years but don’t put down any roots, or even put out feelers, unless you are pursuing an occupation in demand and can help build Australia’s economy. Not only is this unrealistic, it also shows we might be the ones who are calculating and instrumental.

As long as we rely on international students to fund our higher education system and backpackers to pick our produce, temporary migration will continue at a high level. The least we can do is be honest with temporary visa holders about their limited prospects for building a life in Australia, and the new strategy points in that direction. Yet we should recognise that this might inflict an emotional and psychological toll.

In their foreword to the migration strategy, the immigration and home affairs ministers say they want to bring migration levels “back to normal.” It’s not clear what might constitute “normal” in 2024, but a better-targeted and more efficient system would certainly be an achievement, especially if it offers greater clarity and certainty, reins in workplace exploitation, and reduces the number of migrants who are rendered permanently temporary and stuck in a state of being not quite Australian. What it won’t do is resolve the practical and ethical challenges that arise when the number of migrants coming to Australia on temporary visas is so much greater than the number who can hope to settle here. •

The post Is migration heading “back to normal”? appeared first on Inside Story.

Yet, having spent six months studying one of the nation’s most pressing issues, the committee failed to transcend the predictable ruts of partisan politics and reach shared conclusions.

At their best, parliamentary inquiries are powerful democratic instruments and an aid to good government. Inquiring minds delve into complex issues, build up an evidence base, interrogate expert witnesses and listen to the stories of those directly affected by the matter at hand. Rival parliamentarians with diverse convictions work collegially to piece together a coherent picture of a messy problem and then offer joint suggestions as to how it might be tackled. In the past, this has been particularly true of Senate committees, which are more likely to involve influential crossbenchers, and where major-party senators felt less constrained by party discipline than their colleagues in the lower chamber.

My first appearance before a Senate committee in 2006 strengthened my confidence in Australia’s democratic institutions and processes. The questioning was acute, engaged and nonpartisan. Committee members were well briefed and had read our submission carefully. Most impressively, the senators were genuinely interested in discussing novel approaches to a difficult policy area — in this case the future of the horticultural labour force — including proposals that sat in tension with their party platforms.

But my appearances before a few other committees since then have failed to match that experience. Most committee members appeared to listen attentively and grapple with issues in good faith, yet over the years I sensed a growing tendency for parliamentary inquiries to become venues for political theatre. Genuine engagement and collaboration are giving way to point scoring as committee members select evidence to confirm their established positions.

I can’t comment on the day-to-day conduct of the 2023 rental inquiry. I made a submission but wasn’t invited to appear, and I haven’t studied the transcripts of public hearings. But the final report is a missed opportunity that reaches no substantial conclusions.

The committee affirmed that “a dwelling of good standard and equipment is not only the need but the right of every citizen” — a view first articulated in 1944 by the Commonwealth Housing Commission and often honoured in the breach. The report, released on the last day of parliament for 2023, proposes no new measures to realise that failed wartime ambition, simply saying that “while the problems are significant and self-evident, the solutions are less clear.”

The report’s concluding comments include two recommendations carried over from September’s interim report and outline some other points of agreement that are too general to have policy impact. These are followed by three separate sets of recommendations — one from government senators, one from Coalition senators and one from committee chair, retiring Victorian Greens senator Janet Rice.

No one expected members of rival parties to find common ground on questions where battlelines are entrenched and heavily fortified. Labor and the Coalition were never going to back the Greens’ call for a two-year rent freeze or agree to reform negative gearing and other tax concessions and invest the extra revenue in social housing. But given the stakes, senators from all parties should have joined forces to make at least some constructive suggestions.

They had plenty of material to work with in the report itself, which is a concise and easy-to-read digest of some key drivers of our rental crisis that fairly canvasses competing views.

The report’s main sections focus on boosting the stock of social and affordable rental housing, immediate financial relief for renters, improving rental conditions and strengthening tenants’ rights. Along the way, it looks at the impact of short-stay accommodation like Airbnb (and options for its regulation), considers the potential of the build-to-rent sector, and examines arguments for planning reform and rent regulation.

But senators failed to make common cause on topics where evidence is overwhelming and uncontested. Take the lack of affordable homes for renters on very low incomes. Across the political spectrum, it’s generally agreed that providing homes for this group is the responsibility of governments, not private investors. A “conservative” official estimate is that 377,000 households need social and affordable housing today, and a statutory review of the National Housing Finance and Investment Corporation Act found that an extra 614,000 social housing dwellings are required by 2036.

Given such daunting numbers, the interim report’s joint recommendation that the Australian government “continue investment in public, social, community and genuinely affordable housing” is so vague as to be risible. There is no shared view on how much should be built or what proportion of Australia’s rental stock should be subsidised.

Committee chair Janet Rice called on the government to quantify the annual investment needed to meet the shortfall in public and community housing. But this was a step too far for Labor senators, whose additional comments at the conclusion of the report essentially rehash current policies, including the Housing Australia Future Fund, the $2 billion social housing accelerator, the $3 billion in incentives to build 1.2 million homes in five years and the 15 per cent increase in Commonwealth Rent Assistance.

Labor senators claim these measures constitute “the most significant investment in social and affordable housing in more than a decade.” True, but that’s not much of a claim since the Coalition abandoned the housing field almost entirely from 2013 to 2022. The Albanese government’s initiatives to date are welcome but fall far short of what is needed.

The second recommendation carried over from the interim report is for the federal government to take “a coordinating role to implement stronger rental rights.” Labor’s senators seem to feel this has already been achieved thanks to the “better deal for renters” struck at national cabinet in August. Their additional comments essentially reiterate what was agreed there, including better protecting tenants’ personal data, “phasing in” minimum standards for rental properties, establishing a nationally consistent policy on reasonable grounds for ending a lease, and making it illegal to solicit rent bids — that is, stopping agents from asking prospective tenants to pay more than the advertised rate. Such measures will improve the situation of tenants but are weak and short on detail.

The report warns, for example, that bans on “soliciting” rent bids fail because desperate prospective tenants will voluntarily offer higher amounts anyway. Widely used rental technology platforms also ask tenants to specify the amount of rent they are willing to pay, which essentially amounts to a blind auction.

In response to this evidence, the best the senators could agree on was that “further consideration of state tenancy regulation may be required to close this potential loophole.” To call this response wishy-washy would be too kind.

Is Labor so determined to distinguish itself from the Greens that it couldn’t sign on to Rice’s unremarkable proposal to ban unsolicited rent bidding, ensuring that the advertised rent matches the actual rent agreed in the lease?

Similarly, Labor could have found common cause with the Greens’ call for more specific minimum quality standards for rental properties, such as basic levels of energy efficiency and thermal comfort. The committee was told that Australia could borrow from New Zealand’s Healthy Homes standards for heating, insulation, ventilation, moisture, drainage and draught stopping.

Yet all Labor senators could come up with to improve renters’ welfare was a suggestion that “the contents of the committee report may be useful guidance” for the states and territories as they update tenancy regulations. Coalition senators, meanwhile, seem less concerned with helping tenants than with protecting the existing rights of property investors — those “overwhelmingly quiet, aspirational Australians looking to safeguard their retirement.”

Coalition senators see the best response to Australia’s rental crisis as an individual one — pay your own mortgage instead of someone else’s and avoid getting “stuck in a rent trap.” This rubs salt in the wounds of generations of Australians who’ve watched rising real estate values rapidly outstrip wages, mostly on the Coalition’s watch. For decades, the dogged support for first homebuyers offered by both major parties has coincided with falling rates of home ownership, the misguided subsidies simply making the problem worse by pushing up property prices. Yet the Coalition senators’ main recommendation is to “to revitalise the culture of home ownership” by letting first homebuyers access their super.

Senators could have made a united call for a review of Commonwealth Rent Assistance. The committee heard the scheme is ripe for reform because funds are flowing to some households that are relatively well off while others in dire need miss out. Research shows that reallocating rent assistance to better reflect housing need could have saved $1.2 billion in 2022 — or about a quarter of the annual cost to taxpayers in that budget cycle. Given that spending on rent assistance will rise to $5.5 billion this financial year, there is a compelling case to evaluate the program to see if money might be better targeted. Political rivalry seems to have overwhelmed any inclination to pursue such evidence-based initiatives.

The views of renters themselves might not have influenced the recommendations but they did make it into the interim report. With the first of its terms of reference referring to “the experience of renters and people seeking rental housing” the inquiry made a significant effort to hear directly from Australians struggling to keep or find a home.

Ada, a public servant in Canberra, described how, heavily pregnant, she holed up in the smallest room in her house in a desperate bid to keep warm. She blocked the vents, covered the windows in bubble wrap and only splashed out on heating her whole home after going into labour.

Amity in Sydney told the committee that her 11-year-old son had already moved house five times.

The last few years people have been asking me, “Which high school will he go to?” “I don’t know,” has been my reply because on a periodic lease I know that I can be evicted an any time for no reason with only ninety days’ notice.

Mark, a father in Brisbane, told the inquiry that rental stress prevents him and his partner from being their best selves:

The burden absorbs so much of our headspace. We have not been able to do our best as a spouse, a parent a friend or an employee… We have been left constantly worrying about where we are to live and how we are to pay our next bills. This is not healthy for us or our family or our child.

In their separate concluding comments and recommendations, Greens, Labor and Coalition senators thanked those who gave evidence to the committee. But if I were Ada, Amity or Mark I would feel let down by their failure to transcend party politics and agree on ways to jointly advance tenants’ cause.

The committee says it “heard a diversity of views on possible strategies and measures to address the crisis.” But their job was to do more than admire the problem; they needed to reach shared conclusions about how to fix it. •

The post Renters let down by partisan politics appeared first on Inside Story.

Initially, Menzies’s options were limited by the ten-year Commonwealth State Housing Agreement he inherited from Chifley. The 1945 agreement granted the states long-term loans to build homes for low-income families on the understanding that “a dwelling of good standard and equipment is not only the need, but the right of every citizen.” Its focus was on rental housing, with an option for sitting tenants to purchase their homes on favourable terms.

When the agreement came up for renegotiation, Menzies undermined its intent by encouraging middle-class families to buy public housing too, even though they didn’t live in it. Social affairs minister Bill Spooner argued that it was not “fair” to sell homes to working-class families with “no culture of thrift or sense of community obligation.” Not fair, it seems, to Menzies’s “forgotten people.”

To his credit, Menzies at least built lots of dwellings. Between 1947 and 1961, a period of mass migration, Australia’s housing stock grew about 10 per cent more than its population, with governments responsible for almost a quarter of new construction. Menzies also recognised that the state could play a fundamental role in stabilising a construction industry plagued by booms and busts. As he said in his 1949 campaign speech — the same “little capitalists” speech Kohler quotes — governments could plan public works “for periods when private building falls off.” Subsequent governments have forgotten this insight.

Home ownership rates jumped dramatically under Menzies — rising from about 50 per cent at the end of the war to over 70 per cent in 1966, largely due, claims Kohler, to the aggressive selling of public housing stock forced on the states. With their partisan bias towards home ownership, Menzies and Spooner “set the scene for decades of mistakes by their successors in the Coalition.”

Not that Labor hasn’t made its fair share of housing mistakes. It too failed to invest sufficiently in public housing: prior to the 1983 election, the party promised to double the proportion of public housing stock, but when Bob Hawke replaced Bill Hayden as leader the pledge was dropped.

Equally significant was Labor’s failure to stick to its guns on negative gearing. Treasurer Paul Keating eliminated negative gearing in 1985, arguing that allowing high-income earners to claim interest costs so they could trade forty-year-old Bondi flats “was not adding to the stock of housing or to the stock rental accommodation.” Keating was right, but the Hawke government buckled to the property industry and reinstated negative gearing two years later. If it had followed Keating’s logic and only restored the tax concession for new builds, then the trajectory of Australia’s housing might have been different. Nearly three decades later, having taken such a policy to election defeats in 2016 and 2019, Labor has abandoned it altogether.

Labor has also failed to restore housing to the political and administrative status it enjoyed federally in the postwar years. Chifley had a separate department for works and housing, but Menzies shifted housing to social services, where it sits today. The current deeply flawed development of the Albanese government’s promised national housing and homelessness plan is evidence for Kohler’s view that housing doesn’t belong in the Department of Social Services. Government comes at housing “as a welfare issue rather than an economic one,” he writes, yet housing is “almost everything” in the Australian economy.

Over the past two decades, rocketing real estate prices have taken household debt from 40 per cent to 120 per cent of GDP, tying up capital that could be used for far more productive purposes. Excessive housing costs dampen consumer spending and force families to delay having children. Long commutes in sprawling cities hamper productivity, harm health and worsen the climate catastrophe.

The Reserve Bank “manages the economy mainly through housing”— that is, by changing interest rates — which Kohler labels “a policy of cruelty” because the burden of economic adjustment is borne by those “who are already living on the edge.” Worst of all, Australia’s excessive housing costs drive inequality and erode social mobility. “Education and hard work are no longer the main social determinants of how wealthy you are; now it comes down to where you live and what sort of house you inherit from your parents.”

The most notable policy mistakes that made housing the driver of inequality were Coalition tax concessions. The first was the abolition of inheritance taxes in the 1970s and the second was the halving of the capital gains tax by treasurer Peter Costello in 1999. This was “kerosene on the smouldering coals of negative gearing and the lack of an inheritance tax, and turned property investment from a niche activity into the leaping flame of everybody’s tax avoidance scheme.”

This sets Australia apart: “whereas in the rest of the world investing in real estate is all about getting rental income from tenants, in Australia it’s about getting an income tax deduction and then a capital gain.” It helps explain why Australia’s rental market is dominated by small-scale landlords rather than institutional investors — it is small investors, not big ones, who benefit from tax concessions. Australia has virtually no “build to rent” projects because tax settings encourage developers to build to sell to “individual negative gearers” instead.

Coinciding with Costello’s halving of capital gains tax, which spurred real estate speculation, was a new migration boom that added to supply shortages. Unlike his hero Menzies, though, prime minister John Howard failed to use public investment to help housing keep pace with demand. The result was a two-decade-long price boom that saw the cost of housing diverge sharply from wages. Prior to 2000, the average home cost three or four times average annual earnings; now the multiple is seven or eight.

Kohler also has plenty to say about planning and zoning. He laments that Australia didn’t follow Britain’s postwar lead and standardise development controls across the nation, instead leaving them in the hands of state and local governments. This has created a fragmented, complicated system that not only impedes private construction but also hobbles public projects because state authorities must compete with developers to buy land at market rates. As a result, efforts to address housing need through the planning system are “piecemeal, local initiatives.”

Kohler identifies “two tribes” that dominate housing debates in Australia: “One tribe says the problem is tax breaks that boost demand too much and the other says it’s zoning and planning that restrict supply.”

He avoids taking sides, making clear that the fix for our housing mess will require action on a range of fronts — including not just tax reform and streamlined planning and zoning but also mechanisms to consolidate land in established suburbs. Consolidation would encourage the redevelopment of separate blocks with detached single houses as high-quality European-style medium-density apartments, along with a new vision for urban public transport.

But Kohler is not optimistic about the prospects for change. The politics of housing is “both simple and difficult,” he says. Australia is a “bankocracy” and thanks to Menzies’s legacy housing is “a cartel of the majority.” The most powerful players have good reason to want the cost of housing to keep going up. Those with less clout, like renters in the private market, have the odds stacked against them and will lose out. Ultimately, we’ll all be worse off. •

The Great Divide: Australia’s Housing Mess and How to Fix It
By Alan Kohler | Quarterly Essay | Black Inc. | $27.99 | 144 pages

The post And that’s housing appeared first on Inside Story.

She didn’t repeat that call in front of 1300 delegates at the National Housing Conference in Brisbane, but she came close, saying it should be possible to have a grown-up conversation about tax. She said Australia’s taxes encouraged property investors to focus on capital gains rather than a steady income from rents. A “healthy” housing market, she said, would prioritise “homes not assets.”

Lloyd-Hurwitz now chairs the interim National Housing Supply and Affordability Council, set up at the start of the year to advise the federal government on housing policy. In wide-ranging comments, she spoke passionately about the need to build a better and more secure rental sector, pointing out that more than 200,000 poor households hand over at least half their income to their landlords. She described housing as essential infrastructure akin to schools and hospitals, something that can’t be left to the private sector to sort out.

Yet a major thrust of the federal government’s response to the housing crisis does just that. In the updated National Housing Accord accepted by national cabinet, Labor wants the private sector to build 1.2 million “well-located” homes in five years, in the expectation that those new dwellings will bring down prices and make finding an affordable home easier.

Meeting this ambitious target would require an unprecedented rate of building: 60,000 new dwellings every quarter for five years straight. Steven Rowley from Curtin University told the conference that Australia has never achieved that level of residential construction, and only briefly approached it in early 2017. Currently, at just over 40,000 new homes a quarter, the industry is falling well short.

The federal government sees more efficient planning as the key to unlocking the residential construction boom required to meet its target. A blueprint adopted by national cabinet and supported by $500 million in competitive grants aims to streamline approvals, boost local decision-making capacity and fund essential infrastructure. Canberra is also holding out $3 billion worth of incentives to get the states and territories to improve planning systems. The money will flow as bonus payments once a threshold level of new dwellings is passed.

Rowley doubts such measures will be enough. While people love to blame the planning system for a lack of housing supply, he said, it’s market conditions that determine construction levels. And market conditions “just aren’t right.” “The last three years have seen unprecedented cost growth,” he added, “and that means development is unlikely outside the highest return areas.”

Tanya Steinbeck, chief executive of the Urban Development Institute of Australia WA, spoke about the situation in Perth, where construction costs render medium- and high-density residential projects unviable unless the underlying land values are already high. In other words, only upmarket developments in wealthy suburbs are likely to proceed.

According to Rowley, the only way we’ll get 1.2 million new homes is by dramatically rebalancing developers’ costs and the prices they can command. Construction stimulated by a sharp increase in property prices and rents would defeat the purpose of a scheme that aims to make housing more affordable.

Falling costs offer a more hopeful way forward, but Rowley believes costs have been driven up by factors that are largely beyond government control — labour shortages and the rising price of building materials, for example, and more expensive finance. Governments don’t set interest rates and have little influence over the cost of timber, bricks and steel. And while they can, over time, train more tradespeople, governments can’t stop qualified workers defecting to get better wages in the mining sector.

Even if costs moderate and supply chains flow more smoothly, it will take time for industry to respond to improved conditions. The construction tap can be turned off swiftly, said Rowley, but turning it on again is much slower.

Innovation holds out some promise. “We can do things faster without compromising quality,” said Lloyd-Hurwitz, describing an experiment carried out by Mirvac. Twelve terrace houses were built using traditional methods and twelve using a modular approach, with components of the houses made in factories and assembled on site. The modular homes were completed more quickly, with less waste and less neighbourhood disruption.

More generally, prefabrication is growing rapidly. It can help overcome skills shortages and the difficulty of getting workers and materials into remote locations like western Queensland.

But possible savings from innovation may be offset by other factors that make building more expensive. After all, we don’t just need more houses, we need better houses. From the floor of the conference, delegates called for homes that people with a disability can live in easily and homes that allow residents to “age in place.” Updated design standards often increase costs in the short term, even if prices come down again once economies of scale are achieved.

Extreme weather events, meanwhile, are prompting tighter planning controls over where homes can be located, and more stringent building codes in areas at risk from floods and fires. Energy-efficient homes are needed in greater numbers, built from materials with lower embodied emissions, but governments are dragging their feet.

In 2022, after years of negotiation, the states and territories agreed to making seven-star energy efficiency mandatory under the National Construction Code, with the changes to take effect in May this year. After industry lobbying, most states have delayed implementation, saying builders need more time to prepare. The result is grim: no improvement in housing efficiency standards since 2009. Ralph Horne from RMIT told the conference that if higher standards eventually take effect, they will only match ratings for new homes achieved twenty years ago in comparable nations.

The qualifier “well-located” poses another challenge to building 1.2 million homes. It’s code for increasing urban density in established suburbs using medium-rise developments to fill in the “missing middle” — a reference to both the lack of new homes in middle-ring suburbs and the lack of mid-rise apartment projects. A break with the pattern of going up in the centre and out at the edges has so far proved elusive.

More than two decades ago, the Victorian government’s Melbourne 2030 plan aimed to locate a “substantial proportion” of new housing in sites that had good access to services and transport, and to set “clear limits to metropolitan Melbourne’s outward development.” The aim has been partially met by high-rise inner-city towers sprouting up in the CBD, but greenfield estates on the urban fringe continue to accommodate most of Melbourne’s population growth. Some “transit oriented” residential development has sprung up around train stations — Box Hill is a notable example — but new housing in middle-ring suburbs is otherwise limited.

As Lloyd-Hurwitz pointed out, the average dwelling density of middle-ring suburbs is typically around 750 homes per square kilometre, whereas new greenfield estates now achieve densities of 2000 homes (thanks in part to smaller block sizes). Tanya Steinbeck said that while Perth’s established suburbs are dominated by freestanding houses with three to five bedrooms, the growing demand is for one-bedroom apartments, leading to massive underutilisation of existing housing stock.

Transformation of the urban landscape could be encouraged, Steinbeck said, by shifting from stamp duty paid on sales to a broad-based property tax, another long-sought policy reform. This would reduce the financial barrier to people “right sizing” their homes as their circumstances change. The ACT has gone done this path, but other states and territories are unlikely to follow unless the federal government plays a coordinating role. So far, it’s shown no inclination to do so.

There was talk of easier permitting for backyard granny flats, hardly a recipe for top-quality urban redevelopment. But Lloyd-Hurwitz also referred to Auckland’s 2016 “upzoning” to enable the conversion of family homes on suburban blocks into mid-rise developments without running the gauntlet of planning objections. This has been credited with precipitating a boom townhouse development that has slowed the increase in Auckland rents and real estate prices relative to other New Zealand cities (although causal link is disputed).

The aim, said Steinbeck, is not just density, but density done well. The risk of liberalising planning rules is that we’ll get what she called “dumb density” — small-scale developers replacing family homes on large blocks with two or three townhouses that lack energy efficiency and don’t make the best use of scarce land. Such piecemeal infill occurs without upgraded infrastructure and amenity to improve the neighbourhood for all residents.

My conversations with delegates during the conference breaks often came back to this challenge. Doing density well is hard because it means assembling fragmented housing blocks into parcels big enough to develop at scale — few developers have pockets deep enough to engage in such activity and there are few explicit incentives in planning schemes.

The National Housing Accord also includes an aspiration for 20,000 of the 1.2 million “well-located” new homes to be “affordable.” To put it kindly, this is a modest ambition, amounting to less than 2 per cent of all new dwellings over the next five years. If we include the 40,000 social and affordable homes that are supposed to be built with money flowing from the newly established Housing Australia Future Fund and the extra billions extracted by the Greens — and an extra 20,000 dwellings completed independently by state governments over the same time frame (a generous estimate) — that still amounts to only 80,000 “affordable” homes or less than 7 per cent of 1.2 million new dwellings.

Affordable is, in any case, a notoriously vague and contentious term. It’s usually taken to mean rents 20 per cent lower than the prevailing rate for a similar dwelling in the same area. But, as Lloyd-Hurwitz remarked, a discount in a high-priced market isn’t necessarily affordable, especially for tenants on low and moderate incomes.

Despite the challenges, the overall mood at the National Housing Conference was upbeat. As AHURI managing director Michael Fotheringham said in his welcoming remarks, housing has never been more prominent in public discussion than it is today. There was palpable excitement, especially among not-for-profit community housing providers, about bidding for a share of the new funds flowing in their direction. They want to get on with building homes for the people who most need them.

Delegates welcomed the federal government’s efforts to coordinate tenancy reforms via national cabinet so renters around the nation get a better deal, and they are encouraged by the new dynamism apparent at the state level. Since May, Queensland has a dedicated housing department for the first time, led by a minister, Meaghan Scanlon, whose parents both grew up in public housing. Rose Jackson, housing minister in the new NSW government, has launched herself into the job with energy and plain speaking, and Victoria has just released its long-anticipated housing statement.

If there was a general view of the five-year target of 1.2 million homes, it was probably that the ambition is welcome even if it’s unrealistic. Meeting the target would increase Australia’s total housing stock by about 2.4 per cent every year. Curtin University’s Steven Rowley said this could have a moderate impact on rents and house prices, but he doesn’t think it will make homes dramatically more affordable.

What’s needed, he thinks, is sustained public investment to build new social housing in perpetuity, allowing us to steadily build the stock of decent homes that are truly affordable for Australians on the lowest rungs of the income ladder. He worries that the current burst of new funding could again be short-lived. Like everyone else at the conference, I hope he’s wrong. •

Peter Mares facilitated a session at the National Housing Conference and AHURI paid for his travel from Melbourne to Brisbane.

The post Can we build them? appeared first on Inside Story.

The host used materials created by the Victorian Women’s Trust to get us talking, including a set of cards laid face down between mugs of tea and plates of biscuits. We took turns picking up a card and reading the text on the reverse side. One was about events in New South Wales in 1881:

Forty-two Yorta Yorta men living at the Maloga Mission petition the governor to grant them land, to support themselves raising stock and cultivating crops. The petition is published in the Sydney Morning Herald and the Daily Telegraph. Six years later, representatives from the Maloga Mission present the governor with a petition to Queen Victoria, again requesting land.

Eventually the NSW government did set aside 730 hectares in the area for a reserve that came to be known as “Cummeragunja,” or “our home.”

Another card told of the 1963 Yirrkala bark petitions:

The Yolngu Nation from Yirrkala in the East Arnhem Region sends Bark Petitions to the federal parliament. They object to land on their reserve being excised for bauxite mining, without consultation. Territories Minister Hasluck rejects the first petition, challenging the validity of signatures. A second bark petition adds the thumbprints of clan Elders…

The petitions led to a parliamentary inquiry, which visited Darwin and Yirrkala to collect evidence. The committee didn’t support a halt to mining, but it did recommend that sacred sites be protected and the Yolngu compensated for loss of livelihoods.

Dating back as far as 1788, the twenty-nine cards detail resistance, protests, pleas, petitions, strikes, walk-offs, court cases and letters to newspapers. They record the creation of new representative organisations — including the Australian Aboriginal Progressive Association (1924), the Australian Aborigines League (1933), the Aboriginal Progressive Association (1937) and the Federal Council for Aboriginal Advancement (1958) — and the release of the 2017 Uluru Statement from the Heart.

Together, the cards tell a compelling story of a 235-year struggle for land, recognition and justice, of which calls for Voice, Treaty and Truth are the latest manifestation.

Since that conversation, I have played a small role in the Yes campaign, handing out flyers outside a supermarket, a train station and a pre-polling centre. Plenty of people have been supportive and I’ve had constructive, civil conversations with individuals who were genuinely unsure about how to vote. I’ve also been labelled a racist and a race-traitor and accused of not acknowledging that the “real” Uluru Statement from the Heart is much longer than just one-page. This is trivial stuff compared with the abuse copped by First Nations’ representatives on both sides of the campaign, but the atmosphere feels like it has become increasingly polarised as the vote approaches.

Perhaps that was inevitable once the Coalition made the vote partisan and turned the campaign slogan, “Vote No to the Voice of Division,” into a self-fulfilling prophecy. But anger and resentment at the idea of a Voice haven’t come out of thin air. Misinformation and sheer falsehoods need receptive ears. Just as the push for Yes is informed by the long struggle for recognition and rights, so the No campaign draws on deeper wellsprings, including an entrenched defensiveness about Australia’s past.

In a talk at the Byron Writers Festival in August, historian Henry Reynolds recalled the intellectual environment he encountered when he started teaching at the University College of Townsville in 1965. Although it later became James Cook University, at the time the college was a northern outpost of the University of Queensland, and the main textbook set by Reynolds’s southern professors was Gordon Greenwood’s Australia: A Social and Political History.

Greenwood’s collection, with essays by six researchers, was reprinted twelve times between 1955 and 1975, and widely used in teaching around the nation. But it contained nothing about Aboriginal and Torres Strait Islander peoples. Reynolds scoured academic reviews of the book and found that “not one of the eminent historians who reviewed it realised there was something missing.”

This is evidence of what art historian Bernard Smith called “the white blanket of forgetfulness” in his 1980 Boyer Lectures. Twelve years earlier, in his own Boyer Lectures, the anthropologist W.E.H. Stanner had introduced a similar concept — the great Australian silence. Reflecting on the lack of Indigenous voices in histories and commentaries, Stanner said that “inattention on such a scale cannot possibly be explained by absent-mindedness” but must be structural, like “a view from a window which has been carefully placed to exclude a whole quadrant of the landscape.”

More recently, in Telling Tennant’s Story, Inside Story contributor Dean Ashenden showed how this view has been constructed and maintained. Stopping in the old railway town of Quorn near the Flinders Ranges on the road north from Adelaide, Ashenden finds lots of information about the Ghan but nothing about the Aboriginal people of the area, “who they were or how they fared when the inexorable frontier arrived.” The story was similar all the way up the Stuart Highway.

This is my story too. Growing up in South Australia in the 1960s and 1970s, my main exposure to Aboriginal Australia was seeing people sitting under trees in Victoria Square and the Adelaide Parklands. I had an inspiring fifth grade teacher who introduced us to the culture and lifestyle of the central deserts, and around the same time I met a group of Pitjantjatjara elders who were staying with a neighbour who had worked at the old mission of Ernabella (now Pukatja).

Despite these experiences, though, I never thought to ask who had lived on the lands around Adelaide prior to 1836. I don’t recall hearing the name of the Kaurna people until I was in my early twenties. Like so many, then and now, I was blanketed in forgetfulness.

When he arrived in Townsville, Reynolds was struck by the very visible presence of Aboriginal people in North Queensland — something he was not accustomed to in Tasmania. When he started researching local history with his students he knew they had to include the story of relations between coloniser and colonised. And once they went looking, they discovered records of dispossession, conflict and war waiting to be found, not just in the oral stories handed down through Aboriginal and non-Aboriginal families but also in newspapers, court records and diaries.

The first newspaper in North Queensland, the Port Denison Times, was established in 1861. Reading through copies in the Bowen Council Chambers, Reynolds found that frontier violence was openly acknowledged in the nineteenth century. What’s more, the morality of the colonialism was fiercely debated in its pages.

Yet when Reynolds first pitched his landmark 1981 book, The Other Side of the Frontier: Aboriginal Resistance to the European Invasion of Australia, Penguin knocked it back because there were already “too many books about Aborigines.”

“Invasion” is still a rarely used word to refer to the origins of the Australian state. “Settlement” remains far more common, suggesting a benign process that met with little resistance and was long ago complete. The Voice referendum is unsettling because it tugs at the corners of the blanket of forgetfulness to destabilise the dominant sense of who we are as a nation.

Many within the No camp believe that nothing is to be gained by looking back and it is time to draw a line under history. After all, we’re all Australians with equal rights. To give Aboriginal and Torres Strait Islander people a Voice to Parliament amounts to special treatment and breaches the basic liberal-democratic tenet that every citizen has one equal vote and equal standing before the law.

If we are to move forward together based on a shared commitment to liberal principles, though, we must surely confront the fact that the colonisation that shaped Australia and its institutions was entirely illiberal. It did not treat First Nations peoples equally. It ignored their rights, stole their property, suppressed their languages and cultures, denied them voice and votes. The liberal state is supposed to uphold freedom and equality, but the Australian state denied both of those things to Aboriginal and Torres Strait Islander peoples and faced down their fierce resistance with violence, segregation and imprisonment.

The push for constitutional recognition of Australia’s First Nations peoples anchored in the Voice reminds us of these deep and unresolved wrongs. Its challenge to the legitimacy and identity of the liberal state was bound to be met with anger and resentment. Yet, as political philosopher Duncan Ivison has argued, the Voice also provides a way forward — an opportunity “to reset what seems currently fixed.”

As Ivison writes, “By providing a legal and political framework within which Indigenous peoples’ voices can be heard on matters of deep concern to them, whilst at the same time engaging with the core political structures of the Australian state, it offers a distinctive opportunity for ‘re-founding’ these relations.”

I still hold a hope that the opinion polls are wrong and a surge of undecided voters will swing the vote to Yes on polling day. But I’m not optimistic. Whatever the result, I’m confident that history will keep reaching into the present in unsettling ways.

Each successive generation, Indigenous or non-Indigenous, migrant or locally born, will discover, and rediscover, discomfiting truths that pierce the great Australian silence. Historians and others won’t stop delving into the trove of archival and anecdotal records, stirring up the sediment of the past to cloud the waters of the present. Some Australians, many even, may fail to listen or refuse to hear. But there will always be those who grapple with the insistent moral and political demands history makes on us. There is no foreseeable point in the future where we can draw a line under things and say, we’ve dealt with that, now let’s move on. •

The post Yes or No, history won’t go away appeared first on Inside Story.

In return for an extra $1 billion in social housing investment, the Greens dropped their demand that the bill include a two-year rent freeze, although housing spokesperson Max Chandler-Mather says the party is still committed to rent control and clearly sees this as a winning strategy in inner-urban seats.

“For us this fight has just started,” he told ABC Radio National Breakfast. “Nine months ago, no one cared about renters in the media and political establishment. Now they are a national news story.” The Greens had forced national cabinet to meet and discuss national renters’ rights, he said, referring to an August agreement by the states and territories to move towards a nationally consistent policy on tenancy laws.

National cabinet’s agreed measures would prevent landlords from terminating a lease without reasonable grounds or from raising rents more than once a year. They would also “phase in” minimum standards for rental properties — though the limp language doesn’t inspire great confidence that the lives of tenants will materially improve, especially given that the examples of “minimum standards” cited in the national cabinet communiqué are “stovetop in good working order, hot and cold running water.”

As well as setting up the HAFF, other bills before the Senate will create an independent body to provide housing research and advice to the federal government. The National Housing Supply and Affordability Council will fill an important gap created when the Abbott government abolished a similar body a decade ago.

Community housing activists have told me the Greens shouldn’t get all the credit for the progress, since the sector has also been lobbying hard, as has Labor for Housing and other ALP ginger groups. Other members of the Senate crossbench have been influential too.

Still, if the Greens hadn’t blocked the HAFF bill it’s hard to imagine that the government would have found an extra $3 billion to build homes for low-income Australians — the June commitment of a $2 billion social housing accelerator, and the additional $1 billion just announced. This new money will bolster the National Housing Infrastructure Facility and can be used to build new social and affordable homes or to pay for critical infrastructure needed to support them. The facility is administered by NHFIC, the National Housing Finance and Investment Corporation, which will become Housing Australia.

Under the original HAFF bill, the government set an annual cap of $500 million on disbursements from the fund to finance new homes. The Greens and other crossbench senators convinced the government to convert this ceiling into a floor — $500 million is now the minimum spend from the HAFF each year, rather than the maximum.

And independent senator David Pocock was also instrumental in getting these annual payouts indexed, which means their real value will be maintained over time rather than eroded by inflation.

The breakthrough on the HAFF is welcome news to not-for-profit housing providers. According to Wendy Hayhurst, chief executive of the Community Housing Industry Association, it will give the sector confidence to plan and deliver new homes.

Despite its designation as a “future fund,” though, the HAFF only offers five years of certainty. After that, there is no guarantee that more public funds will be available.

This isn’t the impression the government wants to give. In its issues paper promoting discussion of a new National Housing and Homelessness Plan it says the HAFF will “build 30,000 new social and affordable houses in its first five years” (my emphasis). Together with the name, this gives the impression that another 30,000 houses could be built in each of the subsequent five-year periods.

Housing minister Julie Collins has allowed this misapprehension to take hold by saying, for example, that “we’re talking about… a fund that in perpetuity each and every year would be delivering at least $500 million into social and affordable rental homes in Australia.”

At first glance, you might think that $500 million will be spent on new homes in every year of the fund’s twenty-five-year life. But that’s not how it works. Proceeds from the fund won’t provide up-front capital to finance new construction but will instead cover providers’ recurrent costs after the housing is built.

This is sometimes referred to as an “availability payment.” It’s essentially a subsidy to not-for-profit housing providers to bridge the gap between the cost of building and operating new homes and the low rents paid by social housing tenants. As a guaranteed future income flow it enables community housing organisations to raise commercial finance to build new dwellings. After five years almost all proceeds from the HAFF will be fully committed to covering the gap between housing providers’ costs and their rental income (at least until 2050).

The benefit of the model is that the HAFF leverages a modest amount of public money into larger sums of private capital. And once the funds are committed, it will be hard for the scheme to be undone by an incoming Coalition government: abolishing the scheme would mean interfering with commercial contracts.

But the HAFF is a complex way to fund housing. As business journalist Michael West writes, the biggest winners could be whoever manages the government’s investment. There’s a simpler alternative: as an analysis for the Australian Housing and Urban Research Institute concluded, “the cheapest and most efficient way to fund new social housing is direct public investment.” That’s why the Greens are crowing about directing an extra $3 billion from the government — six times the amount the HAFF will generate annually — straight into building new homes.

It’s certainly a good time to get money out the door. With the volatile construction sector heading for a downturn, this counter-cyclical release of new investment will help keep workers employed and firms afloat.

But all the extra investment will barely make a dent in the lack of rental homes for households on very low incomes. What is still sorely needed is a bipartisan commitment to financing new social housing for decades into the future.

The chances of that happening are slim. Shadow housing minister Michael Sukkar accused the government of waving the white flag on the great Australian dream because the HAFF does nothing for Australians who want to buy a home. In refusing to countenance support for the government’s social housing initiatives or engage with the struggles of renters, the opposition has dealt itself out of any role in tackling one of the nation’s most urgent challenges.

This leaves the Greens with a powerful hand in negotiations over other looming housing bills, including federal and state legislation to underpin Labor’s Help to Buy shared equity scheme, which is designed to help people into home ownership with a 2 per cent deposit.

The Greens demonstrated a tough pragmatism in the HAFF negotiations. As Chandler-Mather says, the media, the community housing sector and their fellow crossbenchers pressured the Greens for months to pass the bill without seeking further concessions. “We were told when we started this, that we were absurd and crazy, for pushing for more funding for public housing,” he said. “And look how far the debate has shifted.”

But it’s hard to see the party’s demand for a “rent freeze” gaining traction. The phrase promotes a binary understanding of rent control as a switch that is either on or off, rather than a dial that can be calibrated. It mobilises well-founded opposition based on evidence that blunt controls of this kind have unintended consequences.

As a report from the Centre for Equitable Housing notes, “hard” rent freezes, or “first generation” rent controls, have had negative effects elsewhere, deterring new housing investment and discouraging landlords from spending on maintenance. The report adds that a national one-size-fits-all rent freeze doesn’t account for regional differences and could drive some investors to switch their properties out of long-term rental and into short stays instead.

A range of more nuanced measures — what the report calls “second and third generation rent stabilisation” — could be used to moderate rent increases. These approaches, widely used in Europe, are more focussed on limiting rapid spikes than on bringing rents down overall. They may allow landlords to increase rents between tenancies, for example, or offer allowances for spending on maintenance.

The centre concludes that it is possible to develop rent stabilisation policies that allow the market “to play the defining role in setting rent prices but in a moderated and predictable fashion.”

The next test for Labor and the Greens will be whether they can move beyond the rent-freeze stand-off and begin a nuanced discussion about how to develop a more stable and affordable private rental market. That will require compromise on both sides. •

The post Two cheers for the HAFF appeared first on Inside Story.

The facilitator says she’s sorry there’s no tea and coffee in the room because the urn is fixed to the wall in the kitchen out the back, but she encourages us to duck out and help ourselves to a cuppa. She apologises that the staff from the Department of Social Security will be late because their plane was delayed by Canberra fog.

This modest Monday afternoon gathering in a suburban hall in East Geelong is the first of twenty public consultations — or “community conversation forums” — to help the federal government draft a national housing and homelessness plan.

There is a lot riding on the process. As Chris Martin from the City Futures Research Centre at UNSW has pointed out, Australia has never really had a national housing strategy. What we have had, he told a recent online forum organised by National Shelter, is a series Commonwealth–State agreements regulating how much housing money flows to the states and what Canberra expects in return. Starting in 1945, those multi-year agreements have focused solely on social housing and homelessness; a bigger vision of how housing fits into the economic and social life of the nation has always been lacking.

Martin hopes the new national plan will be more ambitious in scope and help to end the fragmentation of policy within and between different levels of government. He wants to see housing integrated with other policy areas, including employment, welfare, immigration, urban development, climate change, disability and closing the gap.

But the issues paper designed to kick off our “conversation forum” in Geelong is not a promising start. Like many earlier housing inquiries, it seems to assume that Australia’s complex housing challenge has a simple answer — just build more dwellings. It foresees a happy land where homes are available, and affordable, for all. All that’s blocking the way is restrictive zoning, onerous planning processes, cumbersome building regulations and constraints on the release of land. Cut through that thicket of regulation and our destination is within reach.

This popular supply-side explanation to our housing problems was evident at August’s national cabinet meeting, where the states and territories agreed to build 1.2 million new homes over five years from 2024. That’s 200,000 more than the target announced just ten months earlier under the National Housing Accord.

As an incentive to meet this stretch target, Canberra pledged an extra $3 billion to fund $15,000 bonus payments to the states for each additional dwelling. Another $500 million was set aside to “kick-start housing supply in well-located areas” by delivering public services and amenities or bolstering planning capacity. State and local governments will vie for this money under a competitive funding program.

Anthony Albanese calls it “the most comprehensive housing strategy that we’ve seen for a generation.” Even if that’s true, it’s hardly a big claim. With a limited exception during the Rudd years, when Tanya Plibersek was minister, federal governments have dodged responsibility for housing for decades.

Still, the Grattan Institute reckons the prime minister is right to talk up the new deal. It calculates an extra 200,000 homes could make rents 4 per cent lower than they would be otherwise. Its researchers argue that “state and local governments… restrict medium- and high-density developments, largely to appease existing residents in established suburbs.”

Denita Wawn from Master Builders Australia agrees. Welcoming the national cabinet announcements, she said Australia needs to reform planning, zoning, and building approvals to ensure that we’re “not just going out in the suburbs, but up as well.”

In the hope of slicing through the red tape strangling our housing dreams, national cabinet also agreed to a National Planning Reform Blueprint to promote “medium and high-density housing in well-located areas close to existing public transport connections, amenities and employment.”

Rather than a blueprint, though, this is a vague grab bag of sometimes conflicting proposals. While it aims for more timely development approvals, for instance, it also wants to rectify “gaps in housing design guidance and building certification to ensure the quality of new builds.” And while it wants stronger “call-in powers” for state planning ministers it also favours better “community consultation processes.”

Victorian premier Daniel Andrews has already committed Victoria to reducing the role of local councils in significant planning decisions. Yet his government’s record inspires little confidence that this will dramatically boost supply. There’s been little action on a 2017 plan to devote surplus government land to new housing, and the state government can be just as sensitive to resident opposition as local councils are.

Examples can be found in electorally significant sandbelt seats in Melbourne’s southeast. After Kingston Council refused in 2018 to rezone a disused golf course to allow Australian Super to build more than 800 dwellings, the state government intervened and commissioned an independent inquiry. Two years after it reported, its recommendations are still under consideration.

Then there’s what locals call the Great Wall of Frankston. Developers proposed two apartment buildings side by side overlooking Frankston beach — one fourteen storeys high and the other sixteen. The council approved a development overlay that would have allowed twelve storeys. The matter was before the Victorian Civil and Administrative Appeals Tribunal when planning minister Sonya Kilkenny intervened and imposed interim controls to reset the height limit to just three storeys.

National cabinet’s blueprint also calls for states to “consider” the “phased introduction” of inclusionary zoning, which would force developers to incorporate social and affordable housing in any major project — a common practice overseas. The caveat is that this should be done “in ways that do not add to construction costs.”

It’s hard to see such a limply worded proposal generating much change. In 2022, Victoria sought a similar outcome by requiring developers building three or more dwellings to contribute to a social housing growth fund. In the face of property industry opposition, and claims this would push up the cost of buying a home, the proposal was scrapped within a fortnight.

The national planning reform blueprint appears to draw inspiration from work by the Productivity Commission, including a 2021 information paper identifying planning and zoning reforms and last year’s review of the National Housing and Homelessness Agreement. Both reports argue that reforms to planning, zoning and land release are crucial to increasing the supply and affordability of housing.

Many of the Productivity Commission’s recommendations make sense. Its call for state and local planning to be more closely aligned is a good example: a state-wide housing target has little point if local councils refuse to accept their share of new builds or greater density. The commission also wants fewer and broader land-use zones, permitting a wider range of activities without explicit council approval or costly variations. This would make it easier to have mixed developments that combine business, retail and housing.

But a close reading of the commission’s work reveals that many proposals in national cabinet’s planning blueprint are already in train. To varying degrees, all jurisdictions have been “streamlining approval pathways,” especially for significant projects, often by replacing council decision-makers with expert panels. State and local governments have also put considerable energy into removing “barriers to the timely issuing of development approvals.”

In other words, state and territory governments have been reforming planning for a long time without any appreciable effect on housing affordability. As Sydney University planning expert Nicole Gurran points out, more than 90 per cent of multi-unit development applications in New South Wales are approved and decisions issued within about three months.

Nor is there great evidence of planning and zoning being a significant brake on development. Australian Bureau of Statistics data show that more than a million dwellings were completed between December 2017 and December 2022. So, the government’s original Housing Accord target of one million new homes over five years only seeks to match what went before.

An anticipated decline in prospective construction activity has less to do with planning, zoning and land release than with the cyclical nature of the property industry. As this chart shows, the industry is characterised by peaks and troughs. What is more, dwelling completions lag, but rarely match, dwelling approvals. Considerably more housing gets approved than gets built, which points to factors other than planning influencing the supply of housing.

Dwelling approvals and completions 1984–2022

Source: ABS, 8731.0 Building Approvals, Australia and 8752.0 Building Activity, Australia

Among the factors currently dampening activity are higher interest rates, subdued consumer sentiment, weather problems, labour shortages, increased construction costs, bottlenecks in the supply of building materials and construction firms going bust. On top of all that, the Covid-era stimulus brought forward construction that would otherwise have occurred later. None of these adverse factors will be fixed by planning and zoning reform.

Even in a blue-sky world of light-touch regulation, devoid of constraints on labour and materials, a rational developer would avoid bringing so much housing to market that prices would fall, cutting their profit margins.

When I was researching my book about housing in 2018, I visited the 1000-lot Madora Bay development in the growth region of Mandurah south of Perth and chatted to a bored estate agent flogging house-and-land packages. He told me he would get in strife if he clocked up too many sales. His instructions were to sell a certain number of blocks each year, and no more, to keep a floor under prices.

A recent study suggests Madora Bay is not an isolated case. Prosper Australia examined the sales history of nine master-planned communities in three states and found a striking pattern. Sales peak in the early years when a greenfield development is just getting off the ground. But as the project matures, the sales rate slows, even though there is still plenty of land available and demand for new housing has not diminished.

Take the example of Woodlea, a 711-hectare estate twenty-nine kilometres northwest of the Melbourne CBD that will eventually be home to about 20,000 people. When the first of its 6500 lots were released in 2015, sales were brisk, and over the next two years about 14 per cent of the total development was sold — an average of forty-five properties each month. But then sales slowed substantially, even though land prices were still climbing fast. Over the next three years, only about 6.5 per cent of the total lots were sold — an average of just thirteen properties a month.

“Supply effectively reduced from February 2017 all the way through to January 2020, despite rising prices,” writes Prosper economist Karl Fitzgerald. He infers that Woodlea’s developers needed to wind back supply “for fear of price reductions.”

The property industry is one of the loudest voices calling for more land releases and looser planning and zoning rules, arguing that this will enable them to increase supply and reduce the price of housing. But Fitzgerald says this isn’t how property markets operate and it’s illogical to expect private developers to bring on excess supply and, in effect, undercut their own product.

It isn’t just on the suburban fringe that approved residential developments are slow to manifest as dwellings for sale or rent. In July 2015 developer Sterling Global bought the Australian Federal Police building on La Trobe Street in central Melbourne for $70.7 million. Plans were approved in November 2016 for a 70-storey tower including a hotel and 488 apartments. But Sterling Global instead sold the site to Mirvac for $122 million dollars (booking a 73 per cent capital gain in three years) in 2018. In June 2021, the City of Melbourne endorsed new plans for a 31-storey office complex. Construction was due to commence in 2022 but there is no sign of work. The AFP has moved out and the existing five-storey building now sits empty.

UNSW housing expert Professor Hal Pawson advises scepticism about housing strategies based solely on the belief that regulations are limiting building activity. “In reality,” he writes, “the prime consideration for private developers and their financial backers is expected market conditions when constructed homes are saleable.”

The Planning Institute of Australia also points out that planning “doesn’t control the speed with which housing is developed — nor affect powerful drivers for investment in housing.”

“It is simply wrong to say that planning is what is holding back our housing supply,” urban planner Marcus Spiller told National Shelter’s online forum. Yet he says this is the “intellectual architecture” underpinning the government’s approach to a national plan.

The founding partner of SGS Economics and Planning and former national president of the Planning Institute of Australia, Spiller is a veteran of Australian housing debates and has served on numerous state and federal boards and advisory committees. In his view, it is fanciful to assume that we can deregulate planning and then rely on competitive markets to meet the housing needs of low- and middle-income Australians. There is no trickle-down solution to the housing crisis, he says, and government and public policy must play a much stronger role.

If governments had kept building social housing at the same average rate as between 1955 and 1985, Spiller calculates, then Australia would now have 330,000 more homes for low-income earners. Instead, we shifted to providing rent assistance so tenants could find the housing that best suits them in the private market. The theory was that they would become masters of their own destiny. “It’s a compelling economic proposition that we have been pursuing for thirty or forty years,” says Spiller. “And I think it’s time to ask the question, has it worked?”

Clearly, it has not. Barely one in a hundred rentals is affordable for essential workers in full-time jobs, hundreds of thousands of households are forking out more than half their income on rent, and vacancy rates are at record lows. But the conventional supply-side wisdom can never be disproven. If there’s not enough housing or if housing is too expensive, then that must mean we have not yet deregulated enough, and must deregulate more.

In May this year former Reserve Bank economist Tony Richards published a long article in the Australian Financial Review describing how to solve Australia’s housing crisis. Despite the Financial Review’s simplistic spruiking — “1.3 Million Missing Homes Blamed on Councils and NIMBYs” — it is a complex and thoughtful examination of the issues. Richards recognises the need to build more social housing and acknowledges that we could use the tax system to moderate demand. But I was struck by what Richards does and doesn’t say about one of the local governments he picked out as anti-development.

Like all Sydney councils, Hunters Hill must develop a local housing strategy. Astonishingly, though, the council projects that this relatively low-density area just six kilometres from the GPO will lose population between now and 2036. Richards concludes that getting more medium-density housing in such a well-located area may mean taking powers away from local councils, so decisions are not just based on “the preferences of current residents, including NIMBYs,” but also encompass “the needs of the broader city and of future generations of potential residents.”

Richards commends the work of economist Peter Tulip from the Centre for Independent Studies, who has made a detailed analysis of apartment development in local government areas in Sydney and concludes that units are not being built where they are most wanted. Parramatta, for example, is increasing in density much more rapidly than Randwick.

Tulip says we should “build more housing where people want to live, as judged by their willingness to pay for a location.” Mosman is more expensive than Penrith, therefore also more desirable, and so that’s where we should build more apartments — and if we did, this would bring down prices there.

I have very little argument with this line of reasoning, and I think Tulip’s suggestion of a carrot-and-stick approach requiring councils to meet predetermined housing targets is worth pursuing — though Boris Johnson’s efforts to impose mandatory building targets in Britain quickly shattered when worried backbench MPs rebelled against forcing new developments on their wealthy constituents.

And this is what I think is missing from the Richards–Tulip analysis. It fails to draw the connection between housing and wealth. Tulip recognises that “planning restrictions reflect a desire for social exclusion” — that is, rich people want to live near other rich people and not near poor people — but he fails to consider that planning restrictions may also reflect the political power that wealth brings. Perhaps a more progressive income tax would generate a more egalitarian planning regime.

Or perhaps planning is not the issue. Analysing census data in the United States, Seth Ackerman finds a much stronger correlation between housing costs and household incomes than between housing costs and planning restrictions: “Rents and land values in a particular location are determined by the income and wealth of the people and businesses in and around that location. Put plainly, it’s the presence of rich people that makes rents expensive: they can pay more.”

Nor does a conventional supply-side approach concern itself with the fact that rich people generally consume more housing. As British housing economist Geoff Meen observes, housing demand comes “not just from newly forming households, but also existing households as incomes rise.” We need to consider the distribution of housing as well as supply.

“What happens when you build and you have no plan to distribute the housing to people who need it is wealthy people use more housing,” says Maiy Azize from the Everybody’s Home campaign. “They live in smaller households and they buy second homes.”

Excess consumption of housing by the rich pushes up prices for all, but this demand side of the housing equation is rarely mentioned. If we want to promote more efficient use of housing — like people living in apartments instead of freestanding homes with empty bedrooms — then changing how we tax housing and land could make a real difference.

Of course, planning and zoning matter in housing, but not necessarily as barriers — at least not in the way they are normally presented. They can also help overcome systemic problems.

When the Albanese government emphasises the need to build “well-located homes” or Denita Wawn from Master Builders talks about going up in the suburbs as well as out, they are responding to a major problem, often summarised as the “missing middle,” something Richards also identifies in his piece for the Financial Review.

The “missing middle” is primarily a reference to the lack of medium-density apartment dwellings of three or four storeys — the midpoint between high-rise towers and detached family homes. But it can also be applied spatially, to designate the lack of significant new construction in middle-ring suburbs.

A quick summary of where new housing has been built in Melbourne in the past decade illustrates the issue. Between the 2011 and 2021 censuses, dwelling supply in Melbourne’s nine inner-city councils — members of the M9 alliance — increased by about a third. In the City of Melbourne, housing supply almost doubled in that time, from 53,000 to 103,000 dwellings, as new high-rise residential towers sprouted up across the Hoddle grid, Southbank and Docklands.

The supply of housing on the urban fringe rose by more than 50 per cent over the decade, mostly in the form of detached housing in residential developments on former farmland. But the supply of housing in Melbourne’s middle- and outer-ring suburbs grew by just 13 per cent. These are the “well-located” suburbs that the government is targeting for newer denser housing because they have good access to public transport, services, jobs and amenities.

Percentage of dwellings added in Melbourne local government areas 2011–21

Author’s calculations based on ABS Census data

These suburbs might have the most restrictive planning regulations and the most vociferous and well-heeled resident action groups. But I suspect something else is at work.

Unlike central Melbourne, these suburbs don’t have brownfield sites — disused docklands or railyards that can be home to high-rise residential towers. Unlike inner-city Fitzroy, Brunswick or Footscray, they have few warehouses or workshops that can be redeveloped into medium-density apartment blocks. And unlike the city’s outer-urban growth areas, no greenfield sites are available to be transformed into housing estates.

Melbourne’s middle- and outer-ring suburbs are sometimes called “greyfields.” They are, characteristically, residential neighbourhoods dominated by detached homes on separate blocks, with little in the way of industry. That makes urban regeneration challenging, even as buildings age and are due for replacement. Without strategic planning, redevelopment generally takes the form of piecemeal infill — a single family home is demolished to make way for two or perhaps three townhouses. Gardens and trees give way to garages and driveways. Density is increased but the amenity of suburban life is diminished with little planning for the extra demand on services, roads and public transport. No wonder existing residents object to new developments.

More than a decade ago, researchers Shane Murray and Peter Newton identified more than a quarter of a million middle-suburban properties in Melbourne with “high potential for regeneration, in localities where residential building stock is failing and infrastructure is in need of upgrade.” But the historical pattern of residential development based on freestanding houses on separate titles makes it very hard to assemble parcels of land big enough to carry substantial redevelopment projects — the “missing middle” of European-style medium-density housing. This challenge will be even greater in future decades, when current growth areas with smaller lot sizes are ripe for redevelopment.

The Planning Institute of Australia puts its finger on the problem: “many of the easiest candidate sites for housing development are already spent.” It calls for governments to take a leading role in land markets to overcome the inefficiencies caused by fragmented ownership. What’s required to address the “missing middle” is not for governments to get out of the way but for them to intervene more to assist private capital to carry out high-quality, precinct-level redevelopment.

Melbourne, says Marcus Spiller, needs to add one extra dwelling for every existing 1.3 dwellings over the next thirty years, all within the existing urban footprint, “a level of transformation that is difficult to wrap your head around even as a professional planner.” We won’t achieve that with the “hunt and catch, opportunistic, fragmented approach that we’ve had until now,” he says. “The real issues with housing supply lie in land withholding, land assembly, insufficient infrastructure and land fragmentation, all of which require concerted policy effort and public intervention.”

Chris Martin agrees. In a report for the Australian Housing and Urban Research Institute, Martin and his co-authors call for a mission-oriented approach to the national housing strategy. Drawing on the thinking of leading economist Mariana Mazzucato, they argue that the state must play a larger role in “innovation and value creation” and “actively create and shape markets.” Rather than a level playing field in which market can compete, Mazzucato says the state should tilt the playing field towards achieving publicly chosen goals.

The mission, says Martin, can be plainly stated: everyone in Australia needs adequate housing.

We reach a similar conclusion in the community hall in East Geelong. The first session is focused on social housing and homelessness, and our initial task is to share three words to describe what a new national housing plan should achieve. An app collates our responses and projects a word cloud dominated by concepts like affordability, safety and security.

Many of my fellow participants work in public and community housing. They are deeply knowledgeable, their comments detailed and passionate. They talk about renters in the private market needing help to hold on to tenancies — it’s better to support someone in housing than see them slip into homelessness. Yet so many services only kick in after someone is in crisis.

They talk about the lack of emergency housing, about mouldy homes, and about extending Victoria’s approach to domestic violence to the rest of the country — it is the only state that has a policy of removing the perpetrator from the home, regardless of who holds the lease. And they talk about the burgeoning number of applications on the priority list for social housing — 7000 in the Barwon region alone.

After ninety minutes, the top half of our sheet of butcher’s paper is a cluttered jumble of coloured sticky notes. This is where we’ve been asked to identify challenges in addressing homelessness and improving access to social housing. The lower half — where we’ve been asked to identify what is working well — is more thinly populated.

Afternoon has turned into evening and it’s time for a break. Fresh fruit and an abundant supply of traditional baked goods compensate for soggy sandwiches. I load my paper plate with lemon slice and hedgehog and buckle down for another ninety minutes of discussion, this time on housing markets. Our numbers have shrunk from twenty-one to ten.

I am the first to speak and express my dismay that the government’s issues paper makes only passing references to tax, most of them referring to recent changes to promote the build-to-rent sector. The paper ignores debates about the relative merits of stamp duty and broad-based property taxes, and makes no mention of negative gearing, the capital gains tax discount or the exemption of the primary residence from the pension assets test — generous tax concessions that encourage property speculation and over-investment in housing.

The facilitator writes notes and thanks me for my contribution. A few others in the room offer supportive comments. But when we eventually disperse I wonder whether our views, falling outside the parameters of the “issues” offered for discussion, will make any impression on the final consultation paper developed from all these community forums. •

The post Flawed foundations appeared first on Inside Story.

Before 1988, grandparents had near-automatic right of entry. Over the next two decades a slow accretion of administrative, regulatory and legislative measures put permanent residency increasingly out of reach. Slowly but surely the focus of Australia’s migration program shifted to working age migrants with useful skills.

That shift might make a certain kind of economic sense, but what does it mean for grandparents who want to live near their Australian-based children and grandchildren but don’t have Australian citizenship? And what are the implications for families who might come to rely on grandparents for all kinds of help yet live in a country that makes permanent residence so difficult?

I began to get a sense of life on a long-stay temporary visa when I called Edward Adams for an interview about his experiences as a British citizen living in Australia. (Many of the names in this article have been changed to protect privacy.) He couldn’t talk because he was busy picking up a grandchild from school, but promised to call back later.

Seventy-two-year-old Edward and his wife Tracey, sixty-four, have lived in Australia for most of their grandchildren’s lives. “We just couldn’t imagine not being here to help in their formative years,” Edward tells me by phone from Queensland’s Sunshine Coast after delivering his grandchild safely home.

Along with school pick-ups and drop-offs two or three times a week, Edward and Tracey step in at short notice to look after the children if son Rory or daughter-in-law Matilda get caught up at work. They also provide extra support when Rory is travelling for business. “And that means our son and daughter in law have been able to be much more productive than they would have been if we weren’t here,” Edward argues.

When not with the grandchildren, the couple have other distractions. They’ve joined the local golf club and made lots of friends. For all intents and purposes, they are settled in Australia, just a short walk away from Rory, Matilda and the grandchildren. Because they aren’t permanent residents or citizens, buying land and building a house required approval from the Federal Investment Review Board. Edward estimates that this added $40,000 to the cost. Since they sold their house in England, their Sunshine Coast house is the only home they have.

Originally from Bath, west of London, Edward and Tracey both retired in 2014. They came to Australia at the end of that year, ahead of Rory and Matilda’s marriage the following March. Although Rory lived in Sydney, the wedding was held on the Sunshine Coast, and Edward and Tracey immediately fell in love with the area. Edward joked that if Rory moved north, then he and Tracey would consider migrating to Australia.

And that’s how it went. Soon after the wedding, Rory’s employer asked him to move and, in 2016, Edward and Tracey came back for a six-month stay on a standard visitor visa. They returned the following year, this time on a twelve-month visa that they were able to renew for a second year by making a short trip to New Zealand.

Edward and Tracey had put money aside — around $100,000 — to apply for permanent residency via contributory parent visas. But they hit the brick wall of the balance of family test. They needed to show that half of their children are Australian citizens or permanent residents — or, if the family is scattered across different countries, then more of their children live in Australia than in any other country.

They have another younger son, Phillip, in England, who doesn’t yet have a family, and if that had been the end of the story they wouldn’t have had a problem. With one son in each country they would meet the threshold having at least half their children settled in Australia.

But Edward has another son, now in his forties, from a previous marriage that ended acrimoniously when Edward’s first son was just two years old. Frequently overseas for work, Edward failed to meet the regular access requirements set down by the court to share custody. He supported his son financially but was otherwise largely absent as a parent. Edward and his first son are only rarely in contact.

The balance of family test is a pure numbers game: it takes no account of the depth or closeness of family bonds. Since Edward has two children in Britain and only one in Australia, the system locks him out, and so it locks Tracey out too. And it counts for nothing that they’ve been emotionally enmeshed in the lives of their three Australian grandchildren since the eldest was a baby, or that they frequently care for them.

In 2019, another option to stay in Australia opened up for Edward and Tracey, when the federal government introduced the sponsored parent (temporary) visa. This visa isn’t subject to the balance of family test and enables parents to live in Australia for up to a decade. In May 2019, Edward and Tracey’s son Rory was among the first to be approved as a sponsor, and in August the couple returned to Bath anticipating a three- to four-month wait. But within a week of submitting their medical checks they were granted visas and in early September they were on a plane to Australia.

“It was very swift,” says Edward. “Our dealings with the immigration department have been very satisfactory.” It came at a stiff price, though, which is part of the reason why this option hasn’t been anywhere near as popular as expected.

If they’d not been tripped up by the balance of family test, Edward and Tracey could have applied for permanent residency by pursuing one of two options. The first is the “contributory” parent visa, which costs at least $47,955 per person. Around 7000 were granted last financial year but 86,000 people are still waiting in the queue. Given the backlog, Home Affairs advises that a new application “may take at least 12 years to process [their emphasis].” The expert panel commissioned by the government to review Australia’s migration program reckons this is an underestimate; it puts the processing time at fifteen years.

The second, non-contributory, parent visa is much cheaper, with charges starting at $4560 per person, and there are “only” 51,000 people currently in the queue. But since far fewer visas are issued each year — just 1500 in 2022–23— the wait is much longer. Home Affairs advises it will take “at least 29 years” for a new application to be processed; the expert review panel warns it’s likely to be more than forty years.

Given the delays, costs and difficulty of getting a permanent visa, and the number of people, like Edward and Tracey, excluded by the balance of family test, you might expect more families to follow their lead in opting for the sponsored parent (temporary) visa. The government anticipated significant demand for the visa when it was introduced in 2019 and capped the program at 15,000 places annually “in recognition of the challenges of an ageing population, as well as the overall budget impact of older migrants.” It need not have worried — by March 2023, almost four years later, only 8204 visas had been issued.

Why has interest been so low?

Covid travel restrictions are part of the equation, but price is also a barrier. A three-year visa costs more than $5000 and a five-year visa more than $10,000. The same fee must be paid again when the visa is renewed — so a ten-year stay will cost $20,000 per person in two upfront payments.

Visaholders must also pay compulsory private medical insurance at about $5000 per year (although at least one big insurer will no longer provide cover for holders of this visa aged over seventy). And families who sponsor a parent must prove that they have a taxable income of at least $83,455.

There’s a sting in the tail, too: parents on this visa are barred from applying to settle permanently either under the contributory or non-contributory options.

Edward and Tracey might not have been able to establish their lives on the Sunshine Coast and watch their grandchildren grow up if it hadn’t been for the efforts of Arvind Duggal. For someone who insists he’s not “political” and just wants “a happy family life” Arvind has had a big impact during two Australian elections when he’s managed to put parent visas on the agenda and influence the policy promises of the Coalition and the Labor Party.

Arvind hails from Jalandhar, a city in Punjab famous for manufacturing cricket bats and other sports equipment. He migrated to Australia with his wife and two-year-old daughter in 2008 without realising he wouldn’t be able to bring his mother to join them. Because he has two older sisters living in India, the balance of family test prevented him from sponsoring his mother to settle in Australia permanently.

Arvind, who was working as a bus driver, discovered that two of his workmates, Parminder Sohal and Davinder Pal Singh, were also dissatisfied with the existing options for bringing parents to Australia. In 2015 the three men launched an online petition to then home affairs minister Peter Dutton.

Despite its far from catchy title — “Introduce Long Stay Visa for Parents Who Want to Spend Quality Time with Their Family”— the petition took flight and eventually attracted close to 30,000 signatures. The non-political Arvind was thrust into the unaccustomed role of activist and advocate. Having started out not even knowing the name of his local MP, before long he was well-versed in the crucial marginal seats where migrant votes might be influential.

Most mainstream media paid little attention, though SBS reported extensively on the issue, especially via its Hindi and Punjabi language services, as did news outlets catering to specific migrant communities. But in the closely fought 2016 federal election Arvind’s petition had the major parties scrambling to outbid each other to offer a new temporary long-stay parent visa.

Labor moved first. Two weeks before the poll opposition leader Bill Shorten promised a renewable three-year visa. At the end of their stay, parents would only have to leave Australia for four weeks and could then return for another three years. This was a big improvement on the existing visitor visa, which offered a maximum stay of just one year and forced parents to leave Australia for at least six months between visits.

Three days later, the Liberal Party trumped Labor by pledging that a re-elected Coalition government would introduce a five-year visa. Both parties would require parents to hold private medical insurance and post a bond to cover any future expense for government services. Labor set the bond at $5000; the Liberals based it on the existing Assurance of Support scheme (between $5000 and $15,000, depending on who sponsors whom and for how long).

The Coalition squeaked home and within months things started moving. The government launched a discussion paper and announced community consultations to help design the new visa, which it “envisaged” would be in place the following year.

Arvind’s supporters were elated. “My heart is in celebration by the chance of having my mum close to me for longer than six months sporadically,” wrote one of them on Facebook. “I cannot express how happy I am for reading this media release… having my mum for at least three years near her only grandchild is a dream… Gosh, I am in tears!!!!!!!”

But it wasn’t until March 2019, just before the next election rolled around, that details were announced. In the slow transition from generous campaign promise to concrete policy the new visa had been hedged about with bureaucratic conditions and high fees.

Arvind still works in transport, though these days he’s a customer service officer. “Peter Dutton betrayed us on his election promise,” he says when we meet for coffee in Adelaide at the end of his shift.

Eight days before the 2016 election, Arvind received a personally addressed email from the Office of the Minister for Immigration and Border Protection signed by Mr Dutton’s media advisor. It explained that the promised new visa would require sponsoring families to post a refundable bond “within the existing parameters.” There was no mention of a fee. Yet when details were finally announced in 2019, the application charge was a hefty $5000 for a three-year stay and $10,000 for five years.

The email also reassured Arvind that “the number of visas is not capped.” But when it eventually came to fruition, places in the program were limited to 15,000 annually.

Arvind says the Coalition chose to capitalise on the huge pent-up demand to bring parents to Australia. “It’s like selling a bottle of water in the desert,” he says. “You can choose the price… This is making money from grandparents visiting their grandchildren, which is un-Australian.”

Arvind was also disappointed with three other aspects of the new visa. A family must have a high taxable income to qualify as a sponsor, something not mentioned in the election campaign. It can only sponsor one set of parents. And parents must leave Australia for at least three months to renew their visas. (The email from Mr Dutton’s office said they’d need to leave Australia for “a minimum period of four weeks.”)

As Inside Story reported in the run up to the 2019 election, Labor promised to address some of Arvind’s concerns, saying it would remove the annual cap on the existing temporary long-stay parent visas and slash the fees by 75 per cent. The price of the three-year visa would come down to $1250 and a five-year visa to $2500.

After losing in 2019 Labor felt no need to publicly renew its promises ahead of winning the 2022 election, though Arvind says he was privately assured that an Albanese government would honour its earlier commitments. He’s now concerned that he’s seen no action.

“If Labor fails to deliver then migrant communities will have every reason to lose our faith in the Australian political system” he says. “It’s not setting a good example for our kids who just want family time with their grandparents.”

From the start, Arvind and his bus driver colleagues had modest ambitions for their campaign. All they asked for was an extension of existing visitor arrangements to allow parents to stay for up to three years. He doesn’t see why that should be so hard or cost so much extra.

The campaign has been stressful and taken a toll on family life. “If we didn’t have the balance of family test, I never would have done this,” Arvind says. “Just to get a long-stay visa took seven years.” He’d like to put the issue behind him, but he can’t quite let it go. “It’s not just about me,” he says. “So many people had faith in the campaign. They have worked really hard for it, but ultimately they’ve been very disappointed by the end product.”

Misook and her husband Soejun are also in Australia on long-stay parent visas, but their experience is far less happy than David and Tracey’s. They had no trouble with the balance of family test — their only child is an Australian citizen — and their long-stay visa enabled them to stay here while they endure the long wait for their contributory parent visas to be processed.

Misook and Soejun fall into the category of migrants “stuck in permanently temporary limbo,” in the words of home affairs minister Clare O’Neil. The expert review of Australia’s migration program calculated that 90,000 temporary visa holders have already lived in Australia for more than five years, long enough to “lose their connection with their home countries and become embedded in the Australian community.”

“My husband and I have stayed in Australia, legally, for almost eleven years in the hope of living here permanently and becoming Australian citizens,” Misook says.

The South Korean couple and their eighteen-year-old daughter Eun moved to Australia from Seoul in November 2012. Misook’s employer, a global company, sponsored her on a temporary skilled work visa to fill a vacancy in its Australian operations. She believed she would be able to seek permanent residence after being with the company for a year, only to find that this was out of reach due to her age. Applicants under the Employer Nomination Scheme must be under fifty, and Misook was already fifty-one. A possible exemption applied if Misook could stay with the same firm for four years and earn a salary above a very high threshold, but she had to leave her job in 2015 before meeting that condition.

By this time, Eun was at university. Having failed to meet the requirements for sponsorship, Misook and Soejun looked for other ways to stay in Australia with their only child. Since they were now too old to apply for skilled migration, Soejun got a student visa and went back to study.

By 2017, Eun had qualified as a lawyer, started working and become a citizen. This enabled Misook and Soejun to apply for contributory parent visas. Almost six years later, they are still waiting for a decision. In order to remain in Australia while the process drags on, they spent $20,000 to secure sponsored parent (temporary) visas valid for five years. The couple keep themselves engaged by volunteering for their local council, but Misook is frustrated that the visa conditions prevent them from working even when Australian employers are struggling to find qualified staff.

“Actually, my husband and I are healthy and have skill to work here in Australia, but we can’t work due to the ridiculous visa condition,” she says. “I have been suffering from a financial difficulty to pay all living cost due to the long delay of the visa process.”

Misook says she contributed more than $250,000 in taxes while working for the IT company; Soejun also worked and paid tax, and he and Eun paid thousands more in fees to study as international students. Yet they can’t use Medicare or any other government services. With their long-stay visas expiring in December 2024, the family’s anxiety and uncertainty grows.

Despite their generally positive experience, Edward says he and Tracey also have some concerns. The reality that their five-year visas expire in September 2024 is starting to weigh on their minds, and they are preoccupied with securing a second five-year stay. Their biggest worry is that they’ll be forced to leave Australia for at least three months to do so. Once processing times are added in, Edward reckons they could be away from their grandchildren for up to nine months, interrupting those close relationships and disrupting the lives of their son and daughter-in-law, who rely on help with childcare to manage busy professional lives.

Then there’s the cost. Since they have no home to go back to in England, Edward calculates they could be out of pocket $50,000 in accommodation and airfares.

“That’s money that would otherwise be spent here in Australia,” he says, noting that some of it would probably go to Rory and Matilda and their young family to help them weather rising prices and increasing mortgage repayments. “Most grandparents offer financial support to their families especially during today’s worldwide recession,” he says. “I don’t see any downside for the government in allowing us to apply onshore and granting us a bridging visa while our application is processed.”

Edward’s other concern is that he and Tracey won’t be eligible for travel insurance for the journey because they don’t hold Australian visas extending beyond the period of their trip. And once they’re in Britain they face a catch-22: because they’ve been away from that country for more than three months and are no longer considered residents, they can’t access the National Health Service unless they are returning permanently.

Edward has learned from Facebook that some three-year visa holders have been granted a waiver to apply for a renewal onshore because their presence in Australia is vital to enabling their adult children to stay in the workforce. But he’s unsure whether the rules were only relaxed because of Covid travel restrictions and fears he and Tracey may not get the same dispensation.

The rules appear clear cut. The Home Affairs website says permission to apply onshore “may” be approved if the parent is unable to depart Australia due to accident, serious illness or a disaster in the home country, but will not be approved because leaving Australia is inconvenient or the applicant has “sold assets in their home country”.

A letter to immigration minister Andrew Giles from Edward’s local MP brought no joy. The minister fobbed the inquiry off by referring to mandatory conditions applied to temporary visas under the migration regulations. But with its long duration, Edward thinks the sponsored parent (temporary) visa is in a different category to other temporary visas and doesn’t understand why it can’t be renewed in Australia.

“If we applied onshore and were granted the visa it’s not like we’re gaining any extra time on the ten-year limit,” he says.

The reasons for preventing subclass 870 visa holders from applying for a new visa onshore are opaque. It could be a manifestation of the “Genuine Temporary Entry requirement” — a demonstration that temporary parent migrants like Edward and Tracey still have a life elsewhere and aren’t trying to settle permanently. But given that the visa allows a ten-year stay, this is an absurd piece of bureaucratic rigamarole. Perhaps, as one government insider told me privately, “it’s just a very poorly designed visa.”

I have had serious reservations about the sponsored parent (temporary) visa from the outset. When it was first promised at the 2016 election, I described it for Inside Story as Claytons immigration, a reference to the faux whisky marketed in Australia in the 1970s with the tagline “the drink you have when you’re not having a drink.”

The visa offers neither permanent settlement nor a truly temporary stay. It’s a messy political compromise cooked up to appease migrant communities in marginal electorates.

The influence of the “ethnic vote” is not a new phenomenon. Historian Rachel Stevens records that Malcolm Fraser’s Coalition government relaxed the requirements for family migration in its second term in “a pragmatic move designed to gain electoral votes from naturalized southern European migrants.” In the 1980s, Labor supported family migration for the same reason. Stevens cites veteran political journalist Michelle Grattan’s view that “without the southern European vote, the ALP would have lost the 1987 federal election by 2 per cent.”

Yet campaign-driven appeals to specific voters in marginal electorates rarely produce well thought out policy. The sponsored parent (temporary) parent visa is a good example. Designed to appeal to overseas born voters in key seats, it is likely to launch chickens that will come home to roost on some future minister’s desk.

What happens, at the end of a ten-year visa, if a parent has become too frail to return to their homeland, or if they no longer have the family or community supports to sustain them there? Human lives are messy and complicated and tend to explode administrative systems and rules, no matter how detailed and prescriptive. In fact, we already see stories like this, because of the absurd processing delays for permanent parent visa.

In 2020, SBS reported that ninety-eight-year-old grandmother Esmeralda Rosario was facing deportation to India after living in Australia on a bridging visa for twelve years. She had arrived on a tourist visa and then applied for an aged parent visa. In 2019 her application was refused because, unsurprisingly, the nonagenarian failed to meet the health requirement and her care was judged likely to impose significant costs on the Australian community.

SBS also documented the similar case of 93-year-old Mollie Manley. She had been living in Australia on a bridging visa for eleven years when her application for permanent residence was refused. The great grandmother had passed all relevant medical tests when she first arrived in Australia, but by the time her application was assessed she was blind and in aged care. She too was slated as a potential burden on the healthcare system.

Cases like these generally end up in drawn-out appeals before they finally land on the desk of the immigration minister with a request to intervene and grant a visa on compassionate grounds. The minister’s public interest powers can only be exercised after every administrative and legal avenue has been exhausted — a stressful, expensive and inefficient process that takes years.

Plenty of similar cases are yet to come. In March 2023, 17,223 parents were living in Australia on bridging visas — a subset of the 137,000 parents in the combined queue for contributory and non-contributory visas. Most of those people will either die waiting for a decision or end up being rejected because they have become too old and frail to meet Australia’s health requirements.

In 2016, I warned that a long stay parent visa could attract a lot of elderly migrants to Australia. At the time, there were already 80,0000 applicants queuing up for permanent visas, and I figured demand would be significantly higher after factoring in people who were put off applying by the cost or the endless delays for a permanent visa, plus those like Arvind’s mother and Edward who had been excluded by the balance-of-family test.

When the Labor opposition promised to remove the cap on numbers and slash the visa fee, the same concerns re-emerged. Migration expert Bob Birrell predicted “at least 200,000 parent applications” in three years if Labor won government. Demographer Peter McDonald estimated that up to two million families could be interested in sponsoring a parent.

So far, the sponsored parent (temporary) visa hasn’t proved anywhere near that popular, and not because the cap of 15,000 places remained in place or because Covid has interrupted travel plans. The likely reason is that the visa is cumbersome and expensive. But the government would be wise to tread carefully in reforming it. If it was cheaper and easier to access, then the ten-year visa may well become as widely used as Birrell and McDonald suggested, and that would invite a range of unintended consequences.

The Clayton’s approach to migration satisfies nobody and simply defers difficult choices. The government should have the courage of its convictions and either commit to parents being considered “close family” with a near automatic right to join their children in Australia, or say, no, sorry, such a policy is not acceptable to most Australian voters and the best we can offer is a genuinely temporary stay of shorter duration. •

This article is adapted from The Parent Conundrum, a narrative exploring Australia’s troubled approach to parent migration commissioned by the Scanlon Foundation Research Institute, although the views expressed should not be taken represent its views.

The post The visa that missed its mark appeared first on Inside Story.

The HAFF is supposed to deliver 30,000 social and affordable homes over five years. It would be the first significant federal investment in rental homes for low-income earners since the Rudd government’s social housing initiative a decade and a half ago. That $5.6 billion scheme in response to the global financial crisis built almost 20,000 new dwellings and repaired another 12,000, some of which had become uninhabitable.

After that sugar hit, though, it was back to the usual lean years for not-for-profit housing providers, who once again had to cobble together funds from a range of sources to complete one-off projects, always uncertain where the next bucket of money or parcel of land would come from.

The result: Australia’s share of social housing, where rent is fixed at no more than 30 per cent of tenant income, continued its long-term decline to fall from just over 5 per cent of all dwellings in 2001 to 3.8 per cent at the last census.

Given the rarity of substantial public funding, many in the community housing sector are keen to see the HAFF proceed. Yet few could deny that the Greens’ critique is correct — Labor’s scheme is a meagre response to the scale of the problem.

More than 163,000 households are waiting for social housing. Since many of those households are couples and families with children, the number of people stuck in the queue is well over 300,000 and their wait could be longer than ten years. Four in ten households are classified as “greatest need” — in other words, they’re not just struggling to keep a roof over their heads but may be homeless or at risk of homelessness, fleeing family violence, or living in housing that makes them sick.

In its latest State of the Nation’s Housing Report, the National Housing Finance and Investment Corporation estimates that 331,000 low-income households are in rental stress, spending more than 30 per cent of their income in rent and unable to afford other essentials such as food, heating and transport. But, as the corporation acknowledges, this estimate is conservative. Other recent analysis puts unmet housing need at 640,000 households. The Greens are right to say that the 30,000 homes promised under the HAFF will barely touch the sides of Australia’s housing crisis.

Another strand to the Greens’ critique is that it will take too long for any homes to get built. In the interim, thousands of low-income tenants are at risk of being forced out of their current homes as they are removed from the expiring National Rental Affordability Scheme (another Rudd initiative).

The $10 billion for the HAFF will be invested rather than spent directly on housing. Only its returns, at least a year away, will fund construction. And, as the Greens also point out, Australia’s existing Future Fund lost money last financial year, so it could be several years before proceeds are available to invest.

The government says that up to $500 million from the HAFF could be invested in housing each year but it hasn’t specified a minimum annual spend.

Even assuming immediate positive returns, money from the fund won’t provide up-front grants to build dwellings. Instead, they will be used to bridge the gap between the rents low-income tenants can afford to pay and the costs of building, maintaining and operating housing. The idea is to give not-for-profit housing providers revenue certainty so that they can borrow from other sources. In this way, modest sums of public money are used to leverage large amounts of private capital for a positive social purpose.

At least that’s the theory. Analysis for the Australian Housing and Urban Research Institute concluded that “no amount of ‘innovative’ procurement or financing will yield a government ‘free lunch.’” The researchers found that the cheapest and most efficient way to fund new social housing is direct public investment — which is what the Greens are pushing for.

“Our point to the government is that you would not fund schools or hospitals via an uncertain gamble on the stock market,” housing spokesperson Max Chandler-Mather told the Conversation’s Michelle Grattan. “We’re much better off investing money directly in building public and affordable housing every year.”

Like Rudd’s GFC stimulus package, the HAFF will soon be fully committed. New builds will grind to a halt and we’ll be back to square one.

The Greens want the government to commit $5 billion in social housing funding annually. They say the money could come from reining in negative gearing and the capital gains concessions to property investors, or repealing the stage three tax cuts.

They are also calling for a two-year rent freeze. This sounds like a pitch to voters in the urban seats they hope to pinch from Labor at the next election, and it may well strike a chord in electorates with a high proportion of renters, like Macnamara in Melbourne, where Labor narrowly defeated the Greens on preferences in 2022. But it is a very blunt instrument likely to deter new private investment and have other unintended consequences.

A better approach could involve adapting sophisticated European models of rent regulation. Germany, where 58 per cent of households rent, has a system of reference rents for similar-quality dwellings in the same city or region. Landlords can’t raise rents more than 15 or 20 per cent above this level in any three-year period. Rents can rise in response to cost increases and wage increases, but only in a predictable and gradual manner. As economics writer Peter Martin has pointed out, the ACT limits rent increases to CPI and “Canberra landlords don’t seem to have withdrawn from the market.”

The government regards rent and tenancy laws as a matter for the states and territories. The Greens counter by pointing to the role Canberra played in preventing evictions during Covid. And Labor has undermined its own argument by making efforts to strengthen national renters’ rights a key priority at the most recent meeting of national cabinet.

The government could also use the National Housing and Homelessness Plan, which it is developing at the moment, and the next National Housing and Homelessness Agreement to develop measures with the states and territories to moderate rent rises and improve tenant security by getting rid of no-cause evictions and lease terminations.

The Greens’ overall critique of the HAFF is in many respects well founded. But are they letting the perfect be the enemy of the good by blocking the legislation?

The current stoush is reminiscent of the stand-off over Kevin Rudd’s carbon pollution reduction scheme, which the Greens refused to back in 2009, arguing that it would not reduce carbon pollution for at least twenty-five years. The following year they backed Julia Gillard’s carbon price instead. The outcome was a better policy.

Yet the Greens continue to wear opprobrium for that decision, not least because Gillard was so weakened by the broken “carbon tax” promise that her government and its carbon price were thrown out at the next election, ushering in a decade of inaction on climate.

Would it therefore be wise for the Greens to back the HAFF, despite all its shortcomings, and use it as a building block for better policy?

That’s certainly the view of their crossbench colleague senator Jacqui Lambie, who has labelled the Greens’ opposition “disgusting.” “For goodness sake, just tick off on it,” she said earlier this month. “Let’s get these homes built.”

Labor’s Penny Wong, leader of the government in the Senate, is similarly impatient. She has accused Chandler-Mather of prioritising media attention and his own ego “over housing for women and kids fleeing domestic violence.”

But Labor may be underestimating its opponent. A self-declared “massive housing nerd,” Chandler-Mather has a firm grasp of the policy issues and has a demonstrated capacity to get his message across to key audiences, especially younger voters. After all, that’s how he won the Brisbane seat of Griffith from Labor’s shadow environment minister, Terri Butler, at the federal election.

Labor leaders may also be misjudging the political moment. Many of its own members think the party’s housing policy is too weak and have put negative gearing reforms on the agenda for debate at Labor’s national conference in August. While prime minister Anthony Albanese dismissed such moves, the mood may be shifting.

A long-term trend is shifting households away from home ownership towards renting, and it isn’t only young people who are affected. Growing numbers of families with children are renting, and an increasing cohort of older long-term renters face the prospect of their precarious housing circumstances extending into old age as they leave the workforce and their incomes fall.

Late last year the government appointed Susan Lloyd-Hurwitz as the interim head of its National Housing Supply and Affordability Council “to deliver independent advice to Government on ways to increase housing supply and affordability.” As the former head of Mirvac Property and a former president of the Property Council, Lloyd-Hurwitz is not a usual suspect when it comes to debates about tax breaks for property investors. Last week she told the Financial Review that she thinks that concessions like negative gearing and the capital gains tax discount drive up prices and should be reined in.

Chandler-Mather says the Greens’ demands are “a public starting position” and “they’d like to meet the government half way.” If Labor wants to get the HAFF over the line, then it could offer more. It could, for example, go beyond the treasurer’s oblique hints that there will be more money and pledge that the HAFF will be only the first tranche of a pipeline of investment. It could also indicate more clearly how it might work with the states and territories to improve conditions for tenants in the private rental market.

Affordable housing policy consultant Jennifer Kulas recommends that the government tweak the scheme to provide greater certainty that much-needed funding will be made consistently available to the sector over time. She says it could remove the $500 million cap on annual disbursements and formally guarantee a minimum yearly amount from the HAFF instead. Those funds could be indexed in line with construction costs, which rose almost 12 per cent last year. The government could also promise to increase the HAFF’s base capital each year so that the fund continues to grow and fund new housing beyond its current five-year horizon.

By pushing the HAFF to the brink, Albanese appears to be wagering that Labor can see off the Greens’ challenge at the next election by arguing that they stopped any new homes from getting built. But given the way the debate about housing in Australia is developing, that may not be the safest bet. •

On Tuesday 23 May, Peter Mares will be facilitating a free online forum on Australia’s housing crisis for La Trobe University’s Ideas and Society Program.

The post The perfect versus the good appeared first on Inside Story.

It might sound like the minister wants to go back to the future, and revert to a twentieth-century model in which permanent settlement was the norm and temporary migration the exception. But O’Neil has no intention of returning to the past — and that would be impossible anyway for an Australia that depends on visa holders to pick our fruit, process our meat, deliver our takeaway, care for our sick and fund our universities.

What the minister wants to do is to build a simpler, more efficient and fairer migration system that simultaneously boosts productivity, fills pressing skills gaps in the labour market and delivers greater benefits to business. She envisages a streamlined visa system with pathways to permanent residence, and eventually citizenship, for temporary migrants who want to stay and whose skills are in high demand.

In the process, she hopes to end workplace abuse and release long-term visa holders from the limbo state of being “permanently temporary.” Australia, she says, needs “a skilled worker program, not a guest worker program.”

The aims are laudable, but balancing the competing interests won’t be easy.

To take one example, O’Neil promises simpler, faster pathways to permanent residence for international students who, after graduation, possess the qualifications and capabilities Australia needs. Yet she also wants to improve the integrity of international education by “tightening the requirements for international students studying in Australia” to ensure that students are here to study rather than work.

Stricter visa rules for international students would hit the bottom line of universities and vocational colleges, who have come to rely on those students’ fees to fund their operations. They would also reduce the supply of international students to stack supermarket shelves, serve in restaurants, staff late-night convenience stores and much else besides. These are low-paid jobs, and in an already tight labour market they won’t be easy to fill with local workers.

The government’s approach is predicated on an understanding that Australia is in an increasingly intense global competition for talent. We are facing off against other migration countries — Canada is often mentioned — in a race to attract the best and brightest to our shores.

Rather than the postwar impulse to “populate or perish,” the twenty-first-century challenge is to “skill up or sink.” A simplified visa system, clear routes to permanent residency, and a crackdown on workplace exploitation are presented as the keys to success.

The government has already taken three decisive and welcome steps. The first two tackle the limbo experienced by two groups of temporary visa holders. The third seeks to “skill up” temporary migration.

Step one, in February, was to begin the process of enabling refugees on temporary protection visas to become permanent residents, fulfilling an election promise and easing the distress for people who arrived in Australia by boat and have been living with uncertainty for a decade.

Then, just before Anzac Day, step two brought a straightforward pathway to citizenship for New Zealanders who live in Australia long-term. New Zealanders have long had the right to stay in Australia permanently. But the Howard government amended the definition of “Australian resident” in social security laws to block their access to most government services and payments.

New Zealanders who arrived after that 2001 change might “settle” and build lives here but they would remain on a special category visa and never become legally “resident.” While they could work and get Medicare, they were denied most other forms of public assistance. In hard times, for instance, they weren’t entitled to unemployment benefits or other income support.

Howard’s change also had flow-on effects in some states and territories. In some places, New Zealanders might be denied emergency housing or find that their children were not eligibility for disability services. When the National Disability Insurance Scheme was introduced, New Zealanders were required to pay the levy but weren’t eligible for support.

And the only way New Zealanders could become permanent residents was by applying for another visa, usually a skilled visa. That was impossible for many, and expensive for all, with the result that hundreds of thousands of New Zealanders were permanently marginal.

Long-term campaigners for a better deal for New Zealanders were surprised and elated by the Labor government’s new pathway to citizenship, which exceeded their expectations. It not only resolves a longstanding irritant in trans-Tasman relations by treating New Zealanders much more fairly but also enhances Australia’s democracy. Hundreds of thousands of long-term residents who were previously unrepresented in our political system can now join the electoral role, cast a vote and lobby their MPs as citizens.

Then came the third step, announced by Clare O’Neil in her address to the National Press Club: a sharp increase in the Temporary Skilled Migration Income Threshold, or TSMIT. This is the minimum income that an employer must pay if it wants to bring a migrant worker to Australia on a temporary skilled visa.

The Abbott government froze the TSMIT at $53,900 in July 2013. In the decade since then, it has not risen in line with inflation or wages and has fallen far below what most full-time workers earn. From 1 July this year, it will jump to $70,000.

The new threshold follows a recommendation by the Grattan Institute, which argued that the frozen TSMIT “allowed employers to sponsor a growing number of low-wage workers with fewer skills” and left them vulnerable to exploitation and abuse. Grattan says these low-paid workers also lacked the bargaining power to secure wage rises. In O’Neil’s words, it allowed a skilled worker program to become a guest worker program.

For many migrants and their employers, this change will make no difference. According to the most recent data, the average nominated base salary for temporary skilled workers is already above $100,000, and it’s even higher in sectors like finance, IT, healthcare, mining and construction. More likely to be affected are sectors like hospitality, retail and agriculture, where the average nominated salary for temporary migrant workers is much lower.

More than 1000 cooks are in Australia on temporary skilled visas, for example, and they are regularly included in the top fifteen professions nominated by employers. Yet Seek reports that the average wage for a cook is between $55,000 and $65,000. How commercial kitchens will fill these jobs after 1 July remains to be seen, but a sudden rush of Australians into this hard, low-paid work seems unlikely.

Lifting the Temporary Skilled Migration Income Threshold is the government’s first response to the review of the migration program by the former secretary of the prime minister’s department, Martin Parkinson, and migration experts Joanna Howe and John Azarias.

The government has also released the outline of a migration strategy indicating the direction it will take in responding more fully to the review.

Key initiatives include:

• A simplification of the welter of highly specific visa subclasses that create a “bureaucratic nightmare” for migrants, employers and government, and force a heavy reliance on the professional services of migration agents for even straightforward applications.

• A redesign of the points test, which tabulates factors such as age, English-language proficiency and qualifications to determine whether a skilled migrant is granted a permanent visa.

• A formal role in the migration system for the government’s arm’s-length advisory agency Jobs and Skills Australiato determine the extent and location of skills shortages. Drawing on advice from government, business and unions, this process will replace the cumbersome, complex and inflexible “skilled occupation lists” currently used to decide which occupations are eligible for visas. O’Neil says the aim is for Jobs and Skills Australia to integrate the migration system and the education and training system when it comes to meeting labour market needs.

• Better coordination between the Commonwealth and the states and territories on the impacts of migration and population growth (for example, demand for housing).

Labor’s renewed focus on Australia’s migration system is long overdue. With its obsessive focus on boats and border security, the previous government downgraded the role of migration in nation-building and social inclusion. And by profiling minority groups — remember the “African gangs” that made Victorians feel unsafe to go out at night — it undermined the ethos of Australia as a cohesive, multicultural society.

The Coalition allowed processing times to blow out, stranding hundreds of thousands of people on bridging visas for months and then years (a backlog the new government has been working hard to address). Despite consistent and mounting evidence of labour exploitation, the Coalition did next to nothing to address the workplace abuse of temporary visa holders. And when Covid-19 hit, prime minister Scott Morrison simply told them to go home.

Yet O’Neil’s claim that Australia’s skilled worker program “morphed into a guest worker program” while Peter Dutton was in charge of immigration is partisan hyperbole. The permanent shift towards temporary migration began long before Dutton’s reign and runs much deeper.

It was the Hawke government that began internationalising the education sector by allowing Australian universities to accept full-fee international students. By 1996, the immigration department was already granting more than 100,000 student visas each year and education was on the way to becoming a major export industry.

The first temporary skilled worker visa (the 457 visa) was an initiative of the Keating government, although it only came to fruition under John Howard. In 2005, when the agricultural sector was losing workers to the booming mining sector, Amanda Vanstone enticed backpackers to pick fruit by transforming the working holiday scheme from a predominantly “cultural” visa into a labour market program.

It was the Rudd government that trialled and then implemented the seasonal workers program for Pacific Islanders in 2009, and it was the Gillard government that established it as an ongoing program three years later. It was Gillard, too, who introduced the 485 post-study work visa that enabled international students to stay and work in Australia after graduation, though not necessarily in the field for which they had studied. Around 167,000 of these visa holders are in Australia at the moment, almost all of whom will end up spending at least five years here without necessarily qualifying for a visa as a skilled migrant.

The shift in emphasis from permanent to temporary migration is not the result of bureaucratic bungling by the previous government. It is a long-term trend in response to global economic change and demographic forces.

The government has signalled a pushback, at least when it comes to skilled workers. The greater emphasis on pathways to permanent residency is the right thing to do and will make Australia a more attractive destination for young, highly qualified professionals who can help build the nation’s economy and contribute in other ways to society.

Yet big questions remain, particularly about how the government will manage the demand for lower-skilled workers.

Take the example of health and aged care. “Our ageing population will demand more workers in health and aged care than our domestic population can supply,” O’Neil said yesterday. That’s true, though many of those jobs won’t be classified as skilled and attract salaries over $70,000.

O’Neil added that we need “to create proper, capped, safe, tripartite pathways for workers in key sectors, such as care.” But what this means is unclear. Will low-paid caring roles be reclassified as skilled and have a route to permanent residency?

If so, this would run counter to government programs like the Pacific Australia Labour Mobility scheme, which specifically targets the aged care sector as a potential employer. The PALM scheme recruits workers from Pacific Island nations and Timor-Leste to fill “unskilled, low-skilled and semi-skilled positions” but limits a migrant’s stay in Australia to a maximum of four years, with no prospect of settlement. It is a guest worker scheme by another name.

The same issues arise when it comes to filling lower-paid jobs in childcare, disability care, horticulture, meat processing, tourism and many other sectors.

If the government is determined not to have a class of guest workers, then the big question arising out of its reform of the migration system is how Australia fills those low-skilled gaps in the labour market. And how how does it do that without resorting to a system of temporary visas that offer no prospect of a transition to permanent residency and a shadow workforce of international students and other temporary visa holders “who bounce from visa to visa” and end up being permanently temporary.

Clare O’Neil says she wants a conversation about migration that is “direct and honest.” There are more difficult discussions to come. •

The post Skill up or sink appeared first on Inside Story.

This is the Boundary Estate, a public housing scheme that has provided quality homes to working-class Londoners since 1900. It was Britain’s first council housing project and one of the earliest examples anywhere of public investment in affordable homes.

The rise of the estate’s circular garden is reminiscent of an Anglo-Saxon burial mound — and it is a burial place of sorts, interring the rubble of Old Nichol, a notorious East End slum demolished in the 1890s. Described by the Illustrated London News as a “painful and monotonous round of vice, filth and poverty,” Old Nichol was a place of disease and deprivation. Thousands of families crowded into dwellings of just one or two rooms, the walls held together by cheap “billy-sweet,” a mortar that never dried out. Babies born in the slum had a one-in-four chance of dying before their first birthday.

For about eighty years after the Boundary Estate opened, almost all public housing in Britain was “council housing,” built and operated by local authorities. In Australia, state governments took the lead. In both cases public investment dried up in the closing decades of the twentieth century, ushering in a period of decline in the quantity and quality — and the reputation — of public housing.

In both places, housing construction and management increasingly shifted away from governments, local or state, to not-for-profit housing providers, although this process is further advanced in Britain than Australia. What was once known as council or public housing is now generally covered by the broader banner of “social housing.”

My guide through the Boundary Estate is social historian John Boughton, and I’ve drawn liberally on the opening chapter of his book Municipal Dreams, a chronicle of the rise and fall of council housing in Britain, in describing its history. The book grew out of his blog of the same name, launched a decade ago as a retirement project after he left his job teaching history to senior high school students.

“It was completely normal”: the Boundary Estate today. Peter Mares

For Boughton — whose long-term Labour Party membership included what he calls a brief, unremarkable stint as an elected local government official — the neglected subject of council housing chimed with existing political and academic interests. It deserved greater attention, he thought, but he never expected his blog to prove so popular.

“It just took off,” he says. “It caught a moment.” Boughton thinks the contemporary housing crisis has spurred interest in his writing by exposing the limitations of a neoliberal reliance on private capital and free markets to address complex social challenges. “People are starting to look with more sympathetic eyes on the role of the state, in housing in particular.”

Perhaps, too, the blog hit a chord with a generation shaped by council housing. Many of Boughton’s relatives lived on council estates, as did friends and acquaintances. “It was completely normal,” he says. One in three Britons lived in a council home in 1981, and it was often the best housing they had ever experienced.

Today, though, council housing suffers from an image problem almost as bad as Old Nichol’s in the nineteenth century.

I met Boughton soon after the final episode of the hugely popular Happy Valley screened on the BBC. As in many British crime series, part of the action took place on a council estate — in this case in Yorkshire, where a troubled woman was exploited by an unscrupulous criminal duo.

The image of crime- and poverty-ridden housing estates, reinforced time after time in fictional series and news coverage, has stuck. “The tendency to associate council housing with criminality has exaggerated and denigrated the experiences of millions of people currently and in the past,” says Boughton. “That is not to deny problems and missteps along the way. But it is a negative stereotype, and it is self-reinforcing.”

Where problems do arise on particular estates at particular times, they are always shaped by larger forces, he says, and especially the profound effect of demographics.

He cites the Pepys Estate, just south of the Thames in the Borough of Lewisham, which was very popular when it opened in 1973. Built on the site of a former naval dockyard and accommodating 5000 people in 1500 homes, it was one of the Greater London Council’s largest and most prestigious projects. Design innovations included basement garages to separate pedestrians from cars and elevated walkways between blocks to encourage neighbourly interaction. In TV dramas, these same locations are now likely to feature as hangouts for loitering gangs and escape routes for villains.

High-rise flats have become particularly reviled for facilitating antisocial behaviour, as if the fault resides in the very fabric of the buildings. Boughton insists the architecture isn’t to blame. “A great variety of estates have suffered problems,” he says. “Low-rise estates too, not just tower blocks.”

The roots of such ills lie elsewhere. In the decade from 1978, Lewisham lost 10,000 jobs and unemployment trebled. By the mid 1980s more than half the borough’s residents aged sixteen to twenty-nine were jobless. The Pepys Estate was hit hard, and an alternative economy sprang up based on drugs and crime. Racism was rife. Rather than fighting to get into a flat, people were begging to be transferred out.

Boughton tells a similar story abou the Park Hill Estate, a 996-flat scheme that replaced some of the worst slums in Sheffield. Completed in 1961, it also had “streets in the sky” — elevated walkways wide enough for children to play on, which enabled neighbours to chat without the noise and disruption of passing traffic. It had shops, pubs, schools, clinics, community centres and, in the words of one resident, other unaccustomed luxuries: “Three bedrooms, hot water, always warm. And the view. It’s lovely, especially at night when it’s all lit up.”

By the early 1980s, though, Park Hill was another towering symbol of council housing failure, its celebrated brutalist architecture blamed for criminality and vandalism. What rarely gets mentioned is that in the intervening decade Sheffield had lost a massive 40,000 jobs.

“Council housing does not exist in a vacuum. It exists in a social and economic context,” says Boughton. “What is happening to these communities is the product of policy and political choices.”

Attitudes towards council housing also changed as Britain became more affluent. “Into the 1960s, it was the best housing most working-class people could aspire to,” says Boughton. “But as owner-occupation became more widespread, council housing was seen as less desirable for sure. There was a psychological shift.”

As the economy declined in the wake of the oil shock and stagflation in the 1970s, public spending fell too. Repair and maintenance were neglected. Labour, which had once believed council housing should meet “general needs,” moved closer to the Conservatives’ view that it was better seen as a welfare safety net reserved for the vulnerable.

At one level, the shift (which was mirrored in Australia) makes sense: the fairest way to manage limited public resources is to prioritise the neediest. Over time, though, social housing was transformed into housing of last resort — an ambulance service that picks people up from the bottom of the cliff rather than a fence preventing anyone from falling.

Forty years later, social housing in both Britain and Australia accommodates an increasingly narrow stratum of society — the very poorest and those experiencing the most layers of disadvantage. This “residualisation” makes it easier, in turn, to stigmatise residents as “troubled” and point to “failed estates” as evidence that public investment in decent housing is a fundamentally flawed ideal.

Residualisation was compounded in 1980s Britain by the hammer blow of Thatcherism. The national government cut investment in council housing and stopped new construction in its tracks. In the year Conservative prime minister Margaret Thatcher took office, building commenced on nearly 80,000 new council homes in England and Wales. Within a decade, annual new starts had fallen to just 400. But when councils stopped building in England — the green band on the chart below — the private sector failed to pick up the slack. The overall supply of new housing dropped precipitously and has never recovered.

Source: Live table 213, Department for Levelling Up, Housing and Communities and Ministry of Housing, Communities & Local Government

Determined to convert Britain into a nation of homeowners, Thatcher also introduced the right-to-buy scheme. By the time the Conservatives lost office in 1997, one-in-four council homes had been sold, with prices discounted by between a third and a half of market value (up to a ceiling of £50,000). It amounted to a massive, highly subsidised transfer of public assets into private hands, and most of the receipts went straight to Treasury to retire debt.

Tenants with means were supported to become owner-occupiers; those without got less assistance than before as public investment in council housing dried up. “Typically, the best, most desirable homes got sold and the less desirable units got left,” says Boughton. “It was another form of residualisation.”

For many, this brought windfall profits. Boughton gives the example of a security guard living on a council estate in Camden who bought his flat for £39,000 under the scheme. It was valued at £70,000 at the time. Three decades later, his home was worth £600,000. Not surprisingly, he thought the scheme was “perfect.”

“The irony is that generally the first generation of former tenants who became owner-occupiers then sold off those homes,” Boughton says. Forty per cent of homes bought by their tenants are now back on the private rental market, though in poorer condition and with higher rents than the council houses next door.

“If you walk onto a suburban council estate, the well-maintained and modernised houses are council owned, while those sold under the right-to-buy scheme are least well maintained and equipped,” says Boughton. “The market does not do a very good job.”

About 40 per cent of the homes in the Boundary Estate are now in private hands, and those that are rented out are seen as desirable properties. At the “guide price” of £450 per week, a one-bedroom flat would eat up the entire pay packet of a full-time worker earning the London Living Wage.

The rest of the estate’s residents remain tenants of Tower Hamlets, the local authority. In 2006, the tenants vetoed a plan to transfer the estate from the council to the not-for-profit Southern Housing Group, even though the housing association had promised to redecorate the flats and install new kitchens, bathrooms and boilers.

In hundreds of other estates, tenants have voted to switch from the local authority to a housing association. Back in 2001, two-thirds of all social housing in England was owned and operated by local governments and one-third by registered housing providers. Today, those figures are almost reversed, and fewer than four in ten homes remain in council hands.

For the Conservatives, the shift from local authorities to housing providers was — like the right-to-buy scheme — ideological. Boughton says the Tory government genuinely believed that council housing was “the state at its worst, bureaucratic, distant and inefficient.”

While acknowledging that an era of austerity made it difficult for councils to maintain the quality of housing, he says there was some justification for the Thatcherite critique. “It varied from council to council, but some took their eyes off the ball, neglecting maintenance and repair,” he says. “Ongoing expenses were not always budgeted for.” The results weren’t all bad, he adds: local governments responded by decentralising decision-making and devolving management.

The shift to not-for-profit housing associations continued after Labour took government in 1997. Smaller and locally based, housing associations were seen as more agile than councils, more attentive to tenants’ needs and better aligned with Tony Blair’s “Third Way.”

These arguments are familiar in Australia, where the not-for-profit, or “community,” sector is also growing. The Community Housing Industry Association’s chief executive, Wendy Hayhurst, recently urged the Albanese government to direct all the proceeds from its $10 billion Housing Australia Future Fund to her sector rather than do the “easy thing” and divvy the money up among community, state and private providers.

Hayhurst argued that community housing scores better on ratings of quality and resident satisfaction, a claim supported by the Productivity Commission’s most recent Report on Government Services. With its charitable status, the community sector is exempt from GST, land tax and stamp duty, which Hayhurst says enables it to build more houses for any given amount of money than state governments or businesses can.

Duncan Maclennan, a housing expert at the University of Glasgow with extensive experience in Australia, argues that not-for-profits provide better management than state authorities and better integration with other services. He says they are more effective at using their housing assets to secure low-cost private capital for additional investment. “There is a strong case to see much stronger policies of transferring public stock to non-profits,” he concludes.

Though not as advanced as in Britain, the shift from state governments to community providers is already under way in Australia. Over the past five years, more than 21,000 homes have been transferred from public sector to registered housing providers, two-thirds of them in New South Wales. Around 70 per cent remain in state hands, but this is down from 85 per cent in 2008.

The trend is clear, yet the British experience gives pause for thought. Or at least the English experience — thanks to devolution, policies differ in Scotland and Wales.

Take the Juniper Crescent estate, for instance, which won architectural awards after it was completed by inner-north London’s Camden Council in 1996. Across the road from the estate, near some once-hip but now-tawdry markets, builders are hammering away at a £1 billion development, Camden Goods Yards. What was once a commercial site is being transformed into a mixed-use neighbourhood with 644 homes, Grade A office space, a supermarket, a rooftop farm and “landscaped open space for the whole community to explore.”

Thanks to inclusionary zoning requirements, the developers are supposed to include some affordable housing as well — as they are in all new housing projects in England. As a planning requirement, an agreement on the quantity and price range is generally negotiated between developers and local governments, though John Boughton says developers sometimes wriggle out of these commitments and, besides, “affordable is a pretty loose term.”

Sound from the construction site at Camden Goods Yard is audible from Juniper Crescent, which is now run by One Housing, one of London’s largest housing associations. Juniper Crescent might need some upgrades, but it is far from past its use-by date. Yet these 120 terrace homes in stylish yellow brick will soon be demolished as part of a redevelopment more in line with the high-end condominiums being built across the way.

The knockdown rebuild plan required the consent of Juniper Crescent residents, but in a 2020 ballot they voted the proposal down. One Housing’s response was to engage “with residents further about the regeneration proposals in order to understand the ballot results more fully.” In other words, keep trying until the residents gave the right answer. After consultations fuelled by glossy brochures, free pizza and live music, residents voting narrowly in favour of demolition.

One Housing has promised that all current residents will be able to return to the redeveloped estate. Residents will have more open space than before, it says, and their new better-quality homes will be just as spacious as their present dwellings. Each household will receive a £7800 “home loss payment” to compensate for years of disruption.

The demolition of an estate built less than thirty years ago reflects the way markets are structured, says Boughton. Little incentive exists to refurbish and upgrade existing council housing. The financial imperative is for developers to demolish and rebuild, tapping in to profits from new homes for sale and private rental. Projects are justified, with some plausibility, because they bring densification.

The soon-to-be-demolished Juniper Crescent estate. Peter Mares

Redeveloping Juniper Crescent will create about three times as many homes as the estate has now, adding much-needed supply to London’s over-taxed housing market. What remains unclear, though, is how many of these additional homes will be truly affordable for low-income tenants. As even its supporters acknowledge, One Housing’s motivation in this partnership with a private developer is as much financial as social: it needs to generate income from commercial projects to fund its broader operations.

For Boughton, this attempts to turn necessity into a virtue. Housing associations cross-subsidise their social mission by building housing for private sale or market rents. A touted benefit is the creation of “mixed communities,” where rich and poor, renters and owner-occupiers, live side by side and share facilities. Boughton welcomes this aim, noting that this is what all council estates originally were. But he adds, wryly, that no one seems to worry about the lack of social mix in middle-class suburbia, let alone in the exclusive neighbourhoods favoured by plutocrats.

Yet Boughton also fears that housing associations increasingly look and behave like property developers. Even when they separate their commercial and social operations in different divisions, they risk letting the for-profit tail wag the housing-association dog.

“I’m not criticising good housing associations with local roots and a strong grasp of social purpose,” says Boughton. “I’ve got plenty of time for those. But now they have consolidated and got bigger, many are suffering from some of the same evils once attributed to councils.”

There is a compelling argument that Australia’s nascent community housing sector must also grow, professionalise, and consolidate into fewer larger organisations if it is to operate efficiently through economies of scale and a deep well of corporate knowledge. Yet in England, signs suggest that some of the biggest housing associations are losing touch with their residents and becoming disconnected from their social purpose.

CEOs now command impressive salaries and privately lobby government to let them charge tenants higher rents. One Housing is accused of leaving some of its elderly tenants without heating or hot water through winter after bungling boiler repair work. Another big provider, L&Q, was recently rapped on the knuckles by the Housing Ombudsman with two severe maladministration findings over its treatment of a tenant with physical and mental vulnerabilities.

In one chilling case, the Peabody Group apologised after one of its tenants was left dead in her flat for more than two years. Neighbours had complained about a foul stench and Peabody had cut off the woman’s gas because of unpaid bills yet failed to check on her welfare.

Anecdotes are not proof of system failure, nor evidence that things would have been better if councils had remained in control. The G15 alliance of London’s biggest housing associations provides homes for around one-in-ten Londoners: in a sector so large things will always go wrong. Yet the potential for social purpose to be eroded remains real, especially when the sector remains starved of public funds.

This is apparent in the types of housing that are now getting built. Rather than “social rent housing” — that is, homes for people on the bottom rungs of the income ladder — housing associations in England are increasingly building other types of “affordable” housing, including properties rented for as much as 80 per cent of the local market rate — which, whether in London, Melbourne or Sydney, is often still very expensive. One “affordable” property currently listed by Australian social venture HomeGround Real Estate is a two-bedroom apartment at $1100 per week.

Affordable housing is often portrayed as “key worker” housing. It is intended to enable teachers, nurses, childcare workers, police officers, hospitality staff and sales assistants to live closer to their jobs. These are tenants that private developers would welcome in joint ventures like the Juniper Crescent rebuild — if they can afford it. Social renters, who often rely on government benefits, don’t fit so comfortably in marketing brochures.

Boughton warns that social rent housing will always come second under a cross-subsidy model. “You will never have the amount of social rent housing that is truly affordable being built. It will always be neglected.”

The statistics seem to bear him out. In 2021–22, about 60,000 homes were added to England’s “affordable housing” stock, almost half of them resulting from inclusionary zoning agreements. But only about 13 per cent of the total — or 7500 dwellings — were designated as social rent. That proportion has been steady for about ten years.

In the previous decade, though, social rent housing made up 50 to 60 per cent of new dwellings. In the decade before that, it was 70 to 80 per cent. When sales and demolitions are taken into account, Shelter England calculates that England has lost more than 165,000 social rent homes in the past decade.

Today, London south of the Thames is more affluent and desirable than it was in the 1970s, and the Pepys Estate has been rehabilitated. “The Pepys Estate was famous, then it was infamous, now it just looks and feels like a pretty decent place to live,” writes Boughton in a blog post.

After Lewisham Council transferred the estate to a housing association, it underwent an award-winning redevelopment during which many original buildings were demolished, especially those closest to the river. In what Boughton describes as “pure and unabashed gentrification,” a twenty-four-storey tower block with 144 flats was sold to Berkeley Homes, which stacked an additional five floors with fourteen penthouses on top and flogged off all the apartments at a premium.

In this case, the tower block design didn’t seem to be an automatic generator of crime and dysfunction, though the tower did get a new entrance to avoid any taint of council estate. As Boughton explains on his blog, this was another example of financial considerations determining social outcomes:

Lewisham Council claimed to have run out of money and it’s true enough that the rules of the game were — and are — designed to curtail the ability of local councils to improve and expand their housing stock. But it suited, too, a gentrifying agenda which sees some London councils only too keen to bring the middle-class and their money into their boroughs.

For those with municipal dreams, providing decent housing that caters for all, including people with the fewest resources, has been a challenge right from the start. When Old Nichol was cleared to make room for the Boundary Estate, only eleven residents from the original slum made it into the new apartments. Housing generally went to the members of the artisan working class, skilled tradespeople with reliable incomes who today might be described as “key workers.”

Whether housing is built and run by councils, by state governments, by not-for-profits or indeed by private enterprise, it will only provide decent homes for all, including the most disadvantaged, if it receives substantial and ongoing public investment. One persistent hope in Australia is that superannuation funds will invest in social housing, but as the Community Housing Industry Association’s Wendy Hayhurst and Matt Linden from Industry Super Australia write, this can only work if there is consistent and long-term government subsidy to generate the returns institutional investors require for their members.

As Australian housing policy expert Vivienne Milligan warns, only governments can fill the gap between the rent poor tenants can afford to pay and what it costs to build, run and maintain their homes, let alone generate a profit. A reliance on inclusionary zoning and cross-subsidies from commercial projects is just not going to cut it.

Boughton has an abiding sympathy for old-style council housing but is far from dogmatic about whether it should be in local government hands or run by not-for-profits. “Anything that provides genuinely affordable housing and looks after buildings and tenants is welcome,” he says. “A significant share of the population will never own their own home, and housing association, or local authority housing, should and can cater for a broader range of the population.”

But, he adds, “I do advocate for local authority house building as a cost-effective and affordable means of providing housing, as demonstrated from the 1890s to the 1970s.” Between 1945 and 1979, councils built an average of 126,000 dwellings each year. “Local authorities were able to borrow from the national government and use rents to repay loans. They had the resources, organisation, financial clout, and political will to build at scale. That’s what we’ve lost.”

Local authorities also build to a higher standard than commercial developers, says Boughton. “No one is looking to Barratt for best practice,” he says, referring to one of Britain’s biggest mass home builders. “But the very best council housing is something to aspire to.”

Boughton’s new book, A History of Council Housing in 100 Estates, concludes with a profile of Goldsmith Street, a Norwich City Council project of around a hundred highly energy-efficient homes. Awarding it the 2019 Stirling Prize, judges from the Royal Institute of British Architects called the project “a modest masterpiece.”

“Not everywhere can be like that,” says Boughton, “but it’s not a pipe dream to think that local authorities can play that role.” •

Funding for this article from the Copyright Agency’s Cultural Fund is gratefully acknowledged.

The post The elusive quest for decent homes appeared first on Inside Story.

A reporter from the Times had gone undercover in a firm contracted by British Gas to collect overdue energy payments. In a return to the days of putting a penny in the slot to heat the bathwater, his team had the job of installing devices that force customers to pay for gas before they use it. The meters serve two purposes: when consumers add money to their account, British Gas takes a share as part repayment of outstanding bills; and the pay-as-you-go system prevents customers from racking up even bigger debts.

The break-ins are authorised by court orders and intended as a measure of last resort. But of the 367,140 applications for warrants last year — that’s 1000 a day — only fifty-six were refused. The warrants are often “waved through” in bulk, with cash-strapped courts earning a fee per case from the arrangement. One magistrate quit when his job became “nothing more than rubber stamping.”

Energy companies are not supposed to force prepayment meters on families with children aged under five, pensioners, people living with a disability, or other vulnerable households. Yet the Times reported teams breaking into the homes of a single father with three young children, a mother with a four-week-old baby, and a woman whose daughter relies on a hoist and an electric wheelchair for her mobility.

In a British winter marked by soaring energy prices and week-long blasts of sub-zero temperatures, these families are condemned to live without heating or hot water whenever they can’t afford to put money on the meter. And when they do buy gas, they are charged a higher rate than customers paying by direct debit.

Not surprisingly, the Times’s exposé prompted outrage and moral condemnation, not least because Centrica, the company that owns British Gas, recently announced that its earnings in 2022 are likely to be more than seven times what they were in 2021.

This is the logic of Britain’s energy market. Centrica wants to derive maximum profit for its shareholders; customers who can’t pay their gas bills are bad for business so it’s happy to cut them loose; debt collectors are paid with a share of the funds they recover for their clients; prepayment meters are an effective mechanism to claw back as much money as possible. The work teams, which are paid a bonus every time they bust into a home and install a device, tend to overlook cuddly toys, Ventolin puffers, walking frames or other signs of household “vulnerability” that should prompt them to abandon the job.

Yet British Gas management, along with the government and regulators, professed to be surprised by the debt-recovery tactics. Centrica boss Chris O’Shea told the BBC that the contractors’ actions were “completely unacceptable.” The secretary of state responsible for energy, Grant Shapps, was horrified by such “abhorrent practices.” The energy regulator, Ofgem, launched “an urgent investigation” and asked energy companies to suspend the forced installation of prepayment meters until it is reassured that they comply with rules on vulnerability.

We hear equivalent surprise and outrage from corporate leaders, ministers and regulators when business scandals erupt in Australia. How could Rio Tinto have blown up those ancient rock shelters and destroyed so much priceless heritage at Juukan Gorge? Who are these rotten labour hire contractors who systematically underpay migrant workers labouring on farms and in meat-processing plants? What a shock it was to learn, at the financial services royal commission, that clients, some long dead, were being charged fees for no service, that a company duped Aboriginal people into buying overpriced funeral insurance, and that major banks knew their customers were being encouraged into unnecessary debt by mortgage brokers.

Yet such behaviours are entirely predictable and — in the narrow sense of allowing market forces to operate — entirely rational. It’s not that everyone working in finance, mining, labour hire or other scandal-prone sectors lacks a moral compass. It’s just that the attraction of bonuses and other incentives can quickly lead the best of us to lose our sense of direction. Human behaviour is shaped by the logic of the systems we inhabit. And, as NAB chair Ken Henry so memorably put it when he was grilled at the royal commission, “The capitalist model is that businesses have no responsibility other than to maximise profits for shareholders.”

Henry was echoing the views of economist Milton Friedman, who famously railed against the idea that corporations owed any kind of responsibility to the community beyond increasing their profits. Some reporting missed the fact that Henry was arguing, contra Friedman, that the banks needed to move away from treating “customers in purely instrumental terms, as a means to an end, rather than the end in itself.”

Treating people as ends in themselves is surely what Jim Chalmers had in mind when he wrote about creating “a better capitalism,” one that is uniquely Australian and “values-based.” It is a welcome prospect, and the treasurer has offered some glimmers of how it might be achieved.

A wellbeing budget that broadens what gets measured beyond the traditional metrics of GDP growth is long overdue. Welcome, too, is Chalmers’s emphasis on “place-based initiatives” in low-income areas like Logan, in his own electorate, to give communities “the genuine input, local leadership, resources and authority to define a new and better future especially for kids.”

Hearteningly, Chalmers draws on the work of leading thinkers like Mariana Mazzucato, who argues that contemporary economics has lost the moral sentiments that framed the Enlightenment ideas of Adam Smith, and now too readily mistakes price for value. Anyone who turns a profit ends up being a “wealth creator,” even when their earnings are derived from products like gaming machines or cigarettes and the social and financial costs are picked up by the community and government.

Chalmers, like Mazzucato, recognises that markets are not a natural phenomenon that sprang fully formed onto the landscape. They are human systems shaped by policies, laws and incentives. This is obvious from mundane examples — local-content quotas to encourage Australian TV production, for example, or building regulations to ensure fire safety in high-rise towers. If our aim is wellbeing, then we must design markets accordingly, and push to the margins the kind of knuckleduster capitalism revealed at the financial services royal commission and in the Times’s reporting.

Alongside the three crises at the heart of his essay — the global financial crisis, the pandemic and the war in Ukraine — Chalmers refers to Australia’s recent catastrophic fires and floods. And he acknowledges the need to “repair” long-neglected policy fields like “skills and training, energy and climate transition, the standard of aged care, women’s participation and economic equality, equal opportunities more broadly, including in regions and disadvantaged communities, and the unsustainable state of the nation’s books.” The government certainly has its work cut out.

But I can’t help feeling that Chalmers is waging his campaign for kinder capitalism with one hand tied behind his back. He makes only one reference to taxation in the essay — and that is to promise more transparent reporting on “tax expenditures” (concessions like negative gearing and private health insurance rebates that mean the government forgoes revenue). He wants “growth that puts equality and equal opportunity at the centre” and writes that “the type of growth matters — and its distribution matters.” Yet the word “redistribution” doesn’t get a look-in, let alone alongside another unmentioned word, “wealth.” Chalmers wants to tackle disadvantage but is silent on privilege.

Talk of equal opportunity without reference to tax and redistribution fails to take us very far beyond Scott Morrison’s empty notion that those who have a go will get a go. Admittedly, Labor is far more committed than the Coalition to education, training, childcare and healthcare — the kind of public investment that can bring such dreams closer. But if we want equality of opportunity then we must also tackle equality of outcomes. Capitalism is competitive, but we don’t all enter the race at the same point. Some of us get a big head start, and it would be only fair to even things up a bit.

Programs to build opportunity also require significant funding, and apart from extra borrowing — another no-go area for Chalmers given the “trillion dollars of debt” he inherited from the Coalition — the only way to raise sufficient money is through the tax system. Tax is not just good for raising revenue, though, it is also a powerful tool for shaping markets and influencing behaviour, as we saw with the Gillard government’s short-lived carbon price. It is also the most effective way to moderate inequality — and if Labor wants greater equality of opportunity, then this is what it must do.

Jim Chalmers starts and ends his essay with the pre-Socratic philosopher Heraclitus. I’m sure he’s also familiar with the more recent thinker John Rawls. In his Theory of Justice as Fairness, Rawls identified several reasons for regulating economic and social inequalities.

First, “it seems wrong that some or much of society should be amply provided for, while many, or even a few, suffer hardship.”

Second, large social and economic inequalities “tend to support political inequality.” We need to address inequality, he says, “to prevent one part of society from dominating the rest.”

Third, inequality shapes our sense of self, encouraging those towards the bottom to feel inferior and those at the top to feel superior. Rawls thought the attitudes engendered by inequality were great vices: “deference and servility on one side and a will to dominate and arrogance on the other.”

Rawls didn’t want to bring everyone down to the same level. He accepted that differences in status and hierarchy would persist, and probably recognised that they were necessary to drive ambition. But he insisted that “a well-moderated inequality is a condition of economic and political justice.” And such moderation cannot be achieved without progressive tax systems to redistribute income and wealth.

Of course, Jim Chalmers doesn’t want to scare the horses or provide conservative media with a new stick with which to bash Labor by hinting that he might follow the advice of most credible commentators (including the International Monetary Fund) and repeal the stage 3 tax cuts. Yet it is hard to see how Labor can fund the necessary services in care, education and environmental protection, balance the books, shape markets and increase opportunity without fundamental tax reform.

If a Labor treasurer in a government riding high in the polls can’t lead from the front by putting these issues on the agenda, then who can? •

The post Building a better capitalism appeared first on Inside Story.

They weren’t offering to build or finance these new houses; they want private developers to do that.

Sitting behind these policies is the commonsense view that the key to bringing down the cost of housing is building more dwellings. This accords with our everyday experience of how markets operate: when something is scarce, prices go up, and the best way to bring prices down is to provide more of it.

When it comes to housing, though, the relationship between price and supply isn’t so clear-cut.

We know this partly because we have an alternative to house prices — rents — as an indicator of housing demand. Rents track demand for housing as a service, whereas real estate prices also reflect demand for housing as an investment.

It turns out that rents have risen far more slowly than house prices over the past twenty years (although now they are rising sharply in England and Australia). And despite low wage growth, the average share of household spending devoted to rent has also remained fairly constant in both places.

That’s not to say that rents are affordable, especially for low-income tenants in expensive cities like London and Sydney. If rents were already excessive twenty years ago, they are still excessive today, reflecting a persistent shortage of housing. The point is that rent increases over time have been relatively modest; if the pace of house building had fallen well behind the growth in demand then we might have expected sharper rises.

We know, too, that factors other than supply can have immediate and dramatic impacts on property prices. As interest rates have gone up in recent months, house and apartment prices have dropped back from their 2022 peaks.

Prices tend to go down when it’s harder to get a loan (which is why regulatory authorities tighten bank lending rules when they want to dampen the market). And prices go up when governments stimulate the market with first homeowner grants or tax concessions. The construction industry is also notoriously volatile, so the supply of new homes fluctuates as the number of dwellings completed rises or falls from year to year. What’s more, new homes make up only a small proportion of overall housing stock and real estate transactions, so the impact of construction on prices is slow and muted.

Over time, such ups and downs should even out, revealing the underlying relationship between housing supply and housing demand. So, what does twenty years of census data tell us about the housing challenge in Australia and Britain? Is the core problem that we don’t build enough houses or are other factors also at play?

Australia’s population grew by 35 per cent between the 2001 and 2021 censuses, and the stock of dwellings grew by 39 per cent. England’s population grew by 15 per cent, and its stock of dwellings 17 per cent. In short, in both countries, population and dwelling supply moved roughly in tandem.

Of course, as with rents, if there was already a housing shortage in 2001 then that shortage would have carried through to 2021, keeping prices high. In principle, if we’d built more housing then prices should have come down. Proportionally, though, the scale of the problem has stayed roughly the same, so again, a lack of building doesn’t appear to account for the rapid escalation in real estate prices over the past two decades.

But a simple comparison between population growth and dwelling growth can be misleading, for a number of reasons.

First, housing demand is driven not by the overall number of people but by the overall number of households. This might seem like splitting hairs: average household size has remained roughly constant in England and Australia over the past twenty years, and so the relationship between household numbers and dwelling numbers held steady.

Here things get complicated, though, because in an ageing society, with more people living alone, household size should fall. This means more households overall and a need for more dwellings to accommodate them. In both Australia and England, average household size was projected to fall to about 2.2 people by 2021, but has remained higher.

One view is that the projections were wrong, because they failed to anticipate social changes such as fluctuations in birth rates, falling divorce rates and a preference by some recent migrants to live with extended family.

But perhaps housing shortages prevented the decline in average household size? A lack of housing can induce adult children to stay in the parental home longer than they’d prefer or force two families to squeeze into the same accommodation. The formation of new households is suppressed, and the demand diverted into “hidden” or “concealed” households. According to one estimate, two million adults could be living in concealed households in England.

Linking population and dwelling numbers over time also disguises regional differences. Greater London, for instance, gained more than 1.6 million new residents between 2001 and 2021, but the population of Sheffield hardly changed and remains below its 1950s peak. Barring a new industrial revolution to bring factory jobs back to Sheffield, the demand for housing there is likely to remain relatively flat.

Dwelling growth in the City of Melbourne has far outstripped population growth over the past twenty years thanks to a boom in high-rise residential towers. On census night 2021, a quarter of all the municipality’s homes were unoccupied. Covid alone is unlikely to account for all those empty apartments. Rental vacancy rates in the CBD are significantly higher than the rest of Melbourne.

The population of the City of Hobart, by contrast, has grown faster than dwelling supply since 2001, and the share of unoccupied dwellings was below the national average at the last census. This might help explain why Hobart is the toughest capital city for tenants, with the fewest vacancies and the highest rents relative to income.

So, is it possible that we may have been building enough houses, but in the wrong places? London School of Economics geographer Paul Cheshire blames planning failures for “actively preventing houses from being built where they are most needed or most wanted — in the leafier and prosperous bits of ex-urban England.”

Does his thesis gain more weight if we drill down to a more local level and can compare two local government areas in the same city and the same labour market?

Tower Hamlets, in London’s inner east, and Camden, in the inner north, are in many ways similar. About a third of their residents live in social housing, but both also have pockets of considerable wealth. In 2001, each of the boroughs had a population of about 200,000 people and a comparable population density.

Since then, however, their paths have diverged. Tower Hamlets has gained more than 100,000 residents, while Camden gained only 12,000 (and its population declined after 2011). Tower Hamlets is now the most densely populated local government area in England, home to 112 people per soccer pitch–sized piece of land (as the Office of National Statistics calculates it). Camden has “only” sixty-nine people per soccer pitch.

What conclusions can we draw from this? Perhaps Tower Hamlets council is more pro-development than Camden, and better planning has enabled more dwellings to be built there to accommodate new residents? Perhaps Tower Hamlets simply had more room to grow, with disused industrial sites like the docklands at Canary Wharf available for redevelopment? Or maybe the residents of Camden, which is home to an older demographic, have begun to consume more housing per head of population than their younger counterparts in Tower Hamlets?

Camden has double the share of residents who own their homes outright and more than double the share of households with at least two spare bedrooms. It also has a higher percentage of vacant dwellings than Tower Hamlets, and its residents are far more likely to own a holiday house.

The contrast between the two boroughs highlights a third objection to simple comparisons between numbers of people and numbers of dwellings: demand for housing is a product not just of population but also of income.

As leading British housing economist Professor Geoff Meen puts it, housing demand comes “not just from newly forming households, but also existing households as incomes rise.” In other words, as people get wealthier, they want bigger, better houses as well as second homes and holiday houses. Cheshire says his research shows that a 10 per cent increase in incomes leads people to spend about 20 per cent more on extra space in houses and gardens.

We could express this differently: as the rich get richer they consume more housing; as the poor get poorer, they consume less, to the point of living in severely overcrowded homes or without a home at all. If we look for the roots of the housing crises in England and Australia through this lens, then we might shift focus from the supply of housing to its distribution.

When we do that, the challenge becomes not just to build more housing but to find ways to make its use fairer and more efficient — by altering how housing and land are taxed, for example. More progressive land taxes or capital gains taxes on housing could both redistribute wealth and help dampen property speculation.

Or we could adopt the German approach to capturing the value of changes in land use. When land is rezoned from, say, agricultural to residential in England and Australia, dramatic increases in land value generally accrue to the landowner. In Germany, much of this “planning gain” goes instead to public authorities and is used to fund infrastructure or social housing.

The complex relationship between housing demand and housing supply suggests there are no simple solutions to the challenges that we face, and we should be wary of claims that the answer is just to build more dwellings. If high prices are the product of a speculative bubble rather than undersupply, then building more houses will cause a different set of problems.

Economist Ian Mulheirn from the Tony Blair Institute for Global Change points out that high real estate prices fuelled residential building booms in Spain, Ireland and parts of the United States in the first decade of the 2000s. When that boom went bust, it contributed to the global financial crisis and left “a large overhang of vacant and decaying ghost estates.”

The “build more” argument often goes with the view that the supply of new houses is held back by planning and zoning “red tape.” It then becomes an argument for scrapping the rules that limit incursions into land set aside for other purposes, such as London’s green belt or Melbourne’s green wedges.

This is contested territory. Once developed, the environmental or agricultural benefits of that land are lost forever. But if green space effectively subsidises elite pursuits like “‘horseyculture’ and golf” then the case for turning some of it over to housing might carry more weight.

Planning has been the subject of persistent reform efforts in many parts of Australia without, as yet, delivering lower house prices. “Of right” approvals have been introduced for code-compliant projects, decision-making powers transferred from elected councils to expert panels, “special purpose” bodies created to deliver urban redevelopment, and ministers given greater powers to override local decisions on major projects.

Strong arguments exist for rules-based planning systems because the alternative of assessing each application individually is time-consuming and costly, especially if decisions are made at a hyperlocal rather than city-wide level. But planning regimes should align with environmental and social goals, including affordability, rather than simply empower developers to respond to a housing “demand” that may be driven by growing inequality.

Treasurer Jim Chalmers says the task ahead is not just to build more homes, but to build more “well-located” homes. Boris Johnson’s one million homes promise was predicated on every local government area having its own mandatory housing target, although councils were very critical of the algorithm used to determine what to build where. Those targets have since been scrapped anyway, following opposition from Conservative MPs who feared a backlash against new developments in their prosperous constituencies.

This is a reminder that building homes where they are most needed — that is, with good access to jobs, transport and services — tends to throw up the biggest challenges.

In cities like Melbourne, this could be done by replacing postwar family homes with smaller, more energy-efficient, medium-density apartments and townhouses to better accommodate today’s smaller households. But it is in exactly these suburbs that not-in-my-backyard opposition tends to be most intense.

It is also in these areas that commercial barriers are greatest. It is easier to build on a rezoned greenfield site on the edge of the city, or in a rezoned brownfield area like a former dockland, than to transform a middle-ring greyfield area, especially if the aim is to retain the benefits of suburban streetscapes like tree canopies and gardens.

In such cases, what is needed is not so much liberalised planning, as consistent and supportive planning to assist developers to consolidate individual house blocks into larger sites, while also responding to community concerns about loss of amenity.

The number of dwellings is clearly important for the affordability and availability of housing, whether to buy or rent. But along with supply we also need to think about distribution, both spatial and economic. The question is not “do we need more houses” but rather “where do we need more houses, and who needs them most?”

To put this another way, is the challenge to keep up with housing demand, or to respond to housing need?

If it is the former, then the market is likely to meet the demand for a new holiday home more quickly than it meets the need of a low-income family to move out of an overcrowded, overpriced and damp apartment. Property developers have no incentive to provide housing for people who cannot pay prevailing rents or prices. Either we need to help those households participate in the market by boosting their incomes, or we need to build homes they can afford.

Another thing that Australia and England have in common is a sustained fall in public investment in social housing. If governments in both countries had continued to subsidise social housing at the rates they did in the postwar decades, then many thousands more affordable houses would be available today.

Prime minister Rishi Sunak’s Conservative government has no chance of delivering Boris Johnson’s 2019 pledge of a million homes before next year’s election. Let’s hope that Jim Chalmers has more success in building a million “well-located” new homes in Australia, and that a decent share of those homes are affordable for the people who need them most. •

The post Not enough houses? appeared first on Inside Story.

The story came to mind while I was reading Serious Money: Walking Plutocratic London, sociologist Caroline Knowles’s perambulatory new book about how wealth shapes the English capital. Inspired to tread some of the same streets myself, I soon came across one of the spectacles Knowles documents: a “basement conversion” more accurately described as a large-scale excavation to create extra rooms under an elegant Kensington terrace. Sometimes, Knowles tells us, builders find it’s not worth their while to crane a mini-digger out of a multimillion-pound project, leaving “dozens of them… buried in the foundations of houses.”

It sounds like an urban myth, though Knowles says she spoke to builders who confirm it. Either way, the extravagance of efforts to create what have been labelled “iceberg homes” makes the tale credible. On the project I came across, the planning approval posted on the builder’s hoardings said the owners had allowed ninety weeks for construction.

It’s not hard to imagine why. Some excavations go down as many floors as the original house went up, and then extend under rear gardens to create space not just for wine cellars but also for gyms, cinemas, swimming pools and car parks.

Not surprisingly, basement conversions are the source of bitter neighbourhood disputes. Led Zeppelin guitarist Jimmy Page and pop star Robbie Williams engaged in a five-year stoush over Page’s fear that excavations for a pool under Williams’s £17.5 million (A$32 million) Holland Park mansion might weaken the foundations of his own £12.5 million pile next door.

Williams won out in the end, but no mechanical diggers will be buried in the basement of his Woodland House — building approval is conditional on the cavern being hollowed out by hand to minimise vibrations. Avoiding cracks in the stained-glass windows of Page’s French Gothic Tower House will add £1.5 million to Williams’s renovation bill, but this is small change for the singer and his wife, Ayda Field. They recently sold estates in Switzerland and Britain worth more than £30.75 million and splashed out US$50 million on another spread in Los Angeles.

The clash between a 1960s rock star and the lead singer in a 1990s boy band might not qualify as a contest between old and new money, but it could well be an example of the conflict between the “haves” and the “have yachts.” The “haves,” in Knowles’s terminology, are the merely wealthy. The “have yachts” are super-rich. Also known as UHNWIs (ultra-high-net-worth individuals), they can afford to keep fully crewed multimillion-dollar boats moored in Monaco in readiness for the occasional Mediterranean jaunt.

As for yachts, so for cities. In the words of sociologist David Madden and planner Peter Marcuse, when housing enters global investment circuits “its use as a living space barely registers.” The built form becomes “a tangible, visual refection of the organisation of society” and global wealth is “congealed” into bricks and mortar — or indeed underground swimming pools.

As a writer, Knowles places herself in a literary tradition that takes in Virginia Woolf, Walter Benjamin and Teju Cole, figures whose work “exposes politics, like a sediment in the landscape.” As a social researcher, she upends the established focus on poverty and the poor to turn the same “unforgiving framework” of research on the very rich. She walks and talks her way across London, trying to understand how very rich people shape the city, and how they live in it.

She struggles to meet many actual billionaires. Russian oligarchs who use “complex financial instruments provided by London firms” to hide their riches from Moscow prove to be a reclusive bunch. She does meet a lesser billionaire she calls Sturgeon (she gives all her informants pseudonyms), who is investing some of his excess wealth in an “experimental sustainable caviar business” (anaesthetising and milking the fish to harvest the eggs instead of killing them). But Sturgeon is reluctant to discuss the source of his wealth, his compatriots’ lives or any security concerns wealthy Russians may have.

The same goes for the art collector and philanthropist she calls Soviet, who is only a multimillionaire anyway. Middle Eastern oil royalty, British aristocrats and other UHNWIs who moor their wealth in London’s safe financial harbour are no more forthcoming.

Instead, the bulk of Knowles’ insights are gleaned from those who work or live within the gravitational orbit of extreme wealth, like the retired civil servant she calls Officer.

Officer “patrols” the streets of Kensington, keeping an eye on basement conversions and other developments in case the residents’ association can intervene to prevent the worst excesses. Officer himself doesn’t have “serious money” and is disdainful of those who do. He says many of his super-rich neighbours rarely spend much time in the mansions they acquire. That’s if they hang on to them — others buy, renovate and move on.

The super-rich might purchase a terrace house divided into apartments and consolidate it into a single multi-storey home, or knock through the walls of adjoining terraces to create a mansion. As Officer’s friend Historian points out, the next buyer will also have to be super-rich to afford what’s now an even more expensive property, and the neighbourhood will be forever changed.

When Officer’s “ghost neighbours” are in residence, they swim in their private pools, watch films in their private cinemas, work out in their private gyms, and use the vehicle lift to enter and leave their mansions in luxury cars. They don’t frequent neighbourhood cafes or pubs, let alone walk to the corner shop, contributing nothing to the viability of local enterprises or a sense of community. “It spoils things for people who do live their normal lives here,” says Historian’s wife Opera. “Rich people,” Knowles decides, “are poor neighbours.”

Knowles gains further insights into the lives of the rich from Wig, a barrister. One of Wig’s clients wanted advice on whether to seek a divorce in London or go to the considerable expense of shifting his wealth overseas. Advising on the latter course, Wig saved his client tens of millions by avoiding English courts, which are “comparatively generous to partners who are not directly involved in generating the money.”

These manoeuvres don’t always go so well. In another case Wig represented a woman whose husband tried the same trick. Wig stymied the multimillionaire’s claim that he lived offshore by proving that he was still London-based. He had a British shotgun licence, which is only legal if the owner lives at the British address listed on the certificate, and he had a Transport for London seniors card that is only available to residents.

Alerted that divorce proceedings are public documents, Knowles does her own digging. It may be voyeuristic, but it’s also revealing. One divorcee, seeking a settlement that will enable her to live in the manner to which she is accustomed, asks the court for an annual travel budget of £2.1 million, and half as much again for fashion and jewellery — enough to cover a yearly fur coat, fifteen cocktail dresses, fifty-four pairs of shoes, eighteen handbags and much besides.

In this world of extravagant display, domestic staff adorn already elaborate homes. Butler is one of an estimated two million people who work in domestic service in Britain, “the highest number since the Victorian era.” Butler acknowledges that he “looks good in a suit,” which means he can be employed on day shifts and seen by visitors.

He also knows he is easily disposed of. He recounts how a colleague was fired after twenty years’ employment for being “a bit too old.” He witnessed another boss bawl out a valet because he didn’t know how to wind his £250,000 watch, and he saw a team of butlers draw the wrath of their employer at the end of a sixteen-hour day because they failed to serve tea in a Meissen porcelain cup. Money gives the rich the authority “to humiliate those who serve them.”

Money rises early and retires late, and Knowles follows its arc from east to west. Her walks begin amid the glass towers and brash nightclubs of Shoreditch and the City of London, where the finance machine “churns, expands and skims,” redistributing money “into ever fewer hands.” This is where “the building blocks of the plutocratic city” are manufactured, to be reinforced by bespoke advice on estate planning, tax shelters and family trusts.

She moves through Mayfair, Belgravia and St James, where new and imported money mixes with inherited wealth in places that have “the sort of hush which only lots of money can buy.” Hedge funds, private equity firms and family offices hide discreetly behind brass plaques — no names, only numbers.

She examines domestic life in Kensington and Chelsea, discovering that men still mostly go out and make the money while women mostly stay home to manage the household, staff and children who live in a triangle between city residence, country estate and elite boarding school. After hanging out with twenty-year-old Bags and her boyfriend Barbour in Sloane Square, Knowles observes that their lives mimic those of their parents, “heavily prescribed by gender and tradition” with “little room for imagination and manoeuvre.”

Knowles concludes her journey by following the “vortex of extreme wealth” upstream along the Thames to Richmond, home of Kew Gardens, then further west beyond the city fringes to Virginia Water, a London commuter suburb described by the local real estate agent as “the most expensive village in Britain.”

At the heart of Virginia Water is the Wentworth Estate — 1100 large homes built in the 1920s Arts and Crafts style. This is where Chilean dictator Augusto Pinochet endured house arrest in the late 1990s while efforts were made to extradite him to stand trial for genocide and torture. An interior designer tells Knowles that it’s tricky and expensive to find the right materials for building in Wentworth. Bricks, for example, must be “tumbled… so they don’t look new and shiny, or too bling.”

The Wentworth Estate is built around a golf club of the same name, another site of struggle between the haves and the have yachts. After billionaire Chanchai Ruayrungruang bought it in 2014 he doubled the fees and halved membership numbers, pushing out the merely wealthy in favour of a richer, more exclusive clientele. Talk show host Michael Parkinson was among those who offered stiff resistance in the courts.

Knowles finds herself on “sinister and silent streets” where walkers are neither familiar nor welcome. Signs remind her Wentworth is a private estate and members of the public use its roads at the pleasure of the owners. She wonders if driving would be any better and learns that estate managers, with a direct line to Surrey Police, use number plate recognition software to identify vehicles that have no business there.

In other parts of Virginia Water, residents have clubbed together to privatise their streets as well. Road ownership “has spread through the area like a rash,” supported by CCTV cameras, private security guards and signs reading “only residents and guests.” Properties are defended by approach lights, alarms, “tactical landscaping” (fences) and yet more guards.

For Knowles, this is “Johannesburg in Surrey.” While rich white South Africans might fortify themselves “against the imagined depredations of the impoverished black masses,” the source of potential threat in Virginia Water is unclear. A private security consultant tells Knowles that London is a lucrative market because of its lack of actual risks. But if you’d like four black Range Rovers to follow you around, he can arrange it for £10,000 a day.

Like yachts and good-looking butlers, security is another performance of wealth, “an eye-catching display of money that few can afford to stage.”

Art can be spectacle too. On her way to meet “Banker” in the City of London, Knowles admires the paintings in his foyer by Damien Hirst, the British artist best known for putting a Queensland shark in formaldehyde and encrusting a skull with diamonds. In Mayfair alone Knowles counts twenty private galleries: on offer in one of them (in the catalogue’s words) is Hirst’s “delectably fresh” Summer Breeze, sixteen butterflies fluttering against a blue sky, “punctuated by soft formations of luminous white clouds.” The painting subsequently sold for £435,000, about 25 per cent above the gallery’s top estimate.

“As money accumulates,” observes Knowles, “it struts in the clothes of high culture.” But art is not just for display; like property, it is another convenient way to launder money or stash funds in a “safe deposit box.” And if you are prepared to forgo looking at it, you can also avoid Britain’s 20 per cent value added tax by warehousing it offshore.

Culture and finance share the same streets, notes Knowles, and this is true of public art too. Further east, at Canary Wharf, Henry Moore’s Draped Seated Woman is one of three large bronzes gracing a small square. Under a 1960s scheme to place works by leading artists in housing estates, schools and other public places, Moore sold the sculpture to the London City Council at a 25 per cent discount. For three and a half decades, residents of the Stifford Estate in Stepney enjoyed passing by the familiar figure, which they fondly dubbed “Old Flo.”

When the estate was demolished in 1997, Old Flo was loaned to a sculpture park in Yorkshire. Two decades later it was back in its original borough but remained lost to the housing estates of Stepney. Placing the statue in a forest of concrete, steel and glass “constructed on the dispossession of London’s poor” could be described as artwashing — not least because Canary Wharf, like the Wentworth Estate, isn’t a public space.

Here, you’re on private property and “no right of way, public or private, is acknowledged.”* It comes as little comfort to be told that you are also under twenty-four-hour CCTV surveillance for your “safety and security.”

As I traced Knowles’s steps I experience more direct surveillance in Belgravia’s Eaton Square, one of London’s most exclusives addresses. With its Georgian townhouses straight out of a BBC period drama, this is “a world coated in fine aggregate render [and] painted in off-white magnolia,” with matching columned porticos and black wrought-iron fences. In the late afternoon gloom, I watch a resident emerge from her taxi to be ushered inside by a doorman in bowler hat, coat and tie. Then I realise I am being observed too, by a burly figure with a military stance standing watch further along the footpath.

Eaton Square’s heritage-listed terraces surround a series of six rectangular parks accessible only to residents. All the land belongs to the Duke of Westminster: “these streets are his, the squares and the statuary.” Under the rules of primogeniture, the seventh duke, otherwise known as Hugh Grosvenor, inherited the £9 billion estate at the age of twenty-seven despite having two elder sisters.

In one of the most powerful sections of Serious Money, Knowles walks the increasingly gentrified streets of Notting Hill. Here she interviews residents who chose the area for its vibrant “social mix” but found themselves floundering after “the parallel tramlines of the rich and poor, along which the neighbourhood usually ran, suddenly, dramatically and momentarily crossed.” That was on 14 June 2017, when the shoddily renovated Grenfell Tower exploded into flames, killing seventy-one residents and rendering hundreds more homeless.

Knowles speaks to “Palace” and other well-heeled residents who rushed to help distressed Grenfell neighbours. Their efforts were earnest and genuine, but ultimately served to emphasise the gulf between them and their neighbours. “The chasm between rich and poor narrowed in the immediate aftermath of the fire, as lives entwined; and then reopened as social inequalities as usual were resumed.”

Today Grenfell Tower is shrouded in white cloth, awaiting a decision on whether it will be demolished. Across the top floors a banner with a big green heart reads “Forever in our hearts.” At ground level, the white hoardings blocking access to the site host art works, floral tributes and scribbled texta messages to lost loved ones.

Grenfell sits at the northmost end of the Royal Borough of Kensington and Chelsea, which hosts extremes of wealth and poverty. A quarter of all homes in the borough are social housing, though the Notting Hill Housing Trust, in a sign of the times, now accommodates some of its tenants further east in the Borough of Hackney, where properties are cheaper.

You don’t need to walk far south from Grenfell Tower to enter a different social world. The plaque on a last surviving bottle kiln reminds passers-by of “the nineteenth century, when potteries and brickfields were established here amid some of the poorest housing conditions in London.” Today, the local estate agent lists a one-bedroom “mews house” in Pottery Lane at £700 a week. A worker earning the London living wage of £11.95 an hour would need to work a fifty-eight-hour week just to make rent.

Among the property’s selling points are “the green open spaces of Holland Park” just to the south, which boasts an Opera House, an elegant Japanese garden and a statue of its namesake, Henry Richard Vassall-Fox, Third Baron of Holland. In 2020, activists daubed the statue’s plinth with red handprints and placed a cardboard sign in the statue’s arms reading “I owned 401 slaves.” Then as now, London’s wealth is found “in bricks, stones, bodies and bones.”

Southwest of Holland Park is Cromwell Road, where three lanes of rush-hour traffic pass more rows of white stucco, the terraces broken by the occasional squat supermarket or multi-storey hotel, including the old Holiday Inn, an ugly example of 1970s brutalism. Now empty, it’s the site of another protracted planning dispute. In 2018, when developers proposed demolition to build a larger, more contemporary hotel, the Royal Borough received 750 objections arguing that the project would “replace one ‘out-of-place monstrosity’ with an even bigger one.” Approval was denied, but two years later, London mayor Sadiq Khan intervened to give the project the green light. His price was a little bit of additional housing — the developers will build sixty-two units (up from forty-six) for residents on low incomes under the mayor’s affordable homes program.

It is a perhaps-inevitable irony that the architectural splendours we admire in London are the product of violence and exploitation. As Knowles writes, “Imperialism’s industrial, artistic and cultural swagger are stamped into the streets.”

But wealth can leave beneficial legacies. On the western side of Hampstead Heath sits a curious structure known as the Pergola. The 245-metre-long walkway, entwined with wisteria, roses and other climbing plants, affords vistas over the heath and its woodlands. It was built in the early twentieth century by Lord Leverhulme, aka William Lever, whose fortune came from the manufacture of soap and other cleaning products.

Lever was a progressive industrialist who supported universal suffrage and built housing for his workers at Port Sunlight, though there is evidence of forced labour and other abuses in his Congo and Solomon Islands operations. As part of Lever’s private estate, the Pergola was designed as a place for Lever to take a solitary walk, have a think, or stroll after lunch with fellow politicians and business figures.

Today, the Pergola is much-prized public space. As cultural geographer Timothy Edensor writes, this “structure for pleasurable walking” serves as an example of how contemporary city planners might better promote “pedestrian pleasures” into urban design.

Will London’s latest “gilded age” bequeath comparable legacies? Knowles’s observations suggest the diggers excavating the city are driven by a “vacuous rapaciousness” that hollows out urban life. A “troubling and secretive presence,” the super-rich have “a profoundly damaging impact,” with their “endless search for new frontiers of luxury” constituting an environmental disaster.

Stringent personal security, she concludes, is merely a way of hiding the indefensible from public scrutiny. And yet for the rich themselves, the money that drives such wasteful, hidden opulence seems to create increasingly isolated, lonely and paranoid lives.

In Virginia Lee Burton’s book, Mike Mulligan and Mary Anne can’t escape the pit they have dug for themselves. But their story nevertheless ends well. At the urging of a young boy who has been watching them work, the new town hall is built around them. Mary Anne is converted into the boiler that keeps the building warm and Mike is invited to be its permanent caretaker. They become the warm heart of the community. For the diggers of London, no such ending is in sight. •

Serious Money: Walking Plutocratic London
By Caroline Knowles | Penguin | $55 | 320 pages

* After this article was published, Inside Story received an email from a senior account executive at the The Academy PR, a public relations firm whose clients include Canary Wharf, to say that “in fact Canary Wharf is a public space, open to the public at all times and free to access.” When I visited Canary Wharf, I read and photographed a sign with the following text:

PRIVATE PROPERTY: CONDITIONS OF ACCESS.
This is private property and no right of way, public or private, is acknowledged over it. Any use of this land is with the permission of the landowner.

Although I wrote that Canary Wharf “isn’t a public space,” it would be more accurate to describe it as a “privately owned public space” in line with the definition used by Greenspace Information for Greater London: “publicly accessible spaces which are provided and maintained by private developers, offices or residential building owners.”

My overall point is not that the residents of Stepney housing estates are no longer free to visit Henry Moore’s “Old Flo”; rather, its relocation to Canary Wharf means it now resides in an entirely different world.

— Peter Mares

The post The plutocratic city appeared first on Inside Story.

While we wouldn’t have used the term, we were acting as YIMBYs — saying “yes” to a development “in my backyard.” But many progressive, middle-class residents of Fitzroy and other well-located suburbs have switched sides since then and are now firmly in the NIMBY camp, particularly when it comes to housing.

NIMBYs have come to oppose not just “social housing” — subsidised homes for people on low incomes — but new construction of any kind. Apartment buildings attract special ire, resisted as “inappropriate” for being too tall, for overshadowing or overlooking, for being out of keeping with “neighbourhood character,” for undermining heritage values, or because they generate those familiar evils: inadequate parking, congestion and noise.

YIMBYs see it differently. They believe that objecting residents are primarily worried about their property values. Places like Fitzroy and its equivalents in other Australian capitals may or may not be home to nineteenth-century terrace houses adorned with ornate cast-iron fretwork, but they are certainly “bucolic hamlets of wealth within the hearts of cities,” as Melbourne-based American sociologist Max Holleran writes in his new book, Yes to the City. And residents generally want to keep them that way by resisting “new housing that would bring more people and, potentially, greater socioeconomic diversity.”

Conflicts over housing are often portrayed as a simple generational divide between “boomers” and “millennials” — “you spend too much on avocado on toast” versus “you got all the breaks.” Holleran brings other fault lines to the fore, including the different interests of homeowners and renters, and the conflict between established residents in desirable suburbs and those who also want to live in places with good access to transport, jobs, schools, coffee and a lively local culture but can’t afford it. Underlying all these tensions are questions of class and wealth.

The story of the YIMBY movement begins in San Francisco with the foundation of BARF — the Bay Area Renters’ Federation. The acronym was chosen not just to inject humour into dour housing debates but also to emphasise that tenants faced a situation so dire that it made them want to throw up.

From 2010 to 2019, as the tech boom helped boost San Francisco’s population by 80,000 people, only 29,000 new homes were built. The city compounded the problem by ruling in 2018 that only one unit of housing could be built for every new 3.45 jobs created. Real estate values skyrocketed, pushing prices six times higher than the US average.

The 1960s radicals who gave us flower power found themselves occupying homes worth millions while well-heeled tech workers forked out monthly rents of US$4000 or more. Those pushed to the margins were the service workers who clean, make coffee, teach, nurse, fight fires and police streets. They were forced either to become “super commuters,” travelling up to three hours from outlying districts to get to their jobs, or to live in ever more expensive and insecure housing.

As real estate values rose, so did homelessness. Holleran describes the spaces beneath San Francisco’s elevated trains as “encampments reminiscent of Latin America’s informal settlements.” Around the headquarters of firms like Uber and Pinterest “the unhoused roam the streets in huge numbers as tech workers skitter to the other side of sidewalks to avoid them.”

BARF activists began showing up at planning meetings “dominated by homeowners saying ‘no, no, no’” and calling out “yes” instead, hoping that at least some new housing projects would get approved. They wanted to shift the debate from “real estate ruins the city” to “controlled growth moderates prices and allows for new residents to contribute to existing communities.”

Aware that in more affordable parts of the city “urban consolidation” is code for redevelopment that forces out low-income residents, BARF committed to pushing for densification only in well-off suburbs, where house prices were already high.

But the coalition that BARF sought to build was unstable and fractious. On the one hand this group of mostly young, educated, white urban professionals sought to make allies of long-term activists dedicated to getting subsidised housing built for those in most need, and so align themselves with poor African-American and Latino residents attempting to defend their neighbourhoods against gentrification. On the other, BARF courted real estate agents and property developers. It is easy to see how these interests might collide.

This tension has riven YIMBY movements everywhere, especially when they have accepted funding from companies, rendering themselves vulnerable to accusations of astroturfing. They also want to reassure existing wealthy homeowners that new development won’t destroy the character or quality of their cherished built environment (or, as a subtext, lower their property values), while at the same time — as Holleran writes — wanting to convince low-income residents that “new housing will not further intensify gentrification and displacement.”

This doesn’t mean the YIMBY argument carries no weight. While housing justice activists see YIMBYism as a poor substitute for increased public investment in social housing, the reasonable YIMBY response is that decades of campaigning have failed to produce tangible results in economies where most housing is, and always will be, created by the private sector. Enabling new apartments to be built in established suburbs increases housing choices for current and future residents and should help to hold prices down overall, and even reduce them in the long term.

Most of Yes to the City focuses on the United States. Holleran recounts the unsettling story of Boulder, Colorado, an affluent “eco-utopia at the foot of the Rocky Mountains” where lifestyles and property values are protected by an environmental greenbelt and limits on density, height and “non-familial co-habitation.” In the land of the free, liberty does not necessarily extend to living in a share house.

He documents the parallel trajectory of Austin, Texas, a university city celebrated for its lively music scene and “cowboy hippie spirit,” summed up in the motto “Keep Austin weird.” These days Austin is only affordable for people who are “economically productive but culturally boring” (namely, “doctors, bankers, and brokers, not poets, painters, and performance artists”).

Despite an acute housing shortage, downtown Austin still has open-air car parks that lend “a sprawling vacant feeling to some parts of the central business district that should be bustling.” Yet higher-density projects face stiff opposition for threatening the city’s acclaimed “weirdness.” As in San Francisco and Boulder, residential development has been pushed to the sprawling edges, condemning service workers to housing insecurity or car dependency and long commutes.

Australia’s planning constraints are generally less extreme than in the North American cities Holleran profiles. Postcode 3000 has transformed Melbourne’s CBD into a forest of residential towers, and urban consolidation is obvious in inner suburbs like Brunswick and Footscray. Over the past ten years, almost twice as many apartments as freestanding homes have been added to the housing stock of Greater Sydney. Yet Hobart, which has the most acute shortage of affordable rental housing of any Australian city, still has downtown areas, like in Austin, devoted to low-value uses like open car parks.

Whether planning rules are solely to blame for this lack of residential construction, or the causes are more multifaceted, is another question though. In Melbourne, for example, realtors are spruiking the CBD site of the Witches in Britches theatre restaurant as “a significant landbank opportunity.” Sometimes it’s not NIMBYs who delay development, but speculators looking to cash in on rising property values.

Yes to the City concludes by looking at how the concept of Yes in My Backyard has gone global. Holleran brings an acute outsider’s eye to observations about Melbourne and Brisbane, and invites Australian readers to consider how emerging YIMBY activism here might inject new life and fresh ideas into debates about housing and urban policy.

While some of our cities may be going up in the centre, they also continue to push outwards at the edges, giving us our own version of Holleran’s “missing middle” — a reference to underdevelopment in ageing middle-ring suburbs (or greyfields) and to the relative paucity of European-style medium-density housing that sits between freestanding homes and high-rise apartments. Stoushes over planning and densification are alive and well.

Holleran provides a useful contribution to Australia’s bitterly contested and often arid discussion about how to improve housing affordability. Opinion has hardened into two rival camps. For one side, the problem is entirely a question of supply — and the answer is to liberalise planning and zoning rules and let development rip. For the other, the problem comes down to demand: lax credit rules, tax concessions and other generous subsidies have turned housing into a speculative asset and driven up prices. On the latter view, the solution lies in tax reforms, more financial regulation and much greater public investment in social housing.

YIMBY movements generally fall into the former supply-side camp, arguing that all development is good development, even at the luxury end of the real estate market, because it adds to the overall stock of housing and eventually “filters” down to benefit all. Active YIMBY groups in Melbourne, Brisbane and Sydney can be contrasted with NIMBY organisations like Save Our Suburbs that oppose “inappropriate development” and “forced rezoning.”

Interestingly, both sides invoke arguments about lifestyle and environment. YIMBYs argue that higher densities bring the benefits of more walking and cycling, a “buzzy city” with outdoor dining and spaces for arts and culture, and rain gardens and trees in place of car parks. Save Our Suburbs wants to protect residents from “overcrowding, traffic congestion, pollution and loss of bushland and heritage resulting from ill-considered planning impositions.”

Avoiding such unhelpful dichotomies, Holleran reveals rifts within each camp. Not all YIMBYs take the build-more-of-everything approach; they are also concerned with price and quality, resilience in the face of a changing climate, and how new developments enhance or diminish the urban fabric by enabling walkability and neighbourliness. At the same time, he recognises that NIMBYs’ objections can be well founded: “Concern about one’s backyard is often a deeply deliberative form of community engagement that addresses the carrying capacity of land with on-the-ground knowledge that is attuned to environmental quality and social cohesion.”

Overall, though, Holleran is sympathetic to the YIMBY view that “building nothing is not an option.” He points out that hyperlocalism can provide cover for “latent racism and an unwillingness to share space and resources with others.” In San Francisco and Austin, planning controls and rising real estate prices have coincided with a rapid decline in the cities’ African-American population. Rather than “devolved decision-making” he would back the YIMBY call for city-, region- or even nationwide planning that de-emphasises the interests of individual homeowners and enables rational infrastructure and a fairer sharing of the costs and benefits of urban growth.

But Holleran also argues that the YIMBY agenda is far from enough to improve housing affordability, contain suburban sprawl, redress socioeconomic and racial segregation, and better prepare cities for climatic events. Greater state action will be needed to override local sensibilities and interests.

Just how contested this territory can become is evident right now in Britain. As part of its “levelling up” policy to “spread opportunity more equally,” Boris Johnson’s government committed to setting mandatory housing targets for every local council. In the competition for the leadership of the Tory party, Liz Truss promised to put an end to such “Whitehall-inspired Stalinist housing targets.” Her successor, Rishi Sunak, was none too keen either, and in any case the proposal has been white-anted by a group of conservative backbenchers concerned about the impact on their leafy constituencies.

This is not a simple left–right divide. In the Times, the director of the centre-right Centre for Policy Studies called their actions “selfish and wicked,” saying they would “enshrine nimbyism as the governing principle of British society… and leave every proposed development at the mercy of the propertied and privileged.” •

Yes to the City: Millennials and the Fight for Affordable Housing
By Max Holleran | Princeton University Press | US$27.95 | 216 pages

The post Building nothing is not an option appeared first on Inside Story.

As a result, getting access to social housing, whether it’s public housing provided by state authorities or community housing provided by not-for-profits, is harder than ever. The first tranche of 2021 census data shows that social housing’s share of all dwellings has fallen below 4 per cent Australia-wide, continuing a steady decline over more than two decades.

When Scott Morrison opted instead to subsidise property owners through the HomeBuilder program, the states were forced to go it alone. Victoria set the pace in 2020 with the $5.3 billion Big Housing Build, a plan to construct 12,000 new dwellings and refurbish 23,000 existing social housing properties. Queensland soon came to the party with its $1.8 billion Housing Investment Growth Initiative, promising 6365 new homes over four years, and the WA government committed $2.1 billion to deliver 3300 new homes, adding another $408 million in its 2022 budget.

Labor-run states weren’t alone. The largest per capita investment was Tasmania’s $615 million commitment to construct 3500 new social houses by 2027 (funded in part by senator Jacqui Lambie’s success in negotiating a waiver of the state’s historical Commonwealth housing debt.)

South Australia and New South Wales are building too, though their construction programs will mostly replace old, rundown public housing, producing little gain in dwelling numbers.

The total state effort amounts to about $10 billion. According to housing expert Hal Pawson, the states will build more social housing over the next three years than Australia saw in the previous decade. Presenting an analysis by the UNSW City Futures Research Centre at this month’s Affordable Housing Summit in Melbourne, Pawson said that these programs will add 15,500 homes to Australia’s social housing stock (after accounting for demolitions and replacements).

The scale of these efforts is comparable to the last significant federal investment, the Rudd government’s Social Housing Initiative in response to the global financial crisis — a $5.6 billion program that constructed 19,700 new dwellings and refurbished 12,000 more during 2009–12.

Now the Albanese government is bringing the Commonwealth back in, though rather than investing in social housing via the budget, it is setting up a $10 billion Housing Australia Future Fund. Three states, New South Wales, Queensland and Victoria have already created similar off-budget funds, each capitalised at a little over $1 billion.

Details of the federal scheme are yet to be finalised, but Pawson anticipates it will follow the pattern set by New South Wales, with returns from the fund helping not-for-profit housing providers develop new homes by bridging the gap between their costs and the rent their low-income tenants can afford to pay.

The costs are a mix of operational expenses, maintenance, and debt payments, and will vary depending on location and the characteristics of tenant. (In social housing, most tenants rely on government payments, and their rents are capped at no more than 30 per cent of income. In affordable rental housing, aimed primarily at low- and middle-income workers, rents are discounted to 80 per cent of the market rate.)

In 2018, the City Futures Research Centre estimated, the average annual gap for social housing was $12,000 per annum. On that basis, the Future Fund will need to earn $240 million each year to subsidise the 20,000 new social housing dwellings promised by Labor. If its earnings average 6 per cent each year, or $600 million, the extra income can be put towards Labor’s other promises — 10,000 “affordable” homes for police, nurses, cleaners and other “heroes of the pandemic,” repair and maintenance of existing housing stock, and a cash injection to build new crisis accommodation. And, of course, the government will need to pay interest on the $10 billion borrowed to set up the fund.

It’s important to understand that the proceeds from the Future Fund won’t be used to give not-for-profit housing providers up-front grants to build dwellings. Instead, it will guarantee to fund the gap between rent receipts and costs for twenty-five years, giving housing providers income certainty long into the future. This will enable them to seek the finance they need from private sources — including, potentially, superannuation funds (as is already happening in a limited number of cases). In this way, a relatively modest amount of public money can be leveraged to finance a lot of new housing.

Still, the fund seems a cumbersome workaround. An analysis by Pawson and his colleagues shows that another option, providing up-front development grants to not-for-profits, is the most cost-effective way to build social housing. Pawson also points out another downside of the fund: it will be fully committed after five years. In other words, once the first 20,000 social dwellings are completed and tenanted, all annual returns from the fund will be allocated to bridging the gap between rent those tenants pay and the cost of providing them with housing. Unless the fund is topped up with fresh capital, federally subsidised social housing construction will once again come to halt.

This already happened in New South Wales. All returns from its $1 billion Social and Affordable Housing Fund, set up in 2015, have been allocated to bridging the rental gap on 3400 social and affordable dwellings under contracts lasting twenty-five years. As the fund says on its “frequently asked questions” page, this means there “are no current opportunities to access SAHF funding.”

With sufficient political will, such funds could be replenished or duplicated, to enable more building. The fly in the ointment here is that establishing a new fund or topping up an existing one with billions of dollars could be hostage to the vagaries of the electoral cycle. Incumbent governments would need to do more borrowing, which is one thing the funds are set up to avoid. Or they could find other sources of capital, for example by selling public assets. The capital for Queensland’s $1 billion housing fund was extracted from the Queensland Land Titles Registry. But such choices require courageous governments.

The fact that Canberra is borrowing creative ideas from the states at least suggests that federal relations are turning a corner. Encouragingly, housing and homelessness minister Julie Collins has already met twice with her state and territory counterparts. Their last meeting with her Coalition predecessor was almost five years ago.

But Collins will have her work cut out realising Labor’s campaign promise of a National Housing and Homelessness Plan. Such an aspiration implies much more than simply rejigging the 2018 National Housing and Homelessness Agreement that governs the disbursement of $1.6 billion in federal funding to the states and territories.

A true national housing strategy would integrate the approaches of federal, state and local governments, and address not just how to subsidise homes for low-income earners, but the entire housing system and its interaction with other policies, like tax settings, immigration levels, planning regulations and building codes.

The plan needs to extend beyond the five-year horizon of the Housing Australia Future Fund and secure a pipeline of social housing construction after the current burst of state activity has run its course. Pawson says we can’t expect the states, with their limited revenue- and loan-raising powers, to keep investing at the current rate without federal support. (And as he points out, New South Wales and South Australia aren’t investing much from general funds anyway.) But he says Canberra can use its funding muscle to encourage the states to contribute in other ways, such as by providing land and using their planning powers to facilitate more construction.

A planning power widely used overseas but rarely implemented in Australia is inclusionary zoning, which mandates that new housing developments include an affordable component. Since 2005, South Australia has required that 15 per cent of new dwellings in significant development projects be affordable, with at least 5 per cent set aside for high-needs groups. In the City of Sydney, the developers of urban renewal projects like Green Square must include a small affordable housing component in their plans or pay a levy. Industry groups like the Property Council oppose inclusionary zoning on the basis that it amounts to an unfair tax on some landowners that deters investment.

Can Australia learn from its peers overseas? Canada, with similarities beyond a Westminster system, a British colonial history and a federal structure, is an obvious place to look. Both nations have comparable home ownership rates and a history of substantial postwar investment in social housing that was effectively shut down in the 1990s.

Canada’s 2018–28 national housing strategy was meant to turn that around. Set up with an “unprecedented” C$40 billion in funding, it aimed to halve rental housing need and chronic homelessness within a decade. When a keynote speaker at Australia’s 2017 National Housing Summit described how prime minister Justin Trudeau had declared that “housing rights are human rights” and promised to enshrine in law the right to adequate housing, the sighs of envy in the audience were audible.

But at the recent Affordable Housing Summit, McMaster University housing expert Steve Pomeroy explained how creating an effective national housing strategy for Canada has been far from straightforward.

On the plus slide, the strategy is embedded in legislation. While the legislation doesn’t entrench housing as an individual right enforceable by the courts, it commits federal and provincial governments to the goal of adequate housing for all. It also provides funding certainty over a ten-year period (and, since 2018, the budget has been boosted to C$72 billion). The ambition of the strategy was lifted too: it now aims to eliminate rather than merely halve chronic homelessness by 2028.

Yet, as Pomeroy told the conference, the vision and its funding don’t align. A 2021 review by Canada’s parliamentary budget office found that housing assistance to low-income households has fallen in real terms despite the increase in overall spending. Even with commitments to build more than 90,000 new units of housing and repair a similar number, the budget office anticipates the strategy will fall well short of its aim of halving housing need, which will have climbed from 1.7 million to 1.8 million households by 2025–26.

The problem is not just the quantum of funding but its form. Rather than providing grants, most new funding comes as loans, making it suitable only for projects that can generate a return on investment. These projects can increase the supply of rental housing overall, and help hold down rent rises, but they aren’t designed to build homes for those who need them most.

Pomeroy says the strategy has morphed into a program of “market rental supply with a poorly designed affordability requirement.” Along the way, it has facilitated “renovictions” in the private rental market, with loans used to fund modest upgrades that then provide an excuse to evict low-income tenants and raise rents. In real estate terms, these dwellings are “underperforming assets,” says Pomeroy, though he considers them “naturally occurring affordable housing.” The Canadian strategy lacks a commitment to enabling not-for-profits to “buy up affordable housing and keep it affordable.”

With the Albanese government facing similar challenges as it builds a national housing strategy, Pomeroy had two key messages for his Australian audience. First, “a national housing strategy is different from a federal housing strategy,” and an over-centralised model is likely to fail. Second, “a strategy without money really isn’t worth very much.”

Discussion of housing in Australia is always dominated by home ownership, and attention right now is focused on rising interest rates and their impact on real estate values and mortgage payments. While these indicators are important (not least for the stability of a financial system highly exposed to property debt), the sharp end of Australia’s housing crisis — fuelled by the lack of new, affordable homes — is in the private rental market.

According to Domain, average rental vacancy rates in Australia’s capitals were just 1 per cent in August. SQM Research puts the rate even lower, at 0.9 per cent. Outside the capitals, the situation is worse still, with Covid-fuelled sea- or tree-changers outbidding locals, not to mention housing lost to recent floods and fires. Domain puts the rental vacancy rate in regional Australia at just 0.6 per cent. In places as disparate as Warrnambool, Kiama, Queanbeyan, Toowoomba and Burnie, essentially no homes are available to rent.

To put these numbers in perspective, the former National Housing Supply Council used an “equilibrium” point for Australian cities of 3.0 per cent — that is, the vacancy rate at which there should be no upward or downward pressure on rents. With vacancy rates well below that figure, SQM data show capital city asking rents rising by more than 20 per cent over the past year. That’s for new listings; rents aren’t yet rising at the same pace for tenants with ongoing leases. Nevertheless, says Domain, a “landlords’ market” is “driving up rents and escalating competition” between tenants.

The return of international students, temporary skilled workers, backpackers and permanent migrants will put more demand into the system. In Australia’s lightly regulated market these pressures will soon flow through to tenants.

Beyond the $10 billion Housing Australia Future Fund, the federal government wants to avoid borrowing heavily to invest in social housing because that would add to a budget deficit that the Treasurer (misleadingly) claims is “heaving with a trillion dollars of Liberal debt.” Labor has also painted itself into a corner by backing away from sensible changes to negative gearing and the capital gains tax discount. Not only could changing the tax treatment of housing raise the revenue needed to build more social housing without extra borrowing, it would also dampen the speculation that inflates property prices.

The problem is partly one of perspective. Social housing is still framed primarily as a cost to the budget bottom line rather than an economic and social investment. Yet numbers crunched by SGS Economics and Planning for the private sector advocacy group Housing All Australians show that every $1 invested in social and affordable housing delivers $2 in benefits — a rate of return greater than many other infrastructure investments.

The SGS report, Give Me Shelter, says a failure to tackle our social and affordable housing needs will cost the nation $25 billion annually by 2051. We’ll pay the price in expenditure on welfare, visits to emergency departments, police and ambulance callouts, and putting people through courts and locking them up in jails. And we’ll lose tax revenue from lost productivity and lower employment.

By contrast, SGS calculates the benefits of providing adequate housing at almost $110 billion. Since the federal government stands to gain more than the states through increased tax revenue and lower welfare spending, it makes sense for Canberra to provide the bulk of the funding for new social housing.

Combined with recent state initiatives, the federal government’s Future Fund is a significant but modest step forward. To deal with Australia’s housing crisis, it will need to do much more. •

The post A new era for housing? appeared first on Inside Story.

Veteran observers question the need for another inquiry. The Financial Review’s long-time property editor Robert Harley has counted five major housing probes over the past two decades, and another — a report on the related issue of homelessness — was published just two months ago. Detailed analyses have also been published by the Reserve Bank, by Grattan Institute, Per Capita and other think tanks, and in a steady stream of research by the Australian Housing and Urban Research Institute, or AHURI.

Yet, says Harley, “while politicians, bureaucrats and developers have championed the cause of the first homebuyer, prices have risen inexorably higher… and home ownership has slipped, particularly among twenty- to forty-year-olds.” What remains unresolved is what makes housing so expensive, and how it can be made more affordable.

One camp argues that the problem is too little supply: we simply don’t build enough houses and flats. Australia’s stratospheric house prices are the product of red tape and nimbyism, and the solution is to liberalise planning and zoning rules so that developers can get building.

The other camp thinks the core problem is excess demand, fuelled by a combination of record low interest rates, easy credit and generous tax concessions. Housing has been transformed from an essential good into a financial asset, with the search for capital gains driving prices up relentlessly. This camp thinks solutions are to be found in changed tax rules and tighter financial regulation.

Opinions don’t divide quite so neatly, of course, and some views are shared by people in both camps. Many argue, for example, that whatever else happens, governments should invest more in social housing, and swap stamp duty for a broad-based property tax. But it’s hard to see either of these sensible recommendations emerging from the inquiry.

The House of Representatives tax and revenue committee, which Falinski chairs, has been asked to report on “the contribution of tax and regulation on housing affordability and supply in Australia.” The cynic might suspect the inquiry was designed to wedge Labor over its contested housing policies in the lead-up to the next federal election. Any hope on that score was short-lived: just four days after treasurer Josh Frydenberg initiated the inquiry, the opposition dumped its pledge to change negative gearing and capital gains rules.

Expectations that the committee would produce new insights have been dampened by Falinski’s confidence that the answer to the question is already clear. In calling for submissions, he declared allegiance to one side of the housing divide, saying “the research points to limitations on land and restrictive planning laws as the major causes of shortages in supply.”

Falinski’s assumption is reflected in the framing of the inquiry. While it sets out to investigate the contribution of tax and regulation to affordability and supply, the terms of reference refer solely to the latter, as if solving the supply problem will look after affordability.

Demand doesn’t rate a mention, even though most of its drivers — interest rates, immigration levels, mortgage lending regulations, homebuilder schemes, or, indeed, tax concessions like negative gearing — are federal responsibilities. Ignoring demand means ducking responsibility, consistent with messaging by housing minister Michael Sukkar that it is up to the states and territories, which “control planning schemes and zoning,” to solve our housing woes.

Yet, as Sydney University housing researchers Nicole Gurran and Peter Phibbs point out in their submission to the inquiry, state and local governments have already significantly eased controls on residential land release and development by standardising local planning instruments, speeding up and codifying development assessments, and “depoliticising” planning decisions by using expert panels and professional assessments. Far from a lack of supply, they say, construction has reached historic highs in recent years, with more than 200,000 dwellings built every year between 2014 and 2019.

“There are more, bigger, better, dwellings per capita in Australia now compared to any point in history,” agrees economist Cameron Murray. His submission to the inquiry questions whether a further relaxation of planning and zoning controls would provide any incentive for landowners and developers to speed up new housing, since it would lower the price of their future sales. Murray argues that developers systematically engage in landbanking, “holding undeveloped sites off market to ensure they match the rate of sales that maximises their total return on assets.”

The view that the stock of dwellings has largely kept pace with population growth — and even exceeded it in recent years — is supported by Reserve Bank research, as this chart from its submission to the inquiry shows:

The sudden drop in population growth (the orange line in the chart) reflects border closures in response to Covid-19. That fall challenges another version of the supply-side argument — that prices have rocketed in recent years because house building failed to keep up with Australia’s high migration intake. In theory, flatlining immigration since early 2020 should have pushed prices back down again. Instead, with a few exceptions (such as high-rise inner-city apartments in Melbourne), the real estate market has boomed.

As the pandemic demonstrates, the relationship between population, housing supply and prices is far from straightforward.

Not everyone on the Coalition side of politics agrees with Falinski and Sukkar. Writing in the Sydney Morning Herald earlier this month, NSW planning minister Rob Stokes declared “the idea that the planning system alone can solve housing affordability” to be “ludicrous at best; wilfully negligent at worst.”

Simple maths supports his contention. As the Planning Institute of Australia points out in its submission to the inquiry, new housing only increases the total stock of dwellings in Australia by about 2 per cent each year. Because most sales and rentals involve established homes and apartments, “it is hard for additional supply to reduce prices rapidly and deeply.” Even if we doubled the volume of new housing coming onto the market — a high hurdle given constraints on labour and materials — the impact on overall prices would be relatively modest.

This is not to suggest that the problem of housing affordability isn’t urgent. It certainly is, but for rather different reasons than Jason Falinski assumes. His primary concern is with declining rates of home ownership, which he describes as “one of the building blocks of Australian society.” But the more pressing problem is the fall in rental affordability for tenants on low incomes.

We’re familiar with comparisons showing a sharp rise in house and unit prices compared with earnings in recent decades. Westpac, for example, reported in June that “dwelling prices reached seven times average annual earnings” at the end of April 2021, about double the ratio at the start of this century.

But property prices are not necessarily an accurate guide to household housing costs, which are better understood as the amount individuals or families must spend each week — usually in the form of rent or mortgage repayments — to stay in their homes. For most households, housing costs as a share of income are far more important than the price of real estate: they can’t be avoided, and they determine how much money is left to pay for other things.

Australian households can be divided into three groups of roughly equal size: tenants, mortgage holders and outright homeowners. For tenants, rents are the most important factor influencing housing costs, and they have generally risen relative to incomes. For mortgage holders, the most relevant cost factor is interest rates; these have dropped, reducing the price of servicing a mortgage, even though people have taken out bigger loans. For outright homeowners, housing costs bear no relationship to fluctuations in rents or interest rates.

This means that two-thirds of households (mortgage holders and outright homeowners) have not faced rising housing costs over the past two decades, despite escalating house prices.

It’s a very different story for the other third — tenants — and especially for low-income tenants in the private rental market. The true nature of Australia’s housing affordability challenge, and where its impact is most acutely felt, is revealed in another chart from the Reserve Bank’s submission, which shows that for tenants in the first “quintile” (the bottom fifth of households by income), rents have risen, dramatically and unsustainably, to 38 per cent of disposable household income.

Not surprisingly, the Productivity Commission has found that half the low-income tenants in the private rental market experienced rental stress in 2017–18, spending at least 30 per cent of their disposable income (and often much more) on rent. That’s around 550,000 households — many of them families with children — that didn’t have enough money left over to pay for other essentials. And it has happened despite the $4.6 billion paid to some low-income tenants in Commonwealth Rent Assistance.

For these households, the supply problem is a lack of affordable homes to rent. Rising real estate prices do make matters worse, because they make it harder for moderate- and higher-income tenants to move to ownership. Wealthier tenants spend longer renting in the private market, out-competing low-income households for the most affordable homes with the best access to jobs and services.

In theory, a general increase in housing supply should push down the prices of houses and flats, and subsequently rents, across the board. Affordable housing would eventually filter down to low-income tenants.

But the filtering theory has at least two fundamental problems.

A general increase in overall housing supply could take a long time to filter down, with much damage done to individuals and families in the meantime. More fundamentally, though, the filtering doesn’t actually happen, because Australia’s tax structure — its preferential treatment of owners and investors — boosts demand for housing as an asset and encourages house-price inflation.

Supercharged by low interest rates, these tax settings make housing a highly attractive asset, for both owner-occupiers and investors. As researchers Blair Badcock and Andrew Beer concluded more than twenty years ago in their book Home Truths, “taxation arrangements have played an unambiguous role in the high proportion of wealth in Australia held as housing. In many respects, high-income earners would be foolish to invest elsewhere!”

In any case, if prices were to fall to the degree necessary for housing to “filter down” to the poor, that would signal a collapse on the scale experienced in the United States, Spain and Ireland during the global financial crisis.

As the Reserve Bank remarked in its submission to a 2015 parliamentary inquiry, “there are no examples internationally of large falls in nominal housing prices that have occurred other than through significant reduction in capacity to pay (e.g. recession and high unemployment).” In other words, the only sure-fire way to quickly make housing substantially cheaper is to crash the economy.

It’s not an outcome anyone would seek. But it points to the high-stakes situation that Australia finds itself in because our sustained residential property boom has dramatically increased household debt.

Just before the global financial crisis, Australia’s total household debt was estimated at $1.1 trillion, or a little over $50,000 per person. By early 2018, the figure had more than doubled to an estimated $2.466 trillion, or close to $100,000 for every person. Over the same decade, the ratio of household debt to annual household disposable income rose from about 160 per cent to around 200 per cent. The vast bulk of household debt is tied up in loans for buying homes and investment properties.

If interest rates remain low, rising household debt is not necessarily a problem. But a rise in interest rates could force a significant number of households into housing stress, with concomitant risks for major Australian major financial institutions heavily exposed to mortgage lending.

Australia’s housing system also encourages a volatile boom–bust cycle of property investment. Since construction is a major employer, this has repercussions throughout the economy. Given long lead times, developers are slow to ramp up employment in an upswing but quick to shed staff in a downturn. As the OECD has concluded, changes to the tax treatment of housing could moderate this boom–bust cycle: “Higher effective taxation of housing is associated with less severe downturns. Moreover, countries with higher taxation experience more moderate house price fluctuations and smoother residential construction cycles.”

And while the building of housing generates jobs, housing is not in and of itself a productive investment. Increased dwelling prices reflect the value of the underlying land more than the value of the dwelling. The escalation of residential property prices, and the increased borrowing necessary to finance it eat up investment funds that could potentially have been put to more productive use.

I share Jason Falinski’s concern with falling rates of home ownership, but not because I want to “restore the Australian dream for this generation and the ones that follow.” More important, in my view, is to reduce growing inequality.

With interest rates so low, the barrier to home ownership has less to do with managing a large mortgage than with saving the deposit needed to secure a mortgage in the first place. Higher education debts, superannuation contributions and a casualised labour market make it harder for the current generation of first homebuyers to assemble a deposit.

As researchers Hal Pawson, Vivienne Milligan and Judith Yates write in their book Housing Policy in Australia: A Case for System Reform, “wealth rather than income” now presents “the major stumbling block to home ownership.” Home ownership must often be facilitated by funds from parents, which are in turn enabled by existing property wealth. Homeowners beget homeowners and renters beget renters, with the risk that home ownership will become a dynastic privilege. And since the primary financial asset for most Australian households is their dwelling, the difference between owning and renting generally holds the key to whether you acquire any lifetime wealth.

Falling rates of home ownership will also increase pressure on government payments. Australia’s relatively ungenerous age pension rate is predicated on widespread home ownership keeping housing costs low in old age. But declining rates of home ownership mean this “fourth pillar” of Australia’s welfare system is crumbling as more households rent in retirement. Unless house prices can be moderated, pushing up home ownership again, the federal government will need to outlay ever greater sums on pensions and rental assistance.

Our best hope is to engineer a gradual deflation of dwelling prices or allow them to stagnate relative to inflation. Changing the tax mix to make housing a less attractive asset is arguably the best way to do this.

In the meantime, Jason Falinski’s committee could have a quick, practical impact on housing costs and rental stress by recommending the federal government increase the rate of Commonwealth Rental Assistance. As AHURI research has shown, that could be done painlessly by targeting rent assistance more accurately to those on the lowest incomes.

For the longer term, the committee could recommend that the federal government makes a substantial investment in social housing. As Nicole Gurran and Peter Phibbs write in their submission, “The most notable shift in Australian housing production over the past thirty years has been the gradual withdrawal of government involvement in land and housing development, with public sector housing completions falling as a proportion of all new housing from around 12.5 per cent in the early 1990s to around 2 per cent by 2016.”

A long-overdue national housing strategy with a time horizon of at least twenty years should fund an annual increase in supply of at least 15,000 new units of social housing to catch up with unmet demand. This is about five times what gets built now, but no more than the numbers regularly achieved in the decades after the second world war. Sometimes to go forward, we must first look back. •

The post Asking the wrong questions about housing appeared first on Inside Story.

On the morning of Sunday 26 August 2001 the Tampa, a Norwegian freighter, diverted from its route from Fremantle to Singapore to go to the aid of a small Indonesian boat, the Palapa 1, adrift in heavy seas with a failed engine. The Tampa had been alerted to the boat’s plight by the Rescue Coordination Centre at the Australian Maritime Safety Authority in Canberra, and was guided most of the way to the scene by a plane from Coastwatch, the surveillance arm of the Australian Customs Service.

By the time the Tampa reached the wooden vessel it was breaking up in the swell. Australian authorities had warned the Norwegian vessel to expect to find eighty or more people aboard. But by the time the dangerous high-seas rescue was complete, the Tampa’s twenty-seven crew members had been joined by another 438 people — 433 asylum seekers, all but nine of them from Afghanistan, and the Palapa’s five Indonesian crew.

In responding to Australia’s call, captain Arne Rinnan and his crew not only demonstrated great courage, they also observed a foundational principle of seafaring enshrined in the Convention for the Safety of Life at Sea — “a general obligation for masters to proceed to the assistance of those in distress.” Yet they got no thanks from the government in Canberra.

When the Tampa reached the Palapa, it was only about four hours from Christmas Island. But with the distressed boat technically in the Indonesian maritime rescue zone, Captain Arne Rinnan was directed to land the rescued asylum seekers at the Indonesian port of Merak, more than twelve hours away. As he steered towards Java, an agitated delegation came to see him. The five men were threatening that people could jump overboard or riot if the Tampa did not change course. Recalling the moment in a feature to mark the twentieth anniversary of the Tampa affair for Radio National’s The History Listen, the vessel’s chief officer, Christian Maltau, described the men as rude and very aggressive: “We never felt really threatened, but everything on board was very confusing.”

Concerned for the safety of all on board, Rinnan consulted Australia’s search and rescue authorities. He was advised that, as master, it was up do him to decide what to do. This is another key plank of the international convention: “the role of the Master in exercising his professional judgement over decisions necessary to maintain the security of the ship.”

Erring on the side of caution, Rinnan opted to make for the closest port, on Christmas Island. Maltau told the History Listen that it was effectively a declaration that the Tampa was “not seaworthy” — that it wasn’t safe for the cargo ship to cross a large stretch of ocean equipped with lifeboats and equipment for just thirty crew and twelve passengers when there were more than ten times that number of people on board.

As the Tampa neared Australian territory, Rinnan was again contacted by Canberra. This time it wasn’t the rescue authorities on the line but an immigration department official, who warned Rinnan that he risked prosecution for people smuggling if he brought the asylum seekers to Australian territory. The captain maintained his course for Christmas Island but stopped outside the twelve nautical mile limit that demarcates Australian waters. A stand-off ensued. At a lunchtime media conference on Monday 27 August, prime minister John Howard announced that the Tampa would not be permitted to land. Rinnan did not test this declaration but stayed put, requesting medical care for his rescued passengers.

The following day, having spoken to Rinnan, Australia’s Royal Flying Doctor Service assessed that there was a “mass situation medical crisis” on board and that “medical attention was urgently required.” Many people were dehydrated, and fifteen were unconscious, but the ship had depleted its supplies of intravenous fluids. There were women in the later stages of pregnancy, and some adults were on a hunger strike and suffering diarrhoea and abdominal pains. Among the sick was a child, a person with a broken leg, and many people with open sores and skin infections.

By that evening, with no help in sight, Rinnan renewed his appeal, this time signalling medical distress on board in the form of a “pan-pan” emergency call. The next morning, Wednesday 29 August, he repeated the call. Still no help came.

Finally, three days after the rescue, the master of the Tampa defied Canberra’s warnings and sailed towards Flying Fish Cove at Christmas Island. Prime minister John Howard despatched Australian Special Air Service commandos to take control of his ship, insisting that “it is in Australia’s national interest that we draw a line on… an uncontrollable number of illegal arrivals in this country.”

These were the events that gave rise to Australia’s policy of offshore detention for asylum seekers arriving by boat. Despite repeated assertions of Australia’s overall generosity towards refugees, the approach has been endorsed by both major parties for all but four of the past twenty years.

The Coalition was in office when the Tampa sailed into Australia’s political waters in 2001, but Labor backed the government’s actions at almost every turn, declaring it would not be “a carping opposition” in circumstances that required a bipartisan approach. Kim Beazley, opposition leader at the time, might recently have claimed that it was “a no-brainer intellectually and morally” to do everything possible to stop people embarking on such dangerous voyages, but the motivation had less to do with safety than with preserving Australian sovereignty. Howard captured the bipartisan mood in his ringing election declaration: “We will decide who comes to this country and the circumstances in which they come.”

The prominence of the argument that the offshore detention policy saved lives is more recent, and follows a series of tragedies including the drowning of fifty people in 2010 after their boat smashed into rocks off Christmas Island.

In hindsight, John Howard’s stand against the Tampa is seen as a political masterstroke that enabled him to overcome poor polling and guide the Coalition to a third successive election victory. Offshore processing is widely credited with “stopping the boats,” and the Tampa affair is remembered as a fundamental break with past policy. But none of these interpretations is entirely accurate.

Let’s start with the idea that Howard’s response to the Tampa won the election. He was behind in the polls at the time but had already clawed back considerable ground through the course of 2001 with targeted spending in marginal electorates, cuts to petrol excise, and generous handouts to retirees.

This is not to suggest that Howard’s stand against the Tampa wasn’t popular. Egged on by tabloid newspapers and talkback radio, a large majority of Australians supported his refusal to allow Rinnan to disembark the asylum seekers at Christmas Island, not least because, just prior to the rescue, three asylum boats carrying almost 1000 people between them had arrived within the space of six days.

So while it’s true that the sense of crisis and the polarising effect of Howard’s response to the Tampa worked to his electoral advantage, polling suggests that issues like health, education and jobs would have proved more decisive at the ballot box.

If any single factor sealed Howard’s electoral victory it was more likely to have been the 11 September terror attacks in New York and Washington. This is certainly the view put by defeated opposition leader Kim Beazley in The History Listen. As we have seen during the pandemic, moments of national crisis tend to benefit incumbent governments.

To scour media reports from the time is also to be reminded that Howard, whose instincts were aligned to the popular mood, was acting without a script and his improvised lines failed to find a receptive audience with much-needed international partners.

Australia first tried to send the Tampa and its rescued passengers back to Indonesia, but the plan was made public without even a preparatory phone call to Jakarta. Not surprisingly, Indonesia accused Canberra of megaphone diplomacy. In any case, there was no way that Rinnan could have sailed his freighter to Merak after arriving at Christmas Island. Rescuing the asylum seekers and continuing straight to Indonesia might have been an option, but setting out on a new voyage from a safe harbour was not. Even resupplied with food, water and medicines, the Tampa was neither equipped nor insured to make the journey with so many people on board.

The United Nations refugee agency, UNHCR, offered a compromise. If Canberra disembarked the asylum seekers and processed their claims in Australia then it would find countries willing to resettle anyone in need of protection as a refugee. (New Zealand and Norway agreed to help, and Britain and Canada were being consulted.) Australia rejected the offer.

Meanwhile human rights lawyers were preparing action in the Federal Court that could force the government to bring the asylum seekers ashore. In the first instance, Justice Tony North ordered the government to do just this, invoking the “ancient power of the Court… to protect people against detention without lawful authority.” The judgement was handed down on 11 September, hours before the attacks in New York and Washington. It was later overturned on appeal and never tested in the High Court. As with other details from the time, the litigation has largely slipped from view.

A week after the rescue, the headline in the Sunday Age read “Refugee Deal a Shambles.” In the Weekend Australian the previous day, Paul Kelly described the government’s handling of the Tampa as an “inept saga of crisis management” and expressed astonishment that John Howard went in “without any exit strategy.”

Yet the government was still exploring options and, Kelly noted, Australia’s diplomatic resources had been “fully mobilised.” Heads of missions around the region had been instructed to ask their host governments about the possibility of detaining and processing the asylum seekers on Australia’s behalf. This was the fix that became known as “the Pacific solution.”

At the time, Sue Boyd was high commissioner to Fiji, which was still working its way through the repercussions of a coup the previous year. In her recent memoir, Not Always Diplomatic, Boyd describes the government’s response to the Tampa as “an opportunistic and racist move” designed to win votes at the pending election. She says implementing the government’s directive caused her and her staff great distress. “I did not agree with the policy and was extremely reluctant to put the request to the poorer governments of Fiji, Tuvalu and Nauru,” she writes. “I also found the Pacific solution internationally embarrassing.”

Informal approaches were also made to Kiribati, Palau and even a recently traumatised East Timor, which had held its first-ever free elections under UN supervision on 30 August.

Defence minister Peter Reith eventually sealed an agreement with bankrupt Nauru, sweetened by $20 million in development assistance. Nauru didn’t even rate a separate line item in the Australian aid budget prior to the deal, instead sharing an annual sum of $10 million with five other small island states. New Zealand also offered support, agreeing to accept families and several unaccompanied teenage boys from the Tampa — a total of 132 people.

The assertion that offshore processing “stopped the boats” also falters when it runs up against reality. After the Tampa, a further twelve suspected illegal entry vessels, or SIEVs, arrived in Australian waters carrying 2126 passengers between them. A thirteenth — the so-called SIEV-X — tragically sank en route, with 353 lives lost.

It’s conceivable that news of the Tampa affair, detention on Nauru and the SIEV-X disaster helped to deter some asylum seekers in Indonesia from risking a boat journey to Australia. Indonesia also intensified its efforts to break the smuggling rackets and the Taliban were soon driven from power in Kabul, opening the prospect of displaced Afghans returning to their homeland.

But close reading of the Senate select committee report on A Certain Maritime Incident (better known as the children overboard affair) suggests that the decisive factor in deterring boats was Operation Relex — the deployment of naval vessels to force asylum seekers back to Indonesia. Between the arrival of the Tampa and the end of 2001, four vessels carrying a total of 502 people were returned. This news would have circulated quickly among asylum seekers contemplating the journey and would have undermined the promises of people smugglers.

This analysis is supported by research by Madeline Gleeson and Natasha Yacoub at the Kaldor Centre for International Refugee Law. They show that Labor’s reintroduction of offshore processing in 2012 — designed to “send a message” to asylum seekers and people smugglers in Indonesia — failed to halt arrivals. The boats continued even after Kevin Rudd doubled down in July 2013, declaring that asylum seekers arriving by sea would have “no chance” whatsoever of settling in Australia as refugees.

As Gleeson and Yacoub conclude, the dramatic drop in boat arrivals came only “after Australia began maritime interceptions.” In short, they attribute the success in deterring boats to “changes in Australia’s engagement with vessels at sea” — namely “turnbacks and takebacks” — implemented under Operation Sovereign Borders, Tony Abbott’s equivalent of Howard’s Operation Relex.

The turnback operation remains active, with home affairs minister Karen Andrews declaring, in a video posted just eight days after the fall of Kabul, that the Australian government “is responding to the security situation in Afghanistan” and “Australia’s strong border protection policies have not — and will not — change.” Andrews warns asylum seekers not to attempt a boat journey to Australia: “You have zero chance of success.”

If turnbacks and takebacks are what stops boats, and the policy of interception remains in place, then there is no reason to keep refugees in Nauru or Manus. Offering permanent settlement in Australia or New Zealand would not restart the boats. The same can be said of refugees who have been transferred from Manus and Nauru to Australia on medical grounds, and for the thousands of refugees living indefinitely on temporary protection visas. As Robert Manne concluded years ago, while the naval blockade remains in place, the continuation of such policies amounts to “purposeless cruelty.”

The Tampa affair was undoubtedly a decisive moment in Australia’s treatment of asylum seekers and refugees. But it didn’t so much overturn past approaches as build on them. I’ve described this elsewhere as a shift from a policy of deterrence by example to a policy of deterrence by force.

Mandatory detention, formalised by a Labor government in 1992, was a key plank of deterrence by example. Locking people up indefinitely in places like Woomera, Curtin and Port Hedland was meant to warn asylum seekers off travel to Australia. So were temporary protection visas, first introduced in October 1999, nearly two years before the Tampa.

The Pacific solution was simply an extension of the belief that restricting refugees’ rights would make Australia a less attractive destination. You might eventually have your case heard and find safe haven, but the process would be slow, circuitous, legally dubious, highly uncertain and very, very unpleasant. The decisive shift to deterrence by force came when the navy was deployed not just to intercept boats, but to turn or take them back to Indonesia.

This was not unprecedented internationally. The United States had used its coast guard to intercept and return “boat people” from Haiti.

With these policies, Australia contributes to ensuring that the vast bulk of refugees attempt to eke out an existence in the countries neighbouring their homelands, which often have the least capacity to provide for them. Pakistan and Iran can both anticipate new refugee flows from Afghanistan, and while we’ve all but forgotten about the 1.2 million refugees sheltering in camps around Cox’s Bazar in Bangladesh, this week marks the fourth anniversary of the mass exodus of Rohingya from Myanmar.

Meanwhile, countries like Australia continue to build higher fences, though the mechanisms are rarely as crude as sending out the navy. Generally, border protection proceeds bureaucratically and out of sight: visas are refused to anyone deemed likely to claim asylum; airline counter checks prevent travellers without a visa from getting on a plane; any airline that lands an inadequately documented traveller on Australian soil is penalised. It is these measures that drive vulnerable people to undertake dangerous journeys by boat.

If the Howard government hadn’t intervened on the Tampa, the boats would have kept coming, and probably in growing numbers. The increase in arrivals under Rudd and Gillard is evidence of that. This presents a dilemma for governments of any stripe — they are elected to serve the people, and voters want them to secure Australia’s borders and maintain an orderly migration program. Yet leaders could make a greater effort to explain that Australia’s obligations under the international refugee convention don’t disappear simply because they are inconvenient.

On the other hand, to argue that we should simply deal compassionately with anyone who manages to make landfall in Australia is to risk lives at sea and let money and smuggling networks determine who gets protection and who does not. If we were to go down that route, then we would be better to fly refugees from Indonesia to Australia by plane — but that would encourage more and more desperate people to move there.

The choices aren’t simple. But we do know that interception and turnback doesn’t solve the refugee challenge; it simply pushes it elsewhere and forces people to take other risks or endure lives in limbo. The policy depends for its success on Jakarta’s goodwill and would be unsustainable if the asylum seekers were Indonesian citizens fleeing a despotic regime or an upsurge in communal violence.

The real challenge is to work harder to build a coordinated regional response to refugee flows that treats displaced people with dignity and respect. If we committed the $1 billion-plus dollars a year we spend on offshore detention to supporting efforts in that direction, then who knows what we might achieve? •

The post A line in the water appeared first on Inside Story.

The most glaring example is the lack of systematic action on climate change. Australia drags the chain on emissions reduction and continues to punt on energy-intensive exports with a dwindling customer base. A price on carbon wouldn’t have solved all our climate challenges, but it would have left us better placed than we are now.

The failure to rein in house prices is another case in point. The tax system has helped turn housing into a speculative asset, pushing funds into property rather than productive sectors of the economy, driving household debt to spectacular levels, and ramping up inequality. Again, reforming the tax treatment of residential property would hardly solve all our housing woes, but it would ameliorate some of the real estate boom’s worst effects.

In a new essay in Monash University Publishing’s “In the National Interest” series, Wayne Errington and Peter van Onselen argue that carbon pricing and property tax reform have become “pariah policies.” Despite evidence that they would have a net positive impact on Australian society, these measures have become untouchable. Events bolster their case: as we gear up for a federal election, Labor has walked away from its modest reforms to negative gearing and capital gains, and the phrases “carbon price” and “emissions trading” are banned from its political lexicon.

But, Errington and van Onselen argue, weak opposition means poor government: “The progressive side of the two-party divide is too inept to apply pressure to the conservative side, meaning conservatives stay in government without lifting their game.”

The title of their short book is Who Dares Loses. If this bleak declaration is true, then ambitious policy proposals are a recipe for electoral defeat, which appears to be the conclusion Labor has drawn from its loss in 2019. The flip side is that winners aren’t reformers. Having achieved office, governments avoid risking political capital to change society for the better.

Errington and van Onselen set out to “selectively challenge the conventional wisdom” by arguing the case for several “pariah policies,” including a universal basic income, the reintroduction of estate duties, a tax on the family home, a price on carbon, a levy on sugar, and the commercialisation of the ABC. Some of their arguments are convincing, others less so.

The case for a levy on sugar is strong. It would induce manufacturers to produce healthier food and encourage consumers to eat it, reducing the burden of diseases like diabetes and raising extra health dollars to boot. The idea that education campaigns and better labelling can drive this much-needed behavioural change was debunked long ago.

By contrast, the case for putting ads on the ABC is thin. Bizarrely, the authors propose this as a way of countering the decline of quality journalism in Australia. Their argument runs as follows: having lost valuable revenue streams like classified ads, commercial media have cut their newsrooms to the bone; as a result, subsidies for investigative reporting and quality debate must now “reach beyond the current public broadcasters.” So far so good — the case for funding more public interest journalism is strong. But their conclusion — that the ABC, like SBS, “will have to generate more of its own revenue” — is a non sequitur.

Are budget constraints so great that we can only increase funding in one area by reducing it in another? Believing that would be inconsistent with Errington and van Onselen’s support for a universal basic income, at an estimated $125 billion annual cost they claim “isn’t quite as eye-watering” as it may have seemed before JobKeeper.

In order to get more of the public interest journalism and investigative reporting that the ABC still does well, they want to make the ABC more like the commercial media. With the ABC competing for ads, they say, the other networks “would have a market incentive to lift their standard of news coverage, in a bid to steal ABC viewers and their lucrative advertisers.”

The reverse scenario is far more likely — the ABC would move downmarket as it sought to peel advertising dollars away from its (more) commercial rivals. And if it succeeded, the government would quickly cut public funding accordingly.

The “pariah policies” in Who Dares Loses overlap significantly with the reforms identified by the former chief executive of Grattan Institute, John Daley, in his recent report, Gridlock. Daley identifies carbon pricing, the tax treatment of housing, and sugar taxes as areas where government action has stalled. (He doesn’t mention commercialising the ABC.) Other initiatives consigned to the too-hard basket include congestion charging on roads, raising the pension age, introducing an effective mining resource rent tax, broadening (or increasing) the GST and lifting unemployment benefits.

Gridlock sets out to answer three questions. To the first — are twenty-first-century governments more reform-averse than their predecessors? — Daley’s answer is an emphatic yes. The 1980s and 1990s under Bob Hawke, Paul Keating and, initially at least, John Howard were “golden years” for reform. We might argue about the relative merits of measures like floating the dollar, cutting tariffs, deregulating the banks, introducing compulsory superannuation, imposing the GST, and privatising Telstra, Qantas and the Commonwealth Bank, but it is hard to dispute Daley’s contention that recent governments have been far less ambitious.

Daley’s second, more difficult, question is why are contemporary governments so timid? He identifies three obstacles that seem to be stopping governments from tackling major reforms: the lack of popular support for particular changes; the power of the “shibboleths” that mark out loyalties within parties or factions; and the opposition of powerful interest groups. The size of the required budget investment can also be a barrier, but Daley dismisses as relatively insignificant two of the most oft-cited roadblocks — the Senate and the messy division of responsibilities between the Canberra and the states.

But these obstacles aren’t new. The GST was deeply unpopular, but Howard risked electoral defeat to go ahead anyway. Privatising the Commonwealth Bank contradicted Labor shibboleths, but Hawke and Keating pressed on regardless. Vested interests vigorously opposed native title legislation, but it was still steered through parliament.

What’s different today? The glib response is that we’ve stopped electing politicians willing to push through obstacles in the belief that the change is worth the fight. As we contemplate an unedifying electoral contest between “ScoMo” and “Albo,” it’s easy to believe that current leaders don’t measure up to leaders past. That might be an emotionally satisfying answer, but it leaves us hoping forlornly that someone better will eventually turn up.

Deeper answers lie in structural economic and social changes. The echo chamber of social media has driven polarisation and division. The twenty-four-hour news cycle and the professionalisation of politics mean policies are more likely to be shaped by polling and focus groups than by evidence. The shifting and shrinking bases of the major political parties have reinforced polarisation.

Meanwhile, the hollowing out of the public service, the rising power of political staffers and the outsourcing of advice to corporate consultancies have weakened governments’ capacity to generate and implement good ideas. And the “revolving door” that turns a ministerial adviser into a “government relations” professional has picked up pace, as has the “golden escalator” from ministerial portfolio to corporate board or strategic advisory role.

Daley’s third question is obvious: what is to be done? If we want more ambitious, reform-minded leaders, we need to change the system that supports the current epidemic of policy timidity. “Institutional changes to ministerial adviser roles, to processes for appointing and dismissing senior public servants, to ministerial influence over government contracts and grants, and to controls over political donations, campaign finance, lobbying, and post-politics careers would all help to break the gridlock in policy reform,” he writes.

Errington and van Onselen recommend similar changes, and throw in a shift to proportional representation. If New Zealand can change its electoral system, why can’t we? The catch, as always, is that the people we need to fix these problems are a big part of the problem. As Daley says, the institutional changes he proposes “are themselves an example of blocked policy reform.” If our political caste can’t manage to abolish franking credits, let alone create a federal corruption commission, then the chances of substantial systemic reform appear slim.

Daley puts his hope in more independent MPs getting elected to parliament and using the balance of power to force systemic change. It’s hardly a quick fix, but it chimes with the fact that the reform highlights of the past two decades — including the (shortlived) carbon pricing mechanism, the NDIS, the Gonski school funding scheme, and plain-paper cigarettes packaging — mostly came when Julia Gillard was leading a government reliant on crossbench MPs.

Daley’s conclusion suggests the answer lies in getting back to the basics of political organisation at the local level: engaging citizens, listening to their concerns, and involving them in developing campaigns and policies. This is the nuts-and-bolts work that helped the campaign for marriage equality succeed. It is the kind of community organising that elected independent Cathy McGowan in the formerly safe Liberal seat of Indi in 2013, and enabled Helen Haines to succeed her in 2019.

In other words, we need to build democracy from the bottom up, not suffer it from the top down. Electing more independents to parliament seems like a good place to start. •

The post Good ideas going nowhere appeared first on Inside Story.

It was an impressive feat of skill and dexterity. Yet my admiration was mixed with anxiety; one slip and he would have hit the footpath.

I doubt the owners of the hedge intended to expose him to this danger. They almost certainly didn’t think about worker safety when they selected the most competitive contractor to do the work. Spared the extra expense of a scissor lift or a cherry picker, they no doubt got a great deal, loading the risk onto the man with the hedge trimmer.

There is nothing new about low-paid workers clipping leaves for the rich. In centuries past, such differences in power and wealth were explained away by birth. It was one’s station in life either to live in the mansion or to keep the grounds, to be served or to do the serving. It’s bracing to remember that the original 1848 version of the children’s hymn “All Things Bright and Beautiful” included the following lines:

The rich man in his castle,
the poor man at his gate,
God made them high and lowly,
and ordered their estate.

Yet the aristocratic era is long gone. We no longer believe in the privileges of noble birth. Today’s mantra is merit. In the ABC’s recent Australia Talks survey, around 70 per cent of respondents agreed with the statement “In Australia, if you work hard, you can be successful no matter what circumstances you were born into.” It’s a beguiling idea: we make our way in the world through a combination of individual talent and effort, and so end up in the places we deserve — one precariously sculpting a cypress hedge, another playing tennis on the shady court behind. And if we each lie in a bed of our own making, then we need not be much concerned with one another’s welfare. Indifference becomes the rule.

When we order takeaway, most of us probably spend more time thinking about whether we want Indian or Thai than contemplating the experiences of the delivery rider weaving through traffic with our plastic bags of stacked containers. Our biggest worry is whether the food will have gone cold before it arrives. Yet in the space of two months last year, five delivery riders were killed in road accidents in Australia.

We snap up bargains in the supermarket. Asparagus at $1 a bunch. Strawberries at $2 a punnet. If we spare a moment to think, then it’s inconceivable that the workers harvesting the produce are paid a decent wage.

So we live with a contradiction: we talk about creating opportunity and enabling people to work hard and get ahead, while living in a system that consistently generates high levels of inequality and insecurity. This contradiction is masked by the myth of merit.

A century and a half ago, the philosopher Harriet Taylor Mill described how “the ideas of virtue set afloat by the powerful, are caught and imbibed by those under their dominion.” In her time, the paramount virtue of womanhood was loyalty to men, and so “abnegation of self, patience, resignation, and submission to power” were stamped as the pre-eminent feminine duties and graces. “Power makes itself the centre of moral obligation,” concluded Taylor Mill.

In our own era, power resides in the upper echelons of the financial sector, real estate, mining, big retail and big tech, and prominent among the virtues the inhabitants set afloat is the promise of reward for talent and effort.

In this meritocratic system, efficient businesses want the best person for the job, not the proprietor’s incompetent son or lazy daughter. Bright, eager graduates are in; nepotism and the old school tie are out. If you have a go, you’ll get a go. It is an ideology reproduced in popular culture. Shows like The Voice, Masterchef and The Block reinforce the idea that the combination of skill, persistence and opportunity opens the door to success. This meritocratic mindset is so deeply embedded in our value system that it is rarely challenged.

Once you accept all that, then government’s primary role is to ensure equality of opportunity. “In our view,” as treasurer Joe Hockey said in defence of his infamous 2014 budget, “it is the responsibility of government to provide equality of opportunity with a fair and comprehensive support system for those who are most vulnerable. After that, it is up to individuals in the community to accept personal responsibility for their lives and their destinies.” The government’s duty, he added, “is to help Australians to get to the starting line, while accepting that some will run faster than others.”

Labor tends to imbue the idea of equal opportunity with more substance than its conservative rivals do; a fair start requires not just a welfare safety net and anti-discrimination laws, but also positive interventions in the form of education, training, childcare and healthcare so that all citizens are equipped to operate effectively in an increasingly demanding labour market. This dovetails with arguments about productivity — if Australia’s economy is to be internationally competitive then we must invest more heavily in human capital.

Yet, as American philosopher Michael Sandel argues in his latest book, The Tyranny of Merit, this centre-left approach still accepts that market efficiency will produce winners and losers, or to use Hockey’s sporting analogy, that some will run faster than others, even if Labor can level the playing field a little.

Sociologist Michael Young, who coined the term meritocracy in his 1958 satire, shown here in London in 1994. Neil Turner/Alamy

Sandel recognises the attractions of the meritocratic ideal. For a start, it is empowering: “It encourages people to think of themselves as responsible for their fate, not as victims of forces beyond their control.” It also aligns market outcomes with the application of talent and effort, providing a justification for manifest inequality. “In a society where opportunities were truly equal, markets would give people their just deserts,” he writes.

In The Tyranny of Merit, Sandel updates the work of sociologist Michael Young, who played a lead role in drafting Labour’s manifesto for the 1945 British election, and then worked for Clement Attlee’s Labour government, whose achievements included founding Britain’s National Health Service. It was Young who popularised the term “meritocracy” in his prescient 1958 satire, The Rise of the Meritocracy. Little did he anticipate that his linguistic innovation would become firmly established in the political lexicon, let alone that it would be wielded without a hint of irony, including by those on his own side of politics.

As Young wrote in the introduction to a new edition of his book in 1994, the twentieth century had room for the word meritocracy because it bolstered the self-image of those wielding power and enjoying its privileges. Leaders were all too ready to believe that society was ruled “not so much by the people as by the cleverest people; not an aristocracy of birth, not a plutocracy of wealth, but a true meritocracy of talent.” Even in 1958, though, Young had seen how sad and fragile a meritocratic society could be.

Young’s satire took the form of a sociologist’s report written in 2034, when Britain’s fully matured meritocracy is being buffeted by an upsurge in wildcat strikes and protests. In attempting to explain why “the Populist movement” is revolting against a near-perfect system, the report’s author traces the development of the meritocracy through the course of the twentieth century. He begins in 1914, when Britain was still squandering valuable resources by “condemning even talented people to manual work.” A handful of clever people from working families might climb the ranks, but the majority were held back by their subordinate class position. Equally, the top echelons of society carried the dead weight of the intellectually incompetent members of the elite who had attained their positions solely on the basis of family connections.

Young’s fictional sociologist describes how, in the latter part of the twentieth century, Britain’s suboptimal social arrangements were transformed primarily by mass education. Schools acted as a sorting mechanism, with the bright sent to grammar schools, while the rest were consigned to a vocational track (though in fairness to late bloomers there was a fallback system of adult testing). Results were inscribed on a national intelligence card that accompanied citizens throughout their lives. Those displaying the requisite intellect would receive education and employment opportunities shaped to match their “high genetic destiny,” thus increasing their power to do good for society. Intelligence tests became “the very instrument of social justice.”

Once the meritocracy was fully established, aptitude was rationally distributed across society, regardless of birth, with brilliant minds managing the crucial work at the top while the slow mopped their floors. Young’s sociologist sums up the meritocratic achievement in the following sentence: “The talented have been given the opportunity to rise to the level which accords with their capacities, and the lower classes consequently reserved for those who are also lower in ability.”

The first part of Young’s fictional assessment is familiar. Ahead of the 2019 federal election, Labor’s national platform proclaimed that “a university degree is an opportunity earned on merit, not a privilege conferred at birth” and family wealth “should not determine your ability to grow to your full potential.” In a Facebook post made around the same time, Scott Morrison promised more opportunities and described his vision of an Australia where everyone had “the chance to realise their full potential.”

There is nothing objectionable about such aspirations, but in 1958 Michael Young drew attention to the second part of the imaginary sociologist’s sentence — the unspoken corollary of the meritocratic equation: that “the lower classes” would be “reserved for those who are also lower in ability.” As Young wrote in his introduction to the 1994 edition, “If the rich and powerful were encouraged by the general culture to believe that they fully deserved all they had, how arrogant they could become, and, if they were convinced it was all for the common good, how ruthless in pursuing their own advantage.”

Philosopher John Rawls saw this danger too. He pointed out that political and economic inequalities “encourage those of lower status to be viewed both by themselves and by others as inferior” and warned that this “may arouse widespread attitudes of deference and servility on one side and a will to dominate and arrogance on the other.” These were “serious evils and the attitudes they engender great vices.”

This is what Sandel calls the tyranny of merit. At the heart of the meritocratic ethic, he writes, is the idea that success is the result of personal effort and striving, and therefore a sign of virtue: “If I am responsible for having accrued a handsome share of worldly goods — income and wealth, power and prestige — I must deserve them.” The dark side of this credo is what gives rise to our contemporary indifference: “The more we view ourselves as self-made and self-sufficient, the less likely we are to care for the fate of those less fortunate than ourselves. If my success is my own doing, their failure must be their fault.”

Sufficient air remains beneath the wings of the meritocratic ideal to give it flight. Because it takes skill and effort to slog through a competitive university course or clamber up the corporate, bureaucratic or political ladder, it’s easy to believe that we made it to the top under our own steam, and that others fell by the wayside because they didn’t work as hard.

But this perception corrodes our civic sensibilities: “For the more we think of ourselves as self-made and self-sufficient, the harder it is to learn gratitude and humility,” writes Sandel. “And without these sentiments, it is hard to care for the common good.”

At the end of Michael Young’s fictional sociologist’s report, unrest is growing at both ends of the political spectrum. With like marrying like, the meritocratic elite is in danger of becoming a self-replicating class. Its conservative members are pushing to restore the “hereditary principle” so that their own children will be guaranteed a place in the upper echelons of society, even if the genetic lottery hasn’t done them any favours. Among the lower classes, the Populist movement is pushing in the other direction, with a manifesto for a classless society.

“Were we to evaluate people, not only according to their intelligence and their education, their occupation, and their power, but according to their kindliness and their courage, their imagination and sensitivity, their sympathy and generosity, there could be no classes,” say the Populists. “Who would be able to say that the scientist was superior to the porter with admirable qualities as a father, the civil servant with unusual skill at gaining prizes superior to the lorry-driver with unusual skill at growing roses?” Among the rebels’ concrete demands is an end to educational segregation and the introduction of “common secondary schools for all.”

The sociologist of 2034 is confident that their uprising will be a flash in the pan. Not only do the Populists lack a coherent political program, but the meritocratic system has brought about such “a far-reaching redistribution of ability between the classes in society… that the lower classes no longer have the power to make revolt effective.” Besides, they are challenging an elite that has “all the wise distinction that any heart can desire.” A publisher’s endnote informs us that the author was killed in the subsequent riots.

We don’t live in a meritocracy, of course. The idea that we simply need to get everyone to the starting line and we’ll all have the same chance of winning is demonstrably false — not least because some of us come equipped with the latest running shoes and are well trained in the art of sprinting, while others arrive barefoot with no knowledge of how the race works. Connections and pedigree still open doors, and the lottery of birth remains a powerful predictor of future prospects.

Nor can opportunities and outcomes be easily disentangled. During the pandemic year 2020, the net worth of Australia’s billionaires increased by more than 50 per cent.

The cultural embedding of the idea of merit runs parallel with stagnating average wages and rising private wealth. The rhetoric of opportunity and reward for effort gets louder even as Australia becomes less equal and the likelihood that hard work and talent will truly be rewarded diminishes.

A society that shifts wealth upwards and pushes risk downwards cannot lay claim to being fair, and nor is it likely to be sustainable. It will lack the coherence and common purpose to tackle problems like climate change because it separates us from one another spatially and experientially. When inequality is masked by the language of merit, it breeds arrogance and entitlement at the top and resentment at the bottom.

Sandel blames the tyranny of merit for the failures of social democracy and the triumphs of populism: “For decades, meritocratic elites intoned the mantra that those who work hard and play by the rules can rise as far as their talents will take them. They did not notice that for those stuck at the bottom or struggling to stay afloat, the rhetoric of rising was less a promise than a taunt.”

This is the tin ear that had Hillary Clinton labelling Trump supporters “a basket of deplorables.”

If the promise of reward for effort proves empty, and my efforts to shape my destiny fail, then I might be easily persuaded that others are to blame, like the educated progressives who stacked the system in favour of minorities, or the immigrant who stole my job. Trump, the Brexit campaign and similar populist movements won over disaffected citizens not with pledges of greater opportunity and social mobility, writes Sandel, but through “reassertions of national sovereignty, identity and pride.”

Michael Young didn’t live to witness Brexit, but he too was concerned with the failings of centre-left politics and the hollowing out of democracy. Young’s fictional sociologist foretold the future of the British labour movement, describing how the manual workers and tradespeople who once led both party and unions were gradually replaced by university graduates with no experience on the shop floor.

In 2001, just months before he died, Young lamented the accuracy of his prophecy: “With the coming of the meritocracy, the now leaderless masses were partially disfranchised; as time has gone by, more and more of them have been disengaged, and disaffected to the extent of not even bothering to vote. They no longer have their own people to represent them.”

Yet on both the right and the left, mainstream politics adheres to the view that the failings of meritocracy result from flaws in implementation rather than theory. In other words, we just need to get better at building equality of opportunity. We need to invest even more in education. At best, says Sandel, this amounts to an offer to make the ladder-climbing competition fairer, even as the rungs are being pushed further apart by growing inequality. At worst, it tells those struggling in a globalised economy that they are failing because they didn’t try hard enough in school.

The alternative would be to tackle inequality itself: to focus not just on creating opportunities, but on adjusting outcomes. This is what Michael Young suggested in 2001. Along with urging Tony Blair to drop the word meritocracy from his public vocabulary, or at least admit its downside, he called on Labour’s prime minister to increase taxes on the rich.

We tend to think of taxation as a necessary evil, a way of raising public money to invest in schools, health services, social welfare, security forces and physical infrastructure. We may pay our taxes gladly or grudgingly, but the focus is on equipping government to do its job. Young’s point is that we need to use tax as a tool to narrow inequality too.

This may sound like class warfare, but the intent is not to punish the rich. After all, business executives and high-salaried professionals rarely claim to be in it for the dollars — they say they thrive on challenge and the opportunity to add value. Let’s take them at their word and trim their share portfolios and their hedge funds. At the same time, we could boost the wages, conditions and prestige of underpaid workers like gardeners, delivery riders and fruit pickers — not to mention cleaners and carers.

Even if it’s not quite true that “we’re all in this together,” the pandemic has sparked a conversation about the true value of different types of labour and generated mutual experiences of staying home, of being unable to visit loved ones, of wearing masks, of anxiety and hope.

There is a lesson here. When we no longer encounter one another in ordinary ways and places, indifference grows and may blossom into arrogance on one side and resentment on the other. To overcome these corrosive tendencies, we must reduce inequality.

None of us deserves our luck or merits our starting place in life. The key to a better society is to pool our luck and share it around. •

Funding for this article from the Copyright Agency’s Cultural Fund is gratefully acknowledged.

The post The myth of merit appeared first on Inside Story.

On offer in Princes Hill was a second-floor, two-bedroom apartment. Described in the listing as “impeccably maintained retro,” it was the best-situated flat in an ugly block of chocolate-brown brick walk-ups dating from late 1960s. Its interior was charming, and the publicity wasn’t wrong about the abundance of natural light and gorgeous neighbourhood views. When it came to the price, however, it was way off the mark.

The agent’s indicative guide had the apartment selling for between $630,000 and $680,000. My friend, who didn’t come down in the last shower, had come prepared to pay about $100,000 more. But I didn’t even get to raise my finger on her behalf, because a clutch of other determined buyers quickly pushed the price up to $845,000.

The previous Sunday, I’d been a few streets away in Carlton North, visiting another friend who has just rented an apartment in a similar-sized block of a similar vintage. She’d decided to move when her previous lease in a dingy Victorian terrace came to an end. The new apartment was smaller than her old place, but it was also cleaner, lighter, better maintained and much, much cheaper.

My friend is $175 a week better off after the move. That’s consistent with the latest data, which shows rental returns on units in Melbourne down about 10 per cent on pre-pandemic levels, and falls in the inner city far steeper than the average.

A relative owns a two-bedroom apartment in central Melbourne that’s been returning $590 a week in rent for the past two years. Last month, after the tenants announced they were moving out, the agent suggested slashing the price by nearly a quarter, to $450. It’s a good apartment, but it could still prove hard to let. The rental vacancy rate in Melbourne’s CBD is more than 14 per cent — the highest in the country — which means almost one in seven rental units sits empty.

Meanwhile, just seventy-five minutes’ drive away in Torquay, on Victoria’s surf coast, you can’t find a place to rent for love or money. The vacancy rate there is officially zero.

Not long before Christmas, I offered to bid for friends — first homebuyers — who were keen on a house in Geelong, two-thirds of the way to Torquay. Again, I didn’t get to raise my hand as the auction quickly vaulted past the anticipated price. Between December 2019 and December 2020, the median house price in Geelong jumped from $550,000 to $601,000, a rise of almost 10 per cent. Over the past five years, median prices in the city have risen almost 50 per cent.

At one level, such weirdness is easily explained. Inner Melbourne is suffering from the loss of international students and other migrants who have been kept out of Australia by Covid-19 border restrictions. Meanwhile places like Geelong and Torquay are straining under an influx of sea- and tree-changers imagining a lifestyle that combines working from home with fresh air and outdoor space.

This is a reminder that there is not, and never has been, a single housing market, and averages can conceal more than they reveal. Demand for a house-and-land package in Tarneit on Melbourne’s western fringe, for example, is not a good indicator of the value of high-rise apartments in Southbank or, for that matter, a light-filled retro flat in Princes Hill.

On another level, though, the real estate market is just crazy and has been for a long time.

Basic economic theory links prices to supply and demand. If real estate values are rocketing upwards, like in Princes Hill, that means there aren’t enough inner-city apartments to go around. But if rents for inner-city flats are falling sharply, that suggests the opposite problem — the market is flooded with too much stock.

In theory, demand for housing — and therefore prices — should be linked to factors like immigration, employment prospects and household incomes. Immigration has stopped. Unemployment, and underemployment, though lower than feared, are still well above pre-pandemic levels. And average household incomes have been stagnant for more than a decade — and that isn’t about to change, as Reserve Bank Governor Philip Lowe warned this month. Yet (average) house prices defy these trends, as if disconnected from the everyday economy and ordinary lives.

If the housing market functioned with the efficiency claimed by free-market economic theory, then inner-city Melbourne would not be littered with vacant apartments — indeed, many of the soaring residential towers still being built in the CBD would never have been started. If the market were efficient, then it would allocate housing at an affordable price. Instead, more than half of all low-income tenants live in rental stress, shelling out more than 30 per cent of their disposable household income to keep a roof over their heads.

The weirdness of real estate prices and rents should caution us against relying primarily on “the market” to allocate a crucial good like housing.

Housing can’t be compared with bananas, which jump in price when a cyclone wipes out the Queensland crop and then come down again as plantations recover. If bananas get too expensive, we can switch to apples or pears for a few weeks. Nor is there much point in ordinary consumers speculating on the banana market by buying more than they can eat in the hope of selling at a profit in a fortnight. Bananas that don’t get eaten never rise in value, whereas houses that don’t get lived in just might.

The housing market’s distinctiveness doesn’t end there. The prospect that interest rates will remain near zero for the foreseeable future emboldens buyers to borrow more, pushing up real estate values. This inflationary process is further encouraged by stimulatory measures like stamp-duty discounts, first homebuyer grants, home builder programs and other government handouts that are quickly embedded in higher prices.

Also driving up prices is the generous tax treatment of housing. The asset price inflation that has been a hallmark of Australia’s residential market in most capital cities since the start of the century produces tax-free windfall gains for owner-occupiers (with zero impact on owners’ eligibility for the age pension). Meanwhile the capital gains tax discount makes property highly attractive to investors.

The more prices rise, the greater the incentive for further speculation, and the more vociferous the media spruiking that accompanies it.

Peter Phibbs, professor of urban planning at the University of Sydney, has memorably described Australia’s housing market as the “Game of Homes.” The longer the game goes on, the higher the stakes.

One feature of the game is Australia’s record level of household debt. Eventually, though, property prices must fall back to earth, and the higher the debt, the more damaging the shockwaves will be throughout the economy.

Australia’s Game of Homes is also deepening and entrenching inequality. In the postwar decades, anyone earning a reasonable wage had a reasonable prospect of eventually becoming a homeowner. That expectation has long since evaporated. The cost of servicing a massive mortgage on an average income is not the real barrier — the bigger problem is the size of the deposit required to enter the market. According to ANZ, a typical Melbourne household would need to save 15 per cent of their gross annual income for a decade to come up with the 20 per cent deposit needed to buy a median-priced home. Without an advance from the parental bank, most first homebuyers will struggle to reach that goal.

Home ownership is being transformed into a dynastic privilege, and that matters not because owning is intrinsically preferable to renting but because the primary financial asset for most Australian households is their dwelling. So the difference between owning and renting generally holds the key to whether you acquire any lifetime wealth.

What’s more, Australia’s low age pension rates are predicated on an assumption of home ownership in retirement. As Treasury’s recent Retirement Income Review documented, older renters experience higher levels of financial stress and poverty than homeowning retirees because they have much higher housing costs. Home ownership is sometimes called the “fourth pillar” of Australia’s welfare system, but the pillar is crumbling.

Existing property owners like me, watching our tax-sheltered housing assets rise, are generally winners in the Game of Homes. But the game also generates a constant stream of losers — primarily people on low incomes.

As a new report from the UNSW City Futures Centre and ACOSS shows, state governments did a creditable job of providing around 40,000 rough sleepers with immediate shelter after the pandemic hit. Eviction moratoriums reduced the risk of more people being rendered homeless, as did the banks’ mortgage repayment pause and the JobKeeper program. The lift in JobSeeker (via the temporary coronavirus supplement) made many low-income renters better off than they had been in years.

But as the report documents, only a minority of the people put up in hotel rooms and other emergency accommodation have been moved into longer-term housing, and in some cities rough sleeping is rising again. And the eviction moratoriums, the mortgage repayment pauses, the JobKeeper program and the extra payments to jobseekers will all soon end.

There is a simplistic, frequently repeated and often self-interested claim that Australia could build its way out of its housing affordability crisis if only we liberalised planning laws and let market forces work their magic. This is bunkum, not because planning laws don’t matter, but because “the market” is far more complicated than the claim suggests and is profoundly shaped by many other factors, especially tax settings.

I am yet to find an example anywhere in the world of private developers delivering safe, affordable housing for people at the bottom end of the income scale. Doing this always requires significant government investment. The Morrison government wants to push that responsibility onto the states and territories, but as the lead authors of the UNSW–ACOSS report argue, Canberra must “share responsibility for housing outcomes” because the Commonwealth controls vital policy levers like tax, social welfare and immigration. It is also the only level of government that has the resources to fund and coordinate a coherent national housing strategy.

The impact of the pandemic on housing has yet to run its course, and Melbourne’s bizarre combination of rising property prices and plummeting rents should caution us against relying heavily on “the market” to allocate such a crucial good. •

The post Rising prices, plummeting rents appeared first on Inside Story.

Possible is not the same as easy. Political and constitutional barriers make it hard to change the way assistance is allocated, but better housing for hundreds of thousands of struggling tenants is a worthy prize. And any government should be keen to ensure it spends an annual $4.6 billion wisely.

To understand what a better system would look like, we need to get to grips with how rent assistance currently works. Its aim is to reduce the “housing stress” that occurs when poor households — the bottom 40 per cent — spend more than 30 per cent of their disposable income on housing. At that level, they are forced to cut back on other essentials like food, power, phones, transport or medical expenses. By giving tenants extra money, rent assistance helps ease the pressure on tight household budgets.

About 1.3 million “income units” receive rent assistance. Apologies for the ugly terminology, but it’s hard to avoid. An “income unit” is not the same as a person or household. A single parent with two children is one income unit, for example, but a share house with four unrelated tenants contains four income units.

The median fortnightly payment of rent assistance is $137, which, while meagre, is sufficient to stave off rental stress for about two out of every three recipients. Even with the supplement, this leaves about one in three stuck in rental stress — and almost one in ten still shelling out more than half their income on rent.

Rent assistance doesn’t solve housing stress for everyone because payments are capped at low levels and have not kept pace with rising rents. A single person in a share house receives a maximum payment of $93 per fortnight, and the limit for a person living alone is $140. What’s more, an additional quarter of a million poor households — sorry, “income units” — live in housing stress but get no help at all.

Why not? Because rent assistance is only available to people who receive a Centrelink payment, like the age or disability support pension, Austudy, the youth allowance, JobSeeker or the family tax benefit part A (above the base rate). Low-income workers without children — and thus without any government payment — are not eligible, even though they make up a significant share of stressed tenants.

So, extending rent assistance to everyone who needs it — regardless of whether they receive a Centrelink payment — could do a great deal to reduce housing stress. As could increasing the rate of rent assistance, a point I’ll come back to.

Clearly, paying rent assistance to more people — like low-income workers with no children — is not going to save the government money. In fact, it’s going to cost hundreds of millions more. But the extra expense can be more than offset by targeting rent assistance more carefully.

This is where the new research comes in. According to a report published by AHURI, the Australian Housing and Urban Research Institute, hundreds of thousands of tenants receive rent assistance even though they aren’t experiencing housing stress. This “targeting error” arises largely because eligibility for rent assistance is linked to eligibility for family tax benefit part A, and it goes not only to struggling low-income tenants but also to tenants on moderate incomes who are less likely to be in housing stress.

Depending on the child’s age, households with one child and an income up to almost $80,000 may qualify for part A payments above the base rate, and therefore qualify for rent assistance. In a household with two children the income limit — and the linked eligibility for rent assistance — can rise to almost $97,000.

Another feature of the current system also contributes to the error: it is paid at a uniform rate nationwide, even though rents are much higher in some places than others. A single parent with two children who pays $560 a week to rent a two-bedroom unit in Sydney, for example, receives the same rent assistance ($82) as single parent paying $390 for a three-bedroom house in Dubbo.

There are strong ethical and public policy arguments to pay rent assistance to those with the highest housing needs. On this basis, it should be taken away from some moderate-income households with children and directed to low-income workers with no kids. On the same grounds, tenants should get more assistance in regions where rents are higher and less where rents are lower.

The AHURI researchers modelled only the first of these two options, looking at what would happen if rent assistance were paid at current rates on the basis of housing costs alone. Under this scenario, all low-income tenants whose rent exceeds 30 per cent of income would get support, regardless of whether they are eligible for any other government payment. On the flip side, some better-off tenants whose rent is less than 30 per cent of their income would lose their current supplement.

Aligning rent assistance with need in this way would save the government $1.2 billion a year. A free lunch? Not quite. There are two big stumbling blocks, the first constitutional, the second political.

Under its narrow social security power, the federal government can only make payments of a certain type. As the AHURI researchers write, these “do not include rent or other housing payments in their own right.” This makes it impossible to subsidise the rents of households that don’t already receive some kind of Centrelink benefit.

Rental assistance could be extended to other Australians, but none of the options is straightforward in constitutional terms. The least fraught would involve either the states agreeing to refer the necessary powers to the Commonwealth under section 51 of the Constitution, or the federal government leading a federal–state initiative, with Canberra providing grants and state and territory housing departments delivering the payments.

I hardly need to spell out the political barriers to implementing better targeting. Taking away existing entitlements is never popular, and it is particularly difficult when those most likely to lose out are families with children. If a brave government were to push ahead, though, support would go to those welfare recipients who need it most, with the $1.2 billion in savings used to increase rent support for the lowest-earning tenants.

The AHURI researchers calculate that lifting the maximum payment by 30 per cent would cost about $1 billion annually and cut the incidence housing stress among low-income tenants from 60 per cent to 36 per cent. An additional 340,000 “income units” would have affordable homes. That’s a big policy pay-off.

Even in its existing poorly targeted form, an increase in rent assistance makes good economic sense in the economic downturn. As the Grattan Institute argues, most of the extra funding would immediately find its way back into the economy when tenants spend it on essential goods and services. At least one of the AHURI researchers was sceptical about Grattan’s argument — fearing that higher rent assistance would simply lead to higher rents, just as first home buyer grants lead to higher house prices — but the modelling behind their report shows that such concerns are exaggerated.

While some of the extra assistance will find its way into landlords’ pockets, the proportion — between 7 and 32 cents in the dollar — is relatively low. The figure would be higher in the disadvantaged areas because housing supply there is less responsive to changes in demand and poorer tenants are less likely to be able to resist rent increases by moving somewhere else. But even if landlords benefit at the margins, the bulk of any increase in rent assistance would still go to boosting tenants’ spending power.

This points to two features of Australia’s rental assistance program that are worth preserving: payments go to tenants, not landlords; and rent assistance doesn’t have to be spent on rent. This not only reduces the rate of capture by property owners, but also gives tenants greater control, at least in theory. They can choose to devote rent assistance to securing better housing, if it is available, or they can choose to stay put and spend it on other goods and services they need.

None of this means that rent assistance is better or more appropriate than other possible measures, like the social housing investment the government seems so reluctant to make. Rent assistance does nothing to improve the quality of housing in the private rental market. Even though taxpayers are footing part of the bill, landlords are under no obligation to keep houses in good condition, offer secure leases, carry out repairs in a timely manner, improve insulation or install energy efficient appliances.

More importantly, rent assistance does nothing to increase the overall supply of housing. And that’s the strongest argument for a national post-pandemic investment in social housing. Not only would it stimulate the economy and create much-needed jobs, it would also enable state authorities or community housing providers to build tens of thousands of new, high-quality homes that low-income tenants can actually afford to rent. •

The post A free lunch for low-income renters? appeared first on Inside Story.

The matter was not put to a formal vote at AGL’s annual general meeting, but BlackRock signalled its support in a bulletin to investors. The motion, which had won the backing of about one in five shareholders, was likely to have attracted support mainly from large European asset managers, but was opposed by major Australian industry super funds including Cbus, HESTA and Aware.

BlackRock, which manages assets worth US$7.32 trillion, has long called on the corporate world to take stronger action to deal with climate risks. Like Australia’s big industry super funds, though, it has mainly sought influence through private conversations with directors rather than used its voting power overtly.

If the world’s largest fund manager has decided it’s time to be more direct and public, super funds may be encouraged to change tactics too. In the absence of coherent government policy or a price on carbon, the best hope for effective action may come from enlightened business decisions, and Australia’s collective retirement savings — now nudging $3 trillion — give fund managers huge leverage.

When activist members call on their industry funds to divest from polluting companies, they’re often told that it’s better for the fund to stay engaged in order to push polluting businesses in the right direction. But the results of that strategy, at least to outsiders, seem modest and slow.

Like BlackRock, many big industry funds are members of Climate Action 100+, an international campaign by institutional investors to have boards and senior management commit to reducing greenhouse gas emissions in line with the Paris Agreement. The resolution to AGL shareholders focused on just that issue; if passed, it would have required AGL to “align the closure dates of the Bayswater and Loy Yang A coal-fired power stations with a strategy to limit the increase in global temperatures to 1.5°C above pre-industrial levels.”

AGL has pledged to close all three of its coal-fired power stations by 2050. Despite intense pressure from the federal government, it will complete the shutdown of Liddell in the Upper Hunter by April 2023. Bayswater (also in the Upper Hunter) is set to be retired in 2035, when it will be fifty years old, and Loy Yang A in Victoria’s Latrobe Valley won’t close until 2048, by which time it will be more than sixty years old.

AGL is Australia’s largest greenhouse gas polluter, responsible for 8 per cent of national carbon dioxide emissions. More than a third come from Loy Yang A, which burns emissions-intensive brown coal.

The motion for AGL’s annual general meeting was initiated by the Australasian Centre for Corporate Responsibility, or ACCR. It drew on AGL’s own analysis, which shows that even the more modest target of limiting warming to 2°C requires brown coal to be all but phased out as soon as 2030.

AGL chairman Graeme Hunt acknowledged as much at the meeting, insisting that “while closure in about 2036 was needed in a scenario where global warming was limited to no more than 1.5 degrees, it was not AGL’s policy to commit unilaterally to the outcomes of particular climate scenarios.”

ACCR also put a more commercial argument to shareholders, contending that keeping Loy Yang A running after it turns fifty would be a bad investment decision because of increased maintenance costs. “It is not commercial to keep throwing money at coal-fired power stations beyond the end of their commercial lives,” says ACCR’s executive director Brynn O’Brien.

Drawing on data in AGL’s annual reports, ACCR calculates that the amount the company must spend to “sustain” its assets grew from $80 million in 2012 to $536 million in 2020. Spending on “growth and transformation” fell from $690 million to $193 million over the same period. Maintaining ageing coal assets comes at the expense of investing in renewable technologies.

BlackRock appears to agree. It supported the resolution, it said, “to encourage the company in its efforts to proactively and ambitiously manage the climate risk in its business model.” Shareholders’ long-term interest would benefit from AGL’s offsetting financial risks and capturing “some of the opportunities of the global energy transition.” The capital spending needed to maintain Loy Yang A was “a significant factor” in BlackRock’s support for the resolution.

BlackRock chairman and chief executive Larry Fink has built a reputation for stressing the importance of environmental concerns in his company’s investment decisions. In his 2020 letter to chief executives, he argued that climate change was fundamentally reshaping finance and the allocation of capital, and warned that BlackRock would drop investments that present “a high sustainability-related risk, such as thermal coal producers.”

Until now, though, people involved in pushing for action from Australia’s corporate sector have regarded BlackRock’s advocacy as tokenistic. Last year the Guardian reported that BlackRock’s interests in coal, oil and gas had grown substantially since the 2015 Paris accords, yet it “routinely” opposed motions that would have forced directors of fossil fuel firms to act more resolutely on climate change.

ACCR’s Brynn O’Brien says this is the first time BlackRock has supported a shareholder resolution relating to climate change at an Australian AGM. “It’s too early to say whether this represents an overall shift to BlackRock using its stewardship rights more forcefully,” she says.

Responsible investment specialist Alice Martin agrees. Martin, director of consulting firm Moribus Advisory, says BlackRock has largely operated behind closed doors. “It’s great to see strong signalling from BlackRock on this issue,” she says. “However, I’d be wary of making a hero out of them just yet.” She points out that industry super funds, including her previous employer, Local Government Super, have been far more vocal and far more public in pushing Australian companies to respond to climate risks.

Martin is currently working with the Sustainable Economy program at the Centre for Policy Development, which has put increased pressure on big companies in recent years. In 2016, CPD jointly commissioned a legal opinion that found company directors could be liable for breaching their duties under the Corporations Act if they ignore or mismanage climate-related risks.

That message has been reinforced by key financial agencies including the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Reserve Bank, and by former High Court justice Kenneth Hayne, who chaired the royal commission into the financial sector. On Friday, in its latest Financial Stability Review, the Reserve Bank designated climate risk a “key focus” for Australian regulators in coming months.

Alice Martin says the Australian Council of Superannuation Investors is increasingly pushing for action on environmental, social and governance issues, including climate change. On average, its members own about 10 per cent of every ASX 200 company. Under this kind of pressure, at least eight of the forty biggest industry super funds have divested from companies that derive most of their income from mining thermal coal for power generation.

But most funds still hold shares in other fossil fuel companies, including oil and gas producers like Woodside, Santos and Origin Energy. Employees’ super contributions that go to their fund’s default investment option are likely to be partly invested in one or more of these companies. But if Woodside, Santos and Origin realise all their gas ambitions it will be impossible to hold global temperatures to the Paris level.

To achieve more and faster progress, a growing number of ordinary members would like to see their funds shift the emphasis from closed-door corporate conversations to engaging in more public action of the type foreshadowed by BlackRock. But those playing the inside game insist progress is being made by working robustly with company directors and executives.

Liza McDonald, Aware Super’s head of responsible investment, told the Sydney Morning Herald that the fund had been very successful in getting AGL to engage on climate change, including setting targets to reduce their emissions. But McDonald said Aware would not support ACCR’s resolution on Loy Yang A because its implementation was “not commercial.” Despite sharing concerns about AGL’s spending on maintenance, she said management was best placed “to manage their assets… in the most effective way.”

ACCR’s O’Brien is underwhelmed by that explanation, given Aware’s membership of the Climate Action 100+ initiative. “The overriding point of the initiative is to transcend pure short-term commerciality,” she says, adding that HESTA members, who mainly work in the health sector, would expect their fund to move more quickly given the massive health effects of global warming. A higher vote for the AGL resolution would have had “persuasive influence” on AGL’s decision-making, she says.

O’Brien has another explanation for why BlackRock supported the ACCR motion and why big Australian super funds held back. “As a global asset manager,” she says, “BlackRock is less sensitive to some of the things Australian funds are sensitive to, like political blowback.”

It remains to be seen whether BlackRock’s foray with AGL will be replicated with other corporations — and if it is, whether it encourages a new wave of investor action on climate change. In the meantime, I have asked my own super fund, UniSuper, for its position on the AGL resolution. I’m yet to receive an answer.

As part of a commitment to achieving net zero absolute carbon emissions in its portfolio by 2050, UniSuper says it engages with companies to “encourage rapid decarbonisation of their operations and supply chains.” On its website it singles out AGL as an example of why it maintains investments in companies generating profits from fossil fuels: “Often the companies that are being divested have the greatest capacity for impact — for example, AGL is both a large emitter and a large investor in renewable technology. By precluding investment in AGL, we won’t be able to be part of this transition.”

This is a familiar argument. But it raises the question, when does being “part of the transition” ramp up? If now is too soon to support resolutions that align corporate strategy with keeping average global temperature rises below 1.5°C, then when will the time be right? •

The post Putting the heat on polluting businesses appeared first on Inside Story.

Josh Frydenberg and his Coalition colleagues have often framed their aversion to government largesse as an argument about our responsibility to future generations. “Every dollar we spend today is a borrowed dollar,” said the treasurer ahead of the budget. “That’s the reality and the debt will be there for future generations to pay back.”

Finance minister Mathias Cormann agrees. He once compared budget deficits to parents using their credit cards to pay for the weekly groceries and then leaving their children to pick up the tab. “Not a single parent would expect their children to pay off that credit card in those circumstances. Neither should the Australian government.”

Does this mean that the current taxpaying generation is behaving unethically by allowing the government to amass a $213 billion deficit to inject life into the economy, and leaving others to pick up the tab?

In reality, the government had little choice but to spend on a vast scale. What might make that spending more or less ethical in intergenerational terms will depend at least partly on the effectiveness of the budget measures according to the government’s job-creation goals.

Take the tax cut for people in work, which creates a multibillion dollar hit to the budget bottom line, or a permanent increase to JobSeeker payments, again with a multibillion dollar price tag. Which one will be judged to have had a greater impact on job creation — and hence a greater ethical justification — in a decade’s time?

The government chose the tax cuts, using the argument that relatively well-off taxpayers will stimulate the economy by spending the extra dollars or investing in job-creating businesses. But economists know that people on higher incomes are more likely than others to save any extra income they receive or park it in tax-protected assets that don’t generate jobs, like negatively geared property. That’s especially true in uncertain times.

That’s why a majority of leading economists agreed that putting cash in the bank accounts of unemployed Australians would be a better bet, since that money would mostly be spent on food, rent and other essentials and quickly circulate through the economy.

The preference for tax cuts over a permanent increase to JobSeeker is indicative of the character of the budget and how the Coalition’s political message has shifted. Once, its primary claim was “deficit and debts are bad, surpluses are good.” Now it concedes that borrowing to stimulate the economy and create jobs is necessary, but asserts that business and private investors must take the lead, not the government. The constant thread is an ideological preference for small government.

So, the $3 billion spend on roads and other shovel-ready infrastructure projects over the next four years is dwarfed by the $26.7 billion cost of enabling businesses to instantly write off the cost of new assets. And support for the housing sector takes the form of more incentives for first homebuyers rather than direct investment in building homes for renters on low incomes, who can never aspire to own a house.

The common ground across the political spectrum is the urgent need to create jobs. But even if the recovery is to be led by the private sector, that still raises questions of priority. Should the government throw its financial weight behind a gas-led recovery or a wholesale shift to a renewable economy? The response to this question might depend on how seriously you follow the scientific evidence of accelerating climate change.

And here’s an interesting thing. The concern that some political and business leaders show for not burdening future generations with public sector debt is rarely matched by an equivalent resistance to saddling future generations with the catastrophic consequences of more droughts, floods, hurricanes, bushfires and crop failures. An uninhabitable Earth is one hell of a credit card bill to leave to our kids.

The well-established cognitive bias to preference immediate rewards over future gains helps explain inaction on climate change. Carbon pricing is an attempt to counter this perceptual flaw by bringing future costs into the present.

An equivalent ethical justification exists for government borrowing in response to the pandemic recession — it can reduce long-term harm. The recession’s impact is being felt acutely by people who have lost their jobs or watched their small businesses go under. They need immediate assistance. But the damage will also reach well into the future.

We know, for example, that many older workers who lost jobs in the early 1990s recession — the one we “had to have” — never worked again. A downturn forces young people out of the workforce or prevents them from gaining a foothold in the labour market, leaving them demoralised and limiting their life prospects. Training opportunities are lost; skills stagnate. Research and development stalls, as does investment in new plant and equipment.

Collectively, these are known as “scarring effects,” and they cause profound damage to the fabric of society. As Reserve Bank governor Philip Lowe warned in a recent speech, “The clear evidence from history is that the deeper and more protracted a downturn, the more severe are the economic scars.”

We have to hope not only that the government’s multibillion dollar bet on a business-led recovery pays dividends, but also that the benefits are widely shared. As Chris Richardson from Deloitte Access Economics points out, the recession’s impact is unevenly distributed, with regions that were already doing it tough “now struggling a lot more” and affluent areas less severely affected.

The differences are not only geographic; the fault lines are also gendered, class-based and generational. As an outright homeowner with thirty-plus years of well-paid employment and a healthy superannuation balance behind me, I am much better placed to ride out a downturn than a single mother casually employed in the tourist trade.

So when the treasurer tells Australians, “We have your back,” someone like me, pocketing my backdated tax cut, might feel better protected than an unemployed worker who just had his or her coronavirus supplement slashed.

The government’s role in borrowing and investing should not be confined to restarting the economy; it should also make sure the risks are shared fairly. And we can’t assume that the collective good automatically arises out of the cumulative effect of private companies seeking to grow their businesses, and of citizens and families advancing their personal interests through individual spending decisions.

Public borrowing for direct public investment in housing, education, research and healthcare isn’t like flexing the credit card to put your groceries on the never never; it’s laying the foundations for future prosperity. A business-led recovery, and giving Australians back more of “their own money” in tax cuts push risk back onto individuals and households. •

The post Is a $213 billion budget deficit unethical? appeared first on Inside Story.

The pun might have been too tempting to resist, but the article tells a more modest tale. For a super fund managing more than $54 billion in super assets, an investment of “up to” $10 million is barely a drop in the vast ocean of unmet housing need. And it’s not clear how much of it will go to housing people on the lowest incomes.

Cbus is joining with the National Housing Finance and Investment Corporation to finance a ninety-six-dwelling pilot project across six “shovel-ready sites” owned by the NSW Land and Housing Corporation. The land will be offered to community housing providers on a forty-nine-year lease, creating a subsidy that will help deliver housing at lower rents.

But it’s unclear how many of the new homes will qualify as “social housing” — dwellings reserved for poor tenants who would pay no more than 30 per cent of their income in rent. The pilot will provide “mixed tenure dwellings,” and the not-for-profit housing organisations are allowed to partner with private developers and investors to deliver them. This suggests that the numbers will only stack up if the lowest-cost homes are cross-subsidised by dwellings rented out at full commercial rates.

The project is also likely to include an “affordable” component pitched at “key workers” on low to moderate incomes. These homes, rented at 20 per cent below market prices, may come closer to profitability but are unlikely to generate the level of returns super funds require.

NSW housing minister Melinda Pavey says this “innovative build-to-rent and financing model” will deliver on the state government’s objective “to build new and better social housing by renewing ageing assets that are expensive to maintain.” In other words, rather than invest public money or take on extra debt to directly expand and upgrade the state’s declining and outdated public housing stock, the government hopes super funds will finance community organisations and private developers to do the job for it.

Beyond the pilot, the Land and Housing Corporation will invite bids to develop a further 300 homes on sixteen sites in metropolitan and regional areas across New South Wales. And the model could be extended to other states. Cbus has suggested its lending to the sector could exceed $100 million within three years. “We need more of this type of innovative thinking and collaboration that provides the best possible bang for our buck we can get,” says Pavey.

But whether this really represents the best possible bang for the public buck is open to dispute. With Commonwealth bond rates at 0.8 per cent, as former prime minister Paul Keating recently told Fran Kelly on Radio National Breakfast, “we could be building public housing now till the cows come home.” Australia’s leading housing researchers make a similar case: the most efficient way to build homes for low-income renters is “direct public investment,” and Australia should avoid “overly complex private financing ‘innovations’ that have proven ineffective elsewhere.”

“Yes, putting it simply, that’s correct,” admits Stephen Anthony, chief economist at Industry Super Australia and lead author of a recent report on affordable housing for the NSW Community Housing Industry Council. The problem is that the federal government has no appetite for investing in social housing, despite joint calls for action from unions and industry bodies and compelling arguments from economists and housing experts that it is an ideal form of job-creating stimulus. Canberra believes it already has enough pump-priming planned and sees social housing as a responsibility of state and territory governments.

While state governments are stepping up their own efforts — Tasmania, for example, is promising 1000 new units of social housing over the next three years — only the federal government has the resources to make any kind of dent in the national social housing shortfall of more than 430,000 dwellings — a figure that, without action, will grow to well over 700,000 by 2036.

So, in the absence of federal investment, what would it take for super funds to play a role in housing the Australian nation?

When I put this question to Stephen Anthony, he responded by asking me to step back and consider why it is difficult to turn a buck from rental housing in the first place. The main reason is simple: residential property is very expensive. And every time prices go up, so does the investment needed to develop a project. Since tenants — especially low-income tenants — can’t afford to pay proportionately higher rents, the rate of return on capital goes down and rental housing become less attractive to institutional investors.

And why are property prices so high? The rot set in with financial deregulation in the 1980s, says Anthony, when banking was “handed over to the money changers” and became “all about collateralised lending.” Instead of providing small and medium-sized enterprises with capital to expand their businesses and increase employment, the banks’ “main game” shifted to “unproductive” property loans. (As of March 2020, about two-thirds of new lending by deposit-taking institutions was for housing.)

Combined with negative gearing, the capital gains tax discount and record low interest rates, this shift in lending fuelled the rise of “amateur” landlords — the “mum and dad” investors — who are more focused on rising property values than on rental returns. Because they mostly buy existing dwellings, they add little to the overall supply of rental housing. (Almost three-quarters of housing loans are for existing properties.) Instead, they bid up prices and inflate real estate values, especially in Sydney and Melbourne.

Treasurer Josh Frydenberg’s latest push to wind back responsible lending laws and make it easier to borrow from the banks (in the hope that looser credit rules will boost economic activity) is likely to ramp up speculative activity. If prices start rising again, super funds will be even more wary of investing in housing projects focused on rental returns rather than capital gains.

As Stephen Anthony points out, superannuation funds gain no benefit from negative gearing because they can’t borrow to invest in property and so can’t claim interest payments as a deduction. While they do get a capital gains tax discount, it is 33 per cent rather than the 50 per cent available to small investors — and capital gains shouldn’t be the main game in build-to-rent projects anyway. The way states levy land tax further discourages large-scale rental investments.

All this helps to explain why Cbus’s involvement in the NSW housing project takes the form of debt rather than equity. The return to its members will come as interest payments on a loan rather than as an income stream from tenants’ rent, which also means that the community housing providers, rather than the super fund, will bear most of the risk.

The point here is not to disparage the Cbus loan, or other recent initiatives by industry funds like HESTA, Aware (formerly First State), NGS and Australian Super to provide homes for low-income renters and key workers. Rather, it is to argue that investment in rental housing on a significant scale — rather than in once-off niche projects — will remain unlikely while Australia’s tax and financial arrangements encourage landlords to focus on rising property prices rather than a steady flow of long-term rent income.

The higher real estate prices go, the lower the return on investment in rental housing, and the less attractive it becomes to super funds. What’s more, rising property prices discourage governments — state or federal — from developing social housing because the required subsidy keeps getting bigger.

A 2018 report for the Australian Housing and Urban Research Institute, or AHURI, calculated that the average subsidy needed to build a unit of social housing in Australia was $13,000 per dwelling per year. Costs vary greatly between regions, of course: in parts of rural New South Wales the figure could be as low as $5000 annually; in parts of Sydney it could be as high as $35,000.

Let’s imagine that we want to get a super fund to invest in a hundred-unit social housing project (with rents set at 25 per cent of tenants’ income) in one of Sydney’s middle or outer suburbs. For the project to generate a gross rate of return of 6.5 per cent, Industry Super estimates that every two-bedroom townhouse would require an annual subsidy of around $25,000. If investors settled for a lower rate of return — say 4.5 per cent — then the annual per-dwelling subsidy would be about $15,000. If the state government (or a local council or a non-government organisation) provided land at no cost, then the required subsidy would almost halve. And of course, the subsidy can be reduced even further, or wiped out altogether, if, like the Cbus project, the development is a mix of social, affordable and market-priced rentals.

According to AHURI’s modelling, overcoming the NSW shortfall in social and affordable housing would require a state government investment of about $3.5 billion every year until 2036. This might sound like a great deal of money, but since the broader housing sector already receives billions of dollars via negative gearing and the capital gains tax discount, governments could tackle the challenge by changing priorities rather than borrowing more.

This is not just about targeting support to those who need it most, but also about dampening the fires that propel property prices.

In the current low-growth environment, says Stephen Anthony, institutional investors could be attracted to an affordable housing project that offered a return of something like inflation plus 3 per cent. In the first instance, the investment may come not from Australian super funds but from their North American and European counterparts, which will settle for lower returns based on reliable income streams like rent payments because their members are generally older.

But broadscale institutional investment is unlikely until we close the gap between the cost of new housing and the rents low-income tenants can afford to pay. “To make a market work you have to have a market price in there,” says Anthony. “We have to fill the subsidy bucket somehow.”

In the absence of significant tax reform or debt-financing of social housing, prospects might seem bleak. But Stephen Anthony says there are still things governments could do.

One would be to create an Australian version of the Low-Income Housing Tax Credit that operates in the United States. The scheme allows not-for-profit organisations that build social and affordable housing to generate tax credits that they can then sell to private companies looking to reduce their tax liabilities. It helps develop about 110,000 units of housing each year, worth around US$8 billion.

Anthony, who once worked briefly for the conservative Heritage Foundation in Washington, says the tax credit was created by Ronald Reagan’s administration. “It is a game-changing policy that can appeal across the political aisles,” he says. “The ability to trade in tax credits is gold for corporations trying to manage their tax liabilities.”

In operation since 1987, the scheme has an established record and the confidence of corporate investors. It’s no free lunch — just like negative gearing, it means revenue forgone for the federal government — but it may be a more palatable option than extra borrowing.

Another suggestion is for the federal government to set up a housing investment fund along the lines of the Clean Energy Finance Corporation. While this would require a big up-front injection of capital — the CEFC got $10 billion — it has the advantage of taking housing funding off the government’s balance sheet. The NSW Social and Affordable Housing Fund and Victoria’s Social Housing Growth Fund are initiatives of this kind, but their capital of just $1 billion each falls well short of the scale required to match the problem.

A much larger national fund could support social housing developments with equity investments as well as discounted loans to help attract additional private investors. Again, though, it wouldn’t alter the fundamental equation in which rents from low-income tenants are insufficient to generate a positive return on investment (as the CEFC is expected to do across its portfolio).

Anthony argues that the states could also use their planning powers more aggressively to increase the supply of social and affordable housing. His report singles out Western Australia’s integrated property development model, which requires that new land releases or urban redevelopments include various types of affordable and social housing, from discounted rentals to shared equity. It’s rare to see inclusionary zoning used in Australia, but it is common in many other countries.

As the Cbus example shows, super funds can be attracted to social housing if sufficient support is on offer — whether it’s free or discounted land, capital grants, cross-subsidies through market rentals, tax credits, or some other method or combination. Another way to change the equation, of course, is to permanently increase and properly index JobSeeker payments and Commonwealth Rent Assistance so that social housing tenants can afford to pay more rent (though some of the gains would flow to private landlords).

For social housing to be developed at scale, Anthony and other analysts say that Australia needs an agency similar to the National Housing Supply Council, created by the Rudd government in 2008 and abolished by the Abbott government in 2013. “This is not central planning but coordination,” says Anthony. “It’s overall guidance to identify where the shortages are, what resources are available and which players might come to the table.”

The other key requirement is certainty. “You need an institutional constant to establish the framework and leave it in place for future governments,” says Anthony.

The potential rewards of tackling the problem are considerable, as are the potential risks of not acting. As Anthony’s housing affordability report warns, Australia is experiencing its biggest peacetime economic shock since the Great Depression, and our approach to housing finance could make matters much worse.

Australia’s pre-1980s banking system was “framed by the tragedy of the 1890s property bust,” says Anthony, and “forged under fire during the Great Depression of the 1930s,” and “eventually informed by the 1936 Banking Royal Commission.” Deregulation, though, has “reawakened the old boom-bust property cycle” and fostered “an addiction to household debt,” which as a share of disposable income is much higher in Australia today than it was in the United States immediately before the global financial crisis.

If we transform financing and tax arrangements for housing then we can lay the foundations for future prosperity, just as we did after the second world war. And even if government has to take on extra debt to build homes for low-income renters, it’s a public investment that will return a dividend in higher productivity, lower health costs, lower welfare spending and changed lives.

“That’s indisputable,” says Anthony. “The bottom 30 per cent of the population by income just need a roof over their head. They want to live in one suburb for as long as possible. They want stability. And anything that brings stability to the family unit ticks all the boxes for investment and saves government a motza in the long run.” •

Funding for this article from the Copyright Agency’s Cultural Fund is gratefully acknowledged.

The post What would it really take to supercharge social housing? appeared first on Inside Story.

A return to business as usual would mean sending these people back onto the streets to fend for themselves. Providing permanent housing, and ending their homelessness for good, would clearly be a better response.

We know from Finland that homelessness can be eliminated, or at least reduced to “functional zero” — that is, with homelessness as a “rare, short-lived and non-recurrent” phenomenon. Yet Finland remains the exception. It’s not the only country to make serious, well-resourced efforts to eliminate homelessness, but it stands alone in getting close to that goal.

In an illuminating new book, Ending Homelessness?, researchers Mike Allen, Lars Benjaminsen, Eoin O’Sullivan and Nicholas Pleace contrast Finland with two other European countries of comparable size — Ireland and Denmark — to investigate why broadly similar approaches to homelessness over more than a decade have produced very different results: considerable success in Finland, marginal progress in Denmark and failure in Ireland.

All three countries aimed to achieve functional zero by adopted the “housing first” ethos. The core idea is just what the name implies: when people are homeless, you first provide them with housing, without any preconditions attached. Only when they are secure in their home do you offer support for tackling other challenges: improving mental and physical health, reducing drug and alcohol use, finding a job or getting an education.

Finland’s policy succinctly encapsulates the approach: “Solving social and health problems is not a prerequisite for arranging housing, but instead housing is a prerequisite that will also enable solving a homeless person’s other problems.”

Housing first challenges the entrenched “preparation first” or “staircase” model, which helps people overcome addiction, illness and other challenges, while living in temporary shelters or transitional accommodation. The aim is to help them to become “housing ready” — that is, capable of independently maintaining a tenancy in the public housing system or the private rental market.

The staircase approach has no doubt assisted many individuals to regain control over their lives, but it hasn’t reduced homelessness overall. Why? According to the authors of Ending Homelessness?, it individualises the problem and fails to address systemic causes. “Despite a broad academic consensus that structural factors were driving the increase in the number of people experiencing homelessness,” the authors write, “services largely responded to homelessness as a set of personal inadequacies and deficiencies that required addressing and resolving before any attempt would be made to house them.”

Housing first is usually traced back to pioneering work by Sam Tsemberis in New York in the early 1990s, but as Allen, Benjaminsen, O’Sullivan and Pleace explain, Finland’s housing first approach is largely homegrown. What is more, housing first in Finland is a “system” rather than a “program,” “strategy” or “tactic.” In other words, it doesn’t just represent, as in the United States, the determined efforts of a charity to create housing for a specific cohort of people experiencing homelessness and other compounding problems but is backed by “the dedication and commitment of the state.”

With both central and local governments on board, Finland has not only adopted the commonsense philosophy “that all effective responses to homelessness must start with the offer of an affordable home.” It has also tackled the fundamental question that this approach inevitably throws up: “where are the homes to come from?”

This contrasts sharply with the experience in Australia, where leading not-for-profit housing providers have embraced housing first over the past decade, often under the name Common Ground. While sometimes winning backing from state governments, housing first approaches here tend to follow the American rather than the Finnish model — that is, of non-government organisations creating safe but isolated islands of affordable, supported, long-term housing within a landscape of housing insecurity and homelessness.

It’s true that governments back individual projects here and there, routinely paying lip service to the lack of affordable housing, but they rarely move beyond ineffectual responses like first-homeowner grants and stamp duty concessions. That seems likely to continue for as long as Australia lacks a coherent and appropriately resourced national housing strategy linking all three levels of government.

Commendable as they are, the states and territories’ rapid responses to rough sleeping in the pandemic underline this point. People living on the streets only came into sharp policy focus when they began to pose a health risk to the broader community; as long as they bore all the risks of homelessness themselves, government attention was inconsistent and sporadic.

Nor is booking someone experiencing homelessness into a hotel room a novel initiative. It is really an extension of the practice, pre–Covid-19, of routinely putting people up for a few days in cheap motels, backpacker hostels, caravan parks, overnight refuges or rooming houses. This led to exactly the same question that we face now — what happens next? The answer, by and large, was nothing: just an ongoing state of profound insecurity. The few Common Ground dwellings built by NGOs were already full and public housing waiting lists stretched off into the far distant future.

In A Crisis in Crisis, a report released last year, specialist homelessness services in Melbourne’s north and west gave a blunt account of how that shelter mentality plays out in practice. They reported spending $2.5 million in 2017 to put 9000 households into temporary accommodation. That meant paying up to $160 per night for low-grade motel rooms, often with inadequate bedclothes, broken locks and filthy toilets.

Given the high demand and long waiting lists for any kind of social housing, only a small percentage of those distressed households were subsequently assisted to find a secure home. Most remained trapped in a cycle of homelessness, from which a cheap motel room was at best a temporary respite; at worst it was another empty kick-in-the-guts promise. Housing workers were placed in an ethical bind, knowing their best efforts to help potentially made matters worse:

We are contributing to people’s experience of trauma and adding to their feelings of hopelessness… [We] can no longer tacitly accept causing harm by accepting high-cost poor-quality emergency accommodation as a necessary evil for those people who come to us for assistance because they do not have a home.

Some of the hotels booked for the pandemic response are of a higher standard than the down-at-heel motels or boarding houses that usually make up crisis accommodation, and rooms have been secured for a longer period. Yet even with crisp linen, fluffy towels and a deferred checkout, a four-star hotel is not a home.

The shelter mentality of “three hots and a cot” might be driven by the best of intentions: let’s make sure that everyone has good food and a warm bed to sleep in tonight and that no one is left out on the streets. Yet as a response to housing insecurity it is expensive and ineffective, because people end up stuck in services designed for emergencies. A shelter mentality often compounds the very problems it sets out to solve.

The Finnish version of housing first has shifted the focus from the “right to shelter” to the “right to a decent home,” and almost all emergency and transitional accommodation has been converted into permanent dwellings. While this may sound like a costly strategy, and undoubtedly requires significant upfront investment, it’s cheaper in the long run. Research in Finland shows an average saving of €15,000 (A$25,000) per person per year when someone moves from temporary accommodation into a settled home, including reduced costs for the health and justice systems. If secure housing enables people to re-enter the workforce, the savings over time are potentially greater.

Denmark and Finland are very different from Australia. One-in-five Danish dwellings and one-in-eight Finnish dwellings are in the public housing system; in Australia it is about one in twenty-five. Denmark and Finland also have more extensive welfare systems. As a consequence, people are unlikely to be driven into homelessness simply by poverty or excessive housing costs. People experiencing homelessness are likely to be individuals rather than families, and they are likely to suffer from a set of confounding problems. In Denmark, for example, almost four out of five people counted as homeless live with either a mental illness or substance abuse problems, and about a third have both.

Although about one in ten Irish dwellings are public housing, in other respects that country bears more of a resemblance to Australia. It has a less comprehensive welfare system than the Nordic countries, where “most people are not ‘just three pay cheques away’ from homelessness,” according to Allen, Benjaminsen, O’Sullivan and Pleace. Rather than building a new supply of dedicated public housing, Ireland has resorted to providing rent assistance to support tenancies in the private market, just as Australia has. The flaws in this approach are well known: when the market is tight, governments are unlikely to lift benefits at the same rate that property owners raise rents; it does nothing to increase the supply of affordable housing; and it doesn’t improve security of tenure, though termination of private tenancies is a major contributor to homelessness.

Some encouraging signs suggest that what happens next in Australia could be different this time. In Victoria, for example, a $150 million government package extends emergency hotel accommodation until at least April, ensuring that 2000 people who were homeless before the pandemic will not be cast out on the streets in the coming months. What’s more, the state government will lease 1100 properties in the private rental market to enable people to move from hotels to permanent homes.

If people moving from hotels to houses are also offered flexible, ongoing support to rebuild their lives, then this initiative fits well with the housing first philosophy. But when this scheme is limited to people who were already on the streets, then it risks being overwhelmed by a new deluge of housing insecurity created by the economic downturn. Mortgage pauses, eviction moratoriums and income support payments like JobKeeper and the JobSeeker supplement are helping people to keep a roof over their heads in the short run, but unless these measures are maintained, spiralling unemployment is likely to push many more people into homelessness.

One of the urgent lessons from Ending Homelessness? is the importance of helping people to stay in their homes through a personal or societal crisis. The reason is simple: preventing homelessness is cheaper and more effective than dealing with the fallout from evictions and defaults. In Finland, this is known as “housing social work” and also incorporates dedicated measures to ensure that people leaving prisons, hospitals and other institutions shift immediately into permanent homes.

A lack of prevention work also helps to explain why Ireland’s efforts to tackle homelessness failed. The Way Home, Ireland’s revised strategy to address homelessness, was laid out in late 2008 and early 2009, with the ambition of ensuring that by the end of 2010 no one would stay in emergency accommodation for more than six months. Between the plan’s implementation and the target date, the world was hit by the global financial crisis. As households struggled to meet rent or mortgage payments, homelessness increased sharply, including among families. Denmark and Finland were also hit hard by the GFC, but their more extensive welfare systems helped households to ride out the downturn without being pushed from their homes.

Annual spending on homelessness in Ireland more than doubled between 2008 and 2018, and the country spent more on services than either Denmark or Finland in this period. Yet despite strategic plans that emphasised a housing first approach, Ireland’s efforts had less effect because practices quickly reverted to the default provision of emergency support. Instead of expanding the supply of new permanent housing, the extra spending went on securing short-term places in shelters, hostels and private bed and breakfasts.

In 2011, under pressure from international institutions to rein in budget deficits, Ireland also cut its existing investment in public housing, with long-term consequences for the supply of affordable dwellings.

Denmark fared better than Ireland, but still fell short. One explanation was a lack of coordination between housing and welfare policy. While pursuing the goal of reducing homelessness, Denmark simultaneously cut the benefits paid to young people, partly as a cost-saving measure, partly to “motivate” them to pursue jobs and education. Either way, it seems to have contributed to a spike in youth homelessness that overwhelmed its housing first efforts.

Despite its extensive public housing system, Denmark also failed to create a designated stream of new dwellings to accommodate those experiencing acute homelessness. As a result, people identified as needing immediate housing could still find themselves subject to considerable waiting times.

There are many paths into homelessness but only one way out. Domestic abuse, relationship break-up, poverty, unemployment, illness, injury, addiction, eviction — any one or more of these things might force an individual or a family out of their home. But the only route out of homelessness is secure, affordable, decent housing.

It is this simple premise that makes the housing first approach so compelling. But that doesn’t make it easy. Finland has succeeded by setting clear goals and revisiting and refining its approaches over time. It has invested heavily in achieving the targets it set and created a separate stream of dedicated housing for people with the most complex needs instead of feeding them into the existing social housing system. It has benefited from continuity in both policy and personnel, with committed individuals in the government and not-for-profit sectors staying the course over the long term. This has helped it weather criticism from right-wing politicians and tabloid media, which disparaged the policy as “bottle first,” rewarding drunks and drug addicts for antisocial behaviour.

The Finnish model can’t be transplanted directly into an Australian context, but it points the way forward. Substantial progress in reducing homelessness here must involve a long-term commitment to increasing the supply of affordable dwellings, and a coordinated approach linking different levels of government that is not contingent on electoral outcomes for its longevity. Without that, housing first approaches are just not viable. Political champions committed to the long haul would help too — ministers, backbenchers, public servants, non-government leaders and other public figures.

The federal government has a unique opportunity to begin reshaping Australia’s housing landscape in the October budget, by committing to a large-scale investment in social housing as part of a Covid-19 stimulus package.

As Mission Australia CEO James Toomey put it recently in a blog post, to have housing first, we need houses… first. •

The post Beyond shelter appeared first on Inside Story.

Mokak is leading the Productivity Commission team developing a new strategy for evaluating policies and programs affecting Aboriginal and Torres Strait Islander people. The commission sees this as an urgent priority: as its chair, Michael Brennan, wrote in the foreword to the draft strategy earlier this month, “despite decades of new policies and programs aimed at improving the lives of Aboriginal and Torres Strait Islander people, we know very little about their impact.”

“There’s huge variability in quality and practice,” Mokak tells me from his home in Canberra. “There’s no real central stewardship or central oversight.” While some agencies have “quite sophisticated processes” for dealing with research ethics, peer review and publication, for instance, others “haven’t even contemplated those things.”

Mokak says he’s seen “good and bad” approaches to assessing the impact of new initiatives during twenty-five years of working in Aboriginal and Torres Strait Islander policy and program management. But he has also witnessed a persistent pattern: governments launch initiatives and then move on, making little effort to determine what works and what doesn’t.

“Lots of activity, lots of policy development and design, lots of program implementation, but very little commitment to actually undertaking rigorous evaluation,” he says. “Often if an evaluation is required or thought about, it’s bolted on. It’s not planned for, and the objectives haven’t been negotiated with Aboriginal people, so the questions that need to be answered are kind of myopic.”

Mokak’s assessment is consistent with the overall decline in Australia’s public sector capabilities identified by the recent Thodey review into the public service. But he says Indigenous affairs has particular failings that have been compounded by history.

“What we found was Aboriginal people, Torres Strait Islander people are largely left out of the game in terms of planning and decision-making around evaluation,” he says. And this deepens the lack of trust between them and governments at all levels.

Mokak wants to turn things around by putting Aboriginal and Torres Strait Islander people at the centre of evaluation, because, as the Productivity Commission’s draft strategy recognises, “governments need to draw on the perspectives, priorities and knowledges of Aboriginal and Torres Strait Islander people if outcomes are to improve.”

Beneath this overarching principle, with its emphasis on “genuine engagement and partnership,” sit four subsidiary principles: all evaluations should be “credible, useful, ethical and transparent.”

“What I’m keen to do is to take a conversation away from just being about accountability and compliance and getting rapped over the knuckles,” Mokak says, referring to the research that shows Indigenous organisations are often loaded up with much more onerous reporting and financial accountability requirements than their mainstream counterparts.

He isn’t just interested in the kind of hard data — rates of employment, income, incarceration and disease, for instance — that characterises Closing the Gap. He wants to ensure that Indigenous people have the capabilities and opportunities to live the lives they value, in a context that affirms Indigenous identities, cultures and contributions.

As the draft strategy puts it, evaluations “should be in the areas that are valued most highly by Aboriginal and Torres Strait Islander people.” This means shifting from a deficit model — focusing on the gap and assessments of what Indigenous Australians lack compared with everyone else — to building on the existing wealth of experience and knowledge within Indigenous communities, and focusing on their priorities.

Romlie Mokak comes well equipped for what is undoubtedly a challenging job. He is a Djugun man and a member of the Yawuru people, traditional owners of the lands and waters in and around Broome. His role at the Productivity Commission had its genesis in 2017 when Malcolm Turnbull was prime minister.

“There’d been quite a rocky road with the Indigenous Advancement Strategy that sat within prime minister and cabinet,” Mokak explains. “What’s the IAS doing, what’s its effectiveness, et cetera?” The response came in the 2017 budget, which provided additional funding for evaluation and research and to establish an Indigenous Policy Evaluation Commissioner within the Productivity Commission.

Mokak took up the job in April 2019 after fifteen years “heading up black organisations.” He had previously been chief executive of the Lowitja Institute for Aboriginal and Torres Strait Islander health research, and led the Australian Indigenous Doctors’ Association for almost a decade before that.

“I was attracted to the statutory nature of the commission and the independence from government,” he tells me. “I was not anticipating that I’d immediately be leading a specific inquiry or specific study.”

The government’s letter of direction — essentially the terms of reference for developing an Indigenous evaluation strategy — arrived within days of his appointment. He says the project fits “hand in glove” with his other duties, which include contributing to the commission’s yearly report on government services, which assesses the equity, effectiveness and efficiency of state and federal programs in education, health, justice, emergency management, community services and housing; and chairing two working groups, one on Indigenous expenditure and the other on overcoming Indigenous disadvantage.

These working groups emerged in the 2000s when the Council for Aboriginal Reconciliation was seeking a better picture of the gap between outcomes for Indigenous and non-Indigenous Australians, and anxious to gauge improvement over time. While Mokak appreciates the intent, the concept of Indigenous “disadvantage” has always sat uneasily with him, because of the way such language frames Aboriginal and Torres Strait Islander people.

This frame struck Mokak when he took up his first Commonwealth job as a junior executive in the health department in 1998. “The section that I worked in was called Health Issues,” he says. “I should’ve seen the writing on the walls when I looked at that label, ‘Health Issues.’ Aboriginal people have just got health issues.”

Mokak acknowledges the influence on his thinking of the anthropologist W.E.H. (Bill) Stanner, and particularly Stanner’s 1968 Boyer Lecture, The Great Australian Silence. Reflecting on the lack of Indigenous voices in histories and commentaries, Stanner wrote that “inattention on such a scale cannot possibly be explained by absent-mindedness.” It must be structural, like “a view from a window which has been carefully placed to exclude a whole quadrant of the landscape.”

Mokak applies the same metaphor to “Indigenous disadvantage.” “If we look with that lens through that window, it continues to frame the disadvantages as our problem,” he says. “My children are not to be defined by the ‘gap.’ That’s not who they are.”

He wants to look through a bigger window, one that captures strengths, knowledge and experience without glossing over uncomfortable facts. As an example, he points to the Mayi Kuwayu study, which is looking at how Aboriginal and Torres Strait Islander wellbeing is linked to such things as connection to country, cultural practices, spirituality and language use.

Ironically, that first federal health job working on Aboriginal “issues” in the 1990s also gave Mokak an insight into the power of evaluations that have Aboriginal knowledge and experience at their centre.

“The big issue at the time was petrol sniffing,” he says, reflecting on his role as head of substance use policy in the early 2000s. “And there was bugger-all data.” The practice was known to be concentrated in specific geographic regions, and it spread “like wildfire” within a community once it started, because “sniffing leaders are very good at recruiting others.”

The best data on the problem that Mokak could find didn’t come from government sources, but from health services controlled and run by Aboriginal organisations in the Aṉangu Pitjantjatjara Yankunytjatjara lands in Central Australia. This gave Mokak and his team a baseline. They then developed a strategy whose most important element was an evaluation process, built on that Indigenous knowledge base, that would track what was working.

That early experience carries through to his work for the Productivity Commission. “A big part of this work is actually trying to reframe what evaluation means, what it should be about,” he explains. “It shouldn’t be about compliance, it should be about learning, it should be about a relationship, a reciprocal relationship, not just one-way traffic.”

Concrete proposals in the draft strategy include a new Office of Indigenous Policy Evaluation to work with an Indigenous Evaluation Council, which has a majority of Aboriginal and Torres Strait Islander members.

I suggest to Mokak that the thrust of his proposals is in keeping with the Uluru Statement from the Heart and the push for an Indigenous Voice to Parliament. “I was a delegate at Uluru,” he responds. “So, separately to my commission role, as a citizen, as an Aboriginal person, a constitutionally enshrined Voice to Parliament is something that’s very close to me.” He sees the Voice to Parliament, the Closing the Gap “refresh” and his own work on evaluation as all moving in the same direction, “which is about Aboriginal people having greater decision-making powers over their affairs.”

If government policymakers continue to think they know “what’s best for blackfellas,” he adds, “then that’s not where we’re going to get the results. Valuing Indigenous people, Indigenous knowledges, Indigenous priorities is fundamental. This is a part of that centring strategy for the evaluation strategy.”

He believes that Indigenous organisations have enormous strengths to draw on, and not only in the health sector. “Long ignored, this is a part of the continuing silence that needs to be really recognised,” he says. “That knowledge sits within communities and organisations, and those who are coming from outside need to have a bit of humility about trying to kind of access that.”

“Essentially, what is being done in the Productivity Commission now is what Aboriginal people have been talking about for a hell of a long time. The commission comes with a particular way of working, looking at the evidence, thinking deeply about that and then making some sense of it and providing some policy options to government.”

But will government listen and act on the results? When evaluations cast doubt over the value of high-profile initiatives — such as the use of cashless debit cards in Indigenous communities — governments often ignore, dispute or cherrypick the evidence.

“I’m not saying that this will be easy,” he responds. “It’ll require a bit of a mindset shift as well as a cultural shift, but I do want to emphasise that this is about really lifting the bar so that evaluations can properly look at the impacts of programs, policies on Indigenous people, with Indigenous people’s values, priorities, meaning, et cetera at the heart of it.”

While some people accuse him of living in a fantasy land, Mokak is happy to embrace a glass-half-full approach. “The government asking the commission to develop an Indigenous evaluation strategy is unprecedented,” he says. “The commission’s never had work as specific as this call and… I think there is a shifting climate, there’s different policy settings, and different discussions that are taking place.”

It’s true that governments will often talk about shared decision-making and genuine partnerships, he says. “What this strategy’s offering is how we do that in a really concrete way, ultimately to lead to better policies and programs, and Aboriginal people being at the forefront.”

After a pause, he adds, “It might be a rose-tinted view, Peter. But I’ve operated pretty well on optimism.” •

The post Closing the (effectiveness) gap appeared first on Inside Story.

If property values fall and then stay low, Australia’s economic downturn could be deepened by the lack of consumer confidence that comes with subdued house prices. Some borrowers, particularly those who bought recently using low-deposit loans, could find themselves owing more to the banks than their house is worth — and with Australian banks more heavily exposed to residential property than most of their OECD counterparts, the financial impact could be wide.

Master Builders Australia predicts that residential construction will fall by 27 per cent next financial year, which means 43,000 fewer homes will be built in an already slowing industry. Construction — Australia’s third-largest employer — sheds labour quickly in a downturn but picks up much more slowly because of the time taken getting planning approval, running marketing campaigns, booking up pre-sales and securing finance. The impact of a construction downturn also ripples through sectors like building supplies and real estate services.

Perhaps it’s no surprise that Master Builders Australia has joined with its traditional rival, the construction union CFMMEU, in calling for the federal government to stump up $10 billion for 30,000 new social housing dwellings. Community agencies agree: the Community Housing Industry Association has combined with National Shelter and Homelessness Australia to propose a Social Housing Acceleration and Renovation Program, or SHARP, to spend $7.7 billion to build 30,000 new homes and repair thousands more, and ACOSS wants something similar.

This might sound like special pleading by vested interests and the usual bleeding hearts, but these proposals are a far more practical and immediate response to Australia’s recession than grandiose plans like a fast train between Melbourne and Sydney.

How do we know that? At a cost of less than $6 billion over three years, Kevin Rudd’s post–global financial crisis social housing initiative created 14,000 jobs. Every dollar spent generated $1.30 in economic activity. Almost 20,000 new dwellings were built and another 12,000 — some uninhabitable, others likely to become so — were repaired. Along the way the initiative helped to build the capacity and asset base of Australia’s nascent not-for-profit community housing sector.

But Rudd’s initiative was a one-off response to a crisis, and once it was over much of the momentum was lost.

State-based social housing packages — like the one announced this month in Victoria — will help to counter the immediate downturn. But they won’t tackle structural problems in the housing industry, including the way that Australia’s near-total reliance on the private sector generates boom–bust cycles. Despite Rudd’s initiative, real estate prices rocketed in most capital cities after the GFC, boosting household debt, inequality, rental stress, housing insecurity and homelessness.

Any stimulus program needs to fit into a national housing strategy linking all three levels of government. It should build at least 15,000 new units of social housing every year for decades into the future — about five times what gets built now, but no more than the construction levels regularly achieved in the decades after the second world war.

With the need for a national strategy more urgent than ever, the timing of Housing Policy in Australia: A Case for System Reform couldn’t be better. Experienced researchers Hal Pawson, Vivienne Milligan and Judith Yates pull together years of work — not only their own but also that of colleagues working through the Australian Housing and Urban Research Institute — and draw on overseas experience to make a persuasive case for change.

In a sense, the aim of housing policy is simple: everyone should have access to safe, decent, affordable shelter, whether rented or owned, house or apartment, city or country, shared, single or family. But if there is an underlying thesis to this book, it’s that the basic aim has been confused by the different and in many ways conflicting role housing has come to play. Increasingly, it is a vehicle for building and transferring wealth.

As housing researcher Bill Randolph writes in the foreword to this book, we’ve moved from housing policy as “a ‘fourth pillar’ of the postwar political settlement, alongside wages growth, social security and trade protection” to a position where, in effect, “the market became the policy.” But, as the authors make clear, the housing market is profoundly shaped by government action, primarily through iniquitous tax settings and subsidies that benefit some (existing homeowners and property investors) and harm others (low-income renters in the private market).

Successive government policies have led to the “financialisation of housing,” a term that I had found rather opaque until I read this book. As the authors explain, the term refers to how dwellings are “increasingly viewed as tradeable assets with capital value rather than homes with utility value.” It is a process supported by the deregulation of the financial system since the 1980s.

One local manifestation of financialisation is the way it encourages homeowners to view their house as a bank from which they can withdraw funds, often in order to buy more property. Financialisation also means that investors buy “stash pads” as a kind of “safe-deposit box” for excess capital, often in markets where the purchaser has little or no connection to the local community or its urban fabric. Foreign investors buying high-rise apartments in Sydney and Melbourne are a good example, but so are Australian investment funds buying cheap rental properties in the American Midwest.

In a more developed form, financialisation encourages the emergence of private equity firms, trusts and other corporate entities as mass landlords focused on driving up rents and driving down costs. The firm Kushner, in which Donald Trump’s son-in-law and preferred fix-it man Jared Kushner is a major shareholder, owns 23,000 apartments across five American states. It stands accused of systematically harassing low-income tenants to force them to move so that it can raise rents, and then of pursuing those same tenants through the courts for unpaid fees.

Australia’s 2.1 million landlords are mostly small-scale property investors. But if Covid-19 produces a major property slump and distressed owners are forced to sell in a falling market, then we face the possibility of the same kind of property empires that emerged in the United States and Ireland after the GFC. Even during the boom, the number of Australian investors with multiple properties was growing faster than the number who owned just one.

Pawson, Milligan and Yates build their case for system reform by revealing the many shortcomings of a narrowly conceived market approach. For a start, current arrangements increase risk — most obviously for households, with 1.3 million people pushed into poverty by excessive housing costs. But it’s also evident in the apartment boom, where a lightly regulated industry has produced defective buildings clad in highly flammable materials or vulnerable to flooding.

And then there is the risk that property-fuelled household debt poses for the financial system and the wider economy. Periodic “price corrections” in the housing sector depress demand and consumption throughout the economy, and threaten the stability of the banking system. As the authors write, “This latter issue is of particular salience for Australia since, as reportedly demonstrated by IMF loan book profile data, Australian banks’ exposure to residential property is the highest in the developed world.”

Second, our approach to housing increases inequality. In theory, an era of low interest rates and deregulated lending should make home ownership more affordable. But, by enabling higher-income earners to take out bigger loans “to purchase more expensive housing than they might otherwise be able to afford,” it fuels price rises and puts home ownership “further out of reach for low-income earners.”

Rising prices widen the “deposit gap” between the price of a dwelling and the maximum amount a bank will lend, so while a household’s income might be high enough to comfortably service a mortgage, it is almost impossible to save the required down payment. In March, just before the pandemic hit, Melbourne’s median house price reached a record high of $918,000. That makes the standard 20 per cent deposit $184,000, or more than a decade of saving on the gross median income of $88,000 — assuming, heroically, that the household is able to save a fifth of its earnings.

Over the past two decades, as a result, “wealth rather than income has presented the major stumbling block to home ownership entry for low-to-moderate-income households.” The best advice to aspiring first homebuyers is not “get a good job,” as former treasurer Joe Hockey once claimed, but choose wealthy parents.

As home ownership moves increasingly out of reach, the pressure on low-income tenants increases. They are crowded out of the declining number of affordable properties by renters who earn more and are trying to keep their housing costs low while they save for that elusive deposit.

Another way of thinking about housing and inequality is to think about housing as an essential cost that everyone has to pay. True income inequality is not revealed by comparing raw data on household incomes but by comparing those incomes after housing costs have been covered. Using this measure, the gradient of income inequality in Australia is much steeper.

During the housing boom, incomes for the top ten per cent of households rose 85 per cent before housing costs, and 81 per cent after. Incomes for the poorest ten per cent of households, by contrast, rose about 50 per cent overall but only 30 per cent after accounting for housing costs. As a proportion of income, housing costs had risen sharply for the poor — who are mostly renters — but barely changed at all for the wealthy — who generally own their own homes.

At the time of the Henderson poverty inquiry in 1975, as the authors note, “before-housing” poverty was higher than “after-housing” poverty. Now it’s the opposite. In other words, our housing system helped to pull people out of poverty in the postwar decades but now pushes them deeper in.

The role of housing in inequality also manifests spatially, write Pawson, Milligan and Yates, not only in the “coincidence of rising homelessness with growing numbers of grossly under-occupied homes” but also in the fact that residential property close to city centres (and to jobs and services) appreciates more rapidly than dwellings on the urban fringe.

Housing-related tax concessions — like exempting the family home from capital gains tax — drive this inequality. Households in the top income quintile receive “an average benefit more than sevenfold that received by households in the lowest income quintile.” It’s well established that wealthy households also capture the bulk of gains from investment breaks like negative gearing and the capital gains tax discount. Yet these tax concessions do nothing to increase the overall supply of rental housing (let alone affordable rental housing). As the authors document, in the ten years to 2018 only 7 per cent of investment property finance was used to build new dwellings.

These tax concessions don’t just increase inequality, they also reduce productivity by encouraging Australians to overinvest in housing using money that could be spent in sectors that might generate more wealth. By treating housing as a protected asset, tax arrangements encourage inefficient use — large houses with unoccupied bedrooms, for example, or second homes that are rarely used. And housing inequality is itself a drag on productivity: insecure private rental housing is likely to result in frequent moves, which damage children’s schooling, and congestion is worsened by the long commutes of workers forced to the “‘affordable edge” of Australia’s cities.

The market approach has also sent Australia’s public housing system into long-term decline. Under the first ten-year Commonwealth State Housing Agreement, struck in 1945, state housing authorities built about 96,000 homes for rent. Although Menzies shifted the bias towards home ownership under the second agreement in 1955, state construction continued to deliver a significant proportion of all residential building activity through the 1960s, accounting for about one in every six houses built between 1945 and 1970.

Since the mid 1990s, government’s average contribution to building has been about one in every thirty-three houses. Amounting to fewer than 4000 dwellings per year, this is barely enough to keep pace with sales and demolitions of existing social housing stock, let alone the growth in Australia’s population. With many dwellings occupied by long-term tenants, the availability of social housing to people in need has fallen precipitously, from 52,000 new social housing lettings in 1991 to just 35,000 in 2017.

Other processes have also had an impact on public housing. In the 1980s, the deinstitutionalisation movement shifted people with disabilities, especially mental illness, into community care. With no government investment in alternative housing to provide this care, “public housing became the default tenure for many of those affected by the closure of the institutions,” despite the fact that existing stock was not well suited to this purpose. Once a way of increasing the supply of housing, public housing became a safety net and then, increasingly, an “ambulance service.”

Symptomatic of this trend, state and territory governments have progressively transferred responsibility for their housing portfolios from public works agencies to human services departments. “Perhaps the single word that best captures post 1970s change as characterised here is residualisation,” write Pawson, Milligan and Yates:

This describes a process of socioeconomic change whereby the tenant population of social housing has become increasingly confined to those unable to compete effectively for market housing. This change is starkly highlighted by official statistics revealing that the proportion of NSW public housing tenants for whom wages are the main source of household income fell from 85 per cent in 1960 to just 5 per cent by 2013.

The history of public housing in Australia is one in which governments have been “reluctant landlords,” with the period from 1945 to 1956 “a partial exception to this general trend.”

Other nations have taken a different path. About a third of all Dutch households live in secure, rent-moderated social housing. In the face of UK-wide austerity measures, the Scottish government has continued to develop social housing at a high rate. Even in the United States, a longstanding low-income housing tax credit facilitated the private-sector development of almost three million affordable rental dwellings by 2017. US housing financed in this way must retain its affordable status for at least thirty years, whereas under Kevin Rudd’s short-lived National Rental Affordability Scheme, housing only had to be priced affordably for ten years. The US tax credit leveraged around US$100 billion in private investment; in the absence of a similar mechanism here, the holy grail of superannuation funds investing in social and affordable housing will never be realised.

Many other countries also make much greater use of planning measures like inclusionary zoning to generate social and affordable housing, recognising that the market alone won’t deliver an adequate range of dwellings.

While there are differences of detail between the major parties in Australia, write Pawson, Milligan and Yates, “it would be difficult to identify any distinct ideologically inspired policy difference between governments of Labor and Liberal/National hue at either federal or state/territory level.” Instead, governments engage in “busy work” — measures that give the impression of activity but fail to strike at core issues. Partly this failure reflects a shared view that home ownership “is inherently the most superior form of tenure” — a myth the authors debunk — and the linked ideal of “a property-owning democracy.” And partly it’s electoral maths: voters who own their own homes, and who have an interest in seeing the value of that property increase, vastly outnumber aspiring homeowners who have an interest in greater affordability and renters who would benefit from more social housing.

But governments can only ignore the failures of housing policy for so long. Australia’s low age pension rate is predicated on widespread home ownership keeping housing costs low in old age, but this is now the “crumbling pillar” of Australia’s retirement income system. With forecasts that home ownership rates among the over-sixty-fives could fall below 60 per cent around the middle of the century, spending on Commonwealth rent assistance will cost much more than the current annual $4.4 billion, which is more than three times the funding the federal government provides to the states under the National Housing and Homelessness Agreement.

As the authors make clear, pandemic or no pandemic, this is a long-term problem with long-term implications:

Firstly, Australia’s current housing policies and housing system are further compounding existing income and wealth inequalities. Secondly, current forms of housing assistance will become fiscally unsustainable if current trends persist. Thirdly, Australia’s housing system underperformance is increasingly compromising broader public policy objectives.

This is an academically oriented book using careful language and detailed referencing. Retailing at more than $100, it isn’t destined to be a bestseller. But it is a landmark achievement that puts a peg in the ground, a reference point for where housing policy should go next at this moment of crisis and opportunity. Politicians, public servants and industry players who are thinking about how Australia rebuilds after the Covid-19 pandemic would do well to read it. •

Peter Mares’s four-part radio series, “Housing the Australian Nation,” will be broadcast on ABC Radio National’s Earshot on  from Saturday 30 May.

The post When the market is the policy, housing fails appeared first on Inside Story.

We’re not very good at talking about these issues. As Abul Rizvi and James Button wrote in the Griffith Review, “government has largely given up making a case for migration as part of building a nation” and Labor has been “cowed into avoiding discussion.” Along the way, Australia — an immigrant nation — has “lost the ability to talk about itself.” The result has been near-silence about the implications of large-scale temporary migration for workers’ rights, democracy, social cohesion and our system of citizenship-based multiculturalism.

But Labor can’t have it both ways. It can’t claim to be encouraging a reasoned discussion about a sensitive and divisive topic while framing the issue in simplistic, binary terms. Senator Keneally called for temporary migration to be reduced to ensure “that Australians get a fair go and a first go at jobs,” but she and her colleagues know that immigration, even temporary migration, is not a straightforward contest between Australian workers and foreign workers. It doesn’t necessarily follow that if “migrants” get jobs here then “our kids” will miss out.

Take international education. If Labor wants to cut temporary migration then student numbers would be the place to start, since they make up the largest cohort of visa holders. In December 2019, before the pandemic hit, more than 480,000 international students were living in Australia and allowed to work for up to forty hours a fortnight. (Around another 90,000 recent graduates can work full-time on a visa class created by Labor prime minister Julia Gillard.) Students are generally young, which suggests they were in Senator Keneally’s sights when she wrote that “the shift to temporary migration means that our migrant intake is younger and lower skilled than it used to be, and this does not help our kids as they join a labour market with 11 per cent youth unemployment.”

Yes, international students work in entry-level jobs stacking supermarket shelves, delivering pizza or attending petrol stations, and in some cases they might out-compete unemployed young Australians for the same positions. But without international students there would be far less work to go around.

International education is Australia’s fourth-largest export industry and supports nearly a quarter of a million jobs. The fees international students pay, and the money they spend on goods and services — including tourism spending by relatives who come to Australia to visit — is worth more than $37 billion to the economy. Without the revenue from international students, as vice-chancellors have made abundantly clear, universities will have to shed staff and abandon research.

Is Senator Keneally referring to international students when she claims that “the shape and size of our migration intake has hurt many Australian workers, contributing to unemployment, underemployment and low wage growth”? It’s not clear, because her article lumps all temporary migrants together in a headline figure of “2.1 million temporary visa holders.” She then goes on to claim that “Australia hosts the second largest migrant workforce in the OECD, second in total number only to the US.”

This figure appears to come from an OECD report on migration, which actually recorded the number of temporary visas issued in different countries rather than the number of migrant workers. Australia does have a high rate of temporary migration, but data elsewhere in the report shows that most Australian visas go to students and working holiday-makers, whereas in the United States (and many other OECD countries) a much bigger share go to “labour migrants.” Since students and working holiday-makers can take up jobs here, that might sound like hair-splitting on my part, but there is nevertheless a difference between dedicated and de facto migrant workers.

It is hardly surprising that on the same day Senator Keneally’s opinion piece was published, ABC radio news bulletins carried a story that morphed her 2.1 million temporary visa holders into 2.1 million foreign workers. This was lazy journalism, but entirely predictable given the message that Keneally was obviously trying to send to an imagined blue-collar Labor base.

The government has also seeded media confusion by using the same 2.1 million figure in a statement about coronavirus and temporary visa holders early last month, but the detail of that media release at least made clear that 200,000 of those people were tourists on visitor visas (with no work rights).

The 2.1 million figure also includes more than 670,000 New Zealanders, who are only temporary in a technical sense, since their special category visa allows them to live and work in Australia indefinitely. Many of those Kiwis arrived before 2001 and are, to all intents and purposes, permanent residents. Others have come for a short period for tourism, business or family visits. To imply that all 670,000 New Zealanders are “foreign workers” is misleading.

Still, if Senator Keneally wants to cut temporary migration, reducing the entry of New Zealanders would be the other obvious place to start. Is she proposing to rip up the Trans-Tasman Travel Arrangement that has guaranteed free movement between Australia and New Zealand since 1973?

The next-largest cohort of temporary visa holders are on bridging visas. Many are the partners of Australians, and are enduring a long wait for permanent residency because the government has cut the annual migration intake and processing times have blown out as a result. According to official statistics, at the end of last financial year Home Affairs had almost 90,000 partner visa applications on hand (though some of these applicants would be overseas).

Other bridging visa holders are skilled migrants and asylum seekers who have lodged residency applications and are awaiting determination before the Administrative Appeals Tribunal. As of April, there were more than 65,000 active cases before the AAT’s migration and refugee division.

Another significant group of temporary visa holders are the 118,000 backpackers on working holiday-maker visas. But Senator Keneally seems less concerned about them when she acknowledges that one benefit of temporary migration is that it “fill gaps in the short term” and “horticulture relies on temporary migration to supply a seasonal workforce.”

So perhaps her real beef is with skilled workers on temporary visas. As she points out, “migrant workers don’t just pick fruit: one in five chefs, one in four cooks, one in six hospitality workers, and one in ten nursing support and personal care workers in Australia hold a temporary visa.”

But there are only 139,000 skilled visa holders in Australia — and this figure includes partners and dependent children, which means the number of these people who are active in the labour market is likely to be fewer than 100,000. And more than half the 65,000 primary visa holders present in Australia as temporary skilled workers in December 2019 held a bachelor degree or higher qualification, so they don’t really fit the “unskilled” profile of “cheap… temporary labour that undercuts wages for Australian workers and takes jobs Australians could do.”

In other words, when you break temporary migration down into its constituent parts, the numbers are no longer so alarming, and it is much harder to conflate “temporary visa holders” with “foreign workers.”

And even when we look at temporary migrant workers at the lower end of the skills range, the problem is more complex than Keneally suggests. Why do so many chefs, cooks and personal care attendants (and we might add childcare workers to this list) hold temporary visas? Because wages and conditions in these jobs are poor and Australian citizens don’t want to fill them (just as they are reluctant to pick grapes or harvest pumpkins).

There are three ways we could encourage Australians to take up this employment.

First, we could pay these workers better, which means paying more for our food and making a bigger tax contribution to fund health, disability services, childcare and aged care.

Second, we could allow the temporary migrant workers who currently fill these jobs to become permanent residents — in other words, allow them to become Australian workers. But then, like other Australians, there’s a risk they would quickly shift to other sectors of the economy that are better rewarded and we’d have to bring in more temporary migrants to fill the gap.

Third, we could boost our dilapidated vocational training and education system, which is the best way of getting marginalised and disadvantaged young Australians into long-term employment.

Despite her confusing message, Kristina Keneally does raise important issues. As other contributors to Inside Story have argued, it is a mistake to assume that migration-fuelled economic growth leaves everyone better off, for the simple reason that if population is growing faster than the economy, then GDP per capita will actually fall. Keneally is right to warn that it is lazy to rely on immigration to fuel economic growth. As we are discovering, it is risky too, just as it is risky to rely on international students to fund higher education.

The senator’s warnings about the exploitation of temporary migrants are well founded, as we know from numerous reports and inquiries. Keneally puts a refreshing emphasis on permanent migration as a nation-building exercise, and she emphasises the importance of skills. She writes, for example, that in industries like cybersecurity “we can’t quickly skill up enough Australians to meet demand.”

But this is dodging the more difficult questions, since it is not always high-skilled, high-paid professionals in city-based jobs who are in shortest supply. Often the labour market gaps are for low-skilled or semi-skilled workers in regional areas or in low-status, low-paid jobs — think fruit pickers, meat processors, aged care attendants, disability carers and childcare workers.

A thorough review of Australia’s migration settings is warranted. Unfortunately, Senator Keneally’s contribution does not kick it off in a constructive way. What is more, the immediate migration challenges are likely to be around having too few migrants rather than too many. As Keneally writes:

COVID-19 has closed our international borders. Temporary migrants are going home. No new migrants are coming for the foreseeable future. Borders are likely to stay closed well after all other restrictions ease. When we re-open the borders — in six, twelve, or twenty-four months — migrants will not return immediately.

When the economy slows, migration falls. Which leaves us with the question, who is going to pick our fruit, keep our universities afloat, care for our elderly and deliver our pizzas? •

The post Labor’s mixed migration message appeared first on Inside Story.

Let’s start at the beginning, or at the least the Australian beginning for Rudi and his first wife, Veronica. (I’m using pseudonyms because Rudi’s situation is delicately balanced.) About ten years ago, Rudi, Veronica and their toddler Maja left Europe for Australia. Veronica was an international student and the primary visa holder. Rudi and Maja were classified as her dependants.

About a year later, Rudi and Veronica’s relationship fell apart. Rudi needed his own visa if he wanted to stay in Australia and remain a father to Maja. He returned to study, starting with an English course then moving on to vocational qualifications in management and IT. At each stage he gained a new student visa.

For reasons that will become apparent, it’s important to stress that Rudi mentioned his daughter whenever he applied for a new visa, and that staying close to Maja was important to him. Technically, such honesty could have cost Rudi dearly, because all international students must satisfy a genuine temporary entrant requirement designed to identify — and potentially exclude — applicants who use the student visa program “for motives other than gaining a quality education.” Personal ties that “present a strong incentive to stay in Australia” are grounds for a refusal.

Rudi’s visas were routinely granted, though, which meant he could study and work during the week and care for Maja at weekends. “It was a good arrangement,” he says, because his relations with Veronica were amicable. “A verbal agreement on shared custody was all we needed.” But that didn’t last.

Over time, Rudi and Veronica both started other relationships. Veronica’s new partner was Australian, and their marriage meant that she and Maja would eventually become Australian citizens. Rudi fell in love with Maria Rosa, an international student from Latin America. Maria and Rudi married and had a baby, Maja’s half-brother Robbie, who is now a toddler.

Somewhere along the way, relations between Rudi and Veronica soured, and they could no longer agree on arrangements for sharing Maja’s care. When months of mediation failed, they ended up in the Family Court. (The involvement of the Family Court is another reason for blurring personal details in this story; Section 121 of the Family Law Act makes it an offence to report on proceedings in a manner that may identify the individuals involved in a particular case.) After a process that lasted eighteen months, the Family Court granted Rudi shared custody of Maja in a roughly 40–60 split with Veronica: Maja spends five nights a fortnight with Rudi, Maria and Robbie during school terms and is with them for half the school holidays.

While the Family Court recognises Rudi’s central role in the life of his daughter, these legally sanctioned shared-custody arrangements have no bearing on his immigration status. So, as Rudi completed his final course and his last student visa neared its end date, he faced a dilemma — how could he stay in Australia and maintain his role as Maja’s father? Although he was steadily employed, he lacked the qualifications that would secure him a visa as a skilled migrant.

As I have reported before in Inside Story, no visa category exists to allow the foreign parent of an Australian child to stay here in order to share his or her care and maintain their relationship. Desperate foreign parents must find complex workarounds, wriggle through migration loopholes, or leave the country and lose access to their child.

Rudi tried two things, and this is where his visa problems got really serious.

One approach involved an application for a contributory parent visa (subclass 143) supported by the church Rudi attends. As the wrinkled faces gracing the relevant pages of the Home Affairs website indicate, this visa is designed for a completely different purpose — to enable adult migrants who have settled in Australia to sponsor their ageing parents to join them here. As Rudi’s child, Maja is eligible to sponsor her father to stay in Australia; as a minor, however, this would require her mother’s consent and signing on her behalf. With the deteriorated relationship between Rudi and Veronica this was not an option, which is why the church stepped in.

This visa category has other drawbacks. It costs around $45,000 per applicant, it presently takes at least four years to process and it can only be granted if the applicant is outside Australia. Unlike many other visas, lodging an application doesn’t make you eligible for a bridging visa — in other words, it doesn’t help Rudi stay in Australia in the short term.

If Rudi, Maria and Robbie were forced to leave Australia until the visa was granted, they would be separated from Rudi’s daughter for four crucial years of her life — years in which she would go from being a teenager to a young adult. “You show love for children by being there,” says Rudi’s migration agent, who is advising him pro-bono. “If you are not present, they feel like they are not loved. When they grow up, they will say, ‘you left me’ and they won’t necessarily understand why.”

“I don’t want to be one of those absent fathers,” says Rudi. Of course, he could maintain a relationship with Maja online, through video calls and messaging apps. But his ability to stay in touch with his daughter would be at the discretion of his former wife. Given their estrangement, Rudi fears that Veronica might not allow such contact. As his migration agent points out, the Family Court’s decision on shared custody doesn’t say anything about the terms of any contact with Maja from overseas. Nor, once he has left Australia, can he go back to the court to seek new orders enabling him to keep in touch with Maja online.

Rudi and Maria also pursued a second option to keep Rudi in Australia. Maria applied for a new student visa, with Rudi and their son Robbie as her dependents. If she were granted a visa, then the family could all live in Australia while she studied, and the contributory parent visa would be much closer to being finalised by the time she completed her course.

But Maria’s visa application was denied. And when she appealed to the Administrative Appeals Tribunal, it was denied there too.

The fly in the ointment was the genuine temporary entrant requirement. Given the family’s extended student visa history in Australia, the presence of an Australian citizen child (Maja) and a lodged contributory parent visa, Home Affairs and the AAT both concluded, quite reasonably, that Maria was not a genuine temporary entrant. A key purpose of her student visa application was to enable Rudi to remain in Australia close to his daughter.

As Rudi’s migration agent acknowledges, Home Affairs and the AAT are not doing anything wrong in a legal sense. They are applying migration law correctly, but the effect of doing so produces a manifest injustice.

Cases like this are not just about rights of foreign parents; they are also about the rights of Australian children. Maja, an Australian citizen, risks being denied a close bond with her father and her younger brother. This contravenes the Convention on the Rights of the Child, which requires signatory states like Australia to ensure “that a child shall not be separated from his or her parents against their will, except when competent authorities… determine, in accordance with applicable law and procedures, that such separation is necessary for the best interests of the child.” In Rudi and Maja’s case, the competent authorities — at the Family Court — have determined exactly the opposite: that it is in Maja’s best interests to have an ongoing relationship with her father.

The convention goes on to say that governments “shall respect the right of the child who is separated from one or both parents to maintain personal relations and direct contact with both parents on a regular basis.” States must deal with a parent’s applications to enter or leave a country for the purpose of family reunification “in a positive, humane and expeditious manner.”

There is nothing positive, humane or expeditious about the operation of Australia’s migration law in such circumstances. The lack of a simple visa pathway forces families to live for years in a state of anxious uncertainty. And in Rudi’s case, that limbo could last a long time yet.

Rudi’s last hope rests with an application for the immigration minister to personally consider his case. The minister has the discretion to replace the tribunal’s decision with one that is “more favourable” if he or she thinks it is “in the public interest to do so.” In short, the minister could choose to grant Rudi and his family visas.

Sometimes referred to as the God powers, ministerial discretion is non-delegable, non-compellable and non-reviewable. In other words, the minister alone makes such decisions; he or she can’t be forced to consider any particular case; there is no set timeline for reaching a decision; and no decision made in this way can be challenged in any court or tribunal.

The process is also entirely opaque. Home Affairs no longer publishes data on requests for intervention, but in the last year it did, back in 2011–12, more than 8000 individual applications were received. It is reasonable to assume the number is higher today. If the minister were to resolve 8000 cases within a year, that would mean working seven days a week and considering and finalising twenty-two applications every day. Of course, the minister doesn’t consider each case personally. Gatekeeping staff vet applications against a set of guidelines to try to identify which ones should progress to the minister’s desk. As the Home Affairs website warns, only a small number do.

So, the fair resolution of exceptional cases like Rudi’s — ones that migration law does not cater for — rely on the discretion of the minister. And yet there is no guarantee the minister will even look at such cases personally.

“We have to work with the legislation we’ve got,” says Rudi’s migration agent. “We’ve been up front and honest all the way.” The agent is buoyed by the fact that Rudi, Maria and Robbie have been granted three-month bridging visas. That suggests that the application didn’t fall at the first hurdle when it was vetted by staff in the minister’s office. But that also means the process could drag on for an unknown period. The responsible minister, David Coleman, has just taken indefinite leave from his portfolio, and his duties have been handed to Alan Tudge. Given the holiday season, and the fact that Mr Tudge will continue as minister for population, cities and urban infrastructure too, it seems unlikely that he’ll get around to considering Rudi’s plight any time soon.

As a result, Rudi and his family could find themselves living on one short-term bridging visa after another, never knowing if it will be renewed, and unable to travel outside the country in the meantime. Rudi worries that if one of his parents back in Europe were to fall seriously ill, he would be unable to visit them.

Rudi knows that sharing his story with me won’t alter his own fate. But he wants Australians to know what is happening to his family, because he thinks the way the law operates is wrong and should be changed.

Cases like his are not common, but as the number of temporary migrants living in Australia continues to grow, more families will be caught up in legal and administrative complexity, trapped between migration law and family law, two systems that don’t talk to one another. For those involved, the stakes are extraordinarily high. Yet it would be relatively easy for the government to create a straightforward visa pathway to enable foreign parents to live in the same country as their Australian children. • 

The post “I don’t want to be one of those absent fathers” appeared first on Inside Story.

As a hold-out defender of the White Australia policy in its dying decade, Menzies might find contemporary Australia very strange indeed. But he was right to predict that we haven’t detached ourselves from our old anchors and traditions; in fact, we are weighed down by them.

That, in large part, is the thesis of Tim Watts’s book. Watts celebrates Australia as “a nation that combines stable Westminster institutions, an open economy, and a liberal society with a young, dynamic and diverse population.” But it is held back, he says, by the “psychological hangover” of the White Australia policy:

The Australian identity of the past excludes too many of us and doesn’t speak to many others. It doesn’t bind us together in a sense of common purpose, a sense that what happens to one of us should matter to all of us. And our national symbols are increasingly used by people who want to divide us, rather than bring us together.

The ill effects of our hangover are felt in executive suites, courts, lecture theatres, newsrooms and parliaments. There are more CEOs called Peter in the ASX 200 companies than there are Asian Australians. Australians with an Asian heritage make up about 15 per cent of the population but account for just 3.1 per cent of partners in law firms, 1.6 per cent of barristers and 0.8 per cent of judges. Australia’s thirty-nine universities host more than a quarter of a million students from Asia, but there is only one vice-chancellor from a non-European background. All members of the ABC board are white, and the national broadcaster’s senior executives and content-makers don’t reflect the diversity of Australian society either. Asian Australians hold just five out of the 226 seats in the national parliament, and the top ranks of the public service are even less representative.

As Watts notes, this is not a uniquely Australian problem, but the statistics suggest that we perform far worse than comparable settler societies like the United States and Canada, and even former colonial powers like Britain. It seems little has changed since we attempted to become Asia-literate under Bob Hawke and debated whether Australia was an Asian nation under Paul Keating. In 2010, academics Andrew Markus, James Jupp and Peter McDonald wrote of the “paradox” that contemporary Australia is “a multicultural society with monocultural institutions.” As Watts puts it, we have “practically dismantled, but never quite symbolically disowned, the White Australia policy” and “the way we shaped our national identity in the past shapes our national symbols and institutions today.”

Tim Watts is Labor’s shadow assistant communications and cyber security minister and represents the federal seat of Gellibrand in Melbourne’s west. As he says proudly on his website, this is “one of the most diverse electorates in the country” with nearly two-thirds of residents born overseas or having a parent born overseas.

It is refreshing to find a serving politician writing a book that is not a naked exercise in self-promotion. It is especially welcome when that politician engages with complex and contested areas of public policy — national identity, immigration, multiculturalism — that carry significant electoral risk. Despite the obligatory genuflection to Australia as “the best country in the world,” his approach is open and critical. What is more, Watts writes clearly and engagingly. He deftly weaves his own family history into the narrative, opening with a visit to the Gum San (Gold Mountain) Chinese Heritage Centre in Ararat with his four-year-old Hong Kong Chinese–Australian son, and soberly documenting the darker exploits of his pioneering ancestors: Charles Nantes, a nineteen-year-old member of South Australia’s first fleet who arrived on the Africaine, and John Watts, the first MP to represent the Darling Downs in Queensland’s colonial parliament.

Nantes later moved to Geelong, became a member of the local Anti-Chinese Committee and helped lobby for the introduction of prohibitive poll taxes to deter Chinese migrants from landing in Victoria during the gold rush. The Chinese were forced to land at Robe in South Australia instead, and walk hundreds of kilometres overland to the diggings. John Watts, meanwhile, spent some of his brief stint in parliament justifying the atrocities committed against Indigenous Australians by Queensland’s Native Police.

Watts is attempting to grapple constructively with this past:

There is value in speaking about the legacy of the racism of White Australia in our national identity as a member of a family that’s participated in creating, and benefited from, that structure. Taking responsibility and seeking to make amends is an important symbolic act in itself.

Watts’s larger project is to reconcile “our national imaginings” with “our national realities.” He references Noel Pearson’s vision of weaving together the disparate strands of Indigenous heritage, British institutions and multicultural migration into a strong cord of shared identity. This would be the foundation of “the Golden Country,” a nation that offers the best of all worlds.

Watts thoughtfully mines Australia’s past for forgotten riches in support of this project. His title draws on an article published in Blackwood’s Edinburgh Magazine at the time when anti-Chinese sentiment in the colonies was at its height. Running counter to the prevailing sentiment of “Australia for the White Man” — the Bulletin’s strapline from 1886 until Donald Horne became editor in the 1960s — the Blackwood’s article envisaged Chinese and Europeans mixing in the goldfields to create a “Golden Australia.” This strand of “alternative tradition” deserves honouring, as do the lone voices of senator James Macfarlane and Bruce Smith MP, the only federal politicians who objected to the Immigration Restriction Act 1901 on the grounds that it “denied the Christian doctrine of common humanity.”

Watts would also like us to be as familiar with the exploits of sniper Billy Sing at Anzac Cove as we are with Simpson and his donkey. Simpson lived in Australia for just four years, having jumped ship from the British merchant navy in 1910, and enlisted in the hope of getting free passage home to England. None of this diminishes his bravery, but it does raise the question of why Billy Sing only rates on mention in Charles Bean’s official history of Australia’s Great War (in the caption to a photograph), given that Sing was apparently Australia’s best sniper, credited with killing 300 Turkish soldiers.

Born in Clermont in outback Queensland, Sing was a joker and a larrikin who had worked as a stockman, cane cutter, cricketer and kangaroo shooter. His commanding officer described him as “a good-hearted, well-behaved fellow” and said that “a braver soldier never shouldered a gun.” He had all the trappings of a stereotypical Australian hero, bar one — as his surname suggests, he was not white. By contrast, the white and newly dead Simpson was drafted into legend status during the war as part of a propaganda effort to overcome a recruitment crisis and to bolster the Yes campaign in the fierce debate over conscription. “The veneration of Simpson and the near obliteration of Sing tell us a lot about the power of the Australian Legend,” writes Watts, “and the way it perpetuated a narrow image of Australian identity.”

Watts navigates cogently through the history of Australia’s (dis)engagement with Asian migration: the gold rush, Federation, White Australia, the first world war, the mass settlement of displaced Europeans after the second world war, the arrival of refugees from Vietnam and Cambodia in the late 1970s and early 1980s, the subsequent calls by historian Geoffrey Blainey and opposition leader John Howard for a cut in the rate of Asian migration, the Howard era and the rise and fall of Pauline Hanson, the 2016 election and Hanson’s resurgence.

He writes tellingly about recent policy failings: the “creeping securitisation of immigration policy” symbolised in departmental name changes from Immigration and Citizenship to Immigration and Border Protection; the “symbolic downgrading” of the department’s nation-building role when it was subsumed into Home Affairs, and the associated loss of expertise in settlement services; the shocking exploitation of international students, working holiday-makers and other temporary visa holders.

He poses important questions, pondering, for example, what questions we would be asking today if we returned nation-building to the heart of immigration policy. He contemplates how we might come to terms with our past, perhaps by apologising to Chinese Australians, Pacific Islanders and others for the impact of the Immigration Restriction Act on their families and communities, as Victoria has apologised for the gold rush–era poll tax.

The book is not without its weaknesses, though. First, Howard looms too large in Watts’s reckoning of responsibility for our current problems. Howard “crippled our symbolic nation-building capacity when we most needed it,” he writes, with disastrous results. “Unfortunately, the revanchism of the Howard era on matters of race and identity have allowed the unconscious assumptions underpinning the [White Australia] policy to stumble on, zombie-like, in the symbols and institutions of our national identity.” The imagery is compelling, but while I don’t want to diminish Howard’s “weaponisation of race and immigration in the culture wars,” strategies like his only bear fruit if they fall on fertile ground. The resistance to attitudinal and systemic change runs deeper and is much harder to dislodge than a single prime minister.

Howard certainly combined high-level immigration with a tough-on-borders rhetoric and a careless dismissal of multicultural policy. On his watch Australia also shifted away from an assumption of permanent settlement and towards high levels of temporary entry, but there were larger demographic and economic forces at work too.

Watts also fails to resolve the tension between his desire to reimagine the Australian character by populating our history with forgotten characters like Billy Sing and the fact that the dominant strand in Australian identity emerged from the violent processes of expropriation and expulsion that shaped the nation.

Watts puts his finger on a substantial issue here. He argues that a strong sense of national identity is a necessary condition for a flourishing of the core institutions of a progressive society. Active participation in a representative electoral system, public investment in education and healthcare, and redistributive tax polices rely on “the mutual regard and obligation between citizens that underpins national identity.” But this thesis prompts another question: is it possible to create a unifying sense of national identity — an “imagined community,” to use Benedict Anderson’s famous phrase — that is not also simultaneously exclusionary and limiting in its definition of who belongs?

Watts attempt to resolve this tension is to rescue something called “Australian values” from the ashes of our past; the egalitarianism that underpinned the Australian Settlement after federation and helped create a “working man’s paradise”; the mateship that enabled Australian soldiers to survive Japanese prison camps; the democratic temperament that saw Australia lead the world in delivering a universal franchise and electoral innovations like the secret ballot and compulsory voting. He writes, “Many of the values underpinning the Australian Legend — the fair go, egalitarianism, mateship, pragmatism, irreverence — haven’t lost their potency on our journey to the Golden Country.” The question is whether such things can be so easily disentangled. Can these values be recast, untainted by the fires in which they were forged?

The philosopher Charles W. Mills has called out his academic colleagues for teaching Immanuel Kant’s theories of inherent human dignity yet failing to mention that Kant was also one of the founding thinkers behind scientific racism. Kant formulated a hierarchy of race that had whites at the top, Africans and Native Americans at the bottom, and Asians somewhere in between. It is not sufficient, Mills argues, to sanitise Kant by bracketing out his embarrassing and inconvenient racism and sexism as if they were an aberration or somehow peripheral to Kant’s core thinking. Nor can we simply replace Kant’s Eurocentric definition of person with a more inclusive one. In his essay “Kant’s Untermenschen,” Mills argues that we must take on a much larger philosophical challenge:

Instead of pretending that Kant was arguing for equal respect to be extended to everybody, we should be asking how Kant’s theory needs to be rethought in the light not merely of his own racism but of a modern world with a normative architecture based on racist Kant-like principles. How is “respect” to be cashed out, for example, for a population that has historically been seen as less than persons?… How is cosmopolitanism to be realised on a globe shaped by hundreds of years of European expansionism?

I suspect that coming to terms with Australia’s history in order to chart our way to a golden future is an intellectual and moral task of similarly daunting proportions. •

The post White Australia’s hangover appeared first on Inside Story.

By video, prime minister Scott Morrison, champion of “quiet Australians,” invoked the “homes material, homes human and homes spiritual” of Robert Menzies’s forgotten people broadcast to remind attendees that “housing is much more than a roof over your head.” Also by video, housing minister and assistant treasurer Michael Sukkar declared that the government’s priority is to “reduce pressure on affordability” and pointed to the first home loan deposit scheme and other Coalition campaign promises. In person, assistant housing minister Luke Howarth, whose responsibilities include community housing and homelessness, stressed that the government is aware of the shortage of social and affordable housing and “wants to get some wins in this space.”

All three ministers lauded the policy-oriented research of the conference organiser, the Australian Housing and Urban Research Institute, and praised the practical efforts of the housing and homelessness workers who attend each year in large numbers. None of them offered any new initiatives.

Like climate change, housing is in the political too-hard basket, acknowledged as a pressing national problem but tackled in a piecemeal and ad hoc manner. There’s no mystery about why: a comprehensive response would cost a lot of money and upset core constituencies.

Perhaps this is what induced Luke Howarth’s clumsy attempt to put “a positive spin” on homelessness recently. Only a “very, very small percentage of the population” is affected, he told Radio National Breakfast, and “parts of homelessness” have actually “reduced.”

Technically, he’s right. The number of people counted as homeless in the 2016 census represented 0.5 per cent of the population — a small, though not negligible, minority. And while homelessness was higher than in the previous census, the number of rough sleepers had fallen. It was other forms of homelessness, especially severe overcrowding, that got worse. Indigenous homelessness was also down, though the rate among Aboriginal and Torres Strait Islander people remains ten times higher than for non-Indigenous Australians.

On Radio National, Mr Howarth also rejected the idea that Australia has a housing crisis. At first glance the latest Australian Bureau of Statistics data on housing occupancy and costs seems to support that view too. Home ownership might have declined slightly, but two-thirds of Australians still own their own homes. On average, keeping a roof over your head is no bigger burden on your household budget —around 13–14 per cent of gross income — than it was a decade ago. Rising house prices may have forced buyers to take out larger mortgages, but falling interest rates have brought down the cost of servicing loans.

So we might be tempted to ask, along with the assistant minister: Crisis? What crisis? But it’s more appropriate to ask: Crisis? Whose crisis?

Housing costs for those on the lowest incomes — the bottom fifth of households — have risen dramatically from 22 per cent to 29 per cent of gross income. Tenants in the private rental market haven’t benefited from falling interest rates, and rents have risen faster than incomes — especially with wages and government payments stagnating over the past decade.

Housing costs as a proportion of household income, 1994–95 to 2017–18

Source: ABS 41300, Table 1, Housing Occupancy and Costs, Australia, 2017–18

The result is high levels of rental stress, now affecting 57 per cent of low-income households in the private market. This means that about 600,000 households with an “equivalised disposable income” below $775 per week hand over at least 30 per cent of that income to their landlord (and often much more than that). At the conference, Wendy Hayhurst from the Community Housing Industry Association described homelessness as “the tip of a rental stress iceberg,” and the group experiencing the most rapid increase in homelessness is older women, often as a result of the compounding effects of poverty and relationship breakdown (frequently caused by domestic abuse).

If people are spending a large proportion of their income on rent, that’s money they aren’t spending on goods and services in other parts of the economy. (Most landlords don’t spend their rent income either, but use it to pay down mortgages.) Renting in the private market on a low income not only shrinks the budget for other essentials like heating and healthy food, but means that the housing itself is insecure and unhealthy too.

The conference heard that the Warm Up New Zealand Program, which improves insulation in rental properties, has a benefit–cost ratio of four to one. It has been shown to significantly reduce hospital admissions, with the greatest benefits going to the poorest tenants, and to elderly people and children. Even though Luke Howarth said he was keen to hear positive ideas from the conference, the legacy of Australia’s “pink batts” controversy is likely to prevent governments from replicating such a commonsense program here.

Against the vociferous objections of landlords, New Zealand is also enforcing minimum standards in private rentals to ensure that housing is “warm, dry, safe and stable.” As Patrick Veyret from the Australian consumer organisation Choice told the conference, tenants here have more recourse against a mouldy loaf of bread than they do against a mouldy rental property.

The problem for low-income earners is compounded by the fact that they are competing for tenancies with a growing number of higher-earning people who are staying in the private rental market because they can’t scramble into home ownership. This is the phenomenon that lies behind terms like “generation rent,” the cohort of Australians seemingly locked permanently out of home ownership. But viewing the problem solely through a generational lens is misleading: as the Grattan Institute noted in its recent Generation Gap report, home ownership is “dropping fastest for the young and the poor.”

The flipside of generation rent is generation landlord. Australian Tax Office statistics show that the number of individuals reporting an interest in a rental property has been rising rapidly, with the fastest growth among people with an interest in multiple rental properties. The number of investors declaring an interest in three or more properties has grown 40 per cent in a decade. Government ministers are fond of pointing out that 70 per cent of investors own just one property. This is true, but from the tenants’ perspective, they are just as likely to be renting from a landlord who owns two or more properties as from “mum and dad” investors.

People who already have property are able to acquire more as they borrow against existing assets. The rich are getting richer, and my calculations from the latest ABS data show that housing plays a big role. In 2003–04, the mean value of the property owned by the wealthiest fifth of Australian households was worth 1.3 times as much as the mean value of the property owned by all other households combined. By 2017–18 that multiple had blown out to 1.6 times.

Average property wealth, 2003–04 to 2017–18: the rich versus the rest

Sources: ABS 6554.0 Household Wealth and Wealth Distribution, Australia, 2003–04, Table 6. ABS 6523.0 Household Income and Wealth Australia 2017–18 Table 7.2. Note: Property assets minus property liabilities.

While home ownership is falling relatively slowly, the share of Australians who own their homes outright is falling much faster. On current trends, the number of Australians who own outright will soon be overtaken by the number who rent in the private market.

Shifts in housing tenure, 1994–95 to 2017–18

Source: ABS 41300, Table 1, Housing Occupancy and Costs, Australia, 2017–18

As new AHURI research shows, this has profound implications for future welfare spending. First, homeowners entering retirement (or prematurely forced out of the workforce) may be tempted to use their super to pay off their mortgages and then qualify for the age pension. Second, there will be more low-wage earners leaving the workforce without owning a home at all. As renters in the private market, they will become eligible for both the pension and Commonwealth rent assistance. According to the AHURI, the combination of ageing and declining home ownership will be a “seismic shock,” bringing a 60 per cent increase in the number of seniors eligible for rent assistance by 2031.

The budget cost of rent assistance has already jumped from $2.8 billion to $4.6 billion since 2008. Interestingly, a senior Canberra official at the conference couldn’t answer a question about future projections for spending on Commonwealth rent assistance, but we can expect it to keep going up.

Changes in demography and housing tenure are not the only factors. Another driver is the transfer of public housing stock from state-owned authorities to not-for-profit community housing associations. Ten years ago, Australia’s housing ministers agreed that community housing should make up 35 per cent of all social housing. With little money available for new housing, this target could only be met by moving thousands of dwellings into community hands. In the process, thousands of tenants became eligible for rent assistance for the first time. (Tenants in state-run housing don’t qualify, but tenants in community housing do.)

The continuing transfer of social housing stock from state to community hands seemed to be taken as a given by most conference delegates, including housing officials from all jurisdictions. But there are mixed motives behind these transfers. One aim is to boost the community housing associations’ asset base so that they can leverage more funds. Another aim reflects the view that community housing providers are more efficient and innovative than public authorities and cater better to tenants’ needs and interests. It’s certainly true that surveys consistently report higher levels of tenant satisfaction in the community sector.

Equally, though, the transition to community management shifts costs and liabilities off the states’ balance sheets. One community association in regional New South Wales has seen its housing portfolio grow 170 per cent in twelve months as a result of stock transfers, but most of the dwellings it has acquired are already forty years old. As buildings age, maintenance costs increase. Old public housing stock may have been designed to house families, which means it won’t be appropriate for the six in ten social housing tenants who live alone. Or it may not be accessible for the one in three tenant households that include someone with a disability. Where the funds to refurbish or replace these houses will come from is far from clear.

The solution to this problem is supposed to be the National Housing Finance and Investment Corporation, a relatively new means of channelling investment into community housing. An initiative of Scott Morrison when he was treasurer, the NHFIC was variously described at the conference as “a game changer” and “the one bright spark” in housing policy in recent years, though even its biggest enthusiasts stressed it is only one part of the housing jigsaw.

In his address, Luke Howarth spruiked NHFIC’s debut $315 million bond issue, which was four times oversubscribed. So far, though, apart from one construction loan to build ninety-three new affordable dwellings in Sydney, NHFIC’s main role has been to enable community housing providers to refinance their existing debts at lower rates.

For two of Australia’s larger housing providers, one in Victoria and another in New South Wales, refinancing using the NHFIC bond has freed up about $1 million a year for new spending. Another talks of saving $6 million over ten years. These are welcome amounts, but just a small fraction of overall need.

Social housing is in long-term decline, falling from about 6 per cent of all households to about 4 per cent over the past twenty years. Housing finance expert Judy Yates calculates that if we want to restore the share of social housing to the level of 1996, then we need to build 16,500 new dwellings every year for the next twenty years. To meet the total projected shortfall of more than 700,000 dwellings, the City Futures Research Centre at the University of New South Wales estimates that we need to build 36,000 units annually. By way of comparison, about 3000 units of social housing were built last year.

The last major injection of funds — Kevin Rudd’s 2009 stimulus package in response to the global financial crisis — built about 19,000 homes. His National Rental Affordability Scheme resulted in 38,000 new dwellings over ten years, but this was mostly “affordable” rather than “social” housing. (Under charity rules and NHFIC’s guidelines, affordable housing must be offered at a 20 per cent discount on market rates, which can still be very expensive in major cities or tourist towns. Tenants in social housing, on the other hand, pay a fixed 25 per cent of their income in rent, regardless of location.)

These are early days, but NHFIC will only increase the stock of community housing by about 560 dwellings in its first twelve months. If it is going to enable the scale of building Australia needs, then it needs to unlock vastly larger amounts of funding. A secure return above 4 per cent could attract billions of dollars from Australian superannuation schemes and overseas pension funds seeking safe, long-term investments. But community housing associations can’t generate adequate returns by housing people on the lowest incomes. As Bill Randolph from the City Futures Research Centre put it, “there is always a gap” between the cost of building and maintaining social housing, and the rent that the lowest-income tenants can afford to pay. Modelling by Randolph and his colleagues shows that the average gap is about $12,000 a year, even with discounted finance via NHFIC and the added income flowing to community housing tenants from Commonwealth rent assistance. The gap will be larger in city centres, where land is expensive, or in remote Aboriginal communities, where building costs are particularly high.

There are many ways to bridge this gap. The cheapest option would be for government to fund more social housing with up-front capital investment, but this is not politically palatable. Governments — state, federal and local — could also provide vacant or underutilised land for community housing on a long-term peppercorn lease. Or Australia could adopt a version of the tax credit scheme used to encourage investment in affordable housing in the United States.

Another option discussed at the conference was Jacqui Lambie’s proposal that the federal government waive state and territory housing debts so that money can be spent on new dwellings instead of repayments to Canberra. But evidence from South Australia suggests caution here. That state managed to get the Commonwealth to wipe hundreds of millions of dollars off its debt in 2013, when Labor’s Mark Butler was federal housing minister. But an SA official told the conference that increased social housing investment didn’t follow. Instead, the savings were banked by the state treasury and spending on social housing actually fell.

Regardless of how the funding gap is bridged, any government subsidy needs to be stable, predictable and bipartisan so that it can survive a change of government. One-off programs with limited time horizons won’t be sufficient. “How have other countries unlocked affordable housing supply?” asked Carrie Hamilton from the Housing Action Network. “In every single case it has been credible permanent programs of national government subsidy.”

To fulfil election promises, NHFIC is getting an extra $25 million to administer the government’s first home loan deposit scheme and to take on a new research role. The scheme will enable purchasers with a 5 per cent deposit to get into the market without paying mortgage insurance, and the government hopes it will assist 10,000 first homebuyers each year. The research will focus on housing demand, supply and affordability with the explicit aim of ensuring that “owning your own home stays within the reach of most Australians.” Expanding the supply of affordable rental housing for those on the lowest incomes is not a priority. As Ken Marchingo, CEO of the Victorian community housing provider Haven Home Safe commented, “What we get is $25 million worth of research when what we need is $25 billion worth of new housing.”

Given its Darwin location, the conference had a strong focus on Indigenous housing. Under a ten-year agreement and a fifty–fifty funding split with the federal government, the Northern Territory is investing $1.1 billion in remote Aboriginal housing, with the aim of reducing the chronic overcrowding that contributes to easily preventable illnesses. The program has a big emphasis on training and employing local workers and encouraging the development of Aboriginal enterprises.

It’s a promising initiative, but hard-won. Jamie Chalker, the Territory public servant overseeing the program, ended the conference with an impassioned plea to delegates to tell the truth about what they had learned in Darwin: that the Territory has twelve times the rate of homelessness and twenty-two times the rate of overcrowding of the rest of Australia, and that it is a world leader in rheumatic heart disease. Given there have been six reviews of remote Aboriginal housing, he left his audience in no doubt that a Commonwealth contribution of $550 million over ten years is woefully inadequate.

Still, the Territory has done better than other jurisdictions since the expiry of a ten-year national remote-housing partnership in June 2018. Western Australia has managed to negotiate a one-off payment of $121 million from Canberra, South Australia has secured $37.5 million over five years, and there is still no deal in place in Queensland. Overall, says Labor senator Malarndirri McCarthy, remote Aboriginal housing remains a “wicked mess.”

The same term could be applied to social housing in general. There is a glaring need for public investment of at least $5 billion a year to meet the urgent housing needs of people on the lowest incomes. If Labor had won the federal election, its reforms to negative gearing and the capital gains tax discount could have raised revenue on this scale. But it lost, and tax reform is off the agenda.

Significantly, not a single presentation at the conference discussed tax settings. The Coalition says it is open to new ideas but only appears to be interested in initiatives that don’t cost much. The refusal to raise the level of Newstart payments shows that the government has no inclination whatsoever to increase social spending. Neither the Commonwealth nor most of the states and territories have clearly articulated targets for increasing the share of social housing or even for preventing it from declining further.

Even if we don’t invest in social housing, though, we are going to spend a lot more public money on housing anyway. We’re just going to spend it in different, less effective ways: on more rent assistance, more welfare payments, more homelessness services, more visits to emergency departments, more Medicare claims, more police and ambulance call-outs, and more people going through the courts and being put in jail. And tax revenue will be lost as a result of lower employment and declining productivity.

As Scott Morrison said, “housing is much more than a roof over your head.” It is also essential economic infrastructure, the foundation of good health, a building block for educational success, and the cornerstone of flourishing communities and flourishing lives. •

The post Plenty of ideas, not much money appeared first on Inside Story.

Malcolm Turnbull labelled Labor’s proposals “reckless,” and accused the opposition of putting “the value of every Australian home at risk.” Scott Morrison claimed its policies would “erode the value of Australians’ homes and push up people’s rents.” Yet Treasury, the Reserve Bank and think tanks like the Grattan Institute argue the effect on house prices and rents would be modest. And we now know that Mr Morrison himself acknowledged negative gearing “excesses” when he became treasurer, and was open to reforming it.

One significant difference between the two election campaigns was the backdrop. In 2016 house prices in most capital cities were rising fast; in 2019 they were going in the opposite direction. The Coalition’s campaign against Labor’s plan was also helped along by a better-organised real estate lobby, with agents around the country warning tenants that their rents would rise while simultaneously telling property holders that the value of their houses would fall.

Still, even if Labor’s negative gearing policies were sensible — and potentially more saleable if house prices start booming again — they may be too severely tarnished for another outing.

But Labor’s housing policy had a second, less-discussed element: it wanted to scale back the capital gains tax discount on rental housing. The Grattan Institute has recommended the same policy and, again, it didn’t ring alarm bells at Treasury or the Reserve Bank. In an era of low interest rates and low inflation, the discount probably has a far more significant influence on the housing market than negative gearing, and reforming it could have a more transformative effect, especially for renters.

Negative gearing allows landlords to deduct interest payments not just from their property earnings but also from any other income. When interest rates are going down, the interest paid on the investment — and hence the deduction — will fall, especially if rents are rising at the same time. The latest Tax Office data bear this out: deductions for interest payments were lower in 2016–17 than in 2012–13, while gross rental income was substantially higher.

Over the same period, the proportion of landlords claiming a tax loss on their property investments dropped from 64 per cent to 60 per cent. With interest rates expected to fall even further and stay near rock bottom, negative gearing is much less of a reason to invest in property than it was in the past.

The opposite is true of the capital gains tax discount, which halves the rate at which investors are taxed when they sell a property, as long as they have held it for at least a year. Peter Costello introduced the discount as treasurer in 1999, ostensibly to make tax law simpler and encourage saving and investment. Capital gains tax calculations had previously taken account of inflation and then used complex averaging provisions to work out what tax rate to apply. Costello’s reforms did away with all that, compensating investors for the eroding effect of inflation by offering a flat 50 per cent capital gains tax discount.

As a result, capital gains from passive investments like rental properties are taxed much more lightly than earnings from wages. And when inflation is low, investors are overcompensated, especially if they only own the asset for a relatively short time. As the Grattan Institute argues, the tax discount “distorts investment decisions” by encouraging investors to focus on “capital growth rather than annual income.”

The Australian Council of Social Service warned in 1999 that Costello’s decision, in combination with negative gearing, was likely to lead to an escalation in house prices. By 2004, economics commentator Ross Gittins was agreeing that ACOSS was on the money. “First,” he wrote, “it’s clearer today than it was five years ago that the return to low inflation is a lasting thing. In a world of low inflation (in the prices of goods and services, of course, not asset prices), people making capital gains are much better off under the Costello regime.”

For Gittins, the “privileged minority making capital gains” (himself among them, as he acknowledged) “had the best of all worlds. When inflation was high, they had indexation; when inflation reverted to low, thus minimising the benefit from indexation, the regime was switched to half rates.”

At both the 2016 and 2019 elections, Labor promised to cut the capital gains tax discount to 25 per cent. If it had won and implemented the policy, investors would have paid tax on three-quarters of their capital gain rather than only half of it — undoubtedly a fairer approach, and also a boost for government revenue.

But have two election losses made any change to housing taxation too hot for Labor to handle? Would the Coalition contemplate changing course given the extent of the problem?

There is a way forward, but it involves creative thinking and a measure of political sophistication. It would work like this: rather than simply halving the capital gains tax discount, as Labor proposed, the government would phase in reductions according to how long a landlord has hung on to a property. A discount of, say, 20 per cent on the capital gain might apply after one year, a discount of 40 per cent after five years, and a discount of 60 per cent after ten.

This could boost government revenue but still compensate investors for inflation in a relatively simple way. More importantly, it would induce investors to see residential property as a long-term asset rather than a short-term punt. Landlords would have an interest in seeking out reliable tenants and offering them secure, long-term leases.

At the moment, Australia’s generous tax treatment of capital gains combines with its negative gearing rules to feed a speculative spiral that pushes up property prices while — seemingly paradoxically — reducing rental returns per dollar of investment. As a result, Australian landlords generally want maximum flexibility, including the right to terminate a lease with short notice so they can sell the property at any time to realise a profit.

I recently heard an executive from one of the Big Four banks explain that when her staff assess house values, they lower the value if there is a sitting tenant, whereas when banks assess commercial properties tenants would generally be seen as a positive. Her observation highlights the fact that investors in residential property prioritise capital gains over stable long-term income.

It doesn’t have to be this way. Germany, for example, offers residential property investors a capital gains tax discount, but only after they have owned a property for ten years. Landlords have an incentive to offer secure, long-term tenancies rather than stringing renters out month to month.

With around 60 per cent of Germans renting, the interests of landlord and tenant are better aligned: the tenant wants secure accommodation and the landlord wants a consistent long-term return. The average tenancy in Germany is eleven years, so renters are generally able to feel secure in their homes.

Here, by contrast, rental bond data suggests that the average tenancy varies from less than one year in Queensland to a little more than two years in Victoria. Renting is often regarded as a temporary phenomenon — something you do for a few years before buying your own place. But this was never true for everyone, and today the private rental sector is the fastest-growing segment of Australian housing. More people are renting in middle age, more renters have young families and more households are lifelong renters. More than half of all renters over thirty-five have been renting for at least a decade.

So it makes sense to adjust capital gains tax settings to encourage longer, more stable tenancies. And Scott Morrison set a modest precedent when he was treasurer. Since the start of last year, as a result of measures included in the 2017 budget, residential property investors “receive an additional capital gains tax discount of up to ten percentage points” if they provide affordable rental housing for at least three years. This means that they only pay tax on 40 per cent of their capital gain, instead of 50 per cent.

Having recognised that the capital gains tax discount can be modified to encourage investment in affordable housing, it would be no great stretch to make a more substantial change that could have a positive effect on Australia’s private rental market overall. Scott Morrison knows a bit about property. After all, he spent six years managing policy and research for the Property Council of Australia. With his political stocks high, he should act in the interests of housing fairness. •

The post If we won’t fix negative gearing, then what? appeared first on Inside Story.

The burst of interest is revealing. It highlights the growing electoral influence of migrant voters but also shows how issues that greatly concern them can often go largely unnoticed in the mainstream media (with SBS Radio a notable exception). It also highlights the complexities and inconsistencies of Australian migration policy. The government is creating a new visa that will enable tens of thousands more migrants to come to Australia for stays of up to ten years at the same time as it is cutting permanent migration to appease voter concern about urban congestion. Perhaps most importantly, the debate over parent visas highlights the perils of policy on the run.

The promise of a new visa emerged from the 2016 election campaign, following a very effective campaign by frustrated migrant communities. The source of their frustration was the difficulty migrant families experienced in trying to bring parents to join them in Australia. The permanent visa categories for parent migration were either prohibitively expensive or involved a decades-long wait. The only alternative was to bring parents out on a twelve-month visitor visa, after which they would have to leave again for at least six months before applying to make a return visit.

Exasperated Adelaide resident Arvind Duggal launched an online petition to home affairs minister Peter Dutton that quickly attracted almost 30,000 signatures, and migrant voters lobbied Labor and the Coalition, including in marginal electorates. Partway through the 2016 campaign Labor promised to create a new visa that would allow parents to remain in Australia for three years; a few days later the Coalition gazumped it with a plan for a five-year parent visa.

That five-year visa is now a reality, and the first applications can be lodged on 1 July. But the slow transition from an open and apparently generous campaign promise to concrete bureaucratic arrangements has left the new visa hedged about with conditions and fees. To qualify as a sponsor, a migrant family’s annual taxable income must exceed $83,000. A family can only sponsor one set of parents. A visit of up to three years will cost a pricey $5000, and a five-year stay will set the sponsors back $10,000. The visa can be renewed once for another stay of up to five years, but the parents need to leave Australia before applying. And visa places are capped at 15,000 per year.

Arvind Duggal, the original petition organiser, told SBS that the arrangements are unfair. He pointed out that the fee for parents coming on a year-long visitor visa is just $140, yet the annual cost of the new visa will be more than ten times that amount. “They are trying to make money from the grandparents visiting their kids, which is un-Australian and unethical,” he said.

Anecdotal evidence suggests that the costs and conditions attached to the new visa may have rendered the annual cap on numbers unnecessary. Many migrant families would not meet the income threshold for sponsorship or be able to afford the fees. Sponsoring families will also have to stump up the cost of private health insurance and out-of-pocket expenses for their parents, and act as guarantors for any debt to taxpayers that might arise from a medical emergency.

Recognising an electoral opportunity in the dissatisfaction with the new visa, Labor has used the current campaign to promise major changes if it wins office. Not surprisingly, it made the announcement in the marginal Sydney seat of Reid, held by retiring Turnbull loyalist Craig Laundy, where about 76 per cent of residents have at least one overseas-born parent.

Labor pledged to scrap the limit of one set of parents, a restriction it labelled “heartless, callous and cruel” for forcing families to choose between sets of parents. It would also slash the cost of a three-year visa from $5000 to $1250 and the cost of a five-year visa from $10,000 to $2500. The visa would be renewable in Australia, meaning that parents would be able to stay for a total of ten years without leaving the country. Importantly, Labor also promised to abolish the annual cap on numbers.

The Coalition and its boosters in the media have responding by charging that Labor is opening the floodgates to an unsustainable wave of grey migrants. Immigration minister David Coleman said Labor’s policy “showed a complete lack of regard for sensible immigration and population planning.” On Sky News, Tony Abbott’s former chief of staff Peta Credlin described it as “a shameless bid for votes” and an attempt to “mop up” the damage done to Labor’s reputation among migrants when remarks by NSW opposition leader Michael Daley were released during the NSW state election.

Labor can claim it is simply sticking to its guns — it criticised some of the visa’s conditions when the legislation came before parliament, and the bill eventually passed late last year without its support — but its policy does appear hasty and ill-considered. When asked how many applications might be expected, shadow finance minister Shayne Neumann’s response was decidedly imprecise: “We think it will be very popular.”

While it’s hard to predict exactly how popular, the most recent Migration Program Report gives a clue. Close to 100,000 applications for permanent parent visa were on hand on 30 June last year, divided roughly equally between the “contributory” and “non-contributory” categories.

A contributory visa costs $47,455, an amount meant to offset some of the costs these migrants might impose on the community as they age. In 2017–18, 6015 contributory places were on offer; while Home Affairs no longer publishes processing times on its website, SBS reports that the average wait is almost four years.

At $6100, a non-contributory visa is comparatively cheap. Last year, though, there were only 1356 places in the program; with waiting times stretching out more than thirty years, few migrants’ parents are likely to live long enough to make it to the front of the queue.

In other words, the pent-up demand for parent migration is huge, and the costs and caps of the permanent parent visa categories are what make the option of a ten-year stay on a temporary sponsored visa so attractive to migrant families. So it seems safe to assume that Labor’s much cheaper, uncapped proposal would see almost all of this backlog shift to the new temporary category.

What’s more, as this chart shows, the backlog for permanent parent visas has been growing by about 6000 applications per year over the past four years, with all the growth in the contributory visa category. Since there will be many migrant families for whom the contributory fee of almost $50,000 is unaffordable, it is again fair to assume that this represents only a portion of the potential annual increase in demand.

Permanent parent visa applications on hand at 30 June 2018

Source: Home Affairs annual reports on the migration program

Another factor will also make the temporary parent visa an attractive option for migrant families. Applicants for the two permanent parent visas must satisfy the balance-of-family test: that is, at least half the parents’ children must be settled in Australia, or they must have more children living here than in any other country. Since the balance-of-family test does not apply to the new temporary visa, parental migration will become a viable option for thousands of migrant families who would otherwise never have been eligible to act as sponsors.

When I wrote about the 2016 election promises on parent visas for Inside Story two and a half years ago, the immigration department was unable to provide basic information that might have helped judge the potential demand for a temporary visa. When I asked, for example, how many people currently use workarounds like the twelve-month subclass 600 visitor visa, I was told that the information was not “readily available.”

In theory, high demand won’t be a problem, because parents on temporary visas will have to be entirely self-financing. They will have no right to any kind of pension, welfare or government-funded aged care, and they will have to pay all their own medical expenses. They will not be allowed to work.

But attempts to draw neat lines between the categories of “temporary” and “permanent” migrants are fraught with problems, especially when those “temporary” migrants have a right to reside in Australia for up to a decade. It’s not hard to foresee difficult scenarios, like these two, developing down the track:

• A son-in-law sponsors his wife’s widowed mother to Australia, but a few years later the marriage ends. The estranged husband withdraws his sponsorship, but the wife can’t step in as a sponsor because she doesn’t meet the income threshold. The mother’s visa will be withdrawn at exactly the point when the distressed wife is in a vulnerable psychological condition, possibly even suicidal, and she and her children need the support of her mother more than ever.

• After living in Australia for more than ten years on a temporary visa, an elderly parent develops Alzheimer’s. He claims he is being subject to elder abuse by his sponsor child. The relationship deteriorates to the point where the child withdraws sponsorship so the parent must leave Australia. But there is no one in the homeland to care for him. Does the father get sent back anyway? If not, who intervenes and who pays for the parent’s high-needs care?

These are not far-fetched possibilities. Human lives are messy and complicated and tend to explode administrative systems and rules, no matter how detailed and thoughtful the design. Cases like these will end up in the media and lead to lengthy, resource-intensive and tortuous appeals to immigration ministers to use their discretionary powers. The more people who use the visa category, the more unforeseen circumstances and unintended consequences are likely to emerge. Such problems may be many years away, and will land in the laps of future governments, but that’s no reason not to take them seriously today.

Parent migration is undoubtedly a difficult issue. All of us can understand a strong desire to keep fathers and mothers close by as they age, to have grandparents pass on cultural and familial knowledge to Australian-born kids, and to express our love for our parents in tangible, practical, intimate ways. There are also much more pragmatic considerations: grandparents can provide unpaid, in-home childcare and other types of household support.

Despite the strong political demand from migrant voters, though, there is no public policy appetite for expanding the number of permanent parent visas. The government has already cut Australia’s migration program by 30,000 places from its peak of 190,000 a few years ago. What is more, both Coalition and Labor governments have for decades skewed the migration program heavily towards young, skilful, healthy applicants with English-language proficiency, on the basis that they are the new arrivals most likely to be economically productive and pay lots of income tax while placing limited demands on the healthcare system and welfare services.

Ageing parents have none of these desirable characteristics. Indeed, in a landmark report on Australia’s migrant intake, the Productivity Commission estimated the “cumulative lifetime fiscal costs” of a migrant parent on a permanent visa in 2015 to be “between around $335,000 and $410,000 per person.”

The temporary parent visa might seem to offer a way out of this dilemma. Migrant families can have their parents join them in Australia at no cost to the public purse and without needing paid work. But it risks creating a new cohort of people who are not quite Australian — who live here for an extended period but have restricted rights, no say in political decision-making, no political representation and no access to public support in times of crisis. •

The post How migrants’ parents became an election issue appeared first on Inside Story.

Official statistics show that unlawful movement across the southern US border is at a twenty-year low, and that most undocumented migrants don’t sneak in overland but arrive through normal channels and then overstay their visas. Experts point out that illicit drugs, too, are generally smuggled through official points of entry (or perhaps tunnels) rather than across the unfenced frontier. Investing US$20 billion or more in extra walls won’t solve the problem Trump claims he is trying to fix.

But it’s far too easy for us to smugly criticise Trump’s plan. Australia already has its own equivalent of his pointless wall — the continued offshore processing regime in Manus and Nauru. What is worse, it is a folly that enjoys bipartisan support and also costs an enormous amount. Federal budget papers show that offshore processing cost $1 billion or more in every year from 2013–14 to 2017–18.

Defenders of the policy claim that this extravagant use of public money has achieved the twin policy goals of maintaining the integrity of Australia’s borders and saving lives at sea. John Menadue, a former secretary of the prime minister’s department, dismisses such arguments as propaganda. Even if the position is argued sincerely, it is hard to sustain, since offshore processing has been far from crucial in preventing asylum seekers from reaching Australian territory by sea.

As another former senior public servant, Paddy Gourley, wrote recently in Inside Story, boat numbers had already slowed after the Rudd government accelerated the assessment of Sri Lankan asylum seekers and quickly returned those who weren’t found to be refugees. Tighter visa controls in neighbouring countries, no doubt encouraged by Australian diplomacy and technical assistance, also reduced the numbers boarding boats to Australia.

But the most powerful measure was the interception and turnback of boats by the navy and the Australian Border Force. This was true in the Howard era, and it has been just as true under the prime ministerships of Abbott, Turnbull and Morrison. According to the Parliamentary Library, since late 2013 at least 810 people on board thirty-three boats have been turned, taken or assisted back to their point of origin. No vessels have managed to reach Australian territory via established smuggling routes from Indonesia or Sri Lanka in that time. The only boat to get here — a fishing trawler carrying seventeen people from Vietnam in August 2018 — came a different way and landed in far north Queensland.

It is disingenuous to assert, as Scott Morrison has, that resettling refugees from Manus and Nauru in New Zealand amounts to “putting a bit of Kiwi sugar on the table for people smugglers.” Even less persuasive is Peter Dutton’s claim that the medivac bill to allow sick refugees to be treated in Australia would be read as a “green light” to the maritime smuggling trade. If anything was going to help smugglers market their services, it would have been the prospect of eventually reaching the United States via Nauru or Manus; yet the boats didn’t return when Malcolm Turnbull struck a resettlement deal with Barack Obama in 2016. Nor did they return between 2002 and 2006, when the Howard government quietly resettled a significant number of people from Manus and Nauru in Australia.

The only conceivably plausible counterargument — put to me privately by senior officials involved in Operation Sovereign Borders — is that the smugglers could overwhelm Australia’s border defences by launching a coordinated action, sending so many vessels simultaneously that it would be impossible for the navy to intercept them all. According to this argument, continued offshore detention remains a necessary deterrence. But this outlandish scenario would require an unlikely degree of coordination between rival smuggling outfits willing to take a massive financial gamble.

To understand why, it is important to remember that passengers generally don’t pay the smuggler in full for the passage to Australia; instead, they deposit funds with a trusted third party. Researcher Khalid Koser has followed the money trail of the smuggling networks and found that the cost of passage is usually paid to a hawala, or money changer, and held in trust. “The money is only released by that third party to the smuggler once the migrant has arrived safely in his or her destination,” he says. Koser calls this a money-back guarantee on smuggling: “If you don’t make it to your destination safely, I as a smuggler get nothing at all — nothing.”

Research cited in a parliamentary library report also found that smugglers used payment systems “designed to minimise the risk to clients,” including “using intermediaries who passed on parts of the fee only as stages of the journey are completed [and] offered guaranteed services, whereby further smuggling attempts are free of charge if the first is unsuccessful.” It would be a reckless business operator who chanced their arm at beating Australia’s naval defences under these operating conditions.

That’s not to say that Australia’s turnback policy is impregnable. It remains dependent on maintaining good diplomatic relations with neighbouring countries, for example. If relations with Indonesia were to falter, as they have in the past over East Timor — and might in future if, say, Australia pursues a decidedly pro-Israel foreign policy — then sections of that country’s security forces may see assisting smugglers (or engaging in smuggling themselves) as a way to hit back at Australia. If political oppression or ethnic violence were to generate a significant outflow of refugees from Indonesia itself — a remote but not unthinkable scenario given the nation’s history — then Australia’s turnback policy would immediately become unsustainable.

Boats could also start arriving from other countries. Malaysia hosts an estimated 40,000 Rohingya displaced from Myanmar, for example, and it’s conceivable that some of them might try to make their way to Australia by sea. In such an eventuality, the Malaysian government is unlikely to accept turnbacks, and Australia would surely not send the stateless Rohingya back to Myanmar like it has sent “failed” asylum seekers back to Sri Lanka.

The security-minded might see such possibilities as a reason to maintain an offshore processing capacity, but they certainly don’t justify the continued refusal to resettle the people left on Manus and Nauru. Boat turnbacks make this both unnecessary and cruel. As Robert Manne wrote recently in the Saturday Paper, leaving the remaining 1000 or so adults on Manus and Nauru is much worse than a breach of the ethical position that human beings must never be used as a means to an end: “The lives of the 1000 are being destroyed not as a means to an end but for no reason.” As a philosopher friend put it to me, the means has now become the end; we maintain offshore processing in order to maintain offshore processing. It achieves no practical purpose, only the symbolic job of signalling to the Australian electorate that both major parties are “tough on borders.”

To draw on the thinking of early twentieth-century German jurist Carl Schmitt via the contemporary philosopher Giorgio Agamben, what began as an emergency measure — a circuit-breaker to stop a surge in boat arrivals — has become standard operating procedure. Introduced in response to extraordinary circumstances, this “state of exception” has been rendered routine, reinforcing and exaggerating the security mindset that accompanied its inception. Once certain thresholds of policy and action were crossed, they became unexceptional, and the administration of Australia’s immigration program and border controls has changed across the board as a result.

It is this “state of exception” that enables normal government procedures to be set aside so that $423 million worth of contracts can be granted to a company with little track record in providing the relevant services — a company run by directors of questionable character and registered to a beach shack on Kangaroo Island. Official efforts to explain the Paladin affair since it was exposed by the Australian Financial Review have been far from convincing. The case is reminiscent of the cold war–era defence procurement scandals in the United States, another normalised “state of exception,” when the Pentagon discovered that it had been shelling out for “$7600 coffee pots and $400 hammers.” The Paladin affair is not a failure of procedure; it is an example of the kind of procedures that become normal under a “state of exception.”

This is not the first time procurement for offshore processing has been scrutinised and found wanting. In 2016 and 2017, the Australian National Audit Office published two reports criticising the Department of Immigration and Border Protection (as it was then) for its handling of contracts worth $3.386 billion for garrison support and welfare services on Nauru and Manus. Garrison support includes security, cleaning and catering services; welfare services include healthcare, recreation and education. The businesses involved were not pop-up companies like Paladin but established corporations including Broadspectrum (formerly Transfield Services), KPMG, Serco, G4S and, from the non-government sector, Save the Children and the Salvation Army.

The first audit report, which dealt with procurement, identified “serious and persistent deficiencies.” The audit concluded that the department “significantly increased the price of the services without government authority to do so,” not least by cancelling a planned tender and extending an existing contract with Transfield instead. The second report, on contract management, found that the department had “fallen well short” of effective practice. The audit could find “no documentation of the means by which the contract objectives would be achieved” and judged that contract variations totalling over $1 billion had been made without “a documented assessment of value for money.”

In a statement in response to the first audit, the department justified its record “in the context of the unique operational environment the department faced at the time”:

The department met the requirement of the government of the day in an environment that was high-tempo and complicated by logistics and procurement activities in foreign countries. Delegates were required to make decisions on complex matters within very short timeframes. It remains the department’s position that decisions taken in this period were reasonable under the circumstances. The environment remains extremely complex.

Having invoked a “state of exception,” the department then normalises it, by arguing that the average annual cost of operations had been “relatively stable,” ranging from $427,000 per person in 2012–13 to $464,000 per person in 2015–16. The fact that the government was shelling out well in excess of $1000 per person per day on offshore processing was less an exceptional circumstance than a mark of competent administration.

Since the Paladin affair broke, more stories of dubious contracts and poor management have emerged. The Guardian reported that the Australian government paid Pacific International Hospital $21.5 million over ten months to provide healthcare on Manus Island “without finalising a proper contract.” The Australian reported that PNG-based NKW Holdings Ltd received an $82 million contract to provide catering and site-management services on Manus without a competitive tender. The contract ended up costing “$1390 per resident per day,” said the paper, far more than rival companies charge for similar services on mine sites. Both firms had links to influential political figures in Papua New Guinea.

This helps explain why spending by the home affairs department on “illegal maritime arrival offshore management” last financial year was close to $1.5 billion, more than double the budgeted $714 million. Spending this financial year is anticipated to top $1.16 billion, again massively higher than the budgeted $760 million. This pattern of blowouts is well established.

Offshore detention spending blowouts 2015–16 to 2018–19

Source: Home Affairs Portfolio Budget Statements and Additional Estimates

Home affairs portfolio budget statements only include the day-to-day expense of running the offshore program. Although the costs of setting up offshore facilities aren’t transparently reported, we know from answers in Senate estimates hearings that capital expenditure totalled $816 million in the first three years of the policy. As UNICEF and Save the Children point out, the true costs of offshore processing are higher still, given the money Australia spends “to maintain, interrogate and defend the current approach,” including responding to legal challenges and inquiries by parliamentary committees and regulatory bodies. Resources have also been expended on extensive but largely failed diplomatic efforts to negotiate third-country resettlement deals.

Sticking to the numbers we can confirm, the cumulative cost of offshore detention in the six years since it was reintroduced by the Gillard government is at least $7.6 billion, as the chart below shows. It might be less than the US$20 billion Trump wants to waste on a border wall, but it is far more as a proportion of government revenue and national income. As Daniel Webb from the Human Rights Law Centre points out, Australia’s annual spend on offshore detention is “more than five times the UN refugee agency’s entire budget for all of Southeast Asia.”

What is at issue here is not just the neglect of due process, nor the waste of money that could have been spent more usefully, nor even the terrible human cost of lives damaged and destroyed, though we should never lose sight of that. This behaviour has wider implications and opportunity costs as well. By transforming immigration into a security issue, the government has generated avoidable problems and dropped the ball on other complex policy issues.

In separate articles, former senior immigration officials Abul Rizvi and Peter Hughes have recently slammed the government’s broader immigration record. Hughes says the Abbott, Turnbull and Morrison governments have “delivered an immigration shambles — a policy vacuum, a degraded administration and huge processing backlogs.” Rizvi says the “visa system, and by implication our borders, have never been so out of control.”

The evidence to support these assertions can be found in home affairs data. For example, between December 2013 and December 2018 the number of people in Australia on bridging visas more than doubled, from 93,000 to 189,000. Generally, people on bridging visas are waiting for the department to process their application for a substantive visa, or else have sought review of a decision and are waiting for the Administrative Appeals Tribunal or the minister to make a determination. The caseload of matters on hand in the AAT’s Migration and Refugee Division blew out from fewer than 17,000 on 30 June 2016 to more than 44,000 on 30 June 2018.

Meanwhile, the attorney-general stands accused of stacking the AAT with “scores of former conservative politicians, failed candidates, former staffers, party members, donors and other mates.” The AAT is receiving (and rejecting) growing numbers of appeals by asylum seekers from China and Malaysia. Given that nationals from these two countries are unlikely to be recognised as refugees, this suggests deliberate and possibly systematic abuse of the system, with people flying into Australia on visitor visas (or being brought in by labour contractors) and then lodging applications for protection as refugees. Since a claim takes years to wend its way through clogged bureaucratic and legal systems, the applicant can be confident of securing the right to live and work in Australia for quite some time, though probably in exploitative conditions for well below award wages. As Rizvi argues, immigration backlogs and processing delays are “a honeypot for the spivs; the carpetbaggers; the people smugglers.”

At a time when conflict, oppressive regimes, resource constraints and climate change are displacing ever-growing numbers of people around the world, Australia has spurned international efforts to manage migration more collaboratively through the Global Compact for Safe, Orderly and Regular Migration — despite the fact that Australian diplomats worked assiduously on its development with other participants in the Bali Process, which Australia co-chairs with Indonesia.

Returning asylum seekers to Indonesia and Sri Lanka may prevent boats arriving on Australia’s shores, at least for now, but it does nothing to address the bigger issue of forced migration. It is easy to be cynical about efforts to build a coherent humanitarian regional response to human displacement, and negotiations of this kind are by their nature tediously slow. Yet the significant, incremental advances made by the Centre for Policy Development’s Asia Dialogue on Forced Migration show not only that progress is possible but also that high-level support exists in neighbouring countries for a truly cooperative regional framework to manage displacement and counter human trafficking and smuggling in a humane and dignified way. It is impossible to know what progress we might see if Australia devoted more than $1 billion a year to developing such an approach with neighbouring countries, instead of spending it on warehousing vulnerable people in the Pacific.

Perhaps worst of all, the securitisation of immigration policy has severely damaged the vision of Australia as a diverse and inclusive nation in which migrants quickly become citizens with the same rights and responsibilities as the established population. This is not just the result of race-baiting comments by senior politicians about “African gangs,” or the pandering to claims that migrants are to blame for rising house prices, stagnant wages and urban congestion, or the repeated use of statistics that exaggerate the impact of migrants on population growth in Sydney and Melbourne, or even recent assertions that bringing a few hundred sick refugees here for treatment will force Australian citizens off hospital waiting lists or out of public housing. It is also the result of the push to make the pathways to permanent residency and citizenship harder and longer, through poor policies, misguided legislation, basic maladministration and neglect.

Alongside the backlogs in visa processing is a backlog in approving applications for citizenship. According to another Audit Office report, citizenship applications on hand blew out from around 23,000 in June 2014 to more than 244,000 in June 2018. The claim that delays are caused by additional security screening is unconvincing, since applicants for citizenship are, by definition, permanent residents who have undergone intense vetting to get a visa. But the normalised “state of exception” justifies and enables such groundless responses.

Citizenship applications lodged, decided and on hand per year

Source: Australian National Audit Office

The effects of the securitisation of immigration have also bled across from home affairs into other portfolios, most notably defence. The Sydney Morning Herald reports that the Australian Defence Force has had to cancel a range of international exercises and patrols because it is “picking up the slack” for the Australian Border Force. Leaked briefing notes reveal that the Border Force is unable to adequately staff and maintain its own fleet of vessels and aircraft.

Whether the Coalition or Labor wins the federal election, the incoming government will need to appoint a highly capable minister to renew immigration policy and rebuild administration. Energy, imagination and resolve will be needed to repair the damage inflicted on the ethos of citizenship-based multiculturalism that underpins an inclusive migrant society, and to grasp the opportunity to work closely with neighbouring countries to craft a coherent response to forced migration. Dealing with legitimate public concerns about the scale and nature of Australia’s temporary and permanent migration intakes while fending off hate speech and xenophobia will call for deft political skills. As both Paddy Gourley and Peter Hughes argue, an incoming minister may also have to unpick the failed experiment of the home affairs portfolio, which will require careful thought and patient negotiation.

Sadly, such a combination of qualities is not easily found in the parliament, and it’s hard to blame senior politicians for preferring a less challenging portfolio. For whoever ends up in the chair, however, the essential first step will be to end Australia’s “state of exception,” dismantle the expensive and punitive border wall represented by offshore processing, and help those remaining on Manus and Nauru to find a safe home and rebuild their lives. •

The post Australia’s own border wall appeared first on Inside Story.

May had been on her feet for an hour but still only part way through her speech because she kept allowing questions from the floor and taking the time to answer them. She maintained an even temper, persistent but polite. Her questioners, if not always exhibiting such a calm demeanour, were also courteous, thanking the honourable prime minister for “giving way” to their interventions. Despite the importance of the topic and the proximity in which members are packed together in the historic chamber, the proceedings were far less vituperative than an ordinary question time in Canberra.

Nevertheless, the fissures running through British politics were immediately apparent. Discontent with the shape of the looming Brexit, or criticism of specific aspects of May’s agreement with the European Union, were voiced from behind and beside her, as well as from the benches opposite. While she also received some friendly questions from loyal supporters, the process appeared random and unpredictable, at least to an observer unfamiliar with the personalities of British politics. Where was the party discipline? Why weren’t MPs staying on message? This was democracy at work and it was messy.

Visiting rarely seen relatives in the following days, I quickly discovered that the Brexit faultlines reach out from Westminster and into lounge rooms. One cousin was all for leaving. Born soon after the end of the war, she hankered for a rejuvenated Commonwealth; restoring trading links with Australia, New Zealand and countries in Africa could, she thought, provide an economic and political alternative to Europe. Her mother, my aunt, has a picture of the Queen on her lounge room wall. Visiting England for the first time in his life, my twenty-year-old son was nonplussed. He sees Australia deeply entwined with Asia, and the Commonwealth as both meaningless and irrelevant.

Another English cousin is a staunch Remainer. He was worried about the economic impact of leaving the EU and warned that a hard Brexit — that is, a break with Europe without the type of agreements brokered by May — would lead to catastrophe.

Interestingly, both cousins agreed that former prime minister David Cameron should never have held a plebiscite in the first place. They shared the view that politicians in a parliamentary democracy are elected to make decisions on behalf of the people and shouldn’t squib hard choices by shifting responsibility back to voters. And yet, as Theresa May struggles to forge a way forward on Brexit, putting the issue back to the people in the form a second referendum has emerged as one possible future scenario.

The vote on the government’s Brexit deal is scheduled for Tuesday London time and parliament looks certain to knock it back. Some advisers are encouraging Theresa May to delay the vote to give the whips more time to secure support. But with more than a hundred members of her own side of politics thought to oppose the bill, that looks like a case of postponing the inevitable.

Writing in the Observer on Sunday, journalist Andrew Rawnsley compared May’s rush to a vote to the suicidal Charge of the Light Brigade in the Crimean War: “She has been given ample warnings that the cannon of the hard Brexiters are to the right of her, the cannon of the unreconciled Remainers are to the left, and the cannon of the opposition parties are in front of her.”

Yet Rawnsley believes that May is acting in the national interest by continuing with the vote. Britain is scheduled to leave the EU in just over three months, and “if Mrs May’s deal can’t be got through parliament, that needs to be established as rapidly as possible so that MPs can start trying to navigate towards a non-catastrophic resolution of this nightmare.”

What a “non-catastrophic resolution” might look like is unclear. Numerous options are being canvassed. One involves Theresa May resigning as prime minister. Having suffered a resounding defeat, she will say “I’ve tried my best, now it’s someone else’s turn to attempt to clean up the mess,” or words to that effect. This potentially opens the way for a Brexiteer like former foreign minister Boris Johnson to take office and for Britain to careen towards a “hard” Brexit, in which there are no specific post-EU arrangements in place to manage the cross-border movement of people and goods.

Some commentators see May clinging onto office – after all, who in their right mind would want the poisoned chalice at this moment — and then making a last-ditch dash to Brussels, waving the British parliament’s rejection of her deal in the faces of her Europeans counterparts and pushing them for further concessions.

Cabinet minister Amber Rudd is the latest of those who have suggested the fallback of a Norway-style option if parliament rejects the Brexit bill. This would see Britain remain a member of the single market (the European Economic Area) but not the EU. That has the economic benefit of maintaining the free movement of goods but the political disadvantage of maintaining the free movement of people, and May has made immigration control a “red line” issue in Brexit negotiations.

Another potential outcome is a vote of no-confidence in May’s government resulting in a general election. Since both parties are divided about the issue, it’s not clear that this would fix anything or merely prolong the uncertainty. Then there is the option of a second Brexit referendum, which might solve the problem by returning a Remain vote, but which would be likely to deepen the divisions and sharpen the resentments in British society.

The least likely option would be for May to build a government of national unity, and secure a parliamentary majority for keeping Britain in the EU. An opinion prepared for the European Court of Justice (in response to a case brought by Scottish politicians) argues that Britain can unilaterally revoke the Article 50 withdrawal process and call the whole Brexit thing off without the approval of other EU member states. Politicians would at last be stepping up to the plate of political responsibility, but a big chunk of voters would feel disenfranchised as a result.

The problem is that none of the available choices appears to enjoy a substantial level of support, either inside or outside of parliament. According to a poll on Britain’s Brexit options reported in the Evening Standard, 20 per cent of voters back a new referendum on whether or not Britain should stay in the EU, while roughly similar shares want Britain to leave without a deal in place, or want the government to try and extract further concessions from Brussels. Eleven per cent favour calling off Brexit unilaterally, 10 per cent want a general election and 10 per cent want a referendum to support or reject the deal that Theresa May has struck.

It’s a mess, and regardless of what path is eventually taken, it looks like a majority of voters will be dissatisfied with the outcome. •

The post B-Day, and beyond appeared first on Inside Story.

The information was released to Benson amid heated public debate about Australia’s rapidly growing population. Claims were being made that immigration was the primary cause of such social ills as escalating house prices, rising crime, falling wages and increased traffic congestion.

Yet home affairs minister Peter Dutton didn’t say that he’d cut the intake because the nation needed fewer migrants. He put it down to new integrity measures. Apparently, fewer visas were issued because his department had been scrutinising applications more closely to exclude “fraudulent claims” by those who sought entry based on exaggerated qualifications, sham relationships and the like.

Without further detail, expert observers found this tough talk unconvincing. The recent release of the official report on the migration program throws more light on what has been going on, though it still leaves many questions unanswered.

According to the report, the number of migration applications finalised was “only marginally lower” than in the previous year, but “shifting risks and an increased focus on integrity” resulted in “the number of visa refusals and withdrawals increasing significantly in 2017–18.” Decoded from the bureaucratese, this means that the department processed roughly the same number of visa applications but knocked back a much larger proportion of them — in fact, a whopping 46 per cent more than last year. As a result, far fewer visas were issued overall.

While this news is consistent with Dutton’s claim that he has “tightened up the eligibility criteria,” it does not adequately explain why so many visas were denied last year in particular. Had the department been approving dodgy applications previously? This is what the report says:

There is now a higher proportion of high-risk cases across our programs, with applications lodged by individuals with complex immigration histories, including extensive travel histories, unsuccessful visa applications and/or periods of being unlawful in Australia. These require increased scrutiny, including more character and bona fides checks to ensure that the Australian community is protected.

Why were there more “high-risk cases” than in 2016–17, for instance? And was a decision made to prioritise the processing of these more questionable claims in order to weed them out of the system? This is feasible, since skilled visa applications are not processed in the order in which they are lodged — first come, first served — but are prioritised in a manner “that the minister considers appropriate.” Setting priorities in this way would not only fit with Dutton’s security-minded approach to immigration but also serve to produce a politically convenient cut in the migrant intake, without going through the contentious process of revising planning levels set in the budget.

But if the minister did direct his department to focus first on potentially problematic applications, he has not made this public.

According to Home Affairs, the top processing priority is the Regional Sponsored Migration Scheme, or RSMS. This makes sense given the stress that prime minister Scott Morrison and former immigration minister Alan Tudge (now the man in charge of cities, infrastructure and population) have put on the need to get skilled migrants out of big cities — Sydney, Melbourne and Brisbane in particular.

But another curious aspect of the data in the report is that only 6221 RSMS visas were issued in 2017–18, a sharp fall from the previous year and only about half the number issued in 2015–16. While new applications in this category dropped last year, the number waiting in the pipeline rose by 21 per cent to more than 22,000.

So, we have a government that says it’s determined to send skilled migrants to regional areas yet slashes the number of visas issued in the stream of the migration program that enables this to happen. This defies logic. The report states that the RSMS program was “particularly impacted” by integrity issues without giving further information about why this would be the case. Still, if the RSMS is the top priority, then why not approve more of the applications that do pass muster?

On the available evidence, the government seems to be allowing its most significant existing regional migration option to wither on the vine in advance of bringing in its proposed and much-hyped alternative — a provisional visa that would require migrants to live in regional areas for up to five years before gaining permanent residence.

Despite repeated suggestions that he is about to “unveil” this plan, Alan Tudge’s speeches, whether as immigration minister or population minister, remain disappointingly short on detail. Meanwhile, he continues to recycle his unsubstantiated claim that “87 per cent of all skilled migrants are going to Sydney and Melbourne.”

The minister has offered no support for this “fact.” The report on last year’s migration program shows that 32 per cent of skilled migrants intended to settle in New South Wales and 25 per cent intended to settle in Victoria. The share of these two states relative to others has been increasing over time, but even if all these migrants went only to Sydney and Melbourne — which is improbable — the combined total of 57 per cent still falls well short of the minister’s figure of 87 per cent.

Perhaps the minister has evidence that these migrants will eventually wind up in Sydney and Melbourne in the years to come. If so, it would be helpful to know the time frame involved and see the data that supports this conclusion.

Partner visas, meanwhile, make up the vast bulk of the family stream of the migration program. Last year, Home Affairs granted 8000 fewer of them than in the previous year. The fact that the report provides no explanation seems odd, given that more than 80,000 applicants are waiting in the queue. Did more rigorous checks really detect such an increase in fake relationships? Or was this program cut for some other, unstated reason?

Prolonged delays for partner visas can be distressing, and the uncertainty can affect major life decisions such as buying a house or having a child. Along with child visas, partner visas are listed as the top processing priority within the family stream. Since the interests of Australian citizens and permanent residents are at stake, as well as those of migrants, it would be troubling indeed if administrative measures were being used to slow the rate at which partner visas are granted in order to deliver a de facto cut to migration numbers.

Finally, the department’s more stringent approach to permanent migration appears to have two other consequences. With rejected applicants lodging appeals against the department’s decisions, it has probably increased the number of people in Australia who are on bridging visas. (The number of migrants in Australia on bridging visas rose 28 per cent year on year, from 137,000 in June 2017 to 176,000 in June 2018.) And the time visa applicants must wait before getting a decision from the department has blown out. In April 2017, for example, three-quarters of all applicants who applied for the RSMS visa from within Australia could expect an outcome within nine months. Now it is fifteen months. Processing times have also increased in the family stream. In April 2017, three-quarters of permanent partner visas (subclass 100) were finalised within thirteen months; now the wait is seventeen months.

If Home Affairs is required to be more rigorous in assessing visa applications, then perhaps it needs more resources to process them promptly. Or if fewer visas are being granted because the minister wants to use administrative measures to cut migration for political reasons, then perhaps he should own up to this.

The failure — or refusal — to speak plainly and honestly about immigration decision-making only adds to growing public distrust of government and the democratic process. •

The post Migration by numbers appeared first on Inside Story.

This is bad legislation, but Labor should swallow hard and pass it anyway. Why? Because this is an emergency. Only after the political deadlock in Canberra is broken can resettlement in New Zealand begin, and the process itself will not happen overnight. New Zealand will need to do its own security and health checks on prospective candidates, and it will need to set up the reception services, counselling, accommodation and other supports needed to help refugees settle and rebuild their lives.

If work started tomorrow, perhaps some refugee families could get to New Zealand before Christmas. Too much time has already been wasted and too many lives lost or damaged. There must be no more delays.

We shouldn’t fool ourselves, though, that this would end the emergency. New Zealand’s longstanding offer would assist 150 refugees per year. According to the latest Senate estimates, there are 652 people on Nauru, including fifty-two children. Of those, 541 are refugees, twenty-three have had their claims for protection rejected and eighty-eight are still having their status determined. There are another 626 men on Manus, of whom 495 are refugees.

That adds up to 1036 refugees on Manus and Nauru who need a permanent resolution to their plight. Even if the United States and New Zealand each resettle 150 annually (which seems unlikely with Donald Trump in the White House), the problem would drag on for at least another three and a half years.

Don’t forget that there are also about 600 people from Manus and Nauru on “temporary transfers” to Australia for medical reasons — a third of them children. Even though home affairs secretary Michael Pezzullo says that “the law states quite clearly that when their period of treatment is concluded they’re expected to return,” it seems unlikely that they will be sent back to the Pacific. As Pezzullo also told Senate estimates, most who come to Australia are “immediately joined to High Court proceedings, which prevent their removal.”

This is where the government’s demand that Labor support an all-or-nothing travel ban gets particularly messy.

If a law is passed that permanently bans the refugees from entering Australia, then what happens to the 600 who are already here on “temporary transfers”? Technically they are “unlawful noncitizens.” Since there is no visa category under which they could enter Australia, they are effectively in what the department calls an “alternative place of detention.” Are they to live in this limbo status indefinitely, banned from entering the country in which they already reside?

Understandably, the current focus of the public and political debate is on getting the last fifty-two children off Nauru. As treasurer Josh Frydenberg told Radio National Breakfast, “We have got 200 children off Nauru. They are coming off without the press release and the grandstanding.”

But bringing children to Australia for medical treatment does not resolve their longer-term futures — and it is the lack of a future, as much as anything, that is making them and their parents sick. In fact, the UN refugee agency, UNHCR, argues that bringing children and families to Australia adds to the health problems of the remaining adults:

The movement of only children and their families would do nothing to address the predicament of others with urgent medical needs, a number of whom were also children when they were forcibly sent to Nauru over five years ago. Equally, the desperate situation of refugees and asylum-seekers in Papua New Guinea and Nauru is now such that evacuation of only some individuals would heighten the despair and exacerbate severe mental health risks of those left behind.

When UNHCR’s medical experts gathered evidence on the ground in 2016, they found cumulative rates of depression, anxiety and post-traumatic stress disorder among refugees in both Manus and Nauru to be over 80 per cent, “the highest recorded in the medical literature to date.” Things have only got worse since then, and they could still deteriorate further. That is why Labor should vote for flawed legislation based on a flawed premise.

Josh Frydenberg claimed that allowing resettlement in New Zealand without banning refugees’ subsequent entry to Australia would “put up the white flag to people smugglers.” This is the same tired argument rolled out for years by Malcolm Turnbull, Peter Dutton and Scott Morrison that resettlement in New Zealand would open a “back door” to Australia and send a green light to people smugglers to restart their trade.

There are several reasons why this claim doesn’t stack up.

First, the so-called “back door” is really a long, slow road. The resettled refugees would have to live in New Zealand for five years before they could acquire citizenship. Only then would they be able to get the New Zealand passport that enables them to enter and live in Australia with a visa granted on arrival.

Second, the Trans-Tasman Travel Agreement doesn’t grant New Zealanders an automatic right to enter Australia in any case. If there is good reason to prevent these refugees from ever setting foot in this country, it can be organised without special legislation. Numerous New Zealanders can never cross our border because they have been kicked out of Australia on character grounds under section 501 of the Migration Act, banning them for life. Their personal details are on the Movement Alert List, so if they turned up at an Australian airport they would be denied a visa and refused entry; in fact, they would be prevented from even boarding the plane in New Zealand. The Australian government could list all the refugees on Manus and Nauru on that movement alert list if it chose to, on the basis that their presence in Australia “might constitute a risk to the Australian community.”

Third, if resettlement in Australia creates a perverse incentive to restart the trade, then so does resettlement in New Zealand and the United States, even without the ultimate prospect of subsequent entry into Australia under Trans-Tasman rules. After all, Mike Pezzullo says that the possibility of smugglers targeting New Zealand separately from Australia is a “live risk.” So even if New Zealand might be second prize (no offence to our friends across the Tasman), it is a second prize that desperate and vulnerable people will risk their lives on a leaky boat to win.

Finally, and most importantly, the backdoor argument ignores the fact that the key deterrence to the smuggling trade is not the prospect of being detained offshore but the naval interception and turnbacks that prevent boats from arriving in the first place. The racket only works if smugglers can land their passengers in the destination they are selling. As long as naval turnbacks are in place, keeping refugees on Manus and Nauru as a deterrent is pointless cruelty.

The current impasse is all about domestic political advantage and not about logic, evidence or reason, let alone sovereign rights or saving lives at sea. Labor should nevertheless pass the flawed legislation and end the deadlock. It will add to the mess that it will have to clean up if it wins government — but this is, after all, a mess it helped to create. It was a recycled Kevin Rudd who declared in July 2013, “From now on any asylum seeker who arrives in Australia by boat will have no chance of being settled in Australia as refugees.” His was a policy that would inevitably lead to hundreds of people being trapped in misery with no place to go. As Manus detainee Behrouz Boochani writes in his remarkable book No Friend but the Mountains, Australia has created a system that reduces humans to the level of animals, and makes them “accept, to some degree, that they are wretched and contemptible.”

Cleaning up the mess requires passing, and then eventually amending, the lifetime ban that the Coalition has set as the price of giving 150 refugees the chance of a future in New Zealand. This is a risk, because who knows who will hold the crossbench seats in a future House or Senate. Ultimately, though, some of the refugees from Manus and Nauru will have to be allowed to settle in Australia. After all, we have been down this road before, at the end of the round of offshore processing that began with the Tampa. The second incarnation of offshore processing is in its final phase. When government backbenchers break ranks and publicly voice their concern about refugee children, just as they did under John Howard, it’s clear the end is near.

Public opinion is also starting to shift. A growing number of voters now appear to accept that this is Australia’s problem to fix. I doubt whether any amount of political spin from the major parties will swamp that growing understanding. It is clear that permanent settlement in Papua New Guinea or Nauru is not a realistic option, that the expensive Cambodia experiment was a dismal failure and that the deal with the United States will only help a limited number of people. There is little prospect of any other nation gallantly offering to take these refugees off our hands. According to Sydney’s Daily Telegraph, Peter Dutton says that countries like Japan, South Korea, Taiwan and Canada have already been approached and were not interested.

In other words, this is our emergency and our responsibility. Labor can’t wait for the federal election in May to start dealing with it. •

The post Why Labor should break the refugee deadlock appeared first on Inside Story.

There were seven of us in that neglected Federation-era terrace, four adults and three children, including Carolyn’s two preschool-aged boys. It was chaotic and highly sociable and I loved the place — which I’d assumed would be a temporary home — from day one. When my ABC job became permanent, I gladly stayed on.

I had the front bedroom on the second floor, which was meant to give me, as the only non-parent, a bit of extra distance from the trio of exuberant children. We shopped in bulk at South Melbourne market and endeavoured to grow veggies in the backyard. There was always someone cooking or eating in the kitchen and the overflowing compost bin invariably needed emptying.

A constant stream of visitors would call by unannounced — this was before mobile phones — and I entered the social circle that led me to Julie, my partner now for more than thirty years. Like many group houses, though, it didn’t last, and after two years Carolyn and I looked for a new place. We were compatible housemates, and I enjoyed sharing my life with her boys, who were now at school.

For the next two years, the four of us lived in a single-fronted brick terrace in East St Kilda. It was dark, damp and cold in winter, with only a dodgy gas fire in the lounge room for heating, but there were parks, playgrounds and a swimming pool nearby, and on sunny mornings the east-facing kitchen would fill with light.

By 1990, I had been living in shared rental houses for more than a decade. At times, I imagined — naively, idealistically — that this would be how I would always live. I still got on well with Carolyn and her boys, but I had a full-on job and hankered for more orderly surroundings.

After four years at the ABC I had some savings, which my mother had just topped up with ten thousand dollars, generously sharing part of her retirement package with her four children. Julie already owned a house with a friend — she had supplemented her modest wages by making junk jewellery to sell at weekend markets in order to scratch together her original deposit (at a time when banks often demanded that women have a man to act as guarantor on their loan application) — and she understood the real estate market.

So, with Julie’s help, I started looking around for a flat to buy. In the process of inspecting properties, we realised that we really wanted to move in together. With assets and jobs, we had little trouble getting a mortgage on a modest weatherboard in Northcote, though at the time $80,000 seemed a frighteningly large sum to borrow, especially at 15.5 per cent interest.

Julie and I sold that Northcote house three years later, and since then we have bought and sold two other houses in inner Melbourne, realising a significant increase in value each time. The last one was in St Kilda, not far from where Carolyn and I used to share a house. We bought it in 1999, and Carolyn, who still lived nearby, came along to cheer for us at the Saturday morning auction.

It was lucky she did, because I’d forgotten our chequebook, and when we surprised ourselves by ending up as top bidders, we couldn’t complete the contract. Carolyn gallantly dashed home to get her own chequebook and wrote out a cheque for a deposit of tens of thousands of dollars drawn on her own account. We all thought this was pretty funny, Carolyn especially, since she had no savings. On the following Monday, we replaced her deposit with our own and gave Carolyn back her cheque — as a joke, she kept it on her pin board.

Recalling the story now, the humour of the situation has a darker edge to it. In the twenty-seven years since Carolyn and I last shared a house, she has lived in at least a dozen different rental properties. Julie and I have chosen our real estate well, mostly thanks to her nous in picking houses that were undervalued, and we have worked hard to maintain and improve the properties we have owned — investing our money and our sweat in renovations, sanding floors, patching holes, painting ceilings and landscaping gardens.

According to philosopher John Locke’s theory about the origins of private property, Julie and I have been “industrious and rational” and deserve the wealth that has come our way. In truth, though, like most other people who were able to buy houses a decade or more ago, we mostly benefited from a large dose of generational circumstance and locational luck. On relatively modest salaries, we were able to buy houses in inner- and middle-ring suburbs that have dramatically increased in value. By contrast, Carolyn, equally rational and industrious, has been punished for renting — or rather, despite a lifetime of hard work and self-reliance, she has been punished for having neither secure employment nor parents affluent enough to help her out with a gift or an inheritance.

“If I’d had a decent secure income or a big inheritance, we wouldn’t be having this conversation,” says Carolyn, when we discuss our different housing trajectories over the past three decades. Today we are both in our mid-fifties, and Carolyn knows the demographic reality: older renters on low incomes are at increasing risk of homelessness. While only about 6 per cent of over sixty-fives live in private rental housing, their situation points to a dark cloud on the not-so-distant horizon — falling home-ownership rates mean more people are now entering retirement (or continuing in casual, low-paid, insecure jobs) without owning a home. With few assets and a low income, often just the age pension, it is challenging to find an affordable place to live. Already, seven out of ten older renters live in “stress,” which means they shell out more than 30 per cent of their income to the landlord, and potentially scrimp on essentials like food, heating and healthcare.

There are likely to be more older women than older men in this vulnerable category, because women live longer and need more money to adequately fund their later years, but generally leave work with fewer assets. Signs of the problem are already evident. The number of women aged over sixty-five living in private rental housing grew by 64 per cent between 2006 and 2016. In 2016–17, for the first time since the Australian Institute of Health and Welfare began collecting the data, the number of women presenting as homeless overtook the number of men. In 2017, Homelessness Australia found that the number of women over fifty who were couch surfing had almost doubled in the previous four years.

Carolyn is not couch surfing, but she is part of this at-risk cohort. In a decade from now, when she is sixty-five years old, she will probably still have a low income and not much superannuation, and she will almost certainly still be paying rent to a private landlord.

When we meet at her place for breakfast, Carolyn has to come down and let me in at the “security gate.” She should be able to buzz me in from upstairs, but the remote-release lock is perpetually broken. Often there is no security at all, because whenever it rains the wooden gate swells up and won’t close.

Carolyn lives on the top floor of a three-storey block of fifteen red-brick, sixties-era, walk-up flats. With a vista across the rooftops of Victorian terraces to the Exhibition gardens, she reckons she has one of the best views in Melbourne, but her apartment has no heating or cooling, so the temperature inside depends heavily on the weather outside. On hot summer days, Carolyn uses sheets of cardboard to block the rays of the sun penetrating the thin window glass.

There is no exhaust fan in the bathroom or the kitchen, which is barely a kitchen in any case because it does not have an oven or a stove. Carolyn does all her cooking on a single plug-in electric hotplate, which she uses to fire up the espresso pot and warm us some croissants. She has become adept at one-pot meals, generally soups and stews that will last her for a couple of days, supplemented by salad, including lettuces grown on her window sill. She has managed to squeeze in a small couch alongside the table and chairs where we sit for breakfast; it doubles as a bed for her eldest grandchild when he has a sleepover. At $285 a week, she reckons she has found the cheapest one-bedroom flat in inner Melbourne, but rent still chews up close to 40 per cent of her income. Carolyn is not grumbling. “It’s a kooky little flat,” she says, “but I love it.”

Everyone, renters and property owners alike, wants to turn the place they live in into a home. At her own expense, Carolyn is gradually repainting the entire flat to make it cleaner and lighter. It looks like it has been a long time since this was last done, and while redecoration and maintenance are technically the landlord’s responsibility, Carolyn has repainted at least one room in almost every place she has rented.

She has also installed a curtain on the entrance to the bathroom because the sliding door is stuck and she does not see much point in asking the landlord to fix it. “I got the toilet fixed because it had a leaking pipe,” she says. “But the pipe still leaks and now the toilet won’t stop flushing.” The kitchen cupboard over her benchtop has a lean on it to rival the Tower of Pisa, jutting out from the wall at a disconcerting angle. Carolyn had that fixed, too, but rather than securing the cupboard back flat against the wall, the handyman simply braced it with a couple of extra bolts to stop it pulling away any further.

According to estimates on real estate websites, the modest Northcote weatherboard house that Julie and I bought for $137,500 in 1990 is now worth between $1.7 and $2.2 million. Most of the price rise derives not from the improvements that we, or any subsequent owners, made to the property, but from the underlying increase in the value of the land. Changes in the structure of the economy and the labour market have made city centres the locus of high-income jobs. While property prices have risen across the board, the increase has been steepest in inner suburbs, especially in places with good public transport links, parks, shops and desirable schools.

Carolyn’s boys are now in their thirties, and both of them have been in good, secure, full-time jobs for many years. Both rent, and Carolyn knows she will never be able to help them to buy their own homes. By contrast, Julie and I can afford to act as family bankers for our son, and when we die, he will inherit whatever property wealth we have left. In this way, the real estate market entrenches inequality.

Julie and I may move again one day, but we will control the when and the where. Carolyn enjoys no such security and may soon be forced to find a new place to rent. The Fitzroy block containing her kooky little flat recently went on the market. Chances are it will be demolished to make way for luxury apartments. Plenty of people would pay a lot of money for Carolyn’s fine view. •

This is an edited extract from No Place Like Home: Repairing Australia’s Housing Crisis, released this week by Text Publishing.

The post Buyer’s luck appeared first on Inside Story.

Like me, residents of Australia’s inner suburbs witness homelessness every day. But rough sleepers huddled in doorways or crouching behind cardboard signs are just the visible part of a much bigger problem. We don’t see people couch surfing, sleeping in their cars, or holed up in caravan parks, rooming houses and motels.

When we do come across someone on the street, we often agonise about the right thing to do. If I give money, will it just go on booze or drugs? Should I give food instead? Should I offer to buy this person a coffee or just say a friendly word? Should I walk on and console myself that I donate regularly to a local charity?

I have no definitive answers to those questions, but I suspect that they are the wrong place to start thinking about the problem. Surely the fundamental issue is this: in a country that has enjoyed the longest run of uninterrupted economic growth in history, why is there any homelessness at all?

“There are no rough sleepers in Finland,” says Juha Kaakinen, chief executive of Finland’s fourth-largest landlord, the not-for-profit Y-Foundation. “You don’t see people sleeping on the streets.” It was Kaakinen who led Finland’s successful national program to reduce homelessness. Launched in 2008, it aimed to halve the rate of long-term homelessness in four years, focusing not only on rough sleepers but also on people living in insecure and temporary accommodation. “People in shelters and hostels are still homeless,” he reminds me when we meet at the National Homelessness Conference in Melbourne.

As a new report by a federation of homelessness agencies shows, Finland is the only country in Europe in which homelessness declined over the past decade. Official data puts the number of homeless people at 7112 in 2017. Among them were only 214 families, down by a third on the previous year’s figure. “There are no homeless families with children,” says Kaakinen, “or if they are it is an extremely temporary condition.” As the chart shows, the vast majority of the remaining homeless — 84 per cent — are staying with friends and relatives. Only a tiny number sleep out or live in refuges or other temporary accommodation.

On trend: homelessness in Finland 1987–2017

Source: Housing Finance and Development Centre of Finland.

With its population of 5.5 million, Finland’s homelessness rate is thirteen people for every 10,000 residents. At the 2016 Census, the equivalent rate in Australia was nearly four times higher, at fifty per 10,000 residents.

How did the Finnish miracle come about? The answer is beguilingly simple: the country provided at-risk people with a secure and permanent place to live and made sure that they could afford to pay full market rent. In practice, this involved closing down most emergency shelters and boarding houses or converting them into permanent dwellings. Kaakinen says Helsinki’s last big shelter, which was run by the Salvation Army, closed in 2010 and has now been turned into eighty-one independent living apartments with onsite support services.

This might seem counterintuitive, but, as Kaakinen says, homeless people can end up getting stuck in such supposedly short-term lodgings.

By way of illustration, he tells me about a new state-of-the-art shelter for homeless people he helped develop in Helsinki in the 1980s. “Each room could accommodate two men and had a fridge,” he says. “We thought this was really top of the game. It was meant to be a temporary solution for a harsh winter, but it lasted twenty years. When we demolished it, it was the worst place. That’s what happens with temporary solutions: they become permanent.”

Having recently spent a week watching staff at work at Frontyard Youth Services in inner-city Melbourne, I could see what Kaakinen was getting at. In Victoria, as in many parts of Australia, support to overcome homelessness is generally conceived as a three-step process from crisis accommodation, through temporary housing to permanent lodgings. The theory is logical, but in practice people get stuck at chronic bottlenecks every step of the way.

Step one: After seeking help at a place like Frontyard, you get put up in a refuge. But with more than 6000 young people experiencing some kind of homelessness in Victoria, the 110 beds in the state’s fifteen youth refuges are already occupied. Doing their daily ring-around, members of Frontyard’s housing team are lucky if even one or two of these beds has become vacant. So young people often end up in backpacker hostels or back out on the street.

Step two: If you finally secure a bed in a refuge, you are not generally supposed to stay for more than six to eight weeks, at which point you move to transitional housing, where rent is capped at 25 per cent of your income. Here again, the shortage of places is extreme, particularly in the most urgently needed category of one-bedroom dwellings. As a result, a six- to eight-week stay in a refuge can easily stretch to six to eight months.

Step three: After a year, or maybe two, of getting on top of things in transitional housing, you are ready to live independently. But then you encounter another acute shortage, this time of affordable private rental housing. Anglicare’s national affordability snapshot of more than 67,000 dwellings found fewer than 3 per cent matched the budget of a single person earning the minimum wage. For an unemployed person on the Newstart allowance, only three properties across the entire country were affordable; needless to say, none of them was in a major city.

Outside the private market, the only option is social housing, which is afflicted by intractable waiting lists. A recent parliamentary inquiry found that the new Victorian Housing Register (which supposedly “makes applying for housing easy”) is clogged with 37,000 applications representing more than 82,000 people (roughly 57,000 adults and 25,000 children). There are similar waiting lists in other parts of Australia.

“Without sufficient housing you have to build systems to compensate for the lack of the real thing,” says Juha Kaakinen. “If there’s not a big enough supply of affordable housing, then it’s wise to produce more of it.” His logic is compelling. Even if the Finnish model can’t be transplanted wholesale to Australia, we can learn a great deal from it.

Finland’s success in cutting long-term homelessness and all but eradicating rough sleeping is often described as a Housing First approach. Essentially, it involves meeting a person’s need for safe and secure housing before attempting to solve other deep-seated challenges like physical or mental illness, substance abuse, unemployment or poverty.

Housing First developed as an alternative to the established “staircase” model of assistance, widely applied in Australia, which encourages homeless people to proceed through a sequence of treatment steps to reach housing readiness. Interventions like psychiatric care or a stint in a detox clinic are intended to prepare a person for living independently and sustaining a long-term tenancy. But many people, especially those who have chronic problems, find getting to the top of the staircase overwhelmingly challenging. They might get kicked out of emergency accommodation or transitional housing for getting drunk, using drugs, losing their temper or failing to attend treatment, for instance, and then tumble back down the staircase into homelessness. If one step proves beyond them, secure housing can remain permanently out of reach.

Staircase services run the risk of setting “unattainable standards,” writes Nicholas Pleace, director of the Centre for Housing Policy at the University of York, in a guide to Housing First policies in Europe. Although they’re fallible human beings like the rest of us, service users can be expected to behave like perfect citizens.

Housing First reverses the staircase model by providing secure housing up-front and not taking it away after perceived behavioural lapses. Support services are offered alongside housing, in the belief that people are more likely to successfully tackle other issues if they don’t have to worry about finding a place to sleep for the night.

Australia has its own experience with Housing First strategies, dating back more than a decade. Adelaide was the first Australian city to adopt the model, when the initial Common Ground project opened in Franklin Street in 2008. Similar projects followed in other cities, helping to fundamentally improve individual lives.

Nicholas Pleace, who was also in Melbourne for the National Homelessness Conference, says Housing First has worked wherever it’s been deployed in Europe, from tiny pilot projects held together with string in Britain, Sweden and Italy to long-term trials in France and fully fledged government programs in Denmark and Finland.

What does that success look like? “There is strong evidence that Housing First works in terms of keeping a roof over the heads of people who previously experienced chronic homelessness,” says Pleace. “Less can be said with certainty about improvements in mental and physical health, reduced drug and alcohol use or social integration.”

Housing First primarily targets people with high and complex needs. They are repeat users of overnight shelters and hospital emergency departments, and often have repeated interactions with the police and the courts, including cycling in and out of prison. “These people are sometimes referred to as ‘frequent flyers,’” says Pleace, wincing slightly at the metaphor. By reducing the rate of frequent flying, Housing First can theoretically save public money, even if chronic drug use or mental illness persist.

Data presented to the conference by Juha Kaakinen shows that in Finland, the investment in housing and supporting a homeless person pays itself back in less than seven years. A reduction in the use of specialist health services and institutional care generates savings of approximately €15,000 (A$24,000) per person per year.

In Australia, the second phase of the Journey to Social Inclusion, or J2SI, project at Sacred Heart Mission in Melbourne has yielded interim results that point in the same direction. Like other Housing First projects, J2SI uses permanent housing as “a stable base from which to address individuals’ non-housing issues.” After twelve months, J2SI participants are far more likely to be housed than those receiving standard support, and far less likely to spend nights in hospital or drug and alcohol rehabilitation facilities. Although the sample is small and needs to be treated carefully, average annual health costs for the J2SI participants fell by more than $15,000 while costs rose for those receiving conventional support.

But Pleace cautions that cost savings can’t be assumed, because outcomes depend on exactly who is getting help. “Housing First doesn’t necessarily generate cost savings because not all rough sleepers are a cost to the state,” he says. “Some are very low cost to leave on the street. All they need is a blanket and a bowl of soup.”

What is clear is that stabilising housing — and so averting a descent into homelessness — is more cost-effective than implementing Housing First after people end up on the streets. It is better and cheaper to prevent the tumble and the crash than to try to put the pieces back together again.

People usually have to resort to unstable housing after illness, relationship breakdown, family violence, unemployment or other life shocks. The impact of such events is felt most keenly by those with low incomes and few assets, especially when housing costs are high. Marah Curtis from the Institute for Research on Poverty at the University of Wisconsin–Madison says it’s not just the level of income that matters but also its regularity: if you compare two households with the same annual income — one steady, the other fluctuating— then the first household will generally have better housing outcomes than the second.

A corollary of Curtis’s research is that small, timely infusions of financial support can prevent a descent into homelessness. “Markets go up and down,” she told the homelessness conference in Melbourne. “We have to insure people against that process.”

One criticism levelled at Housing First is that it comes too late — that it is the ambulance at the bottom of the cliff, rather than the fence at the top.

But Juha Kaakinen insists that this is not true in Finland, where Housing First is just one component of a comprehensive national strategy on housing and homelessness. Finnish social workers are trained as housing advocates, and one of their main tasks is to help vulnerable people to maintain a tenancy. More important still is providing affordable housing. “Increasing the affordable social housing supply is the best means to solve and prevent homelessness,” says Kaakinen.

He shows a chart that provides a compelling illustration of what he means: as the number of Y-Foundation’s affordable apartments increases, homelessness falls.

Bridging the gap: affordable apartment supply and homelessness in Finland

Source: Juha Kaakinen, “Housing First and Ending Homelessness in Finland” National Homelessness Conference Melbourne, August 2018.

Australia’s own recent history accords with Kaakinen’s argument. Kate Colvin from Everybody’s Home, a campaign for a fairer housing system, told the national conference that after Kevin Rudd implemented the National Rental Affordability Scheme and injected $500 million into affordable housing in response to the global financial crisis, the supply of social housing grew, rough sleeping declined, and emergency presentations by homeless people fell. Without sustained effort, though, these gains were short-lived.

Housing First strategies can’t be divorced from their broader social context. Chronic homelessness is far more widespread in the United States than in northern Europe because of the far less comprehensive American welfare system. There, homelessness can be triggered by poverty alone, whereas in countries like Denmark and Finland it is far more likely to arise from a convergence of multiple challenges in a person’s life. So, while Denmark and Finland are dealing with a far smaller problem overall, the people who end up homeless are likely to have particularly severe problems and high needs.

In the United States, Housing First projects can end up as safe but isolated islands within the broad sea of government indifference. Nicholas Pleace calls it a “welfare state in miniature model.” In Finland, by contrast, Housing First strategies are integrated into a fully fledged welfare system, including universal healthcare and an extensive supply of social housing. People assisted by Housing First have access to the same high-quality support services as everyone else.

Kaakinen sees risks in developing small-scale Housing First projects without a comprehensive strategy to tackle homelessness. “You end up creating a priority service for a very small group of homeless people,” he says. “That’s not solving the issue.” He also thinks that a small-scale effort can pose ethical problems by delivering two levels of housing support. “There is the normal service and there is the good service,” he says. Nor does he see any need for more Housing First experiments or pilots: “We know what works.”

Australia probably sits closer to Finland on the welfare spectrum but closer to the United States when it comes to piecemeal efforts to tackle homelessness. We enjoy universal healthcare, but most government benefits are paid at a low level and there is very little social housing. In Finland, social housing accounts for about 13 per cent of all dwellings; in Australia, it’s a little more than 4 per cent. There are other differences, too. While neither country is a nation of renters — about 70 per cent of Finnish housing is owner-occupied, a proportion similar to Australia’s — rental agreements in Finland are generally permanent, whereas Australian rentals tend to be short-term, making it easy for landlords to eject tenants with little notice.

Affordable housing is largely built by the private sector in Finland, but the government provides long-term low-interest loans to developers on a 5 per cent deposit and guarantees their returns with a housing benefit that can cover up to 80 per cent of full market rent. The equivalent payment in Australia, Commonwealth Rent Assistance, is capped at a maximum rate of $67.40 per week for single people living alone, regardless of how much rent they pay.

What is more, social housing in Finland is generally built on publicly owned land. Local governments in Finland tend to control much larger tracts of urban land than their counterparts in Australia. Kaakinen tells me that the City of Helsinki owns about half the land in the capital, which gives it a very strong hand in planning decisions. A fifth of the dwellings in all new residential developments must be set aside for social housing, and authorities use their rental guarantee to ensure that new social housing meets high standards of design and energy efficiency. “You can’t tell the difference between public and private housing in Finland,” says Kaakinen. In Australia, where publicly owned land is split across three levels of government, local authorities don’t have the same leverage. Still, as new research shows, our cities have many suitable parcels of unused and “lazy” public land that could be used for new dwellings.

Building a large supply of affordable housing has other benefits. It helps to contain rents in the private market and smooths boom-and-bust cycles in the residential construction industry. “When the economy is booming, construction companies are not interested in building social housing,” says Kaakinen. “But they have a sudden increase in social consciousness when the economy slows, and there is a lot of attention when you put out a tender.”

In the absence of more substantial subsidies or stronger planning regimes, Australia’s private developers have no incentive or requirement to build low-income rental housing. Kaakinen says it’s in the national interest to provide more affordable housing as basic social infrastructure, but this won’t happen without coherent policy and concerted effort. “It’s really wishful thinking to think that the private market would solve homelessness or housing issues,” he says. “That’s a completely crazy idea.” He argues that the logic of capitalism works against a balance between housing supply and housing demand because housing shortages push up prices and generate higher returns.

Kaakinen starts from the principle that secure and adequate housing should be a social right but says this right cannot be seen in isolation from other economic and social policy. He’s critical of Australian tax policies that make housing the most secure and profitable place to store wealth: “If all the money that people invest in housing was used for other investments, then that would generate greater productivity.”

Halfway to the station platform, I realise there might be something else I could share with the young man on the pavement outside — information. I stop rushing for my train, go back and ask if he knows about Frontyard and the services it provides. He tells me he does, that he’s been there and is on a waiting list for accommodation. We chat for a while longer and his spirits seem to lift. He’s hopeful that things are starting to look up.

“I’ve got my instrument back with me now,” he says, patting the guitar tucked behind the backpack and rolled-up sleeping bag he’s leaning on. “I’m saving up for my busker’s licence, so I should be working again before too long.” I tell him I look forward to hearing him singing on the streets of Melbourne soon. I hope I do, and I hope he finds a place to live, but until we deal with the fundamental lack of affordable rental housing, the odds are stacked against him.

We need to stop regarding homelessness as inevitable and to name it for what it is — a failure of policy and politics that can be overcome. Finland shows that a national strategy to increase the supply of affordable housing can work. Without that, Housing First approaches won’t make a Finnish-sized dent in the problem. ●

The post “You don’t see people sleeping on the streets” appeared first on Inside Story.

The new prime minister, Scott Morrison, has been one of the few figures on either side of federal politics willing to say anything positive about immigration. As treasurer, he hit back against Tony Abbott’s call for the permanent migration intake to be cut by 80,000 places annually, pointing out that this could blow a $4 billion hole in the budget over four years. He also challenged the connection between immigration and crime drawn recently by Abbott, Dutton and Turnbull.

If Turnbull were still prime minister, he would be presiding this week over a cabinet meeting focusing on how to respond to Australia’s population pressures. Although a truce seems to have been struck among the Liberal Party’s battling factions following the change of leadership, the twin issues of population and immigration are unlikely to disappear from the political agenda.

Many Coalition backbenchers fear that unless the government is seen to act decisively on public concerns, they will continue to haemorrhage votes to fringe parties on the right, especially in marginal seats in the decisive electoral battleground of Queensland. Some early indications suggest how Morrison might respond to this pressure.

One of the surprises in his ministerial line-up was the appointment of the relatively unknown assistant finance minister, David Coleman, to fill the new-but-old role of immigration, citizenship and multicultural affairs minister. “David has a keen understanding of the many different backgrounds and the many different issues that need to be managed to ensure that Australians who have come from so many backgrounds get that fair go I spoke of,” Morrison said when he announced his new team.

How the prime minister reaches this conclusion is not immediately clear from Coleman’s official biography. Perhaps he bases his judgement on the fact that Coleman represents the relatively diverse (and historically Labor-held) Sydney electorate of Banks, whose population is 44 per cent overseas-born, with people of Chinese ancestry making up the largest migrant group. In Peter Dutton’s seat of Dickson, by contrast, only about 23 per cent of residents are overseas-born, and the largest migrant groups are from England, New Zealand and South Africa.

Regardless of constituency, we can hope that reuniting immigration and multiculturalism would prompt any minister to weigh his or her public pronouncements carefully and put social cohesion ahead of short-term electoral gain.

If Coleman understands the connections between the three elements of his portfolio, and particularly between multiculturalism and citizenship, then he may also want to deal urgently with the massive backlog in citizenship applications. Under Dutton, the number of applications on hand blew out from 23,000 in 2014 to 210,000 this year, and the average processing time is now sixteen months. Denying or delaying citizenship to long-term permanent residents seems the least helpful way to promote a sense of belonging, connection and participation among recent migrants.

Coleman is not in cabinet, and his ministry still falls within Home Affairs, but Morrison, himself a former immigration minister, appears to recognise that it was a mistake to allow immigration to be subsumed into a mega national-security portfolio. “Immigration, of course, forms part of national security policy, but it also has always played an important role in economic and social policy,” he said. “We need a strong focus on our immigration program so it brings the skills and the harmony and the unity that we want from the program.”

Morrison seems to be pushing back against the Dutton supporters, who see demonising migrants from certain backgrounds as a way both to wedge Labor and to claw back votes from the likes of One Nation. By giving Alan Tudge, the former immigration and citizenship minister, a portfolio that combines population with cities and urban infrastructure, he also appears to be seeking to shift debate about population pressures to take in more than just migration numbers.

Morrison and Coleman will probably still have to find ways to appease those within the Coalition’s ranks who feel that cutting immigration would boost their chances of re-election. They should start by explaining to the party room that cutting immigration is easy to say, but hard to do.

Back in the good old days of the twentieth century, governments could increase or reduce the flow of immigrants relatively easily by raising or lowering each year’s migration planning level in the budget. Whitlam cut immigration numbers sharply after winning office in 1972, as did Howard in 1996. But immigration is no longer like that. As SBS Digital Lab’s new data visualisation shows, temporary migration now dwarfs permanent migration. And while government can cap permanent migration, temporary migration goes up and down with the economy, with business needs and with other factors like the relative value of the Australian dollar.

Indeed, Australia’s much-debated crossing of the twenty-five million population threshold earlier this month would not have happened for quite a few more years if not for the presence of more than a million long-term residents on temporary visas. Among them are about half a million international students, and no limit currently applies to the number of additional students who might choose to study here in future. Indeed, our universities and training colleges are doing their best to open up new markets and expand their enrolments.

It is reasonable to debate whether international student numbers should be capped. But we need to understand that this isn’t a lever that government can simply pull at whim. It is a complex issue with profound implications for the economy and the labour market.

According to the latest data snapshot from Universities Australia, international education was worth $30 billion in 2017. Overseas students account for more than a fifth of all university enrolments and tertiary institutions are heavily reliant on their fees. If the industry declines, extensive job losses are inevitable, not just in education but also in related industries like accommodation and tourism.

Other tricky practical issues would also need to be negotiated. If Australia were to cap the number of international students, how would the available quota of places be shared between institutions?

Currently universities and colleges compete with one another on fee levels, reputation, course offerings and the attractions of their home city. If student numbers were limited, things could get ugly. Bigger players might muscle out smaller institutions, and if some universities failed to attract sufficient enrolments they could land in financial trouble.

Meanwhile, the federal government would be under pressure to ensure that the rationed international places were fairly distributed between states and regions. If the government allocated places in this way, though, it would undermine the market competition on which the system is based — competition not just between universities here, but between Australian institutions and rival international providers in a globalised market. In short, capping student numbers could damage the competitiveness of Australia’s third-largest export industry.

International student numbers are likely to decline in coming years anyway, because Peter Dutton made it significantly harder for international student graduates to move to permanent residence. Previously, for example, thousands of students moved onto a 457 temporary skilled worker visa before applying for permanent residency. But the 457 visa was abolished and replaced with a temporary skills shortage visa, which is much harder for students to attain. Other established student pathways to permanent residency — the Regional Sponsored Migration Scheme, for instance — have also been narrowed by a higher English-language proficiency cut-off and a requirement for more years of relevant work experience.

Over time, as awareness spreads of how difficult it has become to switch from successful study to successful settlement in Australia, the recent rapid growth in new enrolments is likely to slow or even reverse.

Alongside overseas students, about 135,000 working holiday-makers are living in Australia at any one time. We could reduce immigration by cutting that program, or by removing the offer of a second visa that encourages backpackers to work in rural areas. But this would hurt the tourism industry and horticulture. Remember what happened when the government tried to tax backpackers at 32.5 cents in the dollar when they harvested fruit and vegetables? Farmers protested that their crops were rotting in the fields, forcing the government into a highly publicised backdown. Far from winding back the working holiday program, the government has been expanding it.

It is much easier to cut permanent migration. Indeed, Dutton has done so as home affairs minister, though without bothering to go through the cabinet process of changing the numbers in the budget. He simply redefined the annual planning level as a “ceiling” rather than a target. As a consequence, the government fell 6400 visas short of the 190,000 planning level in 2016–17 and came in 28,000 visas short last financial year. The official explanation was tougher vetting of applications, but this is far from convincing.

Regardless of why Home Affairs filled fewer places, cutting the numbers in the permanent migration program doesn’t necessarily produce fewer migrants in the short term, since it has no immediate effect on temporary migration. It may result in lower numbers in the longer term, by making it clearer that temporary migration is not a reliable stepping stone to permanent settlement, but such changes won’t be felt until long after the next federal election, far too late to staunch the flow of votes to anti-immigration candidates.

In the meantime, by failing to meet the migration planning level, Home Affairs has probably created a blowout in the number of people stuck on bridging visas as they wait for their applications for permanent residency to be processed. Since Dutton took over responsibility for immigration in December 2014, the number of people in Australia on bridging visas has almost doubled, from 90,000 to 176,000. Many of those people will be the partners of Australians, and can’t morally or legally have their applications for permanent residence delayed or denied.

Another issue that Morrison and Coleman will confront is how to spread migrants beyond the big cities, and especially beyond Sydney and Melbourne. As citizenship and multicultural affairs minister, Alan Tudge had been laying the public groundwork for a major initiative in this regard, not least with questionable statistics that overplayed the extent of the problem.

Before the wheels fell off Turnbull’s leadership, the announcement of a new provisional residence visa was understood to be imminent. Such a visa was canvassed as part of the government’s plan to simplify and modernise the visa system. While no details have been released, the tenor of Tudge’s public comments suggests that a new provisional visa could be used to force migrants to reside in regional areas for a set number of years before they become eligible for permanent residence.

There are many unresolved questions and big challenges ahead. With border control — and presumably boat turnarounds — remaining Peter Dutton’s responsibility, where do asylum seekers, refugees and offshore processing fit into the departmental division of labour? Are asylum seekers who reach Australian territory without authorisation an immigration matter or a national security issue? Who is responsible for finding a resolution of the national shame and pointless cruelty that is Nauru and Manus before more people die? Let’s hope this task falls to Coleman and that, with Morrison’s support, he is able to chart a change of direction and quickly resettle refugees in Australia and New Zealand. •

The post Where now for immigration policy? appeared first on Inside Story.

The prime minister’s repeated claim that resettling refugees from Manus and Nauru amounts to “rolling out the welcome mat to the people smugglers” is nonsense. The smugglers are not going to launch new flotillas of dangerously overcrowded vessels in the direction of Australia as long as the military-led operation to intercept and turn them around remains in place. As the home affairs department proclaims in eighteen languages on its Operation Sovereign Borders website, “Australia’s defences against people smuggling boats are stronger than ever. The illegal maritime pathway to Australia is closed, and it will stay closed. If you try to reach Australia illegally by boat, you will be stopped and turned back.”

If the incoming minister believes that assertion, then he or she must acknowledge that keeping refugees on Manus and Nauru is a pointless and expensive act of cruelty.

A new minister could also help to bring reliable evidence and sober argument back into the debate about immigration and population. Fraser Anning may have crossed a line in calling for a return to the White Australia policy, but as Katharine Murphy commented in the Guardian, the new senator’s speech was not “something happening on the fringe of respectable political conversation.” The likes of Peter Dutton and citizenship minister Alan Tudge, and even Malcolm Turnbull himself, have opened the way for Anning with ill-considered and poorly founded assertions about African gangs and ethnic segregation.

As we pass the twenty-five million mark, it seems that many Australians are increasingly concerned about population growth and want to talk about it. And since no one is suggesting that government should intervene with measures to control the birthrate, a national debate about population will inevitably be a debate about immigration.

WA Liberal senator Dean Smith has called for a parliamentary inquiry, arguing that population growth has “heightened quality of life pressures, most notably in Australia’s largest cities — just ask any Australian who commutes during peak hour.” Judith Sloan, economist and columnist for the Australian, has no time for more research and says that “it is as plain as day” that permanent migration must be cut now.

In the Fairfax press, Ross Gittins decries immigration as “the cheap and nasty way to grow the economy” while former foreign minister Bob Carr told Q&A in March that high immigration puts “downward pressure on wages” and “upward pressure on housing prices.” Carr’s views coincide almost completely with those of Tony Abbott, who claims that when it comes to wages and house prices, immigration is “the one big contributing factor that is wholly and solely within the federal government’s control.”

Carr, who is also former premier of New South Wales, often frames immigration as an environmental issue, as does entrepreneur and philanthropist Dick Smith, who accuses his fellow millionaires of foisting high immigration on a reluctant public because it “disproportionately benefits big business and the 1 per cent of wealthy Australians.”

When I reluctantly traded verbal blows with Dick Smith at Hobart’s Festival of Dark and Dangerous Thoughts, he put the view that political correctness had enforced a conspiracy of silence that means it is almost impossible to question immigration without being accused of xenophobia. Gay Alcorn put a similar view in the Guardian, writing that until recently the debate “was stuck in our debilitating culture wars, with many progressives wary that questioning immigration rates would give succour to racists.”

Alcorn’s opinion piece, in which she argued that “the case for easing immigration is compelling,” ran under the plaintive heading “As a Citizen of Melbourne, Don’t I Have the Right to Question Immigration?” Of course she does, and she has used it, as have Smith, Carr, Sloan, Gittins and many others.

No topic of public policy should be off limits in a democratic society, but the real risk is not that the debate will be bound by a political straitjacket but that it will be a short-sighted and thoughtless free-for-all. When prominent figures in the major parties seek to exploit such a sensitive topic for short-term electoral gain, or when they play fast and loose with the facts, they embolden the likes of Hanson, Abbott and Anning. In this respect, we are being let down by both sides of politics.

In a recent speech to the Business Council of Australia, Alan Tudge expressed concern that so many new migrants to Australia settle in Sydney and Melbourne. He claimed that of “the more than 111,000 skilled migrants who arrived” in the last financial year “only 13 per cent will settle outside the two large capitals.” When he spoke to Fran Kelly on RN Breakfast that morning, he rounded the number up to make it more alarming still, saying that “almost 90 per cent of all skilled migrants are coming into Melbourne and Sydney.”

As someone who spends a lot of time trawling through the data periodically released by the home affairs department, I found Tudge’s numbers hard to believe.

No detailed breakdown of the 2017–18 migration figures has been released yet, but on the basis of the previous year’s figures the minister’s claim seems highly improbable. In 2016–17, 32.9 per cent of skilled-stream entrants nominated New South Wales as their intended state of residence and 26.1 per cent nominated Victoria. This makes a total of 59 per cent (for all of New South Wales and Victoria), which falls well short of the minister’s figure of 87 per cent (for Sydney and Melbourne alone). It is just a shade higher than those two states’ share of the overall national population, 58 per cent.

If this year’s figure really is 87 per cent, that’s a staggering turnaround. And it can only have happened because the minister or his department made it happen by changing the way the program is managed or by using a different time frame.

The department has mechanisms it can use to significantly influence where skilled migrants initially settle. In particular, its three state-specific and regional programs — the Regional Sponsored Migration Scheme, the skilled regional visa, and state and territory nominated visas — gave it control over the destinations of 30 per cent of the skilled migration intake in 2016–17.

To reach this year’s alleged 87 per cent, the department would have had to dramatically cut back on approvals in these visa categories. Or New South Wales and Victoria would have had to be far more successful than the other states and territories in nominating skilled migrants for permanent visas. Or there’s a third possibility: perhaps the minister actually meant that 87 per cent of skilled migrants will eventually end up living in Sydney and Melbourne.

If that’s the case, then it would be helpful to know what time frame he’s using. Is it one, five or ten years? My repeated attempts to get a better understanding of the 87 per cent figure from both the department and the minister’s office led nowhere, making it hard to escape the conclusion that Alan Tudge has deliberately allowed an exaggerated view of the impact of skilled migration on Sydney and Melbourne to take hold.

Labor has been playing fast and loose with numbers too. Shadow immigration minister Shayne Neumann has accused Peter Dutton of “beating his chest about permanent migration numbers” while “ignoring real problems” like the “1.6 million people currently in Australia on temporary visas with work rights which undercut the pay and conditions of local Australian workers.” Opposition leader Bill Shorten also used the 1.6 million figure, asking why it is that “the Liberals never talk about all the people with temporary work right visas in Australia when we’ve got youth unemployment, we’ve got declining apprenticeships, and we’ve got wages stagnation holding back the wages of millions of Australians?” Shadow employment minister Brendan O’Connor railed against “the explosion, the misuse, and abuse” of 1.6 million temporary work visas, which is “one of the reasons why we have one of the highest levels of youth unemployment, high underemployment.”

That figure of 1.6 million temporary work visas is deeply misleading. For a start, it includes 670,000 New Zealanders who have an automatic and reciprocal right to enter and work in Australia. Since all New Zealanders are granted the same “special category” visa on arrival, a big chunk of those 670,000 are probably here only briefly, to watch the All Blacks thump the Wallabies, visit family, do a business deal or have a holiday. Another big chunk of New Zealanders have lived in Australia for decades and are to all intents and purposes permanent residents. Does Australia want to rescind the Trans-Tasman Travel Arrangement and kick out all the Kiwis?

Labor’s 1.6 million figure also includes around 490,000 students. Is Labor seriously suggesting that it can solve youth unemployment by cutting international student numbers or curbing their right to work forty hours a fortnight? This would be more likely to cripple Australia’s higher education sector than improve labour-market outcomes.

In other areas of temporary migration, numbers have been falling anyway. In the category of skilled temporary workers (which includes the now-abolished 457 visa) the number of visa holders present in Australia has fallen substantially, down from almost 200,000 four years ago to fewer than 150,000 today. The number of working holiday-makers is down from 151,000 to 135,000.

None of this is intended to suggest that there is no congestion problem in Sydney and Melbourne or that immigration bears no relationship to house prices. Nor am I downplaying the serious problems temporary migration can create. Indeed, as I’ve argued elsewhere, Australia risks gradually moving towards a guest worker ethos of “All Work, No Stay.” But immigration is a complex issue and politicians and commentators should tread carefully, speak thoughtfully and act judiciously.

Is it too much to hope for a new home affairs minister who understands this? •

The post Lies, damned lies and migration statistics appeared first on Inside Story.

The story serves to confirm the myth of Australia as an egalitarian, knockabout sort of place, a haven from the murderous, bureaucratic brutality of fascist Europe and the indignities inflicted by the British. But it’s also a reminder of the vagaries of memory. In some versions the guard goes on to teach the internees how to roll their own cigarettes; in others he isn’t having a smoke at all but is off to the toilet. According to the version recounted by the writer Walter Kaufmann at a 1990 reunion of the Dunera boys in Hay, the guard explicitly recognises the injustice of their treatment:

“Jesus,” says the digger, “I thought you were enemies, but you’re friends. Jews! Jesus Christ!”

This anecdote is among the many examples of the mythologisation of the Dunera boys, a process Ken Inglis, Seumas Spark and Jay Winter deal with deftly in Dunera Lives. The three historians don’t set out to tear down the myth as much as to gently dismantle it, replacing it with something far richer and even more extraordinary.

The “boys” were enemy aliens transported from Britain to Australia on board the HMT Dunera, a passenger ship used by the British military during the war. They were variously detained in camps at Tatura in Victoria’s Goulburn Valley, at Hay in the flat Riverina of western New South Wales and, later, at Orange on the central tablelands. Most were men rather than boys, the youngest aged sixteen, the oldest sixty-six. Dunera Lives also encompasses another 266 internees brought to Australia from Singapore on the Queen Mary, women and children among them. Helmut Neustädter, who went on to become the famous fashion photographer Helmut Newton, was aboard that vessel, as was sculptor Karl Duldig, his wife Slawa and their daughter Eva.

Karl Loewenstein and his son Fritz in the North Sea, 1927. Courtesy Monica Lee Lowen and Jocelyn Lowen

The Dunera boys are generally remembered as Jewish refugees, but this is an oversimplification. Four out of five were of Jewish background, but only a minority practised Jewish rites and customs. The Nazis had persecuted some of them simply because they had a single Jewish grandparent. The authors see them, rather, as a group of “modern Europeans” of German, Austrian, Czech or Polish origin, mostly “city dwellers” and “often bourgeois,” who “enjoyed the fruits of the Enlightenment.”

Nor were they technically refugees, as is sometimes assumed. Many of them had been living freely in Britain prior to September 1939, some having arrived there as children thanks to the Kindertransport organised by the Movement for the Care of Children from Germany after Kristallnacht in November 1938. With the outbreak of war, they were under suspicion as potential fifth columnists who might secretly assist a German invasion. Prime minister Winston Churchill declared them enemy aliens and swiftly had them shipped off to Canada and Australia.

Dunera Lives, the first of two volumes, is essentially a history told through images; the second volume will include narrative accounts of individual Dunera lives. Together, they constitute the final collaborative project of the highly regarded and much-loved historian Ken Inglis, who died late last year. Inglis’s interest in the men was stirred many years ago when he mixed with several of them as a student at the University of Melbourne. In one photograph late in the book we see Inglis with Dunera boy George Nadel and other Queen’s College residents who achieved first-class results in their 1947 examinations; also reproduced is a sketch by another of the former internees, Leonhard Adam, showing students relaxing outside Queen’s College.

The camp at Orange: Ludwig Hirschfeld-Mack, Desolation, 1941, woodcut. University of Melbourne Art Collection. Gift of Mrs Olive Hirschfeld 1979. 1979.0179. Copyright: Chris Bell

The camp at Tatura: Fred Lowen, Watch Tower with Searchlights, Barbed Wire and Gum Trees, 14 July 1942. Picture Collection, State Library of Victoria, H94.95/29. Copyright: Monica Lee Lowen and Jocelyn Lowen

Several Dunera boys studied or worked at Australian universities after their release from detention, and many became significant academic figures, including philosopher Peter Herbst, economist Fred Gruen, political scientist Henry Mayer, fine arts scholar Franz Philipp, physicist Hans Buchdahl and mathematician turned oceanographer Rainer Radok. Part of the Dunera mythology is that they generally went on to stellar careers as scientists, lawyers, entrepreneurs, industrialists, public servants and artists. As a group, they undoubtedly possessed “substantial education and cultural capital,” as the authors put it, but the story of their postwar lives “is not one of uniform achievement, but of striking variety.”

Fewer than half of them settled in Australia; the rest returned to Britain, emigrated to the United States, helped found the state of Israel or ended up in a variety of other counties. A few dozen returned to Germany, West and East. Both Walter Kaufmann and Heinz Eggebrecht chose to settle in the German Democratic Republic: Eggebrecht rose to senior ranks within the communist regime and died a month after the fall of the Berlin Wall; Kaufmann, one of the youngest Dunera boys, still lives in Germany, where he continued his writing career after reunification. He was back in Australia doing interviews as recently as 2014.

A remarkable number of visual artists, illustrators and photographers figured among the internees, and they left a rich legacy of images. Concise introductions and informative captions put the images in context, but this volume doesn’t so much tell the story of the Dunera boys as show it, in roughly chronological order, beginning with the interwar period in Europe. The affecting photograph (above) of Fritz Loewenstein (later Fred Lowen) holding his father’s hand as they stand ankle-deep in the North Sea on a 1927 holiday speaks to the forthcoming trauma that will wrench Europe apart in a manner that could not be conveyed in words.

From arrest to internment: Untitled drawing by Fritz Schönbach, c. 1940, pencil on paper. Jewish Museum of Australia collection 3067.15.4. Copyright: Schonbach family

Among the images from wartime Britain are a haunting self-portrait by the artist Ludwig Hirschfeld-Mack, and a series of compelling cartoon-like sketches by Fritz Schönbach (later Fred Schonbach) depicting the overnight transformation of refugees into enemy aliens. Then come images from the voyage itself, including Schönbach’s sketch of their “reception” by the guards who would destroy, confiscate or steal their possessions, including treasured letters from loved ones, left behind to suffer under the Nazis, whom the boys would never see again.

Fritz Schönbach, Dunera Reception, 10 July 1940, watercolour and pencil on paper. Archive of Australian Judaica, Rare Books and Special Collections, the University of Sydney Library. Copyright: Schonbach family

The ship was terribly overcrowded, and the indignities suffered by the internees included a daily limit of two sheets of toilet paper. Despite the scarcity, a stolen roll of this precious commodity was used by Gerd Buchdahl, Peter Herbst and Peter Lasky to draft a constitution for the boys to manage their own affairs once they were incarcerated on land. Based on the principles of liberal democracy and British parliamentary procedure, it was, to a large degree, implemented in the camp at Hay, which assumed, in the words of internee Klaus Loewald, “the character of a small working republic.” The camp also had its own short–lived currency, printed by the publisher of the local newspaper and praised for its artistry by the manager of the local Commonwealth Bank. Closer inspection revealed that its designer, George Teltscher, who had fought in the Spanish civil war and studied at the Bauhaus, had secreted the words “WE ARE HERE BECAUSE WE ARE HERE BECAUSE WE ARE HERE” into the curls of barbed wire decorating the edge of the banknotes. This soldiers’ lament, sung to the tune of “Auld Lang Syne,” was known to the internees as the Hay–Tatura hymn.

A performance of Beethoven’s Kreutzer Sonata at Tatura on 8 March 1942. Leonhard Adam, Kreutzer Sonata, 1942, watercolour and ink on paper. Jewish Museum of Australia collection 4024

So it’s not entirely surprising to find that Tatura had its own university — Collegium Taturense — which delivered an average of 113 lectures a week attended by nearly 700 students. Concerts, theatre performances and sports matches were another feature of life in the camps, as the internees did their best not only to fill time and combat boredom but also to retain a sense of dignity and purpose in the face of an indefinite wait for freedom. As the editors of the first edition of the Hay camp newsletter, the Boomerang, put it in February 1941: “Please remember that your mind is not interned, nor is it confined to this camp.”

The injustice of the Dunera boys’ treatment was recognised early. Churchill came to regret the decision to order the indiscriminate detention of those who had sought Britain’s protection. He apologised and instigated a court martial that documented the abuses the boys endured at sea. The Dunera’s senior officer was severely reprimanded and a regimental sergeant major was discharged and jailed for theft. A fund of £35,000 was used to compensate the Dunera boys for their lost and stolen property.

Their treatment in Australia began to change too. By mid 1942 at least 1300 had been set free, hundreds of them returning to England as soon as they could. Some — including the novelist Ulrich Boschwitz — died at sea when the Abosso and the Waroonga were sunk by enemy action. Many of those who stayed joined the 8th Employment Company, a non-combatant battalion of the Australian army, which they sometimes referred to as the 8th Enjoyment Company, a reference to the fact that the numerous musicians and performers in the ranks combined their military duties with theatrical pursuits.

One of the heroes of Dunera Lives is the much-loved commanding officer who made this possible, New Zealander Edward Renata (Tip) Broughton, who even played himself in one of the internees’ colourful productions. Karl Duldig cast a bronze bust of Broughton, and one of the images in this collection is of a handwritten note from Broughton to the soldier-tenor Erich Liffmann. First in Māori, then in English, Broughton expressed, “in thoughts emanating from the depths of my soul,” the belief that Liffmann would one day “ascend to the peak of the mount of song and there dwell for ever.” The enjoyment ceased after Broughton retired, and a number of Dunera boys were court-martialled for minor indiscretions. Michael Levin was punished after he complained about “being treated like a schoolboy, herded about the parade ground by a professional soldier whose only ambition in life seems to be bigger and better wars… and who once actually had the impertinence to call me a ‘queen’ — just because I am in the habit of wearing my hair rather longer than customary.”

Baron Martin von Koblitz, a Viennese connoisseur of the arts, at Orange. Fred Lowen, Baron von Koblitz, 1941, pencil on paper. Jewish Museum of Australia collection 3419

The main tasks of the 8th Employment Company were unloading cargo from ships in Port Melbourne and transferring goods between trains on the border between Victoria and New South Wales, but a few Dunera boys were called to higher duties. Bruno Lipmann had learnt Japanese before the war and continued to study it while interned, with the aid of a Japanese–English dictionary. He was seconded to the “listening post” in the headquarters of General Douglas MacArthur. There, translating Japanese radio broadcasts into English, this one-time enemy alien became part of sensitive Allied intelligence-gathering.

The authors touch on, but don’t labour, parallels with the treatment of displaced and vulnerable people today, noting that the Dunera boys were persecuted both by the regime that they fled and by countries in which they sought protection. Many moved to Britain before the full extent of Nazi persecution became apparent, not so much in immediate fear of their lives as in the hope of a brighter future. Today they would probably be dismissed as “economic migrants.” As the authors put it, once set in motion “internment and deportation turned into a gratuitous exercise of brutality.” The Dunera boys, like millions forced from their homes today, had “no rights and no nation.” They were not incarcerated for what they had done but because they were wrongly perceived to pose a threat.

The final section of the book shows the boys’ postwar lives — marriages, careers, achievements, disappointments and, as the decades rolled on, reunions and commemorations. A “memory boom” was spurred on by new recording technologies and a few key “memory activists,” and supercharged by books and films, including the 1985 telemovie starring Bob Hoskins. In the process, a diverse group of people, thrown together by fate, were fashioned into one large family. As Inglis, Spark and Winter write, the Dunera Lives constitute a “fictive kinship group” based on “a family of experience rather than of blood lines” and the bonds “these men and women forged and continue to forge in the process of together remembering the past.”

Although the quality of the reproduction is high, not all the images in this volume are visually arresting, nor do all of them unlock a compelling narrative. In determining what to include, the authors’ editorial path has veered towards the compendious. Perhaps a slimmer, more selective volume published on slightly heavier paper stock would have better conveyed the story to a broad readership. But others with a more direct connection to the Dunera generation, or anyone wishing to engage more rigorously with the detail of its history, will have good reason to appreciate the comprehensive approach.

This first volume of visual history is like a series of snapshots, moments rooted in a particular place and time. The second volume promises to complement it with longitudinal narratives of individual lives. Separately and together, they will make a rich contribution to our understanding not only of the Dunera and Australia, but also of the complexities of migration, flight and refuge. ●

The post Remembering the Dunera appeared first on Inside Story.

To break the ice, music therapist Asami Koike asks us to introduce ourselves and nominate an artist we like whose name begins with the same first letter as our own. The others mostly choose performers I’ve never heard of, and I worry that my pick, Paul Kelly, will make me look even more out of place. But Susie, a slight young woman with lively eyes, short hair and a winning smile, surprises me by saying, “Cool, good choice,” and Conrad, solid and quiet, nods in agreement. The two of them are already holding acoustic guitars; Asami has one too, and Jess is seated at the keyboards, ready to play. Asami encourages the rest of us to pick a less demanding instrument from a selection of things for shaking or hitting that she’s spilled onto the table.

“Okay,” she says. “Let’s make some music. Susie, why don’t you choose something?” Susie hauls over a fat blue folder and begins leafing through. The folders, and there are several of them, are packed with plastic sleeves, each sleeve containing multiple copies of the lyrics and chord progressions for popular songs. Asami has collected hundreds of sheets to cover every possible taste in music.

Susie makes her selection and hands around the photocopies, and we crash our way through a rather sad ballad. I’m not familiar with the artist or the song, but the melody is easy enough and we make a surprisingly good fist of it. Asami’s strumming keeps the rest of us more or less in time and her singing helps us carry the tune. As we finish, a light ripple of laughter goes through the group, a sense of relief and release. No one is embarrassed. No one feels foolish. The song is a small triumph that binds us together.

Music therapy is a relatively new but growing profession. Like many new ways of doing things, it has its origins in wartime, when medical professionals began noticing the effect visiting music groups had on traumatised veterans. Music therapy is mostly used in clinical environments, often with the very old — as a therapy for dementia for example — and the very young, including in children’s hospitals as an aid to treatments, mental health and neurodevelopment. It is also used to help people with autism.

To date, though, it hasn’t often been used in community settings or as a way of helping teenagers and young adults. But Asami says common sense tells her that it has great potential. “If you think about it, adolescence and early adulthood are the times when music plays the most crucial role in our lives,” she says. “Music is the way young people express and explore identities.” Asami is putting her theory to the test at Frontyard Youth Services, where she runs this weekly drop-in session every Thursday afternoon and sees young people individually on other days.

Frontyard is part of one of Victoria’s oldest charities, Melbourne City Mission. It provides statewide services for vulnerable young people (aged twelve to twenty-five), particularly those who are homeless or at risk of becoming homeless. Every day, seven days a week, about thirty young people make their way through the door, some coming back for repeat visits, and a larger number seek help over the phone.

When they first make contact with Frontyard, most of them want urgent assistance with housing: maybe they’ve finally run out of couch-surfing options, maybe they’ve been kicked out of private rental accommodation or fallen out with their housemates. Often, they will have escaped a violent home and sometimes they are already sleeping rough. Frontyard staff do their best to find them a safe place to spend the night, but the best they can offer may be a bed in a dorm at a backpacker hostel or a seedy motel room. On any given day, more than 6000 young Victorians are homeless, yet the state has only fifteen dedicated youth refuges with a total of 107 beds between them.

Beyond a lack of accommodation, Frontyard’s clients generally have other complex needs. Homelessness is frequently tangled together with challenges like experiences of family violence, trauma inflicted in state care, mental illness, disability or learning difficulties, poor social skills, limited education, low self-esteem, and poverty and unemployment. Even with the best-trained and most sympathetic youth workers, a troubled kid is unlikely to be willing or able to lay this all out at the first meeting. So Frontyard strives to build trust and engagement through a range of free onsite services and activities. It offers a help-yourself, all-day breakfast, wi-fi, phone charging, showers and laundry facilities. It helps with practicalities like getting an ID card and registering for Youth Allowance, has its own college, and is co-located with an adolescent health clinic, a free legal service and a mental health team. Staff can help with finding a job or with improving personal relationships.

Then there’s music therapy, one of Frontyard’s newer and more innovative offerings. The program grew out of Asami’s postgraduate studies at the University of Melbourne, which were coming to an end in 2015. In the final semester of her Master of Music Therapy, she and other students were required to find a placement in an organisation that didn’t already offer music therapy. In other words, they had to approach an organisation and convince it to give music therapy a chance. Asami chose Frontyard, and staff there were happy to give it a try. By the end of her placement the results were so positive that management offered her a job, funded out of the untied donations that make up about a quarter of Frontyard’s budget.

Asami is a versatile and highly skilled musician. Along with vocals and guitar, she plays violin, piano, saxophone and drums. She’s also worked as a research assistant on a University of Melbourne study examining music therapy’s role in helping young people recovering from mental illness. Her ability to build rapport within our disparate little group is remarkable.

Crowded together in her basement music room, we work our way through songs by Adele, Bruno Mars and ABBA. “Dancing Queen” is the only song I know well (though it wouldn’t have been my choice) and, apart from Asami, most of us struggle with its rapid transitions from low to high notes. But no one really cares, and I even get a bit more ambitious on my tambourine, with a flourish on the line “Feel the beat from the tambourine, oh yeah…” I don’t think the other participants quite comprehend when I tell them afterwards that the song was a hit when I was thirteen — the mid 1970s is just too remote in time — but they humour me nonetheless.

One participant, Frankie, leaves after our first song to attend a meeting with a support worker, but not before swapping tips about hair colour. The newcomers, Nina and Lucy, are both noticeably more relaxed. “Do you come here every week?” Nina asks Susie. “Because if I know you are here too then it’ll be easier to come back again.” Quiet Conrad is also talking more, telling us how much the fingertips of his left hand are starting to hurt from pressing down the guitar strings to form chords. He looks lighter and makes more eye contact.

Before the group started, Asami had explained to me that promoting social connection was one of her three overall goals. “It is not about music as performance or about giving young people the skills to busk or to get into a music school,” she says. “It’s more about bringing people together.” She wants to give isolated young people a chance to work out who they are in a social context.

“Many young people who come to Frontyard have only a negative sense of self,” she says. “They think, I am homeless, I am in crisis.” Listening to, playing and talking about music enables young people to start building a more positive identity, the second of Asami’s three goals. “Often, they have little sense of who they are,” she says. “They don’t care about themselves and have no boundaries.” In determining the artists they like or hate, in forming opinions about whether they think a piece of music is good or bad, they begin to define themselves, and so put in place the building blocks of a more secure sense of identity. “Young people have such strong opinions about music, so if you can say you don’t like something, then your prefrontal cortex is working,” says Asami, referring to a part of the brain that plays a crucial role in developing personality, complex planning and impulse control, and ordering emotional responses.

This links to Asami’s third aim of using music to regulate the senses and provide emotional respite in an otherwise chaotic world. Towards the end of our group session I get a dramatic firsthand taste of how this works. We’ve just finished a rendition of Oasis’s “Don’t Look Back in Anger.” I couldn’t name the song, but I immediately recognise the tune and the lyrics (“And so, Sally can wait, she knows it’s too late as we’re walking on by.”) We’ve done a solid job with the song, despite its tricky rhythms, and the mood in the room is upbeat but mellow. There is a sense that we have achieved something together.

Then, just as it looks like the session is drawing to a natural close, three new participants burst in, filling the room with backpacks and duffel bags bursting at the seams. Bernie and Helen are regulars at Frontyard, and know most of the others in the room, greeting them loudly. The third young woman, Christie, is a new arrival and has just spent her first night in one of Melbourne City Mission’s four youth refuges, being lucky enough to secure the one bed that is kept vacant for last-minute emergencies. All of them are eating doughnuts, all of them are hyped up and on edge. “This is the last time you’ll see us, Miss,” Bernie calls out to Asami. “We’re going to Brisbane tomorrow!” Susie asks why. “’Cause I got bashed on Saturday night,” she responds, as if this is explanation enough. “Who’s he?” Bernie then demands, pointing at me. I explain that I’m writing about housing and homelessness.

Bernie doesn’t seem to care about my answer or my presence, but her arrival has been like a sudden change in the weather. The energy in the room is completely different, almost electric. I feel like the situation is getting out of hand, and that the progress Asami has made with the rest of the group is at risk of being undone. I expect her to wrap things up quickly to limit the damage, but she does the opposite, quietly suggesting that the three late arrivals join us in another song. She encourages Bernie to choose from the folders. “Nah, Miss, I don’t want to play, I just came to say goodbye,” she says. Bernie is still standing, jiggling from one foot to the other, her tall frame dominating the room. Susie chooses instead and we get stuck into another ballad. Despite themselves, Bernie, Helen and Christie soon join in. When the song ends, Bernie wants another, and then a third. By the end of the session she is calmer and more focused, and is sitting down, joining us in the circle of chairs.

“With the young people who come to Frontyard, often their brain is over-firing, or it is not firing at all,” Asami tells me later. Even playing with one hand on a drum regulates breathing and heartrate and brings participants into emotional sync with others in the group. “The feeling of being in time with a whole group means that everyone is there, everyone is present,” she says. “The effect is both visceral and cognitive.”

While I see that sensory regulation can be almost immediate, Asami tells me that it can take a year or more of incremental steps to achieve longer-term outcomes. A young person may initially be averse to seeing the nurse at Frontyard’s health clinic, for example, but feel more confident to do so after a few weeks of attending music therapy.

While the Thursday event I attend is a drop-in session, open to all, Asami’s one-on-one work proceeds a bit differently. “Some just want to learn guitar, they don’t want to talk and they don’t want to look at you,” she says. “They have lost so much trust with all the authority figures in their life.” But after about fifteen minutes, that generally changes. “They must feel calm and must feel safe to start talking,” she says. “If you start to play music together, then I’m no longer a therapist, I’m a band member. It breaks down the power dynamic.”

Bernie has participated in these one-on-one sessions, and Asami tells me that the first time she came she said, “Nothing fucking works, Asami, so I’m just going to give this a go.” She would use two fingers to pick out notes on the keyboard for long stretches of time, apparently completely at random, with no evidence of melody or rhythm. Asami interprets Bernie’s improvisation as an expression of the intense isolation she feels. She says that music therapy has really softened Bernie, whom she describes as both “intense” and “maternal,” quick to share whatever she has, and often taking others, like Helen and Christie, under her wing. Conrad, too, has been doing individual sessions. I am amazed when Asami tells me that this placid, friendly young man has anger problems and has been the subject of intervention orders by his parents.

At the end of our group session, Nina asks Asami if she can stay behind for a minute and talk to her privately. I sense that this is another opportunity, the moment at which a troubled young person reaches out, revealing more of her story and her needs.

As Asami reminds me, music is symbolic, and we often use it when words are unavailable or inadequate to express our feelings or meet the emotion of a situation. “That’s why we play music at weddings and funerals and before sending soldiers off to war,” she says. Music can lift young people out of the hole they are in, and help them to see beyond the rim of their immediate crisis, connect with others and build trust. As the odd man out in our group, I felt included, with the young participants doing their best to put me at ease and make me welcome.

“What is so interesting is that everyone is so generous,” says Asami. “They step up and take responsibility, as if there is a real need to prove that they are not just taking, but want to give back.” ●

Names have been changed to protect the privacy of participants.

The post “Okay. Let’s make some music” appeared first on Inside Story.

Those fine words are backed by C$15.9 billion of federal money. Evan Siddall, president and CEO of the Canada Mortgage and Housing Corporation, told the conference that contributions from provincial and local governments could bring the total investment to around C$40 billion over ten years, sufficient to repair 300,000 existing dwellings and build 100,000 new ones.

Ottawa is spending C$4.8 billion to increase the quality and supply of public and social housing provided by provincial governments and community organisations, and putting another C$11.1 billion into a National Housing Co-Investment Fund offering low-interest loans to build affordable housing for the private rental market.

To get finance from the fund, 30 per cent of dwellings in a project must be rented out for less than 80 per cent of median market rates for a minimum of twenty years. That’s double the duration required under the successful but short-lived Australian equivalent, the National Rental Affordability Scheme, or NRAS, which funded about 37,000 new homes renting at a 20 per cent discount to the market. The Canadian government is also leveraging its fund to achieve other objectives: projects must outperform existing national codes on energy efficiency and greenhouse gas emissions by 25 per cent or more and at least one in five dwellings must meet specified accessibility criteria.

On top of all that, Canada’s strategy sets a target of halving chronic homelessness within ten years through a C$2.2 billion program that Siddall said would take a housing-first approach, regarded by many advocates as the most effective long-term way to tackle the problem.

The relevance of the Canadian example was not lost on the Australian audience. Measured by housing prices and the pace of their rises, Toronto and Vancouver are up there with Sydney and Melbourne. Both countries are federations, with split responsibilities across three tiers of government complicating housing policy. Both struggle to find a coherent response to chronic homelessness.

Perhaps the reason that Siddall’s presentation had the Sydney audience buzzing was the extent to which the approach of the Canadian government appeared to reflect their own aspirations for policy in Australia. This goes beyond the language of human rights to encompass the benefits of secure, appropriate and affordable housing for health, education, employment and economic growth. Siddall, who helped develop the strategy and described his role in the Canadian system as equivalent to that of a deputy housing minister, cited research showing that housing has “a higher multiplier effect than personal or corporate tax cuts” with a return of $1.50 for every $1 invested. He described the strategy as “community renewal on a national scale” and said the Trudeau government conceived housing as “shelter, not bricks and mortar.”

The sincerity of Trudeau’s promises will only become clear over time. Australia, too, has had a prime minister who vowed to halve homelessness and then found the problem to be far more intractable than expected. Critics note that Trudeau’s new approach to homelessness won’t be launched until early 2019, about six months before Canada’s next federal election. Another key element of the program, a C$4 billion rent subsidy called the Canada Housing Benefit (which looks like it might be similar to Australia’s Commonwealth Rent Assistance) is not due to start until six months after that election, in April 2020. As Australian housing advocates know only too well, programs are only durable if they have bipartisan support solid enough to withstand changes of government and changing budgetary circumstances.

Still, Evan Siddall’s presentation on Canada’s strategy set the tone for many conversations during the rest of the conference. For the more optimistically inclined, there was a sense that measures announced by treasurer Scott Morrison in this year’s federal budget had also moved Australia closer to a coherent national policy.

The most significant step is the creation of the National Housing Finance and Investment Corporation. If it works, the NHFIC will attract new long-term institutional investment into affordable housing by acting as a bridge between community housing providers and superannuation funds. While community organisations can, and do, borrow from banks, each loan must be separately negotiated. Super funds won’t deal one-on-one with individual providers in this way, so the NHFIC and its associated bond aggregator aim to offer them a standardised, rated investment product. “The NHFIC is not a national housing policy,” said Carrie Hamilton from the Housing Action Network, “but it is a very important piece of the puzzle.”

Hamilton was introducing a keynote presentation by Piers Williamson, chief executive of the Housing Finance Corporation. This British forerunner of the NHFIC was set up in 1987, after Margaret Thatcher’s controversial “right-to-buy” program had depleted Britain’s supply of affordable rental dwellings by selling off council houses. It provides long-term loans to Britain’s 170 individual housing associations, which between them own 2.49 million homes and account for 10.5 per cent of all housing.

Williamson, who is advising the Australian government on setting up the NHFIC, described himself as a specialist in risk — “not in taking risks but avoiding them.” He is proud of the fact that no bank or institutional investor has lost money lending to a British housing association over the corporation’s thirty-year history. He also points out that the Housing Finance Corporation helps smooth economic cycles. When commercial banks were falling over in the global financial crisis, its lending grew. Under a government scheme introduced in 2013, the Corporation also guarantees loans to housing associations, reducing the cumulative cost of borrowing for affordable housing, he says, from 3.7 per cent to 2.5 per cent.

On the final day of the conference, when assistant treasurer Michael Sukkar announced that the Commonwealth would offer a similar guarantee on bonds issued by the NHFIC, delegates burst into spontaneous applause. Two other announcements also pleased the audience. The first was that the NHFIC will have an independent board when it begins operations on 1 July 2018. Williamson had earlier told the conference that independence has been crucial to the success of Britain’s housing finance corporation because “politicians always like to dabble and dabbling is not always good.” Sukkar’s third bit of news was that a $1 billion facility set up to finance infrastructure to expedite new housing supply will now be ongoing, rather than terminating after five years.

The NHFIC has the backing of both Labor and the Greens, which means it should survive any change of government, and in his conference speech Sukkar added some small but essential elements that move it closer to being a core piece in the bigger picture of a coherent national housing strategy. But the most important part of the puzzle is still absent — government money.

“Subsidised housing requires a subsidy,” Williamson told the conference. He said that “sitting at the bottom” of Britain’s affordable housing model was £45 billion (A$75 billion) in grant money. “Grants,” he said, “are one of the things missing over here.”

The crucial role of public investment in providing housing for low-income households is well established. Private developers will not build affordable housing because it does not make commercial sense for them to do so. It’s a clear case of market failure.

Two charts from reports by the Australian Housing and Urban Research Institute, or AHURI, help illustrate the point. The first, from a report on the responsiveness of Australia’s housing supply, tracks new dwelling supply over a decade. The authors argue that this data shows that the vast majority of new houses and units are “concentrated in the mid-to-high price deciles” and that there is a “paucity of new supply at the bottom end of the housing market.”

In theory, though, an increase in higher-priced supply should still help reduce the cost of housing overall. As buyers or renters of more expensive homes move up the property ladder, they release their former cheaper dwellings onto the market — a process known as filtering. If filtering works effectively (and there are arguments about that), then what matters for affordability is not so much an increase in supply at the bottom of the market as an increase in supply overall. But what is happening to supply is also disputed, as seen in a current public debate between leading Australian housing researchers.

Ben Phillips and Cukkoo Joseph at ANU’s Centre for Social Research and Methods recently concluded that Australia had an oversupply of new dwellings between 2001 and 2017. If this is correct, then other factors must be stopping filtering from increasing affordability. If new properties are bought as second homes or by overseas investors, for example, then there is no previous property to filter down.

But the Grattan Institute challenges the ANU analysis of oversupply. “Phillips and Joseph ignore how rising prices and worsening affordability pushed people into larger households than they would have chosen,” wrote John Daley and Brendan Coates in response to the report. “And so their estimates underplay the number of dwellings needed to accommodate Australia’s growing population.” Daley and Coates give the example of young people staying longer in the family home than in the past and conclude that this is less likely to be driven by “a social wave of filial affection” than by the fact that “there is less housing to go round.”

Even if the Grattan Institute is right that “a sustained increase in supply over several years” would materially lower prices, it will be a slow process, because high rates of new construction only increase the stock of existing dwellings very gradually. This is why many delegates at the Sydney conference focused less on market settings and more on public investment in social and affordable housing.

Which brings us to the second chart, from an AHURI report on public housing that shows how government investment in the sector has tracked steadily downwards over a thirty-year period, with one brief, spectacular exception. The blip in the chart that resembles the sudden resuscitation of a stalled heartbeat is the dramatic effect of Kevin Rudd’s second stimulus package during the global financial crisis. In February 2009, Labor pumped $42 billion into the economy, including $6.6 billion to build 20,000 new units of social housing dwellings and 802 defence homes. At the time, surprised housing advocates called it a “quantum leap” for the sector. As soon as the stimulus ran out, though, construction of social housing fell off a cliff and the heartbeat of Australia’s social housing sector returned to its dangerously low levels.

On the same day as Justin Trudeau was launching Canada’s national housing strategy, the British government released its autumn budget, which included “£15.3 billion of new financial support for housing over the next five years, bringing total support for housing to at least £44 billion over this period.” Oona Goldsworthy, CEO of Bristol housing provider United Communities, who was at the Sydney conference, told me that “a lot of government effort” is going into housing in Britain, with prime minister Theresa May giving it equal priority, or greater, to health, education and growth.

Despite Michael Sukkar’s announcements, housing doesn’t seem to be getting the same level of attention here. Nor is there evidence of the cohesive approach that unites all levels of government as in Canada. This became obvious at a conference session that brought together senior state, territory and federal public servants. The focus was on housing policy innovation around the nation but the session ended in a degree of acrimony.

The final speaker was Paul McBride, manager of welfare and housing reform in the Commonwealth Department of Social Services. He was endeavouring to explain why the federal government wants to replace its existing deal with the states and territories — the National Affordable Housing Agreement, or NAHA — with a new National Housing and Homelessness Agreement, or NHHA. This was another 2017 budget initiative but it has stalled, not least because of resistance from state governments.

The Commonwealth says NAHA has failed because only one of the four performance benchmarks set up under the agreement has been met. Despite $9 billion in funding since 2009, “growth in the size of the social housing stock has stagnated and numbers on waiting lists have increased.” In return for future funding under the replacement NHHA, the Commonwealth wants the states and territories to put in place credible housing and homelessness strategies and provide data for transparent and consistent reporting. As an incentive, it is offering to index $115 million in annual funding for homelessness services provided under the current agreement and to make that funding permanent.

When McBride described this as “a significant concession from the Commonwealth,” Caryn Kakas, executive director of Housing NSW, shook her head in disbelief. She accused Canberra of holding the states hostage over housing funding. “If the Commonwealth is serious, it should be putting forward a national housing strategy, not just stitching together state programs,” she retorted. She pointed out that the Commonwealth can pull levers like tax reform that are beyond the reach of the states and territories. McBride’s response was interrupted by interjections from the floor. “There’s no strategy, absolutely none,” yelled one delegate. “Spend more money!” called out another.

McBride had earlier noted that treasurer Scott Morrison “wants a pathway to home ownership” and that all subsidies and state programs should point in that direction. And this is perhaps where the difference in views really resides. For most of those at the conference, the core issue is not assisting first homebuyers to take their initial step up the property ladder, but helping low-income households to put a secure roof over their heads.

Sydney University’s Nicole Gurran told the final conference session that Australia lacks a properly funded social housing system, which would require government and institutional investment to increase supply at the bottom of the market. “If we want stable supply, then we have to be serious about building, irrespective of the fluctuations of the real estate market,” she said. “And we have to make sure that we are delivering what we really need, and that’s affordable, new rental housing.”

Gurran noted that forgoing billions of dollars in revenue through negative gearing and the capital gains tax discount failed to deliver this outcome. Labor has promised to reform negative gearing and the capital gains tax discount if it wins the next election. Even if it only saved half of the $11.7 billion calculated to be lost on these concessions to property investors annually, that would still bring in enough funding to revive the heartbeat of Australia’s social and affordable housing sector, not just in a one-off stimulus package, but year on year. Wherever the money ultimately comes from, if we want a national housing strategy, public investment is still a missing piece of the puzzle. ●

The post In search of a national housing strategy appeared first on Inside Story.

But changes to negative gearing and the capital gains tax — the preserve of federal government policy — aren’t sufficient to make housing fairer and more sustainable. At least as important, according to analysis by the Grattan Institute, is reform of state taxes, and particularly the abolition of stamp duty and its replacement with broad-based property tax — something that is even more difficult to achieve politically.

Research released at the 2017 National Housing Conference in Sydney suggests that there is a way forward, though, given sufficient will. A new report on pathways to property tax reform published by the Australian Housing and Urban Research Institute, or AHURI, argues that a gradual transition from stamp duty to a property tax is possible without severely disrupting the housing market or disadvantaging home owners.

Change in this area is difficult because state governments — particularly those with booming house prices — are addicted to stamp duty. State and territory property taxes raised around $40 billion in 2014–15, or more than 10 per cent of all taxes collected in Australia.

But University of Tasmania political scientist Richard Eccleston, who led the AHURI research, says a recurrent property tax could raise the same amount of money as stamp duty. “This is not about increasing taxes, it’s about using a new and more efficient tax,” he told the Sydney conference.

Economists and housing experts generally agree that there are good reasons for using property tax rather than stamp duty to raise revenue.

First, stamp duty is levied at the point of purchase, when buyers, particularly first homebuyers, can least afford it, whereas a broad-based property tax is spread over time. A property tax also brings in more revenue as house prices rise and so captures a share of windfall gains that would otherwise accrue solely to home owners when, for example, government builds a train line, school or hospital that improves the amenity of an area and boosts their property values. It also means that taxes fall with house values, and so home owners pay less if their notional equity is reduced.

Second, the big up-front cost of stamp duty is a deterrent to moving house, making people less likely to move from areas of low to high employment or to take up positions where their skills are more effectively used. Speaking on the same panel at the AHURI conference, Grattan Institute researcher Brendan Coates said the really big benefits of a shift from stamp duty to property tax were productivity gains, which could be worth up to $17 billion a year.

Third, by lowering the cost of moving, the shift to a property tax could encourage more efficient use of housing. Empty-nesters may be more willing to move to smaller dwellings if downsizing doesn’t cost them tens of thousands of dollars in stamp duty.

Finally, property taxes give state governments a more predictable, stable and reliable revenue stream than stamp duties. While New South Wales and Victoria may be rolling in cash right now, if the housing bubble pops and the real estate market slows, then the rivers of gold could quickly slow to a trickle.

The question is not whether shifting from stamp duty to property tax is a good policy idea, the question is how to do it. Asking existing home owners to start paying property tax would seem like double taxation, since they paid stamp duty up-front when they bought their homes. Yet exempting them would create an even bigger disincentive to moving. “Grandfathering is bad for mobility,” Coates told the conference, “because it locks people into their current homes.”

Both Coates and Eccleston recommend a twenty-year transition from stamp duty to property tax — just like the process that has been under way in the Australian Capital Territory since 2012. It’s true that the transition is simpler there because the ACT government is also effectively the local government and can incorporate property taxes into council rates more easily than other states and territories. But such practical obstacles are not insurmountable.

The new AHURI report recommends a four-step process. Eccleston says the immediate first steps are to develop consistent methods for valuing residential property across all states and territories and to establish a national register of property valuations and ownership. The second, short-term step is to simplify stamp duty into a single flat rate of 6 per cent applying only above a significant threshold. Eccleston says this would benefit those 60 per cent of buyers purchasing property at the lower end of the market and transfer costs to those buying more expensive houses. The third, medium-term step is to add a stamp duty surcharge for investors and top-end buyers or increase the rate of stamp duty they pay. According to the report, this would “meet housing policy goals by dampening demand for investment properties and increasing home ownership rates.”

Converting stamp duty into a “single progressive system” in this way would provide the foundation for the fourth and final substantive reform: replacing stamp duty altogether with a recurrent property tax. Stamp duties would gradually fall over the twenty years, and property taxes would gradually increase. Eccleston’s study estimates that the annual rate of property tax needed to fully replace stamp duty on a median-priced dwelling in New South Wales or Victoria would be less than $1300. In Tasmania, the figure would be less than $500.

The transition from stamp duty to property tax requires national leadership and national coordination. Eccleston says the obvious precedent — in terms of process rather than outcomes — is the implementation of National Competition Policy under the Howard government. The Commonwealth should take a similar leadership role in relation to property taxes, he says, because it would be the main beneficiary of the resulting increase in economic growth and output. And only the Commonwealth has the capacity to put a deferred payments scheme in place to enable asset-rich but income-poor retirees to put off paying property tax until they sell their home, or to have those taxes paid out of their estate.

Richard Eccleston acknowledges that moving to what is “essentially a wealth tax based on property” is a political challenge, but says it’s not as hard as the obvious alternative, removing capital gains tax exemption on the family home.

Grattan’s Brendan Coates adds two more big measures to the housing tax wish list. The first is to include the value of the family home in the pension assets test, but only above a certain threshold (say $500,000). Not only might this encourage some older Australians to downsize, it would also save the government money and even up the pension treatment of home owners and renters.

Coates also wants to flatten progressive state land taxes. In terms of fairness, this might sound counterintuitive, but the aim is to encourage a shift in the private rental sector from “mum and dad” landlords to institutional investors. Coates makes the point that investors who only own one rental property often don’t make very good landlords, partly because they are scared of getting a bad tenant and not being able to kick them out, and partly because they want to be able to sell the property any time to cash in on the value of their asset. As a result, they don’t like to offer tenants long tenure.

Institutional landlords, by contrast, invest at scale, spreading the risk of a bad tenant across many dwellings. They are also seeking long-term rental returns ahead of capital gains. Under current arrangements, the rate of state-based land taxes rises with the value of property held, quite steeply in some cases. This significantly reduces the yield for institutions like superannuation funds and creates a disincentive for them to invest in the private rental market.

Politically convenient changes “are often ineffective or harmful,” notes Eccleston, while “meaningful reforms are generally politically difficult.” The major beneficiaries of a transition from stamp duty to property tax would be younger Australians buying their first home. “Do we have leaders with the courage to make that argument?” he asks.

With his own battle wounds from attempting significant tax reform, former Liberal leader John Hewson has his doubts. “Politics is even more short-term, populist and opportunistic than in my time,” he told the same conference session. “It is hard to imagine a serious and sustained debate about any aspect of public policy.”

Changing the way housing is taxed wouldn’t necessarily have a huge impact on housing affordability, but it should make it easier for younger homebuyers to enter the market. It would also help to boost growth, deal with budget challenges and reduce inequality, and so make the entire system fairer and more sustainable. As Hewson told the conference, continuing to push such problems further down the road is “basically intergenerational theft.” ⦁

The post Housing taxes: getting from here to there appeared first on Inside Story.

At issue in Northcote was the fate of eighty-seven dwellings on the Walker Street estate, built in the 1960s and slated for redevelopment under Labor’s $185 million public-housing renewal program. The program promises to replace “older, rundown housing” on nine inner- and middle-ring estates with “new, modern, low maintenance homes.”

While the Northcote stoush has its own special characteristics, similar battles are being fought across Melbourne and in Sydney and other cities. They are symptomatic of how public housing is being reshaped in two main ways.

First, state governments are trying to replace or refurbish ageing public housing without investing large sums of public money or taking on substantial new debt. By giving private developers access to well-located land that is home to public-housing estates, governments can offset the cost of renewing social housing. Second, and simultaneously, state governments are increasingly transferring the management or ownership of public housing to community-housing associations, the other much smaller branch of the social housing sector.

These shifts come on top of a long period of neglect. According to data compiled by the Australian Institute of Health and Welfare, the number of households in state-owned and state-run housing dropped from 331,100 to 312,200 in the decade to June 2016, a fall of 6 per cent despite overall growth in the population.

Given Australia’s ageing demographic and changing household composition, the tally of individuals in public housing probably fell even faster. In 2007, families with children (couples and sole parents) made up 27 per cent of households in public rental; ten years later their share had fallen below 20 per cent. The proportion of single-person households rose from 50 per cent to 54 per cent.

As public-housing assets age, maintenance becomes more expensive. In a report released in June 2017, the Victorian auditor-general found that 60 per cent of the state’s public-housing stock was more than thirty years old — up from 42 per cent just five years earlier. As a result, state governments struggle to maintain existing dwellings at an acceptable standard, let alone expand their portfolios.

In any case, the public-housing mix is no longer fit for purpose. Though many existing houses and flats have three or more bedrooms, designed to accommodate families, growing numbers of long-term tenants live as couples or singles. Children have grown up and moved out; couples have separated or a partner has died. As a result, says the Australian Institute of Health and Welfare, more than 16 per cent of public housing is underused — that is, the property has at least two more bedrooms than the residents need. One- and two-bedroom accommodation is also by far the most sought-after option among people on waiting lists.

Add to those factors the age profile and levels of disability among current and potential public-housing tenants, and it’s clear that older-style “walk-up” flats like those at Walker Street urgently need to be replaced. Lifts will provide access to higher floors for people with limited mobility, better air circulation will create healthier environments, and energy-efficient design can reduce heating and cooling costs.

All these pressures help explain why state governments are looking to leverage private-sector investment and engage the not-for-profit sector in building, upgrading and maintaining public housing.

In theory, allowing the private sector to build commercial residential property on well-located public land is win–win, because it generates revenue to offset the cost of public-housing renewal. This enables government not only to replace stock that is run-down, inaccessible or unsuitable with new more appropriate dwellings, but also to increase the supply of dwellings overall.

In the case of Walker Street, the Victorian government says it included private housing to “help fund” the redevelopment, and insists that its renewal program will increase the total number of social housing properties by “at least 10 per cent.” Existing residents will have to move away during construction, but housing minister Martin Foley has pledged that any public tenant who wants to can return when the work is complete.

Yet the potential benefits were hotly disputed at the Northcote by-election, with the mayor of Darebin, the Greens’ Kim Le Cerf, warning that redeveloping the estate could permanently displace forty-seven families.

Foley and Le Cerf can’t both be right, so what is going on here?

The government’s claim that the number of public-housing dwellings will rise is technically correct. As the plans stand, the eighty-seven existing homes in Northcote will be replaced by ninety-five new social housing units. But the overall number of bedrooms appears to decrease by about 25 per cent (from 201 to 149) because smaller one- and two-bedroom apartments will replace mostly three-bedroom dwellings. So it’s possible that the new estate could end up with more public housing but fewer public tenants.

According to researchers Abdullahi Jama and Kate Shaw, this was what happened when the state government used a similar technique to redevelop an ageing estate in inner-city Carlton. They estimate that 146 public tenancies were lost as a result of renewal and conclude that “the social-mix approach to inner-city estate redevelopments in Australia is driven more by an imperative to capitalise on the sale of public land than it is to assist public tenants.”

But private-sector development has potential benefits. Along with ninety-five new units of public housing on the 1.1 hectare Walker Street site, another 125 dwellings will be built and sold on the open market. This expansion in medium-density housing means that existing infrastructure will be used more efficiently and more housing will be available close to public transport and jobs. All things being equal, it should improve overall affordability and reduce the constant pressure to develop on the metropolitan fringe.

Where the government is on more uncertain ground is when it argues that mixing private development and public housing helps transform “pockets of disadvantage” into “genuinely integrated communities.” Critics argue that this promise rarely translates into practice, with Jama and Shaw again citing the Carlton redevelopment as an example. Far from being integrated, “public” and “private” residents ended up living in separate blocks, entering through different foyers and parking in different areas. The surrounding open space was not fully shared either, with owner-occupiers enjoying a “private courtyard garden” that public tenants can’t use. This parallels the “poor doors” found in notionally integrated developments in New York and London.

Even if these problems were overcome, the evidence that social integration makes a material difference to the lives of public-housing tenants is mixed at best. According to the Australian Housing and Urban Research Institute, or AHURI, “a vast literature compiled over many years” has produced only “inconclusive” findings about the benefits for disadvantaged residents.

What’s more, selling public land to fund the renewal of housing estates is a one-off that can never be repeated. AHURI cautions that “forward-thinking governments” should be planning for forty years hence, when today’s “new” public housing needs replacing and there is no public land left to sell.

More broadly, are state governments driving a hard enough bargain when they redevelop estates? After all, Victoria’s plans to increase the stock of public housing by 10 per cent are hardly ambitious.

The Coalition government in New South Wales appears to be extracting greater value from its public-housing assets than its Labor counterparts in Victoria, at least if the promises made about the redevelopment of the Ivanhoe estate in Macquarie Park are anything to go by. Under its “innovative approach to social housing,” dubbed Communities Plus, the NSW government is hoping to transform “259 social housing properties on the 8.2 hectare site into a socially integrated neighbourhood of around 3000 properties including at least 950 social and 128 affordable rental apartments.” The state government seems to have accepted that the necessary price for getting the private sector to build more social housing in Sydney is much higher levels of density.

Oona Goldsworthy, CEO of the not-for-profit housing association United Communities, based in the English city of Bristol, has dealt with private developers in creating mixed residential communities. “The land owner is in the driver’s seat,” she told me recently. It can require developers to meet particular design standards or insist on a bigger share of public housing on a revamped estate.

“One developer wanted to put all our social housing at the back of the site,” says Goldsworthy. The development was on municipal land, and a progressive city government used the planning system to demand a different layout. It’s true that governments may end up having to accept a lower price on the sale of public land as a result of applying constraints to private-sector development, but she believes this is an acceptable trade-off for more high-quality social housing.

Goldsworthy is visiting Australia on a Churchill Fellowship studying the way other countries are planning to house millennials. Her initial impression is that the problem here “is even worse than in the UK” because so many factors work against an increased supply of affordable housing. “The tax system gives such a huge advantage to people buying investment properties,” she says. “And the split of responsibilities between federal, state and local government makes things extra complicated.”

Yet Goldsworthy, who is speaking at AHURI’s 2017 National Housing Conference this week, thinks not-for-profit housing associations could play a key role in the delivery of affordable housing in Australia, just as they do in Britain. There, around 10 per cent of all housing is owned or managed by housing associations, considerably more than the 7 per cent owned by local government. Less than 1 per cent of Australian housing is owned or managed by not-for-profits.

“Housing associations in the UK grew out of an ideological and political push that the state is not necessarily the best provider of housing and the view that it can be better handled by smaller organisations that are closer to the community,” says Goldsworthy. “Ironically, some community-housing providers are now much bigger than local councils.”

She says the community-housing sector in Britain “matured relatively quickly.” Housing associations were able to borrow proactively, capturing a relatively small amount of public subsidy and matching it with lending from other sources — something public authorities couldn’t do. This agility makes housing associations attractive for Australia too, and similar arguments are being used to justify putting public-housing assets under the control of community organisations.

In a modest way, Victoria is following that lead. Under its affordable housing strategy, Homes for Victorians, the state government plans to hand over the management of 4000 state-owned properties to housing associations, about 6 per cent of its existing stock. New South Wales is going a bit further, with 14,000 public-housing dwellings on nine entire estates to be transferred to community management as part of its social housing reform program. This will increase the share of the state’s social housing managed by community-housing providers from 19 to 32 per cent.

From the perspective of state governments, transfers make sense for four main reasons. Housing associations are generally closer to the ground and more in touch than public servants tucked away in CBD offices. Housing associations do the very thing governments are reluctant to do themselves — create more housing by borrowing against the assets and their rental return. The shift to the community sector pulls in additional subsidies from the federal government, since it enables social housing tenants to qualify for Commonwealth Rent Assistance. And as long as community-housing providers hold rents below 75 per cent of market value, they are exempt from paying GST on any inputs used in building, repairing or maintenance. (State governments do not enjoy the same exemption.)

It all adds up, says David Cant, who spent sixteen years at the helm of the Brisbane Housing Company, one of Australia’s most innovative community providers. Cant, who is also speaking at the AHURI conference, reckons that every dollar invested in public housing by the state government generates a return of just 85 cents, whereas the same dollar invested in a community-housing provider can generate at least $1.35 — and significantly more if local government can be persuaded to join the party with cash or in-kind contributions, such as free or discounted land.

Victoria’s plan is part of a trend. The renewal of Sydney’s Ivanhoe Estate is a joint venture between community provider Mission Australia Housing and private developers Frasers Property Australia and the Citta Property Group. The project promises not only to generate affordable housing but also to reduce residents’ utility costs by building in solar panels, green roofs, high-efficiency centralised hot water and other environmental and energy-saving features.

The shift from public housing to community housing can have big benefits. One example is the Brisbane Housing Company’s award-winning Caggara House, in the middle-ring Brisbane suburb of Mt Gravatt. The $15 million development created fifty-seven one-bedroom apartments designed for older tenants who were living alone in public housing that had become too large for their needs. Residents who previously felt isolated, or were overwhelmed by the upkeep of a three-bedroom home with a garden, express relief and pleasure at moving into a brand-new apartment located close to shops, public transport, a library and medical services.

The advantage for the Queensland government is that a $15 million investment in Caggara House freed up existing public housing worth $25 million. “What makes Caggara work is that it is liberating houses worth $500,000,” says David Cant. He thinks the capacity of community-housing associations for innovation is even more important than the hard numbers. “Small not-for-profits know their residents and know their geography,” he says. “We’ve overheard so many conversations between the kids and Mum about how she’s always cold in winter because she’s living in a draughty old Queenslander, and the lawn always needs mowing.”

Working face to face at a local level, with a single focus on affordable housing and a willingness to take risks, community associations can do things “quicker and smarter” than an overly cautious public service, says Cant.

A “gradual but steady” shift from “public” to “community” housing has been apparent for some time, says Cant. Over the past decade, the decline in state-provided public housing has been offset by a doubling in the number of households living in housing provided by not-for-profit community organisations, up from 35,700 in 2007–08 to 72,400 in 2015–16.

As a result, the total stock of social housing (public and community housing combined) has grown, although not quickly enough to match population growth or keep up with demand. As a proportion of all housing, the share of households in social housing has fallen from 5.1 per cent to 4.7 per cent over the past decade and almost 200,000 households are on waiting lists for social housing nationwide.

Can community-housing associations be scaled up rapidly to meet this pressing need? Recent federal moves should help. In this year’s budget, treasurer Scott Morrison announced two measures designed to enable not-for-profit associations to develop more housing for low-income households by borrowing long-term at low interest rates: the National Housing Finance and Investment Corporation and an affordable housing bond aggregator.

The Victorian government has created similar mechanisms: a $1 billion loan guarantee to help housing associations borrow at affordable rates, and a $100 million revolving credit facility to provide them with long-term, low-cost loans.

Despite governments’ emerging ideological and practical support for community housing, the kind of take-off seen in Britain will only be achieved with much higher levels of subsidy than what is currently on offer. In the meantime, thousands of Australians are being denied safe, secure, affordable housing.

At the end of last year, more than 34,000 households were on the waiting list for public housing in Victoria, and upwards of 10,000 of them were classified as priority cases in urgent need. According to the state’s auditor-general, applicants “who are homeless or experiencing family violence” face an average wait of almost nine months. Applicants “who are in insecure, unsafe or inappropriate housing, or who have a serious medical condition” can expect to wait sixteen months on average, and “low-income households that may benefit from public housing” face nearly two years in the queue. The expected wait for “general social housing applicants” in most suburbs of Sydney, is “ten-plus years.”

All this serves as a reminder that community-housing providers can’t work miracles with only relatively modest government help. “Community-housing providers can extend public money much further,” says Oona Goldsworthy, “but you still need the subsidy in some form, whether that is land, financial grants or tax concessions.” David Cant agrees. “If you want to house people on lower incomes then you have to find a bit of a subsidy,” he says. “If public money comes in, private capital will follow.” ⦁

The post Does public housing have a community-run future? appeared first on Inside Story.

History doesn’t run in straight lines, but nor is it totally disjointed. Pezzullo imagined a future writing books about the history of warfare and strategy, but instead built a career in the portfolios of defence, foreign affairs, customs and immigration helping to craft national security strategy. If his star keeps rising, he will play an even broader role in creating history of the sort he once hoped to write about, as head of the powerful new home affairs ministry, which will oversee Australia’s intelligence agencies.

Pezzullo, who currently heads the Department of Immigration and Border Protection, is far too discreet a public officer to comment on possible assignments. “It’s not in keeping with etiquette to canvass, discuss or speculate about the appointment of secretaries,” he says. The prime minister’s announcement of a new home affairs ministry is still a few days away when we meet; if Pezzullo knows about it, he gives me no hint.

We talk over lunch at an Italian restaurant in Belconnen. “Thanks for coming all the way out to Canberra’s far north,” he jokes when he arrives. The venue is close to his office, and he describes it almost apologetically as “modest and suburban” but offering “very flavoursome food.” He is right on both counts. A neighbouring barn-like pub dwarfs the low-slung Bella Vista, and from the barren carpark the prospect of a beautiful outlook seems remote. Inside, however, floor-to-ceiling windows provide a panoramic view of the wintery landscape of Lake Ginninderra.

Pezzullo’s choice of restaurant matches the heritage of this Australian-born son of migrants from rural Campania, outside Naples. In 1960, his father was determined to leave a country still waiting for a postwar recovery to take hold. He chose Australia over rival destinations Canada and Argentina because his sister had already settled here. But Pezzullo’s mother was reluctant to move so far away from her parents, and went to live with siblings in Manchester. After two years of long-distance courtship, she was convinced to join her teenage sweetheart in Sydney. Once married, they settled close to his relatives in the St George area in Sydney’s south, where Michael, the eldest of three sons, was born in 1964.

“It is a typical migrant story,” says Pezzullo. His parents had little education and no formal qualifications, he tells me. His mother was pulled out of primary school at the age of six to care for a newborn sibling; she returned to school after about six months, but when she was nine she had to leave permanently to help out at home. His father never completed high school. They did unskilled and semi-skilled work, labouring on building sites and in factories and gardens, often holding down two or three jobs at a time. At home, the family spoke a mixture of Italian dialect and English. “We were spoken to in Italian but we were encouraged always to respond in English,” says Pezzullo. “It was the same with all my cousins. And our parents were very strong on that. This is our home. We speak English here.”

Pezzullo was urged to maintain his cultural heritage but regard himself as Australian. “Mum and Dad would say, ‘This country has given us everything. We owe this country everything.’” At school, he learnt to ignore insults of “wog” and “dago,” which, he says, were like “water off a duck’s back.” There was no malice in the jibes, he says, though he adds that it “wasn’t funny at times and it certainly wasn’t done in a nice way.”

Pezzullo was raised as a Catholic and went to Catholic schools, but now attends an Anglican church with his wife Lynne, who grew up in a Protestant family. Lynne Pezzullo is another influential Canberra player, providing extensive advice to government as the lead health economics and social policy partner at Deloitte Access Economics. The couple has four children.

Last year the Canberra Times ranked them at number four on a list of Canberra’s top ten power couples, but some of the other media coverage that Pezzullo has received has been less flattering. Former Australian Financial Review columnist Tony Walker recently described him as “a ruthless political operative,” while milder-mannered colleague Michelle Grattan labels him “an aggressive bureaucratic player.” ABC political correspondent Andrew Probyn says Pezzullo is seen in Canberra as “an extraordinarily hard-working, driven and intelligent fellow” who is “admired and loathed in unequal proportions.” He sums him up as “brilliant but divisive.”

If Pezzullo has an abrasive side then it is not on show as we break bread in Belconnen. He is friendly, engaged and solicitous, topping up my mineral water, inquiring about my food. (Our grilled barramundi is perfectly cooked and very reasonably priced.) He doesn’t deliver pronouncements while staring into the middle distance in the manner of some top bureaucrats I’ve met, instead leaning in to listen, making eye contact and responding thoughtfully.

His comments also reveal that he is a keen reader, especially in the area of military history and strategy. A recent speech to the Australian Strategic Policy Institute was peppered with references to such works: the first volume of Niall Ferguson’s biography of Henry Kissinger (Kissinger, 1923–1968: The Idealist), Paul Dibb’s study of the Soviet Union (The Incomplete Superpower) and the writings of early twentieth-century strategists Alfred Mahan, Halford Mackinder and Nicholas Spykman.

Pezzullo tells me this interest began early. Around the age of ten, he would play with massed groups of toy soldiers “always configuring them for battle.” He avidly watched the 1973 British documentary series The World at War and by his early teens was reading anything he could get his hands on about the great battles of the second world war — the attack on Pearl Harbor, D-Day, Operation Barbarossa. His preoccupation was not encouraged at home. “Mum remembered the war and said you never want to go through a war,” he says. “She hated the war.” The family’s only connection with the armed forces was his father’s compulsory military service in Italy, a box that had to be ticked.

Nor was it a bookish family. Pezzullo says his parents could only read and write “to a limited extent.” They encouraged scholarship but primarily as a means of getting ahead. Their view was that reading books was a necessary precursor to a professional career. They didn’t want their son to labour for a living like they had. While his parents assumed that their diligent teenager was poring over books that would help him become a doctor or an engineer, he was instead devouring information about strategy, and trying to understand how the second world war started, what Churchill’s plan of action was, and how America’s approach to the conflict evolved. “Then I branched out a bit with the first world war,” he recalls, “and similarly tried to deconstruct how nations found themselves stumbling into wars, how they can be prevented, what the strategies are for getting out of wars.”

In the early 1980s, Pezzullo felt he had found his calling studying European history and historiography at the University of Sydney. But Richard Bosworth, renowned historian of Italy, steered his bright honours student away from the academy, telling him it offered few jobs and poor career prospects. Instead, he encouraged Pezzullo to consider a more secure future in government service.

It is hardly surprising that the firstborn son of working-class migrants would feel pressure to seek a stable job with good prospects for advancement. In Pezzullo’s case, an extra consideration was in play. His mother was now a widow, bringing up her sons alone. In 1983, at the age of forty-six, Pezzullo’s father had taken his own life. “Mum had done it pretty hard,” he says, “so getting a job was important.”

Pezzullo was just eighteen years old at the time. He reveals enough for me to glimpse the distress associated with his father’s rapid and unexpected mid-life descent into illness. “I always remember he was very muscular, very strong, because he laboured all day,” says Pezzullo. Over two years, as he went in and out of psychiatric institutions in the antiquated support systems of the day, his father lost both his physical health and his self-esteem. “This was a very proud, hard-working man, physically very fit, and to see him hit a wall so he couldn’t work, couldn’t hold down a job… it was very difficult.”

In 1987 Pezzullo joined Defence as a graduate. But his career in government has not been a standard climb through civil service ranks; he has achieved a rare trifecta, working not only at the highest level of the public service but also as a top adviser to a senior government minister and a lead staffer to an opposition leader.

In 1992, after five years in Defence and a stint in Prime Minister and Cabinet, Pezzullo left his public service position to join the office of foreign minister Gareth Evans. This was not a “political appointment” in the way that term is understood today. “In those days, it was standard, especially in the foreign minister’s office, to have public servants fill the role of what were traditionally called private secretaries,” he says. “So you didn’t come up out of the party.” Most ministers in the Hawke and Keating government had a strong complement of public servants in similar roles, he says, “moving the papers, making sure that the minister has everything he needs contextually to come to a decision.” Other people in the electorate office dealt with party business and it was “very unusual” to have political officers on ministerial staff.

Pezzullo’s work for Evans was guided by some golden rules: “Never shape the advice, never filter the advice and never withhold it from the minister.” I ask him if these rules are observed today. “No comment,” he responds with a grin. But it is unfortunate, he has told politicians on both sides of the house, that the demarcation of duties has blurred. “You are never going to have a completely hard separation, because in the minister’s mind the policy, the politics, the ideology, the platform, the program, the activities, they all ultimately have to come together,” he says. But he thinks the traditional Westminster separation of private secretaries from party concerns should be maintained to the extent possible, so that they can focus on administration and policy.

“In today’s environment, where the media cycle is just revving at such a rate, the time for administration is quite rapidly being sucked out,” he says. “So you have to create time and space around the minister. The good ministers — and I’ve been blessed to work for a number of them on both sides of politics — fight hard to create that time and space for proper administration, considering certain issues, meeting with their senior public servants to go through options, commissioning new options, getting intelligence briefings, and the like.”

After John Howard led the Coalition to victory in the 1996 election, Pezzullo continued working for Gareth Evans in opposition. Then he became deputy chief of staff to Labor leader Kim Beazley, running his office and advising him on national security. It was a meeting of like minds: “Colleagues pretty quickly worked out this is not going to be helpful because these two are just going to be constantly talking about either the [American] civil war or military technology or the second world war or whatever,” he laughs.

Pezzullo rejoined Defence after Labor lost the 2001 election. He had formed a personal and professional bond with both Evans and Beazley, he says, but he didn’t see himself as “a political animal.” If Beazley had won the 2001 election, though, things might have been different. “If Kim had become the prime minister and had asked me to stay on in some capacity as a national security adviser, I would have very favourably considered that,” he says.

In “policy and intellectual terms,” the most fulfilling experience of Pezzullo’s public service career so far was writing the 2009 defence white paper under Kevin Rudd. He was excited to have the space “to deconstruct defence strategy and policy” and to conjecture in a rigorous way about the strategic circumstances Australia would face in the future. His warning about the possibility of a conventional war at sea was not widely accepted at the time. “Regrettably, it’s proved to be prophetic,” he says.

Prime minister Julia Gillard answers questions during a press conference in March 2013 with Mike Pezzullo, who was then the CEO of Australian Customs. Paul Miller/AAP Image

While assembling the white paper connected with Pezzullo’s lifelong interest in the history and strategy of warfare, the “more emotionally and personally fulfilling” part of his job as departmental secretary is leading teams, something he would never have done as an academic historian. So the high point of his career aligns with his controversial and contested role in “stopping the boats”: oversight of Operation Sovereign Borders, with its offshore detention centres, turnbacks and temporary protection visas.

At this point in our discussion, Pezzullo is at pains to ensure that he is not misunderstood. “I don’t want any suggestion that Pezzullo was thrilled by supporting Abbott or something,” he says. “I’m not talking about the political dimension, that’s between the politicians to argue about. And I’m not even speaking to the discourse around managing refugee policy.”

Satisfaction came from rising to the demands of the assignment he was set. “It was a challenging strategic and operational problem to deal with because the flow of boats was just unrelenting,” he says. “The fulfilment factor… was really about how you harness a dozen or more agencies to execute the plan.”

The role of “a responsive public servant,” says Pezzullo, is to think “conceptually and intellectually” about how to implement the policies of an incoming government. Discussing the “work in progress” that is the merger of immigration and customs, he says that public servants at his level should be able to manage changes almost irrespective of the content. He draws an analogy with industrial relations in the Howard era: “As one of my colleagues says, as a good professional public servant, you have to be able to both create WorkChoices and then, when the government changes, dismantle WorkChoices.”

Yet Pezzullo has been accused of stepping beyond his role as an independent public official to become “a muscular protagonist” in the hotly contested debate about refugee policy. In early 2016, for example, he famously told Senate estimates that “no amount of moral lecturing” by advocates would bring forth solutions to the plight of refugees detained for years in Manus and Nauru.

A strong policy thread certainly runs through Pezzullo’s career. In 2001, during a federal election campaign dominated by the September 11 attacks and the Tampa affair, opposition leader Kim Beazley promised to set up an armed Coast Guard “fully integrated into our nation’s intelligence and surveillance network” within a new “powerful, cabinet-level Ministry of Home Affairs.” Mike Pezzullo was Kim Beazley’s national security adviser at the time.

Veteran Canberra-watcher Malcolm Farr credits Pezzullo with providing “the aggressive energy” behind the armed and uniformed Australian Border Force created in the merger of Customs and Immigration (or, as critics would have it, the “hostile takeover” of the larger entity by the smaller). Dennis Atkins, another experienced press gallery journalist, says Pezzullo has long urged his political masters “to reorganise the border force, domestic intelligence and policing functions into a United States style Homeland Security set-up.”

In a follow-up telephone call, I ask Pezzullo whether he takes any credit for the intellectual and strategic impetus to create a new ministry of home affairs. “None at all,” he replies. “It was the prime minister’s decision.” The same is true of the policy Labor took to the 2001 election, he says: it was Beazley’s policy, not Pezzullo’s. He insists that he is not ducking my question. The job of public servants is to provide advice in a robust and contestable fashion, but elected officials own their decisions.

What if a public servant has serious ethical or moral concerns about a policy? I ask. Having worked closely with five prime ministers at secretary or deputy secretary level since 2005, Pezzullo says senior public servants have every opportunity to raise whatever concerns they may have, without any fear of repercussions. If, after having been heard, the final decision is one the public servant still cannot accept, because it contravenes a deep personal conviction, the public servant has no choice but to resign. “I have not had to contemplate resigning,” he adds.

As we tuck into our fish, I ask Pezzullo how he regards the deeply held views of the 30 per cent or so of Australians who find the government’s border protection policies morally unacceptable.

“I respect their right to not only oppose the policy, but to express their dissent as they see fit within the law,” he says. “I mean, the whole point of preserving your sovereignty is to allow the diversity of expression and opinion.”

But does he regard them as misguided or naive?

“No, I would never use pejorative terms like that.” He insists, though, that opponents of the bipartisan policy of offshore detention and boat turnarounds must face up to two problems: “the death rate problem” and “the rationing problem.”

To illustrate, he begins with an interpretation of the Refugee Convention that obliges signatory countries to assess the claims of all asylum seekers who reach their territory and to allow them to stay if they need protection. That’s “a perfectly valid view to at least put into the argument,” he says, but it becomes problematic when you “operationalise” it. Why? Because it builds “a supply chain of movement,” he argues, in which “non-state actors” become the intermediaries between the place of persecution, the final destination and all points along the way. While some intermediaries have honourable motives, he says, many are criminals focused only on profit.

“I can’t think of any other policy areas where you would design in the space and the scope for criminals to say, okay, I can move people,” he says. Cutting the people smugglers in, says Pezzullo, inevitably means some people will die. A conservative estimate of 1200 deaths at sea during the arrival of around 50,000 asylum seekers by boat under the last Labor government produces a death rate of about 2.5 per cent. That is not the intent of policy settings, says Pezzullo, but it is the outcome, and that can never be acceptable to any government.

He recognises that there is an alternative response to the problem: set up a government-based solution that cuts out the people-smuggling intermediaries. In other words, organise “planes, cruise ships, whatever” to go and pick people up. But this raises his second concern, “the rationing problem”: how many people do you rescue?

“What is the limit?” he asks. “If you ration it at fifty thousand, when the fifty thousand and first person arrives, what do you do then?” He is convinced that if Australia were to organise airlifts of refugees from, say, Indonesia, then countless more asylum seekers would seek to travel the same path. With sixty-five million people displaced from their homes around the world, including twenty-one million refugees outside their national borders, there is no obvious upper limit to the number of people who would seek Australia’s help.

The way forward, he believes, has three stages. First, deal with the reasons why people flee their homes in the first place. “Now Syria, that’s difficult,” he says. “In East Africa, the South Sudan, people pouring into Kenya, I get all that, but we can’t disconnect this from the Security Council, what Gareth Evans famously in his book called ‘peace building.’ That whole agenda just has to be constantly attended to.”

Second, protect people in place — either in their homelands or in neighbouring countries. Again, Pezzullo acknowledges the difficulties: safe-haven strategies in response to the war in Yugoslavia and the genocide in Rwanda foundered on rules of engagement that prevented peacekeepers from using their weapons to protect unarmed civilians. Pezzullo knows that the real burden of global displacement is borne by countries of first asylum like Turkey, Lebanon, Pakistan and Kenya. He says the international community needs to find ways to support people who flee into neighbouring countries until it is safe for them to return, and this means enabling them to work, raise a family, educate their children and get access to healthcare for a decade or even longer.

Finally, says Pezzullo, governments around the world need to offer more places to those in urgent need of permanent resettlement in a third country. There are around one million people on UHNCR’s books ready to be resettled, but only about 100,000 places available annually.

Australia is pursuing these objectives, he says, as part of the global compact initiated by the September 2016 special UN General Assembly session on refugees and migrants. He is cautiously hopeful that the process may eventually produce positive results. But as the world currently stands, critics who want to dispense with the bipartisan policy of offshore processing and boat turnbacks must address the twin problems of the death rate and rationing. “I think that there should be a respectful, clinical discussion, and if people can solve that conundrum, we should adopt the view of the 30 per cent or so that you describe in your question.”

Our allotted hour is up, but I squeeze in one last question. If changes currently before parliament were in place in his youth, I point out, then his parents, with their limited literacy, might never have met the English-language requirements necessary for citizenship. (Pezzullo has spoken elsewhere about memories of his parents’ earnest discussion about the significance of making a full commitment to Australia.) He won’t discuss the substance of the bill, but he reassures me that the government will make appropriate exemptions and create supports for refugees or people with learning difficulties.

He also believes that the context has changed. In the 1950s and 1960s, Australia was seeking unskilled and semi-skilled workers to build its population. “Did you want to see signs then of, not their assimilation, but their integration?” he asks. “Yes, absolutely. Was it happening organically? I can tell you it absolutely was.” In those circumstances, there was no need for government to concern itself with English-language testing. Today, in a service-based, high-skills economy, when migrant communities remain intimately connected to their homelands by modern communications, “it’s a different world.” •

The assistance of the Copyright Agency Limited’s Cultural Fund in providing funding for this article is gratefully acknowledged.

The post Making a different kind of history appeared first on Inside Story.

Western Sydney is Australia’s third-largest economy. With its population set to grow by one million people over the next twenty years, a City Deal for this region will be a big deal. The two other City Deals struck so far – in Townsville and Launceston – have been more modest in scope, which makes Western Sydney the first substantial test of the Coalition’s “smart cities” approach to urban development. When he announced the policy in April last year, prime minister Malcolm Turnbull said that smart cities would deliver all the things that Lindy Deitz wants for her squinters and more: “Jobs closer to homes, more affordable housing, better transport connections and healthy environments.”

Smart cities are also designed to drive “the innovation economy,” and City Deals are at their heart. Angus Taylor, Turnbull’s assistant cities and digital transformation minister, told the Melbourne conference that “we have to reshape the way our cities work” because they are becoming “a brake on productivity.” It’s not just the time lost to traffic jams and long commutes, it’s also inefficient land use and poor matching of jobs and skills. Deitz gives the example of major hospitals in Western Sydney struggling to find staff because key workers like nurses are priced out of nearby housing.

The very things that make cities economically productive – the benefits that flow from bringing people, ideas and capital closer together – also undermine that productivity by creating congestion and pushing up rents and property prices. Existing landowners make windfall gains but the poor and the young are forced either to pay excessively for housing or to move away from the places that offer the most jobs and the best career prospects. We are “actually asking young Australians to buy a high-paid job… by buying an expensive house or renting an expensive house,” says Taylor.

Improving Australia’s cities is “not a minor issue about productivity, but a central question of economic policy,” international urban development expert Duncan Maclellan told the conference. With current policies reinforcing inequality and frustrating sustainable development, it is also a matter of fairness and environmental impact. And the fact that Angus Taylor’s cities portfolio is located within the prime minister’s department suggests that Turnbull – unusually for a Liberal leader – recognises these realities.

In his famous “It’s time” policy speech during the 1972 election campaign, Labor’s Gough Whitlam told supporters in Blacktown that almost every major national problem related to cities. “A national government which cuts itself off from responsibility for the nation’s cities is cutting itself off from the nation's real life,” he said. “A national government which has nothing to say about cities has nothing relevant or enduring to say about the nation or the nation’s future.”

In office, Whitlam set up a Department of Urban and Regional Development and involved the Commonwealth in everything from inner-city renewal and heritage protection to public transport and sewerage projects. Since then, the engagement of national governments with cities has tended to rise under Labor and fall under the Coalition. During the Hawke–Keating years, Labor minister Brian Howe initiated the Building Better Cities program, which shares some characteristics – including collaboration between different levels of government – with City Deals. The Rudd and Gillard governments not only developed a national urban policy to improve “the productivity, sustainability and liveability of major urban centres,” but also set up the National Affordable Housing Agreement and the National Rental Affordability Scheme, created Infrastructure Australia, and tracked progress in annual State of Australian Cities reports.

By contrast, the Fraser, Howard and Abbott governments tended to “stick to their knitting,” treating cities, urban policy and public transport as the realm of state governments. Turnbull is bucking this trend. The idea is to bring together all three tiers of government – national, state and local – to forge agreement on urban development goals and the measures needed to achieve them. Angus Taylor says the deals will be transparent and the lines of responsibility will be clear: “No more finger pointing, no more saying, look, housing’s the state, or local or the federal government’s fault. We put the finger-pointing aside and we say, you know, we’re actually going to solve this problem. We’re going to publicise who’s accountable for what and we’re going to hold ourselves to account.”

Taylor’s bold words are an attempt to deal with the fact that no single level of government has clear carriage of urban issues in Australia. Tim Williams, CEO of the Committee for Sydney, describes cities as “orphans of public policy.” In Melbourne, Duncan Maclennan asked rhetorically, “Who deals with the issue that we had a 20 per cent rise in property prices in Sydney last year?” His answer: “No one.” Three layers of government, he says, “is precisely the problem.”

City Deals have their origins in the longstanding French contrat de ville system, but they have come to Australia via more recent developments in Britain. Both Maclennan and Williams have direct experience of the way the deals have operated there since 2012, Maclennan as “knowledge leader” on City Deals for Britain's Economic and Social Research Council from 2014 to 2017 and Williams as a former senior adviser in the UK Department of Communities and Local Government.

Although he was initially sceptical about a private-sector-led scheme supposedly based on innovative finance models, Maclellan believes that City Deals have been “fundamentally positive” and “changed the game.” The poster child is Manchester: its agreement, the biggest and most established in Britain, has produced a revolving infrastructure fund (with the city earning back some of the tax revenue arising from the boost to economic growth), a metropolitan investment strategy, a housing investment fund, and hubs to promote apprenticeships, business growth and low-carbon initiatives.

The Manchester deal only involved two levels of government – national and local. Perhaps more relevant to Australia is Britain’s second-largest City Deal, in Glasgow, which also involved the Scottish government. The deal activates more than £1 billion (A$1.7 billion) in infrastructure investment for urban renewal and transport projects, establishes a life sciences research centre and provides targeted assistance for young unemployed Glaswegians and other vulnerable residents.

One of the most important things to come out of both the Manchester and Glasgow deals is not new money or new construction projects but innovation in the way those cities are governed. The Greater Manchester Combined Authority brings together ten separate local authorities and the Glasgow and Clyde deal brings together eight. The idea is that an overarching body can more effectively address issues that cross council boundaries, including transport planning, urban regeneration and investment strategies.

The Western Sydney City deal is also aiming for this type of horizontal integration. In bringing together eight local governments (Camden, Campbelltown, Fairfield, Hawkesbury, Liverpool, Penrith, the Blue Mountains and Wollondilly), it seeks to overcome another perennial problem of urban planning in all of Australia’s capital cities except Brisbane – the lack of an overarching authority that can coordinate policies across a greater metropolitan area. “Sydney does not exist as an entity,” says Tim Williams. “It doesn’t act as an entity; it has things done to it.”

One of the advantages of City Deals, says Williams, is that they are shaped from the bottom up, based on what local governments determine they need rather than on what central governments want to give them. And since local governments must invest some of their own money up front, they also have skin in the game. Both these factors move City Deals away from the Australian norm of top-down federal grants that are so vulnerable to pork barrelling (although it didn’t pass notice at the Melbourne conference that Australia’s first three City Deals are all in electorally sensitive regions).

One of the potential pitfalls of City Deals is the amount of effort needed to set up and implement them. Necessarily bespoke by nature, they can’t simply be rolled out across the nation. Townsville’s deal includes investment in port and rail facilities, as well as a new NRL stadium and a cooperative research centre for the development of Northern Australia. The Launceston deal includes money to move the University of Tasmania campus into the heart of the city, to redevelop the historic Paterson Barracks and support local schools to extend classes to Years 11 and 12. (Many Tasmanian high schools only go to Year 10.) Both deals are integrated to some degree with defence projects.

In Western Sydney, the deal is likely to include public transport investments, local employment initiatives and a housing package. In return for its investment, the Commonwealth will expect significant planning and zoning reforms at state and local government level to reduce restrictions on residential development and speed up building approvals. This is in line with the federal government’s dubious argument that red tape and a lack of new construction are almost entirely to blame for Sydney’s runaway house prices.

In reality, two distinct issues to be dealt with: “housing affordability” and “affordable housing.” The first relates to the general rise in house prices, which puts pressure on new home-buyers and raises overall levels of mortgage debt, with associated risks to the economy and the financial system. The second relates to the provision of dwellings for low-income households that simply can’t afford to buy or rent in the current market. While an increase in supply may help with housing affordability, it will do little to generate more affordable housing stock.

Many participants at the Melbourne conference argued that City Deals will only improve housing options for low-income households if they involve previously taboo initiatives such as inclusionary zoning. Widely used in other countries, inclusionary zoning requires developers to set aside a proportion of new dwellings in any project for sales or rentals at below market rates.

David Waldren, head of planning, design and development for the construction company Grocon, told the conference that his firm is absolutely certain that inclusionary zoning will be part of the future (though he acknowledged that rival firms strongly oppose the idea). The “notion of a fair go” is still embedded in Australian society, he argues, and would find expression in a demand to provide affordable housing options close to city centres. City Deals were an opportunity to make inclusionary zoning a reality.

One way to introduce inclusionary zoning would be to make it a condition of developers’ bids for government land like the former defence site at Maribyrnong, in Melbourne’s west. With developers incorporating the cost into their modelling, governments may earn less from the sale, but the benefit will be an increased supply of well-located affordable housing. Inclusionary zoning could also be combined with an investment strategy for not-for-profit housing providers. Duncan Maclellan says the funds unlocked through City Deals can help buy off the ideological opposition of some local governments to new social and community housing.

Whether Western Sydney’s City Deal will make much difference to either housing affordability or affordable housing will depend on the nature of the final deal struck. Given that the most urgent and necessary housing reforms lie in the realm of tax policy, and are being dodged, City Deals may be the only available option right now. They aren’t perfect, but at least they have the potential to generate coherent, region-wide land use strategies that better align housing, transport and jobs. And if they result in increased coordination and cooperation between Australia’s three tiers of government, and across fragmented local councils, then the process of striking the deals may be just as important as their content. •

The post Dealing cities in appeared first on Inside Story.

In his second reading speech to parliament, the minister described Australian citizenship as “an extraordinary privilege.” This kind of language is used so often that it usually passes unquestioned, yet it only takes a moment’s reflection to see that it doesn’t match what citizenship actually involves. To use an analogy, it equates citizenship with membership of a club. I can only join the Melbourne Club if I meet certain (written and unwritten) criteria and the existing members accept my application. If I break club rules then I can be kicked out, losing the privilege of sitting in a comfy armchair drinking cognac by the fireplace. But most Australians, including me, never applied to become citizens. We were never okayed by the existing members of Club Australia. We are citizens by birth and can’t be expelled or voted off the island.

I have never had to swear a pledge of allegiance to the nation, or sit a test to show that I understand Australian values. Nor have I had to demonstrate that I have made an effort to integrate myself into society by volunteering, looking for work or educating my children. My citizenship results from a lucky draw in the lottery of life; my character, behaviour and beliefs have no bearing. If I break society’s rules or fail to meet its obligations – by not paying tax or not voting, for instance – then I can be punished. If my transgression is serious enough, I might be locked up for the rest of my life. Yet I would remain a citizen and I would be punished as a citizen.

So citizenship isn’t really a “privilege” to be bestowed or withdrawn. It is a signifier of belonging that brings with it important rights and responsibilities. It isn’t the granting of membership but the recognition that membership has already been acquired, either through birth or through extended participation in the life of the nation.

That’s not to diminish the importance of citizenship or to suggest that it is something that gets handed out to anyone who turns up and hangs around long enough. Rather, it is to emphasise the link between citizenship and the fundamental principles of democracy.

In advance of the proposed changes to citizenship laws, the Department of Immigration and Border Protection released a discussion paper for public comment. The fact that the legislation was fully drafted and submitted to parliament just two weeks after the deadline for submissions suggests that the government had no serious interest in the responses. The paper nevertheless lays out the thinking behind the bill and can be used as a standard against which to assess it.

Democracy’s first mention comes early in the paper. The second paragraph of the introduction identifies “democracy, freedom, the rule of law and equality of opportunity – a ‘fair go’ for all” as the “Australian values” that define us as a nation. If the nebulous concept of Australian values is to be given concrete form, then an emphasis on our democratic system of government seems a reasonable starting point.

But immediately there’s a problem. If we build from this democratic base, then the introduction of far higher barriers to citizenship is contradictory. The underlying logic of a democracy is that the entire permanent adult population of the nation should participate in shaping the laws by which it is to be governed and in selecting the representatives who make those laws. As political philosopher Joseph Carens argues, “To meet the requirements of democratic legitimacy, every adult who lives in a democratic political community on an ongoing basis should be a citizen, or, at the least, should have the right to become a citizen if she chooses to do so.” The tighter citizenship tests included in the bill move in the opposite direction.

Under current law, a migrant can become a citizen after four years’ “lawful residence” in Australia, including at least one year with the status of permanent resident. If the bill before parliament passes, it will require migrants to clock up four years’ permanent residence – not just lawful residence – before applying. Peter Dutton describes this as a “probationary period, so that a person’s word and deeds across this time can be considered” before they apply for citizenship. The effect will be to substantially delay citizenship for many migrants, particularly those who initially arrive on a temporary visa.

The example of the 457 visa illustrates what this could mean in practice. In the past, an employer could sponsor a 457 visa holder for permanent residency after two years, enabling the migrant to gain citizenship after a total of four years living and working in Australia. The government’s recent changes to temporary skilled migration, however, increase the threshold for acquiring permanent residency via employer sponsorship to three years – and so, in future, a temporary migrant will generally have to live and work in Australia for at least seven years before applying to become a citizen.

Last year around 50,000 skilled migrants made the transition from a 457 visa to permanent residence, so the changes will affect large numbers of people. If seven years still seems reasonable (to me, it doesn’t), then remember that the pathway will in many cases be even longer, since temporary migrants often move across a series of visas, such as working holiday-maker visas or student visas, before attaining permanent status. In its 2016 report on Australia’s migrant intake, the Productivity Commission found that the “average duration of a multi-step pathway to permanent residency is approximately 6.4 years.”

This means that the measures in the bill would extend the transition to citizenship for these people beyond ten years. New data from the Australian Bureau of Statistics suggests that around 40,000 migrants have been living in Australia on temporary visas for about ten years; if these people are to become citizens, then their “probationary period” as residents will end up being at least fourteen years.

Since permanent residence is a precondition of citizenship, the new measures apply to people who have, by definition, already made Australia their home. In travelling along the pathway to permanent residency, they will have passed through the rigorous security, health and skills assessments needed to demonstrate their suitability to migrate to Australia. To delay full political membership of the nation by at least three more years serves no useful purpose.

Worse, it could give migrants the impression that they are outsiders who are not fully welcome, an impression reinforced by other recent changes. Under the government’s reforms to higher education, for example, permanent residents will have to pay tens of thousands of dollars more in fees to attend university because they will no longer qualify for Commonwealth-supported places (although they now have the option of deferring payment through a HECS loan).

Setting a much higher English-language hurdle is equally divisive. Requiring future citizens to have “competent” English may not sound excessive, but it would be wholly unrealistic to expect recent migrants to achieve the standard of “a competent user,” which requires an International English Language Testing System score of six. The bill does not define competent, but the explanatory memorandum says that “the minister is empowered to determine the circumstances in which a person has competent English,” which might be “where the person has sat an examination administered by a particular entity and the person achieved at least a particular score.”

For the vast majority of language learners, the 500 hours of tuition offered under Australia’s Adult Migrant English Program does not come close to achieving this level of fluency. Many adult migrants may never reach this level. Indeed, many Australian-born citizens may fall short of this standard.

While many skilled migrants will already have achieved an IELTS score of six or more to qualify for entry to Australia, the higher English-language bar will deny citizenship to many other migrants who need and want it more urgently, particularly refugees from strife-torn countries who have been resettled here under Australia’s humanitarian migration program.

Others likely to fall at the English-language hurdle are partners of Australian citizens or permanent residents, or partners of the primary applicants for skilled migration (known as secondary visa holders). Most of these partners will be women, who may not have the same level of English-language competency as their spouses, and may have caring duties at home that make it more difficult for them to acquire English-language skills quickly. To deny them citizenship because they cannot meet the required level of English serves no purpose beyond giving them the impression that they are unworthy of full admission to the Australian political community. It leaves them isolated and vulnerable in the event that there are problems in the relationship.

The new language threshold is also fundamentally undemocratic. Imagine if Australia introduced a law that prevented citizens from enrolling to vote unless they could first pass a proficiency test in English. This would be immediately recognised as unacceptable discrimination and would almost certainly be ruled unconstitutional by the High Court. Yet the proposed English-language barrier to citizenship amounts to the same thing: because only citizens are eligible to vote, it prevents settled members of the Australian nation from exercising the franchise. Whether such measures are unconstitutional would need to be tested, but they certainly fall short of the democratic ideal of universal suffrage – which is, according to the government, one of the Australian values that defines us a nation.

Nor do the heightened English-language requirements sit comfortably with the immigration minister’s claim in parliament that “pathways to citizenship give new migrants the opportunity to be full and active members and participants in Australian society.” Clearly, if the English-language barrier is set too high, then it has completely the opposite effect, because the pathway to full membership and active participation is closed off.

Since the Nationality and Citizenship Act 1948 came into force, Peter Dutton told parliament, “more than five million people have chosen to become Australian citizens.” Yet if his proposed English-language requirements for citizenship had applied in the past, then vast numbers of those postwar migrants and refugees would have been denied citizenship. The prime minister celebrates Australia’s record as “the most successful multicultural nation in the world.” Even if this is an exaggeration, it is hard to imagine that Australia’s multicultural record and history of social cohesion would be as good as it is if millions of postwar migrants had been denied citizenship because they did not speak university-level English.

Inevitably, security, safety and counterterrorism are dominant themes in the government’s discussion paper. In parliament, the minister put the bill in the context of “an increasingly challenging national security environment and complex global security situation.” Making Australia safe is an entirely valid aim, but it seems to have little connection to the issue of citizenship. If recent migrants pose a security threat to Australia, they do so regardless of whether they obtain the status of citizen, since they are already resident in Australia. Delaying or denying a pathway to citizenship for migrants can’t appreciably improve national security or in any way reduce terrorism. It may, however, have the opposite effect if it leads some migrants to feel that they are excluded, marginalised and unwanted.

Other technical measures in the proposed legislation have largely escaped attention. Under existing laws, any child born and raised in Australia until the age of ten automatically becomes a citizen, regardless of the parents’ migration status. Children of undocumented migrants, for example, or children of asylum seekers living on a succession of temporary protection visas become citizens in their own right on their tenth birthday. Peter Dutton asked parliament to change the law so that the automatic acquisition of citizenship at age ten only applies “to those persons who have maintained lawful residence in Australia throughout the ten years, including maintaining a right to return if they travel outside Australia during those years.” Since refugees on temporary protection visas and safe haven visas lose the right to return to Australia if they travel overseas, their Australian-born children will no longer have a pathway to citizenship.

The bill also renames the “pledge of commitment” required for citizenship as the “pledge of allegiance,” and allows the minister to delay inviting an applicant to make the pledge for up to two years. The minister says this is necessary to “better align with time frames of some complex investigations” into the background of applicants. It could also be seen as a way of circumventing December’s Federal Court finding that the minister was wrong to withhold invitations to citizenship ceremonies from Afghan refugees.

Citizenship is important and should not be taken lightly, but most of the measures in the government’s bill are at best unnecessary and at worst counterproductive. Rather than promoting increased social cohesion, increased loyalty to the Australian nation and greater adherence to Australian values, they are likely to intensify marginalisation, alienation, resentment and division. The bill fosters not unity but disunity. It promotes neither cohesion nor a sense of belonging, instead creating division and a sense of exclusion.

“People who live and work and raise their families in a society become members, whatever their legal status,” writes Joseph Carens in The Ethics of Immigration. They acquire “a moral right to citizenship from their social membership and the fact of their ongoing subjection to the laws.” •

The post The department of perverse effects appeared first on Inside Story.

That broadbrush picture doesn’t tell us how long these migrants have been here. With the exception of the special category visa issued to New Zealanders, all temporary visas are time-limited. Working holiday-makers can stay for a maximum of two years, 457 visas are issued for up to four years, and a student’s stay is generally linked to the duration of the course.

But we do know that tens of thousands of temporary migrants transfer from one visa category to another and stay on in Australia. Immigration department figures reveal, for example, that in 2015–16 more than 72,000 international students transferred to a different temporary visa subclass. Almost 40 per cent swapped to a different student visa, and most of the remaining 60 per cent transferred from a student visa to one of three other temporary visa categories – a 485 post-study work visa, a 457 temporary skilled work visa or a working holiday-maker visa. And more than 9000 temporary visa holders moved the other way, from working holiday-maker and 457 visas to student visas.

In other words, it’s possible for migrants to live in Australia for an extended period and become, effectively, indefinitely temporary. I have met many such people, and describe them as being “not quite Australian.” They live and work in Australia, they have made their lives here, but they don’t, officially, belong. It’s surprisingly difficult to get an accurate picture of how many people fall into this category.

When I have sought this information from the immigration department in the past, I have been told that the department’s administrative systems are not set up to collect the data in this way. Information on length of stay generally captures the amount of time a temporary migrant has spent in Australia since the date of his or her last arrival. This gives no reliable indication of how long a visa holder has been based in Australia, because migrants (like a lot of us) move in and out of the country, visiting friends and family or holidaying, working or studying. More relevant would be their length of stay since the date of first arrival, but the department says that calculating the movement across different temporary visas would involve complex and time-consuming data-matching for more than a million individuals.

Fortunately, the Australian Bureau of Statistics releases useful data in its Characteristics of Recent Migrants series, which draws on a three-yearly survey of the progress of migrants who have come to Australia over the past decade, covering areas such as employment, education and household income. The survey isn’t concerned with how long a migrant may have lived in Australia on a temporary visa, but some of the data is organised by visa status and year of arrival. That makes it possible to see the number of people who first arrived on a temporary visa and are still living here on a temporary visa many years later.

The most recent of these surveys, just released, shows that of the temporary visa holders living in Australia in November 2016, 45,300 had first arrived on a temporary visa eight or nine years earlier – that is, in 2007 or 2008. Another 78,800 temporary migrants had first arrived in Australia on a temporary visa six or seven years before (after arriving in 2009 or 2010).

These are significant numbers. But the data needs to be treated with some caution. It doesn’t reveal whether all these visa holders have been living in Australia continuously during the years since their first arrival. A temporary migrant might have first come to Australia in 2007 as, say, a working holiday-maker, then returned to his or her homeland for several years before coming back to Australia in, say, 2014 to study or to work using a different category of temporary visa. My hunch is that such cases make up a relatively small proportion of the overall caseload, but I can’t be sure of this.

At the very least, though, the new figures provide an indication of the number of migrants who have had an extended engagement with Australia and yet remain temporary. They also show how much this cohort has grown since the previous survey, in November 2013, which found 18,600 temporary migrants who had first arrived in Australia on a temporary visa eight or nine years earlier. In other words, the number of visa holders in this category has grown by 250 per cent in three years.

There’s one other caveat. Because the ABS survey is only concerned with “recent migrants” – those arriving in the previous decade – it doesn’t provide any indication of the number of temporary migrants who first arrived in Australia on a temporary visa more than ten years ago. It also excludes anyone who was under fifteen at the time of arrival, and may still be in Australia on a temporary visa. And it excludes New Zealanders living in Australia for extended periods on the “temporary” special category visa.

These numbers matter because they reveal a significant cohort of migrants whose engagement with Australian society extends over long periods without their being fully included in the life of the nation. They work, pay taxes, generate export revenue (particularly in the form of university fees) and contribute in many other ways, yet after years in Australia they have diminished rights and little or no access to government support. Combined with the government’s plan to make it harder for permanent residents to become Australian citizens, this situation risks creating a protracted and uncertain migration experience that generates high levels of stress and insecurity and works against a sense of belonging and a coherent national identity. •

The post Counting the Not Quite Australians appeared first on Inside Story.

I know he surfs at that spot, though, so it almost certainly was Australia’s most famous philosopher checking the swell. My friend and I were returning from taking a look and had concluded that the waves were too small and messy. Perhaps we should have shared that information, but then we might have denied him a certain pleasure; a few minutes spent gazing at the ocean can never be counted as wasted time.

Seeing Peter Singer at the beach reminded me of an event at Melbourne’s Wheeler Centre a couple of years ago. His presentation that day, and particularly his answer to a question from a woman named Rachel, has nagged at me ever since.

It was April 2015, and Singer was there to fire a Midday Shot at a capacity crowd. The topic was effective altruism, or “The Most Good You Can Do,” which is the subject (and title) of his most recent book. He paced slowly around the stage, intoning in a slightly gravelly voice, his flat Australian accent tinged with an American inflection after seventeen years at Princeton. There was nothing slick or showy about his presentation: with its clunky PowerPoint slides, it was less a philosophical excursion than a workmanlike attempt to convince and convert.

Singer wants us to help make the world a better place. This is the great intergenerational, utilitarian project that he compared in a previous book, The Life You Can Save (2009),to a climb towards the summit of an immense mountain. He believes we have already broken through the clouds and are in sight of the peak. “There are sections of the route that will challenge our abilities to the utmost,” he writes, “but we can see that the ascent is feasible.” In this belief he echoes the great liberal philosopher John Stuart Mill, who wrote in Utilitarianism (1863) that “no one whose opinion deserves a moment’s consideration can doubt that most of the great positive evils of the world are in themselves removable, and will, if human affairs continue to improve, be in the end reduced within narrow limits.”

There is data to support this optimism. In his keynote address to the 2013 Tasmanian Writers Festival, Singer quoted UNICEF’s calculation that 6.9 million children died in 2011 before the age of five, generally from one of six poverty-related diseases, including diarrhoea, malaria and pneumonia. It’s a shocking figure – thirteen children dying every minute – yet it is also relatively good news. In 1990, the annual number of under-five deaths was twelve million. By 2015, according to UNICEF, the number had fallen further, to 5.9 million worldwide (or eleven children per minute). In the space of fifteen years, infant deaths halved, even as the planet became home to an extra two billion people.

Utilitarianism is often seen as a commitment to maximising happiness, or creating the greatest good for the greatest number of people, but Singer generally formulates it the other way around, as minimising misery. He believes that we do the most good, and make the world a better place, by reducing the avoidable suffering and premature deaths of humans and animals.

At the Wheeler Centre, he used Toby Ord, the Australian founder of the organisation Giving What We Can, as an exemplar. When he was a philosophy student at Oxford University, Ord survived comfortably on an annual scholarship of £14,000 (about A$22,000); having completed his PhD, he saw no reason to live more extravagantly, even though he would soon enjoy a higher income. Using a standard academic salary as his guide, he estimated that if he donated two-thirds of his lifetime earnings to carefully chosen charities, then he could, in effect, save the lives of 1000 children. It seemed a small sacrifice to secure such a significant good, so Ord committed himself to living on no more than £18,000 per year (about A$28,000) and to giving away everything he earned above this amount.

Ord was nudged towards effective altruism by reading “Famine, Affluence and Morality,” an essay Singer wrote, aged twenty-five, in 1971 (recently republished with a new foreword by Bill and Melinda Gates). There, with the refugee crisis accompanying the bloody birth of Bangladesh as a backdrop, Singer argued that deaths in East Bengal from a lack of food, shelter and medical care were entirely preventable if we – human beings – only made the necessary decisions. He pointed out that the financial support Australia provided to millions of Bengali refugees at the time amounted “to less than one-twelfth of the cost of Sydney’s new opera house.” Today, Singer might mention that Australia’s annual contribution to the UN High Commissioner for Refugees (around $72 million in 2016) is less than a quarter of the amount we spent preparing athletes for the Rio Olympics ($340 million).

Surviving comfortably: Toby Ord discussing effective giving at a forum in London in 2013 sponsored by Intelligence Squared and Deutsche Asset & Wealth Management. Deutsche Bank

Singer is never difficult to read. As he says in the introduction to a new collection of short essays (Ethics in the Real World: 86 Brief Essays on Things That Matter), he holds to the view that if something cannot be said clearly enough to be understood by people who have not studied philosophy then it is “probably not being thought clearly either.” He constructs arguments much like a brickie builds a wall, establishing a firm footing and then laying down a series of straightforward propositions that lock together to form a solid conclusion.

The foundation stone of that famous essay ­– and indeed of much of his subsequent writing – is the unarguable but easily neglected belief that “suffering and death from lack of food, shelter, and medical care are bad.” The next layer seems equally straightforward: “If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it.” Accepting premise A – that avoidable suffering and death are bad – makes it hard to dispute premise B – that we should help to alleviate the suffering of others, at least when we can do so at minimal personal cost. Yet we might already be uneasily aware that Singer is leading us into ethical territory that we would rather avoid.

In the famine essay, Singer brings these implications home with the analogy of a drowning child that has become his trademark. “If I am walking past a shallow pond and see a child drowning in it, I ought to wade in and pull the child out,” he writes. “This will mean getting my clothes muddy, but this is insignificant, while the death of the child would presumably be a very bad thing.” We will surely agree, unless we are nihilists and hold that the death of a child is of no importance, in which case we are also rejecting Singer’s primary claim that avoidable suffering and premature death are bad. Perhaps there could be an individual so self-absorbed as to prefer spotless clothes to saving a drowning child, but such a person would be universally condemned for failing in a most basic and shocking way at the task of being human.

In his example, importantly, Singer makes it easy for us to act: the pond is shallow and we don’t need to risk life or limb to save the child. Only relatively trivial possessions – an expensive pair of shoes, for example – could possibly be damaged. To fail to save a child in such circumstances would constitute a moral transgression of the highest order.

But Singer is leading us towards a much less comfortable version of premise B, which points to the larger truth that there is always a real child drowning somewhere in a metaphorical shallow pond. Granted, we don’t see the child in a literal sense; she is not drowning in a suburban park as we walk past. But we know that she exists, that she is in trouble and that we are in a position to help her. In fact, thanks to UNICEF’s figures, we know that eleven such children “drown” every minute. Many of us know, too, that we could save at least one of those children with minimal personal discomfort, if only we shifted our priorities. If we fail to do so, it is because we are willing, more often than not, to rank her life as less important than something else, like a new pair of shoes. In shifting our attention, we evade our moral responsibility. We fail to live as human beings should rightly live.

Perhaps you don’t accept Singer’s implicit suggestion that postponing or cancelling construction of the Sydney Opera House would have been an “insignificant” price to pay for helping more refugees in East Bengal in 1971. You might also reject my implication that we are funding Olympic athletes at the expense of the UNHCR. Respectable arguments can be made about the wider benefits of beautiful architecture and success at international sporting events. Yet it’s hard to disagree with the proposition that affluent citizens of a country like Australia could do a great deal more to reduce the suffering of unseen-but-known refugees around the world.

Spread across those of us on comfortable incomes, the cost of doubling, tripling or quadrupling Australia’s contribution to the world’s chronically underfunded refugee agency would be modest. If the top fifth of Australia’s roughly nine million households gave $200 each, this would raise $360 million, or five times Australia’s current annual contribution. It is worth noting that households in this top quintile receive more than 40 per cent of Australian income and own more than 60 per cent of the nation’s wealth. The sacrifice required to achieve a fivefold increase in Australia’s contribution to the UNHCR can be compared to the wealthiest Australian households postponing the purchase of one pair of new shoes for a season or two.

Peter Singer is not the first to weigh the difference between our immediate, mundane concerns and the life-and-death interests of distant others. In The Theory of Moral Sentiments (1759), Adam Smith asked readers to contemplate “a humane man in Europe” who learns that “the great and populous empire of China was suddenly swallowed up by an earthquake.” The man might be momentarily saddened by the event, but would then “go about his business or his pleasure… with the same ease and tranquillity as if no such accident had happened.” China’s catastrophe would not disturb our cultivated European’s nightly slumber in the slightest, whereas the gentleman would surely not sleep a wink if he went to his rest in the certain knowledge that his little finger were to be chopped off first thing in the morning. As Smith observes, “the destruction of that immense multitude seems clearly to be of less concern to him than this paltry misfortune of his own.”

Impartial spectator: the political economist and philosopher Adam Smith (1723–1790). Detail from a portrait by an unknown artist. Scottish National Gallery/Wikimedia

Smith then outlines a scenario in which our cultivated European is offered the option of avoiding the loss of his pinkie by sacrificing the lives of one hundred million fellow human beings in China. “Human nature jumps back with horror at the thought,” he comments. Our “sordid” and “selfish” feelings are overcome, Smith concludes, when “reason, principle, conscience” remind us that “we are only one of the multitude, in no respect better than any other.” Self-love is trumped by a more powerful affection, “the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.”

Mill says something similar in Utilitarianism: human dignity finds expression in a noble character that gives no greater weight to one’s happiness than to the happiness of others. For Mill, the “ideal perfection of utilitarian morality” is the golden rule of Jesus of Nazareth: do unto others as you would have them do unto you.

Singer reaches the same conclusion. In How Are We to Live? Ethics in an Age of Self-Interest (1993), he writes that the golden rule “is as close to an objective basis for ethics as can be found.” Singer makes no recourse to religion. Nor does he draw on notions like virtue, dignity and nobility of character. Reason enables us to discover the golden rule, he says, because it tells us that “our own sufferings and pleasures are very like the sufferings and pleasures of others” and therefore “there is no reason to give less consideration to the suffering of others, just because they are ‘other’.” With this understanding, we transcend subjectivism and adopt “the point of view of the universe” (a phrase Singer borrows from another nineteenth-century utilitarian, Henry Sidgwick). Smith and Mill express a similar idea when they talk about adopting the perspective of an “impartial spectator.”

It is hard to fault Singer on these arguments. Not everyone will accept his expansion of our circle of concern to the suffering of animals, but if we sidestep that issue by confining our thinking to human affairs, then the logic appears sound. I know it is painful and debilitating to go without food for a significant period; reason tells me that other people experience an equally unpleasant sensation and equally damaging physiological effects when they are starved of nutrition. Since I have no grounds to think that my hunger matters more to me than their hunger matters to them, reason tells me that I should do what I can to alleviate the hunger of others, at least to the point at which my efforts to help would cause significant loss to myself or my loved ones.

Our tendency to put self-interest and personal wants ahead of the needs of others may have sound evolutionary roots. But, as Singer writes, reason takes us beyond the evolutionary need to “survive and reproduce” and leads us to conclusions that can be at odds with “our more basic desires.” We see this in the mundane example of what we put in our mouths: evolutionary biology encourages us to want things that were once scarce in the human diet but are now abundant, like sugar, salt and fat; reason tells us that we must control such appetites or suffer the long-term consequences.

The logic is deceptively, disturbingly simple. If we are to live by the ethic of the golden rule, then we must help refugees to the extent that we can afford to do so. We can choose to follow what Smith terms our sordid and selfish feelings – as most of us do, most of the time – but in refusing to go where reason leads, we can no longer claim that our behaviour is rational or that we are living ethical lives.

These steps in Singer’s argument establish the basis for altruism, for doing what we can to reduce the suffering of others. But his reasoning also requires that our altruism must be effective – or, as he put it on ABC TV’s Q&A shortly after I saw him in action at the Wheeler Centre, that we get “value for money” from our donations. When we buy a dishwasher, says Singer, we generally research its effectiveness compared to other models. He finds it strange that we rarely evaluate charitable gifts in the same manner. On Q&A, Singer said that if we made donations in this way then we would not give money to “train guide dogs to help the blind” in wealthy countries like Australia, which costs “tens of thousands of dollars,” when giving something like $100 to the Fred Hollows Foundation can avert a case of blindness caused by trachoma in the developing world. (Fellow panellist Amanda Vanstone, chair of Vision 2020 Australia, did not think the matter was so clear-cut.)

Sometimes such a calculation does appear straightforward. I wouldn’t find it hard to choose between helping the National Gallery of Victoria to acquire a new frock for its fashion collection and supporting the work of the Hamlin Fistula Hospital in Ethiopia. Does that mean that we shouldn’t spend any money on fashion museums until we have eradicated reproductive health problems around the globe? I can be dismissive of fashion, but a designer once stopped me in my tracks by reminding me that bodily adornment has been a characteristic human behaviour ever since humans came on the scene. So the study of fashion can tell us something important about ourselves as a species.

Like Singer, we may find it obscene that Jeff Koons’s work “Jim Beam – J.B. Turner Train”– a stainless steel train filled with bourbon – sold for US$33.8 million at Christie’s, but that doesn’t negate the fact that artistic creation is a distinctly human activity that enriches our lives. Are art and culture always less important than physical health and wellbeing? Would the world be a better place if Bach had devoted himself to curing leprosy instead of composing partitas? According to Singer’s logic, I should discourage my pianist son’s ambition to a professional life in music, since it is unlikely to be lucrative; instead, I should coax him towards a high-income financial career, so that, like Singer’s former student, Wall Street trader Matt Wage, he can give away a big share of his super-sized salary to reduce poverty.

By expressing the utilitarian standard in the negative – as reducing avoidable suffering rather than increasing possible happiness – Singer largely sidesteps these complications. If promoting happiness is not our concern, then we do not need to ask whether some ways of pursuing happiness are of greater value than others. Liberal societies like Australia tend to assume that there are as many valid ways of pursuing and achieving happiness as there are different individuals. We tend to make no distinction between the happiness that comes from riding a jet ski, the happiness that comes from contemplating a Joy Hester painting, or the happiness achieved by helping a fellow human being overcome adversity through a generous act. Hence, GDP per capita becomes the proxy for human wellbeing, because money enables each of us to pursue our happiness in our own way. Yet the question of what constitutes human happiness (or flourishing) is a central concern of moral philosophy that raises complicated questions about whether reducing suffering is always more worthwhile than facilitating greater individual agency, increasing joy, pursuing knowledge, enhancing intellectual stimulation or providing aesthetic pleasure.

For Singer, we just have to do the maths. If we do, then we will always donate to save lives before supporting the arts. We will give a donation that has a high probability of saving one life ahead of a donation that has a low probability of saving ten; but if the chance of saving ten lives is 20 per cent, then that will be the better investment. Evaluating ethical choices by numbers is confronting, but it also raises more complexities than Singer seems to acknowledge.

Which brings me back to Rachel’s question at the Wheeler Centre in April 2015. She began by gently chiding Singer for suggesting that preventable blindness from trachoma was a problem confined to the developing world; it is a sad truth that trachoma is endemic in Australia too, primarily among Indigenous communities. As a midwife who had worked in Central Australia as well as in Asia and Africa, she then asked Singer to reflect on what she called “the numbers game” – the fact that $100 spent on eye health in remote Aboriginal communities would do far less to reduce suffering in quantitative terms than $100 spent improving sight in a populous village in Tanzania.

In response, Singer argued that as citizens of a wealthy nation we should pressure our government to eradicate trachoma among Indigenous Australians, but that, because he is “strongly influenced by numbers,” he generally puts his charitable money where it could “help the largest number of people.” In other words, he would give to the Fred Hollows Foundation to cure blindness in poor countries in Africa before committing funds to Central Australia.

The specifics of this argument invite an obvious reply. Fred Hollows began his work in Australia: witnessing appalling eye health and pervasive trachoma disease in Aboriginal communities in the Northern Territory inspired his life-long and ultimately global crusade against curable blindness. The Fred Hollows Foundation continues that work in remote Indigenous communities today, and its advocacy was instrumental in securing funding for a government program to eradicate trachoma there by 2020. So donating to a pioneering charity that apparently helps only a small number of people at high cost may well be the catalyst for something larger, with important practical and political effects far beyond its immediate remedial impact. No mathematical calculation can tell us that in advance.

But there is a deeper issue at play here. As Australians whose wealth was secured in large part by the colonial expropriation of Indigenous lands, do we not owe a particular responsibility to those people whose lives are blighted by the enduring consequences of that act of dispossession? This question raises issues of affiliation, obligation and historical justice that Singer’s utilitarianism seems ill-equipped to address.

We can see similar concerns arising in relation to refugees. In September 2015, when the number of displaced people reaching the borders of the European Union had passed 100,000 per month, Singer outlined his views on the appropriate ethical response to asylum seekers in an opinion piece with the confident title “Escaping the Refugee Crisis.” He argued that it is time to reconsider the 1951 Refugee Convention, because it has given rise to the “new, often unscrupulous, and sometimes lethal industry of people smuggling.” It seems odd that an ethicist concerned with reducing unnecessary suffering should blame people smuggling on an international humanitarian treaty rather than on the equally modern phenomenon of militarised border controls that hinder safe passage, especially given that the business of people smuggling pre-dates the signing of the Convention.

Singer also asserted that “it has become difficult for tribunals and courts to determine who is a refugee, as defined by the Convention, and who is a well-coached migrant seeking a better life in a more affluent country.” While it contains some truth, this statement oversimplifies a complex reality. It suits governments to suggest that there is a neat distinction between economic migrants and “legitimate” refugees, but the world is messier than that. Consider the case of people displaced by climate change, a group likely to grow rapidly in coming decades. If its farm is inundated by seawater or taken over by desert, a family will be unable to sustain itself if it stays put. Yet if family members pass through the rich man’s gate without an invitation they will be labelled as economic migrants “seeking a better life in a more affluent country.” (The 1951 Convention, of course, makes no provision for environmental refugees.)

In keeping with his search for effective forms of altruism, Singer argued that it makes economic sense to hold refugees in already overwhelmed countries of first asylum like Pakistan, Jordan, Turkey and Lebanon, rather than allow them to make their way to the West. Why? Because (doing the maths again) it costs four times as much to support a refugee in a rich country than a poor one. While this might be accurate – and while there is obviously a strong case for increasing funding for the work of the UNHCR in countries of first asylum – Singer overreaches when he claims that “people smuggling – and deaths in transit – would be eliminated” if displaced people “were sent to a refugee camp, safe from persecution, and supported financially by aid from affluent countries.”

Anyone who has read Ben Rawlence’s magisterial City of Thorns (2016), a book chronicling the lives of nine people in the world’s largest refugee camp, at Dadaab in Kenya, will understand, as Singer surely must, that food, shelter and safety from persecution are not sufficient for a fulfilled human life. They don’t compensate for the loss of a sense of purpose, personal agency and future possibility. Even if people are well-fed, protected from the elements and safe from violence, they may still prefer a risky onward journey to the futility of indefinite waiting. Hope is more likely to be found in individual initiative and action than in putting your trust in governments, bureaucracies and aid agencies, even when they are well-intentioned.

The final step in Singer’s argument about refugees is that we must engage in the “emotionally difficult” task of turning away people who cross our frontier in order to send them to the “safe haven” of a well-supplied camp. This is no longer to adopt “the perspective of the universe,” in which we recognise that the suffering of another is very much like our own; rather it is to see other people as pieces on a chessboard, devoid of agency and aspiration, who can be contained geographically at our convenience, with the happy side effect of protecting our own advantageous position in the world.

Certainly Singer argues that if his conditions were met, then affluent countries should also “fulfil their responsibility to accept more refugees from the camps.” This would be a welcome development: around sixty-five million are currently displaced around the world, and fewer than 100,000 are accepted annually for resettlement in the West. But a dramatic increase in resettlement places is not much more likely than the push for open borders that Singer summarily dismisses on the basis of “our species’ lamentable xenophobic tendencies.”

We can compare refugees arriving at Western borders with the homeless people who had the temerity to spoil the atmosphere of the 2017 Australian Open in Melbourne in January by camping outside Flinders Street station. Would they have received more help and attention if they had stayed out of sight until the tournament was over? I think not. Similarly, if refugees could be quietly contained in the “safe haven” of refugee camps, it seems likely that the rich world would happily leave them there forever. As William Maley writes in his recent book What Is a Refugee?(2016), people smugglers hold the rich world to account “by presenting them at their borders with refugees whose needs they have recognised in principle, but whom they would prefer not to have to help.”

Among the organisations to which I have given modest donations is Refugee Legal, a not-for-profit community legal service in Melbourne that provides free advice to asylum seekers living in Australia, advocates for alternative policies and pursues landmark legal cases. I have also provided financial and practical assistance to a refugee family I have come to know in Melbourne. According to Singer’s reasoning, I have lost perspective. I am giving to the cause that most tugs at my heartstrings rather than to the organisation that can do the most good with my money. I am being led around by my empathy rather than my reason. The truly effective altruist rises above such subjectivism. If, like Singer, I was “strongly influenced by numbers,” I would do more good – reduce more suffering among more people – by directing my money to the UNHCR to provide direct relief to refugees in countries of first asylum.

But this isn’t the end of the matter. Asylum seekers assisted by Refugee Legal, and the particular family that I have helped, suffer in specific ways under policies of the Australian government: a government to which I pay taxes, a government that represents me and acts on my behalf. I can’t ignore the suffering around me, to which I am connected and for which I feel in some immediate way responsible as a member of this political community, even if the number of people involved, measured against the scale of the global refugee crisis, is small. To refuse to help on the basis that I could do more good in other ways would be like walking past the child that I can see drowning in the pond because my time is better spent providing life-saving medicine to rescue five other children “drowning” in a refugee camp in Turkey. Proximity and affiliation matter: we act not only because we reason in abstract and calculating ways, but also because we feel in immediate and tangible ones.

We also live in political and social communities that require our involvement if they are to thrive. I fear that Singer’s “strongly influenced by numbers” approach risks devaluing the ordinary ways in which donations of time and money for immediate and very local purposes contribute to a society that is worth living in, one where bonds of mutuality and cooperation can tip the balance against self-love, indifference and greed. A decision to volunteer in a school canteen, bake a cake to raise money for a kindergarten or donate to support a neighbourhood soup kitchen may be parochial and subjective, and is almost certainly based on proximity and affiliation. It is unlikely to save the life of a child suffering a poverty-related illness. Yet it is from this kind of engagement that the fabric of community is woven; our lives unfold in particular places and our everyday interactions and affiliations imbue them with shape and meaning.

Giving our labour or money to local causes may not do as much to reduce the global quantum of suffering as donating a large proportion of our salary to an international development agency, but it helps to craft a society based on an ethic of solidarity and reciprocity, and perhaps contributes, over time, to a political environment in which increasing foreign aid is seen as more important than winning Olympic medals.

Sometimes, too, giving money is the easier option: we can feel good about being generous without getting emotionally entangled or coming face to face with another person’s distress. A financial contribution can buy the excuse that we’ve done our bit.

We could say also, as Singer might, that art doesn’t save lives. On this basis he would discourage cultural philanthropy, at least until we have attained the peak on the long climb up his utilitarian mountain. But we need spiritual nourishment to sustain us on that journey. Literature, visual art, film, music and other forms of creative expression invite us to pause, reflect, contemplate and feel. They encourage us to find worth in goods beyond the material and the consumable, invite us to see the world in new ways and embolden us to take the imaginative leap into other lives. The arts help us to develop empathy and compassion; these may be unreliable emotions on which to base all our actions, but their cultivation is essential if we are going to care at all. Reason alone is unlikely to get us there.

Whatever my disagreements with Singer, though, when I apply his criteria to my own life I come up short. Arguing about where we can do the most good, or about the value of art, or about whether animals matter as much as humans can easily become an excuse for doing little or nothing. As Singer says, “What is the point of relating philosophy to public (and personal) affairs if we do not take our conclusions seriously?” He doesn’t expect us all to live on less than the minimum wage like Toby Ord, or to donate one of our two healthy kidneys to the next person on the organ waiting list like Missouri student Chris Croy (another effective altruist inspired by Singer’s famine essay and profiled in The Most Good You Can Do). Singer knows that kidney donation is a relatively low-risk procedure, and that most donors live a healthy life with only one kidney, yet he is not willing to donate one of his own. He acknowledges that he “only” gives away a third of his professorial income, not two-thirds like Toby Ord. He uses examples like Ord and Croy to provoke people like me – affluent citizens of a rich country – to ask ourselves searching questions about what more we can do.

I have made a monthly donation to Oxfam since getting my first secure full-time job in my early twenties. Reading Singer, listening to him speak, and writing this essay caused me to triple that regular contribution, and to agree with my partner that we will aim to donate at least 5 per cent of our annual household income to charitable causes. This is the percentage that Singer suggests as a minimal starting point for those who lead secure and comfortable lives. The causes we choose, however, won’t necessarily match those that do “the most good” according to Singer’s utilitarian calculus.

The next time I run into Peter Singer at the surf, I will stop to introduce myself. We share more than friends in common; like him, I also took up surfing in my fifties – as he writes, “too old ever to become good at it, but young enough for surfing to give me a decade of fun and a sense of accomplishment.” Actually, I hope for a bit more than a decade of fun. And perhaps, one day, Peter Singer and I might even share a wave. •

The post Surfing with Singer appeared first on Inside Story.

Prime minister Malcolm Turnbull says that the 457 visa has “lost its credibility.” Immigration minister Peter Dutton asserts that “the 457 brand was tarnished beyond recognition.” But temporary skilled migration will continue, so Turnbull and Dutton obviously hope they can alter the public’s perception of this complex and contentious policy area by changing the terminology from “457” to “TSS.” Good luck with that.

Both the manner of the announcement – via a prime-ministerial Facebook post – and the choice of words – “Australia first” – show that this was also an attempt to rebrand and reposition a struggling government. In the course of an interview on AM, the prime minister referred more than a dozen times to putting Australians first, putting Australian jobs first or putting Australian values first. Turnbull’s Trumpish rhetoric is aimed at reversing the voter drift to populist anti-immigration campaigners like Pauline Hanson and makes his celebration of Australia as “the most successful multicultural nation in the world” look mealy-mouthed.

Particularly egregious is the backhanded suggestion that 457 visa holders are somehow undermining “Australian values” (however they may be defined). There’s no evidence to suggest that they are doing much more than working hard and paying taxes, all without drawing on any government benefits or healthcare. They are the sort of people past conservative politicians were wont to describe as “lifters, not leaners.” The reality is less that temporary migrant workers want to undermine Australian values and more that many of them want to embrace them by becoming more fully Australian, as permanent residents and citizens. Turnbull’s cynical language promotes the divisive perception that a significant proportion of temporary migrants are here illegitimately or somehow rorting the system. In the context of increasingly assertive expressions of xenophobic nationalism, this is playing with fire in the pursuit of short-term political advantage.

Yet rebranding is far from the only thing going on here. Beyond the new nomenclature, the government is introducing a confusing welter of changes to the current 457 scheme. Some are substantial and some minor; some are belated responses to a thorough review of the 457 visa carried out when Tony Abbott was prime minister; others run contrary to that review’s recommendations. And though the government claims it is cleaning up a mess created by Labor, some of the changes actually reverse earlier Coalition initiatives.

The most substantial change is the splitting of the 457 program into two distinct temporary skilled migration streams. The first stream – described as a “short-term” TSS visa – allows for a two-year rather than a four-year stay, and can only be renewed once “onshore” (without leaving Australia). A migrant on this “short-term” visa can’t apply for permanent residency and must attest to being a “genuine temporary entrant” – that is, to having no ambition to stay long-term, as is already required of international students. The range of occupations open to “short-term” temporary migrants will be more limited than was the case for 457 visas; 216 occupations have been removed from the previous list of 651 occupations, and fifty-nine others have been restricted (some, for example, will only be available in regional Australia). Much of this is largely cosmetic, though, since many delisted occupations – such as goat farmer or antique dealer – were never used to bring in migrant workers anyway.

The second stream – described as a “medium-term” TSS visa – is valid for up to four years and, as with the current 457, is indefinitely renewable. It will be open to a narrower range of occupations, 183 in total, that have been “assessed as being of high value to the Australian economy and aligning to the government’s longer term training and workforce strategies.” This is a more significant culling of the occupation list, since some of the most frequently used 457 occupations have been excluded, including the top three: cook, restaurant–cafe manager and marketing specialist. Also cut from the list are the occupations of chief executive and university lecturer. This is the sort of detailed government regulation that could misfire badly. As ANU migration researcher Henry Sherrell writes, “Imagine being the chairperson of a Big Four bank or major law firm and not being able to offer potential CEOs a five-year contract due to visa restrictions?”

Unlike their short-term counterparts, medium-term visa holders can apply for permanent residence, although in future they will have to live and work in Australia for at least three years, rather than two, before becoming eligible to do so.

The new visa split is likely to affect the interaction between Australia’s temporary and permanent migration programs in ways that are not necessarily predictable or desirable. Since its introduction in 1996, the 457 visa has developed into a major pathway to permanent residency in what is sometimes described as two-step migration. Immigration department statistics show that around 50,000 temporary migrants on the visa made the transition to permanent residency in 2015–16, making up close to 40 per cent of Australia’s total annual (permanent) skilled migration intake. In three out of four cases, this shift from temporary to permanent status ran via employer sponsorship.

The phenomenon of two-step migration via employer sponsorship has been both a big plus and a big minus for the 457 scheme. It is a plus because it facilitates better matching of skills to positions: rather than migrants landing in Australia to fill part of an annual government quota and then looking around, perhaps unsuccessfully, for a job matching their qualifications (and potentially ending up driving a cab), employers directly recruit candidates to fill specific vacancies, initially on a temporary basis, and then sponsor them to become permanent if they prove a good long-term fit to the needs of the enterprise. The negative is that sponsorship can give employers inordinate power over migrant workers, especially when they are keen to stay in Australia long-term.

Closing the pathway to permanent residency will remove this form of leverage over future “short-term” TSS visa holders, but it will remain, and may worsen, for “medium-term” visa holders. These migrants must now work in Australia for an extra year before becoming eligible for employer sponsorship. Both short- and medium-term temporary skilled migrants will remain vulnerable to workplace pressure in other ways too, because, as with the 457 scheme, their visas are closely linked to their jobs. Temporary migrant workers are unlikely to complain about unfair wages and conditions if they fear that getting sacked means losing the right to remain in Australia. On the other hand, with the introduction of data matching – linking temporary migrants’ tax file numbers to records held by the Australian Tax Office – the government has given itself a swifter and more efficient means of combating workplace exploitation by checking whether employers are at least paying specified wage rates.

The recasting of temporary skilled migration is also likely to make the pathway from temporary to permanent status longer and harder – or, in some cases, to close it altogether. While many 457 visa holders have made a fairly quick and straightforward transition to residency, the image of “two-step” migration doesn’t do justice to the complexity of movement within Australia’s evolving hybrid migration system. Visa holders often take multiple steps, and may jump sideways rather than forwards, as they seek to establish a more stable foothold in Australia. In its 2016 report Migrant Intake into Australia, the Productivity Commission found that the average duration of a “multi-step” pathway to permanent residence was 6.4 years and involved more than three visa grants. This largely reflects the experience of migrants who first arrive in Australia as working holiday-makers or international students before moving onto a 457 visa.

The creation of “short-term” and “medium-term” temporary work visas could extend the multi-step pathway and make it more precarious. While “short-term” skilled work visa holders can’t apply directly for permanent residency, nothing appears to stop them from extending their stay in Australia beyond four years by applying for other temporary visa categories – including, perhaps, a “medium-term” TSS visa. If they don’t have an occupation that immediately qualifies them for a “medium-term” visa, then they might swap to an international student visa and upgrade their qualifications first, which could add years to their stay in Australia. Potentially, too, these temporary workers could be “recycled” – sent offshore at the end of their maximum four-year term and then brought back in on a new “short-term” contract. It remains to be seen whether such manoeuvres are ruled out in the accompanying regulations.

A measure that further complicates the pathway to permanent residency is the requirement that applicants for both of the new TSS visa streams must have at least two years’ full-time work experience “relevant” to the job for which they are recruited. A lot will hang on the definition of relevant, but this would appear to make it harder for international students to transfer to a temporary skilled work visa after graduation. The potential still exists, because an international student can theoretically gain the relevant professional work experience in Australia on a two-year post-study 485 visa. Though foreign graduates, like their local counterparts, often find it hard to move straight from university to a career-related position, this is another way in which the pathway from temporary to permanent may be drawn out.

One part of the Turnbull–Dutton package that hasn’t received much attention is the higher language hurdle for permanent residency. To qualify for a permanent visa under the main pathways of the Employer Nomination Scheme (subclass 186) or the Regional Sponsored Migration Scheme (subclass 187), all applicants will now have to prove that they have “competent” English – that is, achieve a score of six in every component (speaking, reading, listening and writing) of the International English Language Testing System, or IELTS. Previously, an IELTS score of five (“vocational English”) could be sufficient.

The creation of two temporary work streams, the requirement for two years’ relevant work experience and higher English standards for permanent residency may convince some temporary migrants, including international students, to give up on any ambition they had to stay in Australia long-term. But it is hard to predict the full range of possible responses. The government’s new combination of measures may encourage temporary migrants to develop unanticipated workarounds or to extend their stay in other ways, such as undertaking further study or moving on to a working holiday visa.

The risk here is of creating a growing cohort of migrants who are not quite Australian, who contribute to Australian society for long periods without gaining a sense of belonging or accruing any of the rights and entitlements that come with membership of the political community.

What emerges most clearly is that the split of the 457 visa into two streams moves Australia towards a two-tiered system of temporary skilled migration: the upper class visa holds out the conditional prospect that you may eventually be accepted as a full member of “the greatest multicultural nation in the world,” while the lower-class visa makes clear that we want to extract value from your labour but have no other interest in you.

The larger threatening picture painted by Turnbull and Dutton is of 457 visa holders displacing local workers. Dutton told ABC Melbourne Drive, for example, that the 457 visa has created a “big problem” of “foreign workers taking Australian jobs.” Such assertions need to be treated with caution.

There are fewer than 100,000 primary 457 visa holders in Australia, and they make up less than 1 per cent of the total labour force. Even if we include secondary visa holders (partners and children who also have work rights, but who do not necessarily work), then the total count of 172,000 would only equate to about 1.3 per cent of the workforce. It might be tempting to think that replacing all these foreign workers with locals would drop the unemployment rate by the same amount, but such equivalences are simplistic.

About 56 per cent of 457 visa workers are at the top skill level under classifications used by the Australian Bureau of Statistics – in other words, they have skills commensurate with a bachelor degree or higher-level qualification. Another 41 per cent are at skill levels 2 (equivalent to an advanced diploma or associate degree) or 3 (equivalent to a Certificate IV). While qualified locals could potentially replace some of these foreign workers, most employers do not go to the trouble or expense of recruiting migrants if suitably qualified local staff are available. Dutton’s claim that employing foreign workers on 457 visas ahead of locals has become “the default position” is unsustainable.

If there is a problem of migrants displacing locals in employment, it is more likely with working holiday-makers and students than 457 visa holders. There are far more of them – around 140,000 working holiday-makers and 400,000 students – and they more commonly take up entry-level jobs that might also be sought by young Australians. But we must always keep in mind that temporary migrants create jobs as well as take them: working holiday-makers help keep our rural industries running and international students prop up our tertiary education system and pump billions more dollars into the domestic economy through their spending. Skilled workers on 457 visas also create jobs by taking up positions that might otherwise go unfilled and keeping enterprises competitive. Many regional meatworks, for example, rely on skilled slaughtermen and boners from countries like the Philippines and Brazil to stay afloat. Without those offshore workers, they would not have the capacity to employ locals in lower-skilled positions on the production line; plants would close, taking other jobs and services in country towns with them.

Yet Dutton is correct to point out that there are problems and questionable practices in the 457 visa program – such as the extensive recruitment of commercial cooks and restaurant–cafe managers, including in the fast food industry. Together, cooks and cafe managers make up about 12 per cent of the 457 labour force; if chefs are included, the figure rises to 15 per cent. One explanation is that the difficulties in regulating the hospitality sector make it easier for employers to pay below-award wages or demand excessive hours – conditions that most Australian workers would not tolerate.

The Dutton–Turnbull package addresses this problem in several ways: some helpful, others not. First, as already noted, cooks and restaurant–cafe managers cannot be recruited for the medium-term temporary skilled visa, and while these occupations are still on the list for short-term visas, they have caveats attached to the regulations that prevent the employment of migrant workers in “fast food or takeaway food services; fast casual restaurants; drinking establishments that offer only a limited food service; limited-service cafes including, but not limited to, coffee shops or mall cafes and limited-service pizza restaurants.” The attempt to codify every class of restaurant in such daunting detail will create challenges for immigration officers, lawyers, courts and tribunals.

Another part of Dutton and Turnbull’s answer to the perceived problem of protecting Australian jobs is to strengthen labour-market testing by imposing more rigorous requirements on firms to advertise jobs locally before they can employ a migrant worker. Ironically, tighter labour-market testing has long been a core demand of the trade union movement and is detested by business as the kind of red tape that is easily evaded by the unscrupulous but entangles those who try to do the right thing. The Australian Chamber of Commerce and Industry has described it as “akin to asking employers to walk through wet cement.” Labour-market testing was part of the 457 scheme when it was introduced under John Howard, but immigration minister Philip Ruddock abolished it in 2001 because it was ineffective. The last Labor government restored labour-market testing in a more limited form in 2013 and was roundly chastised for doing so by the Coalition, which was then in opposition. In 2014, the independent Azarias inquiry into 457 visas, commissioned by prime minister Tony Abbott, recommended labour-market testing be scrapped again, but his government didn’t accept the recommendation.

The problem with labour-market testing is that it is almost impossible to police, especially in an era of online advertising. Two alternative mechanisms for ensuring that local workers get priority in employment hold out far greater promise.

One is the proposal from Adelaide University legal scholar Joanna Howe for an independent authority with its own research capacity that uses hard economic data and consultation with stakeholders to determine when an occupation is in shortage in a particular part of the country (given that shortages can vary greatly between metropolitan, regional and outback Australia). This expert body would also make recommendations on whether any shortage is best addressed through temporary migration, as opposed to other measures, such as the provision of more local training. The Azarias committee endorsed this model, and the government supported the recommendations in its response to the report, yet the resulting Ministerial Advisory Council on Skilled Migration doesn’t appear to be equipped or resourced to do the necessary work.

The second potential mechanism to ensure that local workers are the priority pick for employers is a stronger price signal. Migration expert Henry Sherrell has championed this idea for many years; he argues that increasing the fee that firms pay for employing temporary migrants would focus employers’ minds and “ensure they look to potential Australian workers first.” The extra revenue raised could be invested in local training, particularly for the young and the long-term unemployed, who struggle to break into the labour market because they lack skills. Vocational education is easily the most important and neglected pathway for getting disadvantaged Australians into jobs

The government may be moving in this direction: it has foreshadowed that the new TSS visa system will include “a strengthened training obligation for employers sponsoring foreign skilled workers to provide enhanced training outcomes for Australians in high-need industries and occupations.” The prime minister says that details of the training fund will be announced in the budget.

This is by far the most promising initiative to come out of the changes to temporary migration, and arguably has little to do with migration at all. It is all too easy to point the finger at foreign workers taking Australian jobs when the real issue may be that chronic neglect has left our domestic vocational education and training system unable to properly equip domestic workers for the needs of the economy. Let’s hope that the May budget produces a potent and effective package to revitalise vocational education, funded in part by a new training levy on TSS visas. But I wouldn’t hold your breath. •

The post The 457 visa is dead! Long live the TSS? appeared first on Inside Story.

As someone with fond memories of Arts classes at Adelaide University in the 1980s, I think Pyne should take a deep breath and count to ten.

I am one of many Australians who have deliberately broken the law to pursue a principle and contribute to a larger political campaign. I am thinking in particular of the protests against the damming of the Gordon-below-Franklin in Tasmania. In the summer of 1982–83, I joined hundreds of other protesters camping in the Tasmanian wilderness at Warners Landing, near the proposed dam site on the Gordon River. On the day heavy earthmoving equipment was brought up the river on barges, we attempted to “blockade” the site to prevent it from being unloaded.

Given the strong police presence, our protest was more symbolic than practical. After some cheerful running around in the bush, I was collared by a copper and charged with trespass. I spent the next week in Hobart’s Risdon Prison, because, like many others, I refused to accept special bail conditions that required us not to travel back up the river to rejoin the protest. The decision to exercise my right to refuse bail was also part of a larger strategy to drive up the political and financial cost of building the dam by overloading Tasmania’s corrections system.

This was – shock, horror – a clear case of breaking the law in a democracy, and while there may have been a few Marxists taking part, there was nothing anarchic about the action. It was highly organised and disciplined. Before departing for Tasmania, we undertook non-violence training and made a strong commitment to avoiding any escalation into confrontation, particularly with many Tasmanians openly hostile to “mainlanders” intervening in what they saw as a purely local issue. (A popular bumper sticker of the time read “Fertilise the bush, bulldoze a greenie.”)

According to Christopher Pyne, “Every citizen has to abide by the law. That’s how our Western democracy works.” Opposition leader Bill Shorten and many others on the Labor side of politics echoed that view as they scrambled to distance themselves from McManus and avoid predictable condemnation by the tabloid media and talkback radio. Shorten insisted that the way to change unjust laws is through the democratic process. “That’s the great thing about living in a country like Australia,” he said. “That’s what democracy is about. We ­believe in changing bad laws, not breaking them.”

So Martin Luther King Jr was not a democrat? He was arrested countless times for breaking the law, and when he led unlawful protests against racial segregation he did so in the name of democracy. In his famous 1963 Letter from Birmingham Jail, he correctly predicted that history would one day vindicate those African Americans who deliberately flouted the laws that forced them to sit at the back of the bus or banned them from eating in restaurants:

One day the South will know that when these disinherited children of God sat down at lunch counters, they were in reality standing up for what is best in the American dream and for the most sacred values in our Judaeo-Christian heritage, thereby bringing our nation back to those great wells of democracy which were dug deep by the founding fathers in their formulation of the Constitution and the Declaration of Independence.

Today King is recognised as a hero and honoured in the United States with a national holiday.

Peaceful civil disobedience and non-violent direct action are not anti-democratic; they are part and parcel of the ethical tug-of-war that is social progress. Democracy is not infallible; majorities can and do support laws that are wrong. Plenty of examples dot our own history, including the White Australia policy and the systematic denial of fundamental rights to Aboriginal Australians. In 1965, Australia’s own freedom riders were threatened with arrest for obstruction when they tried to assist Aboriginal children to gain entry to the segregated Moree swimming pool. Among the law-breaking anarcho-Marxist students trying to foment social chaos at the time were James Spigelman, a future chief justice and lieutenant-governor of New South Wales, and Charles Perkins, who would go on to be a top public servant and be honoured with an Order of Australia and a state funeral.

In supporting the right of trade unionists to break the law in certain circumstances, McManus was not endorsing rampant criminal activity by the CFMEU, or suggesting that we can individually choose to follow the laws that suit us and ignore the rest. The threshold for civil disobedience is high, as are the potential costs.

In his letter from Birmingham Jail, King approached the question of what constitutes an unjust law from several angles. The first was theological: “A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law.”

The second was based on the fundamental question of human dignity: “Any law that uplifts human personality is just. Any law that degrades human personality is unjust. All segregation statutes are unjust because segregation distorts the soul and damages the personality.”

Third, King pointed out that Birmingham’s local ordinances contravened the spirit, if not the letter, of the decisions of higher courts, in particular the 1954 Supreme Court decision in Brown v Board of Education, which found that racial segregation of children in public schools violated the constitution.

Fourth, King tested the laws of segregation against the fundamental principle of human equality: “An unjust law is a code that a numerical or power majority group compels a minority group to obey but does not make binding on itself.”

And finally, he pointed out that a law may appear just, but be implemented in an unjust manner: “For instance, I have been arrested on a charge of parading without a permit. Now, there is nothing wrong in having an ordinance which requires a permit for a parade. But such an ordinance becomes unjust when it is used to maintain segregation and to deny citizens the First Amendment privilege of peaceful assembly and protest.”

The decision to break the law in a democracy is not one to be taken lightly. Above all, it requires accountability. Anyone who breaks an unjust law, says King, “must do so openly, lovingly, and with a willingness to accept the penalty.” When I deliberately engaged in trespass in the Tasmanian forests, I did so in the full knowledge that I would be arrested and face a penalty. I assume that the Christians who occupy politicians’ offices to hold prayer vigils for refugees on Nauru and Manus also know that they are risking arrest and sanction. When construction workers walk off an unsafe building site, or stop work because a colleague has been killed on the job, they are aware that they, or their union, will be hit with massive fines.

They also know, as we did in Tasmania, and as King did in Birmingham, that the act of breaking the law does not, in itself, bring about change; in the end, it is through parliaments, elections and court decisions that legislation is made, discarded or amended. Acts of civil disobedience and non-violent direct action are a way of bringing attention to the rightness or wrongness of an issue and advocating for change. Whether such campaigns succeed or not will ultimately be determined by broader public debate and the contest of ideas. The dam on the Gordon-below-Franklin was never built, because a majority of Australians voted in March 1983 to elect a government that had promised to halt its construction.

Sally McManus says that a belief in the rule of law is not inconsistent with refusing to obey laws that are unfair and unjust. King would surely agree. As he wrote, “an individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for law.” •

The post Anarcho-Marxist claptrap and the rule of law appeared first on Inside Story.

As mayor of Tatiara District Council, the “good country” around Bordertown in the southeast corner of South Australia, the former shearer is keen to get things right. He doesn’t want the mayor’s mangling of their names to be the dominant memory of becoming Australian for these four new citizens.

“Beepa Masho Mangooka,” he says, somewhat tentatively, perhaps conscious that he has an audience. I am watching artist and film-maker Malcolm McKinnon record Graham’s efforts from the corner of the room. Sitting opposite the mayor, the council’s executive assistant, Mandy Clarke, is encouraging, though she points out that Bipamacho Mbanguka’s first name should not be broken up with a pause. “Beepamasho,” he tries again, and she nods approvingly.

Mandy has taken the trouble to ask each of the candidates how their names are pronounced, and has written them down phonetically for the mayor. She’s been careful to check if they’re happy to be photographed for the Border Chronicle and to find out if anyone has any dietary restrictions, religious or otherwise, before ordering catering from the cafe up the road. She’s also provided each candidate with an advance copy of the citizenship oath so they can prepare and won’t be embarrassed by stumbling over words.

In the council chambers across the hallway, everything stands ready. The four certificates are laid out in order in crisp white envelopes, each accompanied by a commemorative $1 citizenship coin from the Perth Mint and a complimentary ticket to the Royal Adelaide Show. The Australian coat of arms and a portrait of the Queen are displayed as legally required, and a laptop and projector set up with a karaoke-style, singalong version of the national anthem. In the side room, where refreshments will be served, gift baskets for the new citizens are packed with Australian goodies – peanuts from Queensland, pure Australian honey, banana bread and the inevitable jar of Vegemite.

Mandy has checked and doubled checked the arrangements, but she’s still a touch anxious. “I’m always a bit nervous before a citizenship ceremony,” she admits. “Things can still go wrong.” She remembers a pre-digital accident when they played God Save the Queen instead of Advance Australia Fair because the cassette had been put in the player the wrong way around. There was nothing to do but let it run to the end and then switch the tape over.

“People get very excited about their citizenship ceremony,” Mandy says. “Some of them get quite teary. They feel free, liberated, now they are Australian citizens.” This evening’s four candidates are all from different countries in Africa: Yakob Tesfay Sultan from Eritrea; Saieed Mohammed Taha from Sudan; Ninneh Gowah Dewee from Liberia and Bipemacho Mbanguka from Congo. Ninneh and Bipemacho – known to locals as Morrison and Angel – are a couple. They have a toddler, Daniel, and a baby on the way.

“It will be interesting to see if the African lady comes in traditional dress,” says Graham. “The Filipinos normally come very well dressed. Even the little kids. Girls in new dresses, boys in suits and ties.” Although he’s been mayor for less than two years, Graham is already something of a veteran when it comes to citizenship ceremonies. “A little while back we had a lot of Filipinos,” he says. They had been recruited on temporary 457 skilled worker visas to work at the local meatworks. After their visas came to an end, the owners, Brazilian conglomerate JBS, made good on its promise to sponsor them for permanent residency. The final line in the company’s mission statement is “the certainty of a better future for all our employees.”

Bryan and Loreen Fuentes are beneficiaries of the JBS policy. Theirs is one of the many stories Malcolm has documented in Bordertown. The couple were living in Albany in Western Australia and working in an abattoir owned by a different company, their two young children left behind in the Philippines in the care of relatives. When Bryan’s 457 visa was about to run out, the meatworkers’ union helped him to find an alternative employer who would also sponsor him for permanent residency, or PR. JBS needed fifty workers, so “all up,” Bryansays, counting partners and children, “125 people ended up coming to Bordertown, chasing for the PR.”

Loreen and Bryan Fuentes: separation from their son and daughter lasted “only” a year. Malcolm McKinnon

Bryan had moved to Australia in March 2006, when Loreen was pregnant. Luckily, the meatworks shut down for maintenance every year in July, so after three months he was able to return to the Philippines for the birth of his daughter, and return annually after that to celebrate her birthday. Sometimes he got to go back a bit earlier, in June, so he could celebrate his son’s birthday too. Bryan spent his first three-and-a-half years in Albany alone, before bringing Loreen, but not the children, out to join him.

“We didn’t want to bring the kids to Australia on a visa that is not secure,” says Loreen. Their Australian friends are shocked at this, but Loreen says this is “not a strange thing to us.” More than ten million Filipinos live outside their homeland; many are “guest workers” on fixed-term contracts in places like the Gulf States or Singapore, which don’t allow them to bring family members with them. Others are undocumented migrants, living below the radar in rich countries like the United States, where they often work as housekeepers, caring for other people’s children but never getting to see their own kids grow up. They can’t go home, even for a holiday, for fear that they will not get back into the United Sates if they leave. Their families depend on the money they send home. Overseas workers remit around US$30 billion to the Philippines every year.

As a child, Loreen never saw much of her own father because he was a merchant seaman and often away at sea. For Bryan and Loreen, the separation from their son and daughter lasted “only” a year. After they moved to Bordertown and their pathway to residency became clear, they brought out the children too.

Loreen’s first impressions of Bordertown were not great. She had flown into Adelaide in the daytime and thought the city looked grand. She had no idea that Bordertown – population 2800 – was another three hours away by road. “We arrived on a bus in the dark,” says Loreen, “and there was no one in the streets.” To their surprise, they discovered that there was already a small but established Filipino community in the town – mostly Filipinas who had married Australian men. “They held a welcome party for us so we felt at home straight away,” says Loreen. Speaking good English and attending church helped them to establish connections with the broader community.

Now, after six years, the family are all Australian citizens and settled in a brand new brick house. Bryan coaches a local basketball team and sits on the kids’ school council. They still miss the Philippines, especially family. “It’s like we’re half Filipino, half Australian,” says Loreen. “The Philippines is my home. I’m still adjusting here,” says Bryan. But there is no going back. “Dreams are possible here in Australia,” says Loreen.

This story isn’t unique to Bordertown. As the latest immigration department statistics show, “skilled meatworker” is the second-top occupation for 457 visa holders in South Australia, and the sixth-highest occupation grouping for 457 visa holders in Queensland. So versions of Bryan and Loreen’s story are being played out in Murray Bridge and Rockhampton, and probably also in Cobram, Scone, Albany and elsewhere around the nation. In Australia, there are many bordertowns.

With around 470 staff, the JBS meatworks is Bordertown’s biggest employer. Almost two-thirds of its workforce are migrants. But unlike the Filipinos who come as skilled employees on temporary 457 visas, many of the newer members of the company’s labour force are asylum seekers and refugees who mostly arrived in Australia by boat. Plant manager Trevor Schiller says these workers are crucially important to the business: “From a regional point of view, Bordertown has low unemployment and without the migrant workers we probably wouldn’t operate,” he told the Border Chronicle in June this year.

Slaughtering and processing up to 8000 animals a day, the JBS plant helps keep local farming prosperous, supplying Australia and the world with Halal-certified lamb and mutton. Not only that, but by spending their wages in local shops, renting local houses that might otherwise sit empty and using local services, the plant’s migrant and refugee workforce help the town itself to thrive. In direct contradiction of immigration minister Peter Dutton’s federal election claim that “illiterate and innumerate” refugees would “take Australian jobs” or “languish in unemployment queues,” Bordertown’s migrants are not only working but also creating and sustaining jobs for local workers.

The largest group of refugees in Bordertown are Hazara, an ethnic minority from Afghanistan and Pakistan. As Shia Muslims, they have suffered persistent persecution, particularly at the hands of the Taliban and other Sunni militias. Alongside them are refugees from Iran, Sri Lanka and various countries in Africa. In fact, at least twenty-three different cultures are represented in Bordertown, and most have been drawn by jobs, especially at the meatworks.

The Australian Migrant Resource Centre recently opened new premises in the main street to provide a place to socialise, as well as practical support including English-language classes and help with such things as opening bank accounts, understanding phone bills, registering for Medicare, filling out the census form and dealing with Centrelink. Often another refugee with better English will act as a volunteer interpreter in such situations. Since there are no registered migration agents in Bordertown, centre staff can sometimes spend hours on the phone as the intermediaries between refugees and Adelaide-based migration lawyers or immigration department officers in Canberra.

An English-language class at the Australian Migrant Resource Centre in Bordertown. Malcolm McKinnon

Some of the refugees and asylum seekers working at JBS have already been in Bordertown for four years, but unlike Bryan and Loreen Fuentes, they mostly remain unsettled. Many will find it difficult, if not impossible, to truly establish their lives here. The pathway to Australian residency from a 457 visa may be uncertain and precarious, but for many refugees such a pathway is all but non-existent.

In late 2014, the Abbott government reintroduced Temporary Protection Visas, or TPVs, for refugees who arrived by boat, a measure that affected the “legacy caseload” of around 30,000 asylum seekers who had arrived under the Gillard and Rudd governments but whose refugee claims had still not been processed. TPVs last only three years; after that time, claims for protection are reassessed. If refugees still face persecution in their homeland, they’re granted another three-year temporary visa. The same process is repeated three years later, and so on, ad infinitum. Temporary visa holders can’t sponsor family to join them in Australia, so if they have left a wife and children behind in Afghanistan, or in a refugee camp somewhere, as many of these men have, then they will be separated from their loved ones indefinitely, perhaps forever.

The only glimmer of hope they have of a settled life in Australia came courtesy of the mining magnate and one-time federal MP Clive Palmer. Recognising that many regions suffer severe labour shortages, Palmer convinced the Abbott government to create a second type of temporary refugee visa, the SHEV, or Safe Haven Enterprise Visa, to attract refugees to jobs in rural industries. This visa lasts five years rather than three, and holds out the slim prospect of permanent residency if a refugee works or studies in a designated regional area for at least three-and-a-half years without accessing any Centrelink payments during that period.

To become a permanent resident, though, a refugee on a SHEV will still have to jump through many more hoops. Usually this means meeting the criteria for skilled migration – that is, having a qualification or trade that is in great demand in Australia – as well as meeting age, health, character and high-level English-language requirements. As Scott Morrison (then immigration minister) put it when the visa was introduced, “this is a very high bar to clear” and the opportunity for refugees to move from a SHEV to permanent residency is “very limited.” Three-and-a-half years as a diligent process worker on the floor of a meat packing plant won’t make the grade. As things stand, the “temporary” visa system condemns most people who arrived by boat to a life of permanent heartbreak, loneliness and uncertainty.

Some refugees, like twenty-year-old Mujtaba Peyvandi, known as MJ, are luckier, having arrived earlier, when permanent protection visas were still being granted to “illegal maritime arrivals.” MJ was a teenager when he came to Bordertown. He spoke little English but learned quickly and was excited that he would finally get a chance to go back to school and continue his interrupted education. “I really wanted to study,” he tells Malcolm in an interview. “I want to go to uni. I want to be a lawyer or a senator and go into parliament.” MJ says his heroes are Martin Luther King and Anne Frank, “people who have done things that changed history.”

“Very high ambitions”: Hazara refugee Mujtaba Peyvandi. Malcolm McKinnon

MJ secured an afternoon shift at JBS so that he could attend school from 8am to 3pm and then process and package lamb at the meatworks from 3pm to midnight. It didn’t last; not because MJ lacked the stamina for such a punishing schedule but because market conditions forced JBS to reduce staff and change its roster; for now, the meatworks only operates a single day shift and for family reasons MJ has to prioritise earning over learning. MJ’s mother, father and two siblings all work at JBS. “People say to me that ‘Oh, you guys must be rich,’ but we’re not,” he says. The family, who are now Australian citizens, live simply and put every spare cent towards the cost of bringing other family members to join them in Australia. So far, they have managed to bring out one brother and his family at a cost of tens of thousands of dollars.

In his spare time, MJ volunteers at the Migrant Resource Centre, interpreting for other, usually older, Hazara refugees, helping them fill out forms or accompanying them to the bank or the doctor. Compared to the city, he says, Bordertown is quiet, safe and affordable. “Everyone here is really friendly,” he says. “People are not racist.” Yet MJ thinks that the best he can hope for in the town is to become a skilled worker at JBS, a slaughterman or a boner, who get paid the highest rates. He believes that he will have to go elsewhere to achieve his “very high ambitions.”

On my brief visit to Bordertown I don’t get to visit the meatworks itself, but Malcolm shows me the photographs and videos he has shot inside the plant. It is a highly regimented, highly efficient production line from the moment a stunned sheep slides down a chute to have its throat expertly slit right through to the cling-wrapping of rib roasts and chops ready for the supermarket shelf. In between, huge hydraulic shears sever heads from torsos in one massive cut, and rapidly spinning horizontal blades slice through backbone to separate forequarters from hind. There are stainless steel surfaces, white plastic tubs lined with blue plastic sheets, rubber conveyer belts, hooks and knives, and everywhere constant motion.

Men and women work side by side, adorned in white coats or aprons, white hard hats, blue gloves, black earmuffs, plastic sleeve protectors, hairnets and safety glasses. They labour in steady, focused, non-stop movements – an intense, repetitive dance to match the squealing, clunking music of the machinery. Despite the inevitable blood and guts, I am surprised that the messy work of butchering can appear so clean and orderly.

The facial characteristics of the workers reveal a wide diversity of backgrounds, but the intensity of the work and the muffling of eyes and mouth leave little opportunity for conversation. While people work closely together, it is hard to imagine how they could form connections and emotional bonds. MJ says he has made friends in the lunchroom, but even on breaks there are barriers of language and exhaustion to overcome. Outside work, there is also a risk that locals and migrant workers will lead parallel lives.

Bordertown is a small, conservative town. It has a stable population whose family attachments to the Tatiara often stretch back generations. According to the 2011 census, more than 80 per cent of the town’s population was born in Australia, and 75 per cent of  residents had two Australian-born parents (compared to an Australia-wide average of 54 per cent). When newcomers arrive, they generally establish social connections through sport, school and church, but this can take time, even for Australians. Newly arrived refugees are unlikely to play cricket or AFL football, and many are single men without children at school. If they are from a Muslim background, they won’t attend church and they generally won’t drink, which means the social lubricant of alcohol is also not available.

Not that Bordertown is a hostile environment. There are occasional outbursts of anger and misunderstanding, like the time when a local worker “lost it” and became abusive at a meeting at JBS because he objected to everything being translated into other languages for migrant staff. There is some low-level anxiety about the fact that many of the refugees are Muslim. Overall, though, after numerous visits to Bordertown in recent months, Malcolm thinks the lack of connection between locals is not a product of rudeness, racism or fear. Rather, he has gained the impression that many locals don’t reach out to the newcomers because they see the migrants as “just passing through.” Added to this is uncertainty about how to breach the cultural gulf.

Spiro Tsaousoglou shares this view. He says that locals are generally “very accepting” but “don’t know how to make connections.” Spiro migrated to Australia as a baby from the Greek island of Rhodes and has lived in Bordertown for fourteen years, running an IT business. When locals kept asking him how they could come to meet the recent arrivals, he responded by setting up social soccer games. In an on-camera interview, he tells Malcolm that he wanted to be able to put his arm around a refugee’s shoulder and ask, “How was your week?”

Spiro knew he needed to create an environment that would make such interactions possible. Since soccer is “a universal currency,” he uses the games to “create an atmosphere for anyone to be able to come and join in and not have to step on unfamiliar ground.” With up to forty people turning up to play, there are now two matches every Sunday. “Everyone has a need to be ‘friended,’ to be part of the community; we all want to be accepted,” says Spiro. “We just have to put ourselves into their shoes. If we had to migrate and move over to their country, how would we want to be treated?”

Other Bordertown residents are also reaching out to the strangers in their midst in ways that give expression to country hospitality, Christian kindness or their own experiences of arriving as an outsider.

Pat Martlew, a local woman mindful of her own experience as a migrant from Britain many years ago, organises weekly in-home English classes and lunches for newly arrived migrant women who are at risk of social isolation. Retired farmer Denis Russell is a volunteer English-language teacher at the Migrant Resource Centre who sees his involvement as an act of receiving as much as giving. “It’s very rewarding,” he tells Malcolm on camera. “I’m discovering a lot of things I didn’t know.” Denis, a lover of fine food, has formed a close friendship with a particular refugee who now cooks him elaborate Iranian meals once a week.

Former midwife Pam Copping and retired teacher Gwen Fisher pair up to run a weekly class to help refugees and other recent migrants prepare for the Australian government’s citizenship test. “Much of it I didn’t know myself,” says Gwen. Citizenship is a necessary step for refugees to bring immediate family members to join them in Australia, and Pam recently witnessed a father from Afghanistan being reunited with his wife and children after many years’ separation. “It’s just so beautiful to see,” she says. It made her feel “so happy and so good.”

Refugees on temporary protection visas are forever denied such joy, but even those on permanent visas are finding this cherished goal has is being pushed out of reach. It is technically possible for a refugee on a permanent protection visa to sponsor family members, but such applications are given the lowest priority for processing. In other words, they never make it to the top of the bureaucratic pile. That is why citizenship has such a high priority for recently arrived refugees. Once they have citizenship, they can get their families here faster.

But even refugees with permanent status are encountering barriers, because the government is deliberately delaying applications for citizenship from refugees who came as “illegal maritime arrivals.” They might meet all the legal requirements for citizenship, having lived in Australia on a permanent visa for four years and passed the citizenship test, but they can’t be confirmed as citizens until they attend a citizenship ceremony and swear the citizenship oath.

Thousands of refugees are queued up, waiting for their invitation to attend such a ceremony. The immigration department says it reaches a decision on 80 per cent of citizenship applications within eighty days, yet a survey of hundreds of refugees by the Refugee Council of Australia in October 2015 found they had been waiting an average of 215 days for an invitation to attend a citizenship ceremony. Some had waited more than 600 days. Two Hazara refugees have now challenged the immigration minister in the Federal Court for not exercising his powers within a reasonable timeframe. The case was heard in July but a decision is yet to be handed down.

The damage done by indefinite delays to citizenship applications mirrors the emotional and psychological harm done by temporary protection visas. Refugees who came as single men and left wives and children behind in their homeland or in a refugee camp are unable to get on with their lives. As long as they are separated from their immediate family, it is very difficult for them to settle. This contributes to the gap between refugees and locals by preventing the new arrivals from forming lasting ties to Bordertown. Until their family is reunited, they can’t put down roots here or anywhere else.

Back in Woolshed Street, Malcolm and I join friends and relations on the lurid green chairs at the rear of the wood-panelled council chamber. Resplendent in dress shirt and waistcoat, Morrison and Angel’s toddler son Daniel is wandering happily about the room, finding himself in constant demand for photographs. His parents are also dressed to the nines. The ceremony goes smoothly and then there is much happiness, laughter and many more photographs over tea and sandwiches. I meet ninety-six-year-old Arthur Milne, who used to cultivate the land where the JBS meatworks now stands. He can remember working with draught horses, and the good years with plenty of rain after he returned from service during the second world war. He welcomes migrants coming and says they keep the town alive.

On the edges of the gathering, though, there is sadness. Citizenship ceremonies in Bordertown are usually held together with council meetings, but this one has been timed specially to coincide with Pam and Gwen’s weekly citizenship class at the Migrant Resource Centre. They wanted their students to come along and witness proceedings so they know what is involved when – or if – their own turn comes.

I chat to one of the participants in the citizenship class, a dignified Hazara man who arrived in Australia in 2010. He spent almost two years in detention in Curtin and has now lived in Bordertown for four years, working at JBS. He hasn’t seen his wife and young son for six years, and tells me he dreams of bringing them to join him in Bordertown “so we will live together as a family.” With deliberate and persistent effort, he has learnt excellent English. He has been granted a permanent protection visa and is ready and qualified to become a citizen, but he fears it won’t happen for a long time yet, if at all. He says some friends submitted their applications eighteen months ago and are still waiting for an invitation to a ceremony.

Australia’s border protection regime doesn’t just involve airport immigration officers and coastal patrol vessels. It doesn’t stop at Christmas Island or Manus or Nauru. It reaches deep into the Australian countryside, into rural industries, regional centres, council chambers and even human hearts. In Australia, every town is a bordertown. •

The post Every town is a Bordertown appeared first on Inside Story.

Now, the Turnbull government is attempting to manage the problem by introducing an entirely new five-year temporary visa, commencing next July. With the immigration department apparently unable to provide basic information about how great the demand for such a visa might be, it looks like a political fix rather than a coherent policy initiative, and is likely to create a new set of problems. To understand how we arrived at this point, it helps to go back to Melbourne’s outer eastern suburbs on that March night more than a decade and a half ago.

In his opening presentation, Philip Ruddock proudly described the government’s success in swinging the pendulum of permanent migration away from family reunions and towards skills. Under the Hawke and Keating Labor governments, family visas had made up around two-thirds of all places in the migration program; after the Coalition took office under John Howard in 1996, the share soon fell to less than half. (Since then the share has fallen further; for many years now, the family stream has made up only about a third of the permanent migration program, or 57,400 of 190,000 places in 2015–16.)

Ruddock bolstered his bias towards skills with numbers. According to the neat charts he projected onto the screen, every 1000 people who entered the country as skilled or business migrants created a net gain to the federal budget of $36.7 million over five years. The same number of family migrants, by contrast, cost the budget $1.8 million. And because not all family visas were alike – migrant parents impose “a significantly higher ongoing cost” than spouses and partners, for instance – he had changed the character of family migration by capping parent visas at 500 places per year. With 20,000 applications pending, he cheerfully revealed, the waiting time to bring aged parents to Australia was roughly forty years.

For many in the audience – Australians of migrant backgrounds who were keen to find ways of bringing older relatives to join them here – that last piece of information wasn’t at all cheering. But it wasn’t news. Ruddock’s capping of parent visa numbers was one salvo in a war of attrition with the Senate. In 1998, the Coalition had attempted to manage the growing demand for parent migration by introducing a contributory parent visa, which would have allowed sponsors to bring their parents to Australia as permanent migrants as long as they were willing to stump up $17,000 – a revenue-raising measure designed to offset some of the costs these migrants might impose on the community as they aged. Labor and the Senate crossbenches initially disallowed the new visa on the basis that it amounted to “queue jumping”: the rich would have the capacity to bring their parents swiftly to Australia; the poor would wait forever. Ruddock returned fire by imposing his 500-place cap.

In Knox that night, I saw how this blunt instrument had swung many migrant families to his side. Given the choice between an indefinite and uncertain wait for an affordable parent visa and a relatively short wait for an expensive one, they would choose the latter. I recall passionate pleas from participants at the consultation, promising to take full responsibility for their parents living expenses, to provide for their housing and to guarantee their healthcare costs, if only the minister would allow them to bring parents to Australia quickly. The government had to understand how crucial it was in their culture to honour and care for your parents in their elder years, and how essential it was for grandchildren to know their grandparents and hear their stories. If required, migrant families of all backgrounds were willing to pay large sums to get their parents to Australia.

Ruddock’s tactics were ultimately successful. When the Senate relented in 2003, the contributory visa immediately became the main mechanism used by families to bring parents to Australia. In 2003–04 the cap on parent visas was raised from 500 to 5000 places, but around 70 per cent of visas were in the new contributory category. In recent years 80 to 85 per cent of parent places have been set aside for contributory visas. (In 2015–16, this translated into 7175 out of 8675 parent places.) If the Coalition government had got its way, the non-contributory parent visa would have disappeared altogether. It tried to abolish the category in 2014, but was again stymied by the Senate.

Predictably, the cost of the contributory visa has also increased sharply over time, from $26,200 when it was introduced in 2003 to $47,295 today (and this doesn’t include the cost of migration advice or outlays for such things as medical checks and police reports). Despite the high charges, the federal government has no trouble filling its annual quota, and there are almost 30,000 applications in the pipeline. Applications are usually finalised within two years of being lodged, although as the right-hand graph in this chart from the Productivity Commission shows, processing times have been lengthening.

In the parental queue: places and waiting times

Source: Productivity Commission, Migrant Intake into Australia, figure 13.3.

As the graph shows, however, the waiting time for a non-contributory visa (which carries a base visa application charge of $3870) is much longer; currently it is a ludicrous thirty years, so only relatively young parents would have much hope of living to see their visa issued. Despite the wait, there is nevertheless a backlog of more than 50,000 applications. Clearly there is huge pent-up demand for parent migration, especially when you consider that applicants for the two parent visas must also satisfy the balance-of-family test: at least half the parents’ children must be living permanently in Australia, or they must have more children living permanently in Australia than in any other country. Tens of thousands of potential parent migrants no doubt fail to meet these criteria.

This unsatisfied desire to bring parents to Australia has fuelled what might seem like a paradoxical campaign for a new, temporary visa category for families that don’t meet the balance-of-family test, or can’t afford the expensive option of permanent migration under a contributory visa and don’t want to suffer the indefinite wait for a non-contributory visa.

It’s important to be aware that migrant families are already bringing parents to Australia on temporary visas. For now, however, their options are limited to a maximum twelve-month stay on a subclass 600 tourist visa. When that visa expires, the foreign parent must leave Australia and remain outside the country for at least six months before applying for another visa.

Frustration with this arrangement coalesced into a concerted campaign for a temporary “long-stay visa for parents.” Adelaide bus driver Arvind Duggal, who was instrumental in getting this campaign off the ground, told SBS that the visa restrictions prevented him from fulfilling his responsibilities as a son and that he was tired of answering his children’s repeated questions about why grandma was leaving again. Duggal’s appeal struck a chord: two years ago he started an online petition to immigration minister Peter Dutton that has now attracted almost 30,000 signatures. Migrant communities saw an opportunity in the lead-up to the 2016 election. They lobbied Labor and the Coalition on the issue, including in marginal electorates, and both parties responded with apparently hasty campaign promises that passed largely under the radar of the media. Labor pledged a temporary visa that would allow parents to remain in Australia for three years and would only require them to leave for four weeks before qualifying for a renewal. A few days later, the Coalition upped the bidding, promising a five-year parent visa.

The final factor in the mix that may have influenced the government’s thinking on a temporary parent visa was the Productivity Commission’s report into Australia’s migration intake. The report suggested a new “provisional visa” that “would permit parents to stay for a longer period of (say) five years” and could, “after a given period of absence from Australia, be renewed multiple times.” While the commission’s report was not made public until well after the election, it had been presented to government in April 2016, about a month before the campaign kicked off. So the idea of a new temporary parent visa may well have been knocking around already in the heads of immigration department officials and ministerial advisers.

Returned to office, the Turnbull government moved relatively quickly to make good on its election commitment. On 23 September, assistant immigration minister Alex Hawke announced a series of community consultations on the design of the new visa. The immigration department also published a discussion paper and called for public submissions to be lodged by 31 October.

Supporters of Arvind Duggal’s push for a long-stay parent visa were elated. “My heart is in celebration by the chance of having my mum close to me for longer than six months sporadically,” wrote Viviana Aroujo on the campaign’s Facebook page. “I cannot express how happy I am for reading this media release… having my mum for at least three years near her only grandchild is a dream… Gosh, I am in tears!!!!!!!”

The Productivity Commission looked at the issue with much drier eyes. Its support for a temporary parent visa was motivated less by any emotional and physical well-being that results from bringing families together than by the huge future costs of the system of permanent parent visas, whether contributory or non-contributory.

The commission’s argument goes like this. Compared to other immigrants, parent migrants are likely to have weaker English-language capabilities, fewer skills, lower personal incomes and lower volunteering rates, thus reducing their chances of forming “deep and broad community connections.” True, “immigrant parents can make valuable social contributions to their families,” but these “mainly benefit the family members themselves.” Even when unpaid childcare is provided, for example, this essentially amounts to a private benefit – in the form of family savings on childcare costs – rather than a public good. Indeed,the “need for childcare is greatest for infants, and so often not enduring,” whereas “the responsibilities of taxpayers for supporting the parent visa stream apply throughout the rest of their lives.”

The long-term costs of supporting parent migrants were the commission’s main concern – and according to its calculations, those costs are considerable. It estimated the “cumulative lifetime fiscal costs” of a migrant parent on a permanent visa in 2015 to be “between around $335,000 and $410,000 per person (with the ‘best’ estimate being just over $370,000).” As the report concluded, “the current contributory visa charge of $47,295 meets only a small fraction of the fiscal costs for the 7175 contributory parent visa holders in 2015” (while the 1500 non-contributory parent migrants make an even less significant contribution).

The commission calculated that the net liability for providing assistance to the 8675 parent visa holders who arrived in 2015 was, over their lifetimes, “around $2.9 billion.” Even if there were no increase in the number of parent visas issued each year, it estimated, the costs to the Australian community of permanent parental migration would still be between $68 billion and $85 billion from now to 2050. (The commission noted in passing that this cost might rise even further due to “the effect of decreased mortality rates for successive cohorts” – in other words, if migrant parents inconveniently start living longer.)

In short, the commission thinks permanent parent visas are a thoroughly bad idea. To reduce the future burden of supporting more old migrants, it suggested the government dramatically increase the application charge for the contributory parent visa – “by roughly double in the first instance” – and simultaneously cut the annual intake. It suggested scrapping the non-contributory visa altogether, and instead introducing a strictly limited “compassionate parent visa.” This visa would only be available in a few compelling circumstances – if both parents of Australian citizen children were killed in a car crash, for instance, and the foreign grandparents were the most appropriate alternative carers.

Alone, such recommendations were not going to be politically palatable; they would enrage migrant communities lobbying to bring their parents to Australia. But the commission also sought to resolve the “tension between… the significant fiscal costs of this visa category and the desire to allow some parent and child reunion” by proposing a temporary but “longer-term” visa class, periodically renewable, which would allow parents to stay for longer than the maximum twelve months permitted under a visitor visa.

That’s the outline of the new visa now under discussion. In theory, it enables the government to reconcile the competing pressures identified by the Productivity Commission: the growing demand by migrant communities to bring parents to Australia, versus the associated public costs. As the discussion paper on the proposed visa puts it:

The Australian Government believes that parents should have the opportunity to visit children and grandchildren who live in Australia as long as parents and their sponsors can satisfy community expectations and that their stay in Australia does not have an undue cost impact on the Australian community.

This will be achieved by attempting to privatise all the costs of parent migrants under the guiding principle of “user pays.” In other words, temporary migrant parents will be required to have private health insurance and cover all their own medical bills, housing costs and living expenses. Sponsors – their Australian children – will be responsible “for ensuring that their parent does not become a burden on the Australian community.”

Sponsors’ capacity to meet this responsibility will be subject to threshold tests: an income assessment to show that they can support their parents, and a minimum number of years “living in and contributing to Australia” to ensure that they “have had sufficient time to become engaged with the Australian community and to contribute to Australia financially.” The longer a sponsor has been resident in Australia, the higher his or her priority for getting a visa for a parent living overseas. Sponsors will also be required to post a “significant” financial bond (immigration minister Peter Dutton has suggested between $5000 and $15,000), which government can use to recoup some costs in cases “where sponsorship obligations have not been honoured.”

But while drawing a boundary between temporary and permanent migration might appear bureaucratically neat, it won’t resolve all potential problems. As some of the questions posed in the immigration department’s discussion paper make apparent, things could get messy:

What (if any) limits should be placed on the total liability of sponsors where their parent incurs significant health or aged care costs not covered by their private health insurance?

In the event that the holder of a parent visa is unable to depart Australia due to illness or accident:

• what responsibility should be borne by the sponsor and their immediate family, and
• to what (if any) extent would it be reasonable for these costs to be borne by the Australian community?

If a sponsor dies:

• in what circumstances, and what timeframe, should their parent be required to leave Australia
• what liability should remain with their immediate family, and
• in what circumstances should their immediate family be able to take over the sponsorship to enable the parent to remain in Australia?

It’s not hard to imagine difficult scenarios:

• A son-in-law sponsors his wife’s widowed mother to Australia but a few years later the marriage ends. The estranged husband withdraws his sponsorship and demands his bond back and the wife can’t step in because she has no independent income. The mother’s visa will be withdrawn, yet the distressed wife is in a vulnerable psychological condition, possibly suicidal, and she and her children need the support of her temporary migrant mother more than ever.

• After living in Australia for more than ten years on a temporary visa, an elderly parent develops Alzheimer’s. He claims he is being subject to elder abuse by his sponsor child. The relationship deteriorates to the point where the child withdraws sponsorship so the parent must leave Australia. But there is no one in the homeland to care for him. Does the father get sent back anyway? If not, who intervenes and who pays for the parent’s high-needs care?

These are not far-fetched possibilities. Human lives are messy and complicated and tend to explode administrative systems and rules, no matter how detailed and thoughtful. Cases like this will end up in the media and as lengthy, resource-intensive and tortuous appeals to immigration ministers to use their discretionary powers. The more people who use the visa, the more unforeseen circumstances and unintended consequences are likely to emerge. Such problems may be many years down the track, and so will land in the laps of future governments, but that’s no reason not to take them seriously today.

At this stage, though, the immigration department appears unable to offer even such basic information as an estimate of the expected demand for a new visa. We know from the length of the existing queues that there are at least 80,000 potential applicants, but the numbers are likely to be significantly higher once we factor in people who are put off by the current cost or the length of the wait, or who fail to meet the balance-of-family test. The discussion paper makes no mention of the potential number of future temporary migrant parents, and when I asked the department for data on how many people currently use work-arounds like the twelve-month subclass 600 tourist visa, I was told that the information was not “readily available.”

For those of us old enough to remember the non-alcoholic beverage Claytons – “the drink you have when you’re not having a drink” – the new temporary parent visa seems a lot like Claytons immigration. We allow people to live in Australia long-term – for five, ten, perhaps even fifteen or twenty years – but we never permit them to become Australian because of the costs they might impose on us. The requirement to leave for a month or two every five years is just a fig leaf to enable the deception: it means government can call migration temporary even when it is essentially permanent settlement, as with New Zealanders on special category visas, or refugees on temporary protection visas. The government can maintain the pretence that parents are just visiting, when in reality they are making their homes here.

The question of parent migration is undoubtedly difficult. All of us can understand the strong desire to keep fathers and mothers close by as they age, to have grandparents pass on cultural and familial knowledge to Australian-born kids, and to express our love for our parents in tangible, practical, intimate ways. Yet the Productivity Commission’s dry-eyed data is also compelling. As the commission argues, public funds spent supporting ageing migrant parents are funds that will be diverted from other areas of social policy. “Ultimately, every dollar spent on one social program must require either additional taxes (reduced private consumption) or forgone government expenditure in other areas … such as mental health, homelessness or, in the context of immigration, the support of immigrants through the Humanitarian Programme.”

A temporary parent visa might seem to offer a way out of this dilemma, but it risks creating a new cohort of people who are not quite Australian – who live in the nation for an extended period but have no say in the decisions that are made, no representation and no access to public support in times of need, and have restricted rights. To exclude long-term Australian residents from full membership of the political community in this way is inequitable and undemocratic, and age should make no difference to those fundamental principles. •

The post Ageing parents: the next wave of temporary migrants? appeared first on Inside Story.

Some measures in the bill have been widely canvassed, especially two related to climate change: the $1.3 billion cut to the Australian Renewable Energy Agency, and the removal of the small energy supplement originally introduced in 2013 to compensate people on government benefits for the impact of the Gillard government’s carbon price.

Other cuts have almost escaped notice, including the proposal to deny recent family migrants access to government payments for at least two years. The government calculates this measure will save $225 million over four years from 1 January 2017.

Most new permanent migrants are already required to wait two years before they can receive Newstart unemployment benefits, youth allowance, sickness payments, Austudy, carer payments and some other payments (and of course these benefits generally aren’t available at all to temporary migrants, no matter how long they have lived in Australia).

The Keating Labor government first introduced a six-month “newly arrived resident’s waiting period” for new migrants in 1993. In 1997, soon after the Howard government took office, the waiting period was extended to two years. But exemptions have existed, most notably for refugees and other “humanitarian entrants,” and for anyone who is the “family member of an Australian citizen.”

It is this second exemption that Scott Morrison wants to remove. The change was first canvassed in December in the MYEFO – the Mid Year Economic and Fiscal Outlook for 2015–16. At the time, social services minister Christian Porter described the exemption as “very curious,” noting that “if an Australian citizen or resident goes overseas and marries and brings back a wife or dependent child, then the wife and the dependent child… have been able to enter the welfare system straight away without engaging in the wait that every other newly arrived migrant has to wait.”

This is not a completely accurate summary of the current situation, however. The vast majority of the new migrants who enter Australia under the family stream are the foreign partners of Australian citizens. Often they are granted a provisional partner visa (subclass 820) and only move to permanent residence after two years (presuming the relationship lasts). They are not eligible for Centrelink payments like Newstart or youth allowance on the provisional visa, which means, in effect, that they are already subject to the two-year new resident’s waiting period.

Foreign partners can only access government payments on arrival if they are granted a permanent visa (subclass 801) upfront; to get that visa they must already have been in the relationship with their Australian partner for at least three years (or at least two years if the couple has a child). In other words, government payments are not available to the partner of someone who simply goes overseas and “brings back a wife.”

The case for removing the exemption for family migrants is laid out in the explanatory memorandum to the omnibus bill:

This change would reinforce the Australian government’s position that all newly arrived migrants should be self-sufficient or seek support from family members and should not expect to be supported by the Australian taxpayer immediately on arrival in Australia… It is reasonable to expect that migrants, particularly those with family members living in Australia, should be financially secure or at least put arrangements in place to support themselves prior to moving to Australia.

This might seem like a fair argument, but it raises at least two issues.

First, why were family members exempted in the first place? What was the thinking of legislators and policy-makers in 1993 and 1997? My quick search through the explanatory memoranda of previous pieces of legislation failed to throw up an answer to that question, but presumably the rationale ran something like this: the nation owes a particular obligation to the immediate family of Australian citizens, above and beyond any obligations that it might owe to other foreign nationals who are granted a permanent visa, such as independent skilled migrants. If that argument holds true, then it should be as persuasive today as it was twenty-three years ago when the newly arrived resident’s waiting period was first introduced.

Second, and more fundamentally, it is logical to assume that the vast majority of family migrants would already “take steps prior to moving to Australia” to ensure that they have financial support during their initial period here. In other words, the exemptions to the waiting period are a safety net and not a feather bed – they are intended to help out Australian families in cases of adversity. It is easy to imagine such circumstances. What if the Australian partner of a newly arrived migrant dies in an accident, for instance? If the omnibus bill passes unamended, the new resident, who may not yet have found a job, would be unable to apply for unemployment benefits. Or what if the Australian spouse is unexpectedly diagnosed with a terminal illness? The new resident would not be able apply for a carer’s allowance to look after his or her partner in a time of need. If the Australian partner becomes violent, then the new resident will have fewer options for escaping: in its submission on the omnibus bill, the Australian Council of Social Services warns that there is “a valid concern” that financial dependence on the Australian partner could “prevent people from leaving abusive situations.”

The government’s response to all these scenarios is to point out that newly arrived residents will still have access to special benefits – a fallback payment made at Centrelink’s discretion to people in severe financial hardship who are “unable to receive any other income support payment.” While the two-year waiting period also applies to special benefits, the Department of Social Services reassured Labor senator Claire Moore (in answer to a question taken on notice in Senate estimates) that new residents would retain the exemption for this payment “if they have experienced both financial hardship and a substantial change in circumstances beyond their control after arrival in Australia.”

Based on immigration department data, more than three-quarters of the estimated 5700 people affected by changes in the omnibus bill will be women. When Senator Moore asked in Senate Estimates whether Social Security had “undertaken any research to examine whether this change will have a negative impact on new migrants’ settlement experiences,” the answer was a succinct “No.” In response to questions about whether any assessment had been made of the impact on new residents’ labour market participation and social welfare, the department responded that it “undertook analysis of previous cohorts that were granted social security payments via the family member exemption” for “the purposes of estimating savings.” Asked whether stakeholders had provided feedback on the proposed changes, the department offered the highly illuminating response of “Yes.” (According to the backbenchers’ brief on the omnibus bill, the “consultation” on removing the exemption involved the Department of Human Services and the Department of Agriculture and Water Resources.)

When the MYEFO changes were announced in December, Labor’s shadow citizenship and multiculturalism minister, Michelle Rowland, condemned the removal of the waiting period exemption for Centrelink payments. She said that prime minister Malcolm Turnbull had “ripped support from newly arrived migrants,” making him “crueller than Abbott.” Yet Labor now appears to have quietly signed up to the change under its election promise to support “responsible savings measures.”

In this way, Australia’s welfare system is eroded, bit by bit, without debate or protest. In fact, without most of us even noticing. •

The post New migrants on board the budget-cut omnibus appeared first on Inside Story.

The Manus detention centre has been found to be unconstitutional and must close; the PNG government says refugees can settle in the country if they choose, though few want to. Nauru has made it clear that refugees can’t remain permanently on its territory. Bill Shorten might have promised to redouble efforts to find alternative resettlement places, but the reality of the Labor–Coalition unity ticket is that neither side has the faintest idea of where these refugees might go.

To justify the policy of offshore processing and turnbacks, both parties resort to the realist language of necessity. When recycled prime minister Kevin Rudd announced shortly before the last election that no one arriving by boat after 19 July 2013 would settle in Australia as a refugee, he described the measure as “hard public policy… which must now be implemented.” It was a “practical step forward,” he said, and would be taken “calmly, rationally and with resolve.” Australians might have “kind and compassionate” hearts, but we would accept the policy because we also have “hard heads.” In other words, we must focus entirely on the result we are seeking and ignore (or suppress) any niggling emotions that might prompt us to discuss the ethics of the process we use to get there.

Turnbull used remarkably similar arguments during the 2016 election campaign. On Q&A, responding to a contractor’s description of the situation on Manus – “It is terrible the way they treat the people there. They are treated worse than animals” – he acknowledged that the policy was “harsh” but insisted that it was necessary because “the alternative is far worse.”

“None of us have hearts of stone,” the prime minister added, while insisting that the situation requires us to behave as if we do. To resettle refugees from Manus and Nauru in Australia would be, he says, “the biggest marketing opportunity for the people smugglers you have ever seen.” They would exploit our “weakness” and the “boats would be setting off again.” The consequence would be “women, children and families drowning at sea.”

Labor’s policy differs slightly from the Coalition’s. It would abolish temporary protection visas and open up Manus and Nauru to journalists. But in the first leaders’ debate during the campaign, Shorten was eager to show that he and Turnbull were essentially one. “We would defeat the people smugglers,” he said. “We accept the role of boat turnbacks, as we should, because we don’t want to see the people smugglers back in business.”

While the emphasis shifts, both leaders give essentially the same reasons for why we must be tough: to defend the integrity of our borders, save lives at sea and defeat the smugglers. On Q&A, Turnbull added keeping children out of detention to the list. In his time as immigration minister, Philip Ruddock claimed that harsh policies were needed to shore up public support for an orderly migration program that might otherwise be overwhelmed by a xenophobic Hansonite backlash.

Regulating movement across borders, combatting people smuggling, saving lives at sea, keeping kids out of detention and countering racism – all these are legitimate aims of public policy. Indeed we might say that policy-makers are obliged to act to realise such aims. Problems arise, though, when we are told that there is only one realistic, hard-headed way to do this, and when leaders insist that moral questions are an unwelcome and unhelpful distraction from the necessary task of achieving a practical solution.

“No amount of moral lecturing from those who seem unable to comprehend the negative consequences of an open borders policy will bring forth those solutions,” immigration department head Mike Pezzullo told Senate estimates in February 2016. “All that can be done is being done,” he insisted, with reference to the search for resettlement places beyond Australia and New Zealand. Pezzullo suggested that to deal in the real world of necessity, we must be wary of giving expression to feelings like empathy. “Yielding to emotional gestures in this area of public administration simply reduces the margin for discretionary action which is able to be employed by those people who are actually charged with dealing with the problem.”

The famously hard-headed Scottish Enlightenment thinker Adam Smith, best known for his description of the invisible and indifferent hand of market economics, might argue otherwise. He regarded empathy (or sympathy, as he called it) as the fundamental human emotion, crucial to our capacity to establish norms of behaviour that enable us to live together cooperatively. For Smith, emotion (“immediate sense and feeling”) rather than reason is the source of our “first perceptions of right and wrong.”

Defenders of Australia’s system of border control would say that this is an area of public administration that must be quarantined from such troublesome moral sentiments. A hard head can’t be combined with Smith’s soft heart. We must do what is necessary.

In his discussion of just and unjust wars, political philosopher Michael Walzer argues that the word “necessary” enfolds two meanings – inevitable and indispensable. To say that something is inevitable is to accept that it could not be otherwise; it is the outcome of forces beyond our control, like a natural disaster, or an event that we could not possibly have anticipated because of our ignorance of essential facts. We can only decide if something was inevitable with the benefit of hindsight. To describe an action as indispensable, though, is to make it contingent on some particular outcome; it is to assert that A is necessary (indispensable) in order to achieve B. And this kind of argument is always open to challenge.

Walzer discusses this issue with reference to the Melian Dialogue in Thucydides’s History of the Peloponnesian War (a text Turnbull also likes to reference). The Athenian representatives argue that it is necessary (indispensable) to invade the island of Melos in order to maintain and expand their empire. To allow Melos to remain neutral would show weakness and so invite other subjugated territories to rebel. With thirty-eight ships and 3000 soldiers waiting offshore, the Athenian “negotiators” tell the Melian leaders that they have no choice but to surrender. The Melians refuse to submit, and defend their stance with talk of what is right, rather than what is necessary. The Athenians respond by arguing that if the Melians had the upper hand, they “would be acting in precisely the same way.” The Melians are duly crushed.

The Melian Dialogue is the classic example of realism in international relations and a staple text in defence studies and foreign policy training. The thrust of the realist reading is that while we might clothe our actions in the language of justice, dignity and honour, when push comes to shove, it is interests and power that hold sway in international relations. Noble talk is just gloss. In the end, as the Athenians say, “the strong do what they have the power to do and the weak accept what they have to accept.” The dictates of realism and necessity draw a line under, or through, moral arguments.

The applicability of this doctrine to the policy of offshore detention and turnbacks is apparent. We are told repeatedly that there is no other way. Policy is instrumental in achieving one particular aim – stopping the boats – and the only valid measure of assessment is whether that aim is achieved. “You could say we have a harsh border protection policy, but it has worked,” a newly installed Turnbull told RN Drive in September 2015. “’I know it is tough, but the fact is that we cannot take a backward step on this issue.” There is no place for moral qualms or ethical discussion.

But, as Walzer points out, if “necessary” really means “indispensable,” then it should mark the start of a moral argument, not its end. He asks us to step back from the final, fateful dialogue between the Athenians and the Melians and consider what kind of debates may have taken place in the assembly in Athens some months earlier. Away from the front line, he contends, crucial questions of morality and strategy must have been in play. Will the destruction of Melos really reduce the risk to Athens from its client states? Might massacring the Melians in fact weaken the empire, since Athens will be seen as ruthless and tyrannical? Is it right to make an example of Melos to expand Athens’s imperial ambitions? Are there alternative policies that might achieve the same outcome without the same loss of life? Perhaps the questioning might have gone even further: is maintaining and expanding Athenian imperial power really a desirable aim in the first place?

With no known record of these discussions, Walzer admits that he can only speculate as to what was actually said. He does note, though, that Thucydides recorded an earlier debate about the fate of the Mytilene, who had broken ranks with Athens to ally with Sparta. The assembly first determined a collective punishment: all the men of Mytilene would be put to death and all the women and children enslaved. The next day, the assembly softened the decree. (“Only” a thousand ringleaders are condemned to die.) The amendment could be seen as “realist” in the sense that the assembly determines that massacring or enslaving the entire population might undermine the stability of the empire, but Walzer’s point is that (at least in Thucydides’s account) the citizens’ repentance and concerns about excessive cruelty cause them to revisit their original decision. “Moral anxiety, not political calculation, leads them to worry about the effectiveness of their decree.”

In other words, Walzer concludes, the destruction of Melos was not inevitable. It was a deliberate choice, and a different process of deliberation and a different choice were possible. The same can be said of our border protection policies; they too invite and require debate that draws on ethical principles as much as practical outcomes.

Some people might claim that what we do in Manus and Nauru can’t be described as punishment. People are safe from the persecution they faced in their homelands; they are fed and clothed and given shelter. This argument is unsustainable, and amounts to wilful ignorance, especially after the publication of Madeline Gleeson’s carefully documented book Offshore. To punish some asylum seekers in order to deter others is to treat people as means not ends, and so breach the Kantian categorical imperative that sits beneath contemporary conceptions of human rights.

We can ditch Kant and argue instead on the moral ground of utilitarianism – the greatest good for the greatest number or, to express it as Peter Singer does, doing all we can to minimise “avoidable pain and suffering.” We might argue, as many of our politicians appear to do, that the reduction of suffering achieved by preventing drowning at sea justifies any increased suffering caused by detention on Manus and Nauru. But such a crude calculus invites its own crude utilitarian rejoinder: might not the reduced suffering of displaced people who make it to safety counterbalance the increased suffering of those who die in the attempt? Hundreds of thousands of asylum seekers around the world appear to have drawn exactly this conclusion.

Any serious attempt to discuss the issue in utilitarian terms would require a more nuanced debate and a broader perspective. If our yardstick is the biggest possible reduction of avoidable pain and suffering, then we can’t focus solely on those displaced people who happen to come into Australia’s orbit; we must also consider what we can do to help the record numbers of people forced from their homes around the world.

I am not trying to suggest that there is an easy or obvious solution. To say that we should simply deal compassionately with those who manage to get here is to risk lives at sea and let the smuggling networks determine who gets protection and who does not.

My argument is that the real world and the moral world can’t be separated and that tough moral debate is a necessary part of the process of practical policy. If we incorporate moral considerations into our thinking, then we will have to work harder and think differently about our approach. This does not mean being impractical and indifferent to outcomes. Over the past four years, Labor and Coalition governments have spent billions of dollars vigorously pursuing deterrence through offshore detention; might the situation look different if similar energy and resources had been devoted to working with neighbouring governments to build a comprehensive regional protection framework?

If necessity rules our actions and realism is transcendent, then all discussion of justice is pointless and all talk of morals irrelevant. But this is not the case. Moral arguments have purchase; they are every bit as “real” as instrumentalist approaches and practical outcomes. Inconvenient as it can be to those in power, morality exists in the world (alongside strategic and other interests) and, as Walzer writes, “notions about right conduct are remarkably persistent.” That is why passionate concern about what happens on Manus and Nauru keeps returning to the surface: morality matters to us as human beings.

It is the capacity to make moral choices that allows us to describe ourselves as free beings. “Stand in imagination in the Athenian assembly, and one can still feel a sense of freedom,” writes Walzer, referring to the decision about the invasion of Melos.

Athens destroyed Melos when it was at the height of its imperial power. Thucydides’s history goes on to describe the subsequent naval expedition to Sicily, which ended disastrously for the Athenians. This turning point in the Peloponnesian war led to Athens’s ultimate defeat by Sparta.

So the real realist lesson may be this: when political leaders invoke the language of necessity, it is time to be on our guard. •

The post “None of us have hearts of stone”: refugees and the necessity of morality appeared first on Inside Story.

When I checked with the relevant authorities, I found that the boss who had given the instruction not to provide free immunisation was indeed implementing official policy. The Australian government’s program of free childhood vaccinations against a wide range of communicable diseases is restricted to citizens, permanent residents, and other people eligible to hold a Medicare card.

In early 2016, over another dinner, my midwife friend told me happily that policy at her workplace had been revised and that all children under ten were now to receive free vaccines, regardless of their visa status. A visit to the Victorian Health Department website confirmed the change. When I’d checked in 2013, the Victorian guidelines stated that you needed to be eligible for a Medicare card to get your children immunised for free, whereas in 2016, the Victorian rules were that all children under ten “can receive the National Immunisation Program vaccines.”

At the federal level, though, the policy had not changed. When I called the federal government’s Immunise Australia Information Line, the helpful young man who took my call assured me the rules were the same as when I originally inquired in 2013. Reading from a written document, he told me that you had to be “eligible to receive Medicare benefits” in order to get free vaccines, which means that the children of most 457 visa holders and international students miss out. So Victorian health authorities say one thing and federal health officials apply another. What is going on here? The answer, it appears, is that the Victorians are pushing definitional boundaries.

In 2015, the federal government was so concerned at the growing gaps in comprehensive childhood immunisation in Australia that it put in place a “no jab, no pay” policy, which means that parents who fail to fully immunise their children are no longer eligible for family assistance payments, including the childcare benefit, the childcare rebate and the family tax benefit part A. This stick was accompanied by a carrot: to encourage parents to fully immunise their children, the federal government introduced a “catch up” program for all states and territories to distribute “free National Immunisation Program vaccines for all children under the age of ten that require catch-up.”

In the Victorian government’s interpretation, any child under ten, including a newborn, who is not fully immunised requires “catch up,” regardless of their parents’ visa status. In short, Victoria has used the catch up program to extend the federal government’s free immunisation program to the children of all temporary visa holders.

The ingenuity of state public servants is admirable. In the field of immunisation, even a small percentage increase in population coverage produces very significant gains for public health. It is difficult to work out whether other states and territories are following Victoria’s lead or sticking to a narrower interpretation of the federal government’s rules because public resources like health department websites offer little, if any, detail on eligibility for vaccines by visa status.

But even if other states and territories do adopt Victoria’s more liberal interpretation of federal rules for under-tens, the teenage children of temporary visa holders are still ineligible for free vaccinations rolled out through schools. The overall result is a mess of different policies and approaches across the nation – hardly an ideal situation in a crucial area of public health policy.

According to the National Centre for Immunisation Research and Surveillance, migrants and culturally and linguistically diverse communities are among the “special-risk and under-served populations” for immunisation. The National Health Performance Authority says tracking the percentage of children who are fully immunised is more difficult in areas with large immigrant populations.

While immunisation providers are expected to have a comprehensive understanding of the eligibility rules for access to free or subsidised vaccines, the Centre for Research Excellence in Population Health warns that “differences in eligibility by vaccine and visa class add complexity and act as a barrier to the provision of catch-up immunisation” in communities that are ‘particularly vulnerable to under-immunisation.” Excluding a proportion of that migration population from free mass immunisation schemes on the basis of their visa status serves to further complicate an already complex situation.

Like many other administrative and legal systems, immunisation programs have failed to keep pace with the shift from permanent to temporary migration. Policy and practice neglect the growing cohort of people who are not quite Australian, because of a flawed assumption that people are either citizens or permanent residents. This oversight could come at significant cost. As one public health official put it to me privately, “I don’t know too many infectious diseases that distinguish between who is a Medicare holder and who is not.” •

This is an edited extract from Not Quite Australian: How Temporary Migration is Changing the Nation, published this week by Text. Inside Story readers can order a copy for 15 per cent off using the promotion code MARES15.

The post Immigration’s vaccination paradox appeared first on Inside Story.

Having had fair warning of Turnbull’s intentions, other committees rushed out their findings at the last minute. In the week before parliament was dissolved, the various Senate, House and joint committees published around seventy interim or final reports between them. Among the releases was a report from the joint standing committee on migration on its inquiry into Australia’s Seasonal Worker Programme.

It is no surprise that this document garnered little attention except among observers with a specialist interest. The nuts-and-bolts work of parliamentary committees – less spectacular than question time jousting and more taxing than poll-watching or leadership speculation – often goes unrecognised even in the middle of the electoral cycle. The pressure of the twenty-four-hour news cycle gives journalists little incentive to wade through bulky and often verbose publications, especially once they switch to campaign mode.

Yet committee work can be important and influential, as the history of the Seasonal Worker Programme, or SWP, shows. The Senate standing committee on foreign affairs, defence and trade put the scheme on the political agenda during its 2003 inquiry into Australia’s relations with Papua New Guinea and the island states of the southwest Pacific. One of the thirty-three recommendations of its report, A Pacific Engaged, was “a pilot program to allow for labour to be sourced from the region for seasonal work in Australia.” The Howard government’s response, two years later, was belated and muted. It noted the recommendation with the terse comment that “Australia has traditionally not supported programs to bring low-skilled seasonal workers to Australia.”

Yet the idea gained traction, not least because Pacific Island leaders began lobbying for such a scheme at regional meetings. The World Bank took an interest, too, commissioning research on labour mobility in the Pacific that fed back into the parliamentary process. In 2006, the Senate education and employment committee explored the idea in far greater detail. Its report, Perspectives on the Future of the Harvest Labour Force, recommended against piloting a seasonal worker scheme, arguing that the proposal was “likely to be vulnerable to populist sentiment at this time.” Yet the committee’s inquiry served to advance the cause by engaging interested parties and putting a wealth of evidence, argument and research on the public record.

In 2007, in a report on Australia’s aid program in the Pacific, the joint foreign affairs, defence and trade committee renewed its push for “an active and serious evaluation” of a scheme, and in the same year New Zealand launched its seasonal labour program, now known as the Recognised Seasonal Employer Work Policy. Eventually Australia followed suit, announcing the Pacific Seasonal Worker Pilot Scheme in 2008. In 2012, the pilot became the SWP, an ongoing program for migrants from Pacific Island nations and East Timor.

Since then, New Zealand’s scheme has taken off – it is widely seen as a success – while Australia’s SWP remains limited in size and impact. Despite its much smaller economy, New Zealand hosts around 8000 seasonal workers each year; Australia’s numbers are fewer than 3000.

In an effort to reinvigorate the SWP, the federal government introduced changes designed partly to make it more accessible to employers, and partly to complement the white paper on developing northern Australia. The annual cap on worker numbers has been removed, and participation will now be “determined by employers’ unmet demand for labour.” The scheme has also been broadened from horticulture to take in aquaculture, and cane and cotton farming, with proposals to extend it to other agricultural sectors under active consideration.

A trial of seasonal workers in the “accommodation industry” has been converted into a permanent program, opening up jobs for waiters, kitchen hands, gardeners and cleaners. This is initially limited to Western Australia, the Northern Territory, tropical north Queensland and South Australia’s Kangaroo Island, but other locations are likely to be added over time and a trial of other seasonal jobs in tourism is under way in northern Australia.

Other rules designed to protect the interests of seasonal workers have also been relaxed. Sponsoring employers no longer have to guarantee workers a minimum of fourteen weeks’ employment, for example; that requirement has been replaced by a vague onus on employers “to demonstrate to the Australian government that seasonal workers will benefit financially from their participation.”

Even with these changes, though, it’s unlikely that the scheme will be attractive to large numbers of employers, particularly in the horticultural sector, which it was originally intended to assist. And despite remaining small, the scheme is also likely to be prone to periodic scandals. Why? Because other key problems haven’t been dealt with, as is clear from the migration committee report released just before the election campaign began.

The report pointed to the fact that the SWP is “in direct competition” with the much larger and largely unregulated Working Holiday Maker scheme. Of the 226,812 backpackers given working holiday visas in 2014–15, a large proportion would have sought seasonal employment. The reason is no mystery: if they work in a regional area for at least eighty-eight days (in plant and animal cultivation, tree farming and felling, fishing and pearling, or mining and construction), they qualify for a second twelve-month visa. More than 41,000 of these second visas were granted last financial year.

Farmers who want to engage working holiday-makers don’t have to prove their credentials in any way, whereas “approved employers” under the SWP must demonstrate not only “good immigration practices and a history of compliance with immigration legislation” but also “a history of compliance with Australian workplace relations, work health and safety legislation, and other relevant laws.” While only fifty-eight employers were approved under the SWP in 2014–15, a majority of horticultural producers report employing working holiday-makers. An employer who wants to recruit backpackers doesn’t have to test the local labour market at all, whereas approved SWP employers must advertise for a two-week period within the three months before they bring a seasonal worker to Australia.

Extensive evidence shows that working holiday-makers are vulnerable to exploitation and abuse from employers who can determine whether they qualify for a second twelve-month visa. The SWP is not without problems either – as recent cases involving the ill-treatment of workers from Fiji and Vanuatu show – but it is easier to monitor the employment conditions of teams of workers deployed under a centrally organised program than it is to keep track of what happens to tens of thousands of backpackers independently entering the rural labour market. As the migration committee noted, the Fair Work Ombudsman receives a “relatively low” number of complaints about employers in the SWP compared to other sectors. So it’s disappointing that the committee called for yet another review of the two programs rather than making the bolder recommendation that the second working holiday visa be phased out and the labour market gaps filled instead by an expansion of the SWP.

Abuse could be further reduced if state and federal governments regulated the labour hire industry effectively. On this point the migration committee did call for action, endorsing an earlier Senate education and employment committee recommendation that labour hire contractors be subject to a licensing regime. That committee’s report on temporary work visas, A National Disgrace, concluded that “certain parts of the labour hire industry… have been a breeding ground for the widespread and egregious exploitation of temporary visa workers.” A re-elected Turnbull government committed to cutting red tape (or even a minority Coalition government) is unlikely to act decisively on this issue.

The migration committee’s report on the SWP also recommended that the program be expanded into new sectors suffering from labour shortages, notably aged care, childcare and disability care. This would certainly help achieve the committee’s laudable aim of opening up the program to more women, but it is problematic in other ways. Unlike significant parts of the agriculture and tourism industries, there is nothing remotely seasonal about care work.

Bringing in low-skilled migrant workers on temporary visas to fill ongoing gaps in the labour market is a very different proposition from a seasonal scheme in which migrants come to Australia for a defined period each year, and it would open the door to a different range of problems. Assuming that these migrants would be working and paying tax in Australia for years at a time, what rights would they accrue to access welfare benefits? Would there be a pathway to permanent residency and citizenship, or would they, like many New Zealanders, be trapped in permanent temporariness? If Australia needs low-skilled workers from the Pacific and East Timor to fill permanent jobs, then we must offer them permanent visas and allow them to settle with their families and become full members of the political community.

The SWP was designed to be cyclical, with migrants spending less than six months at a time in Australia but returning year after year in subsequent seasons. (For workers from Kiribati, Nauru or Tuvalu, the time limit has been extended to nine months because of the significant expense and difficulty of travelling to Australia from those micro-states.) It was hoped that migrant workers would be able to maintain close links with their families and home communities rather than be separated from them for years at a time. And it was hoped that the workers would use the skills and savings acquired in Australia to improve their own lives at home and the lives of those around them.

The program focuses on island states in the Pacific (and East Timor) in recognition of the reality that these small, often isolated nations can struggle to generate internal economies of scale or export markets large enough to create sufficient employment for young and growing populations. (Thankfully, the migration committee resisted calls for the SWP to be expanded to countries in Southeast Asia. Some employers and industry lobby groups had sought this expansion so that they could argue for greater market access for Australian agricultural products.)

The SWP was also designed to benefit Australian employers, especially in horticulture. Over recent years it has become increasingly difficult to recruit sufficient staff for the “dramatic but predictable seasonal peaks in demand for labour” in the industry – work like fruit picking and pruning. Jobs like these don’t offer an attractive career path, and with populations declining in rural areas and competition from other more lucrative sectors like mining, no pool of local workers exists to take up positions when needed. Students might once have filled this niche during vacations, but they can now find better-paid work without leaving the city. Since the introduction of the second working holiday visa, backpackers have become the default workforce for horticulture and are also increasingly important in tourism. But relying on such an itinerant workforce has its disadvantages.

The Victorian apple-growing firm Vernview, for example, told the committee that the high turnover makes working holiday-makers unreliable because “backpackers tend to only want to be around for short periods before heading off to the next region as many have a pre-planned itinerary of exploring Australia.” This has often left the business “short of labour and caused issues on critical days of harvest and getting the crop picked in optimum condition.”

Mossmont Nursery in Griffith echoed this concern, noting that backpackers are unskilled:

They generally care little for the work and are very unreliable. On average, they work for us for about a month – maybe two months if we are lucky – and then move on. Every time they leave, we have to retrain and reskill staff, which costs us money and time. Further, a lot of our trees get damaged…

By encouraging migrants to return year after year, the SWP aims to provide employers with a secure source of increasingly skilled and experienced labour. Queensland firm Golden Mile No. 1 confirmed this experience, telling the committee that employees under the SWP were “at least twice as productive as backpackers.”

In 2014–15 more than half the workers in the SWP were return migrants. The increased productivity that repeat workers bring to an enterprise should offset the extra costs associated with a more highly regulated scheme (including the requirement for employers to share the costs of workers’ travel). It is not only individual growers who stand to benefit, but also the industry as a whole and the wider economy. According to evidence presented to the committee, New Zealand’s Recognised Seasonal Employer scheme has delivered a 32 per cent increase in output.

As long as the second working holiday visa is on offer, though, many rural enterprises and labour hire firms will continue to recruit cheaper, unregulated backpackers rather than go to the trouble of seeking accreditation under the SWP. And unless labour contractors are subjected to a rigorous system of licensing and regulation, we should expect more scandalous examples of abuse of temporary workers of all kinds. •

The post Comparing apples and oranges appeared first on Inside Story.

But in the legal world, politeness often combines with passion, and this demonstration was no exception. Having called on us all to respect the right of way, Woods went on to describe what was happening inside the court complex that was our backdrop. More than 80 per cent of those appearing in court today, he said, would suffer from a mental illness, be a victim of domestic violence, have a problem with substance abuse, or be homeless or be unemployed. “More than 60 per cent of them will have been to court before,” said Woods, who chairs the Law Council of Australia’s Access to Justice committee. “Yet only a quarter would qualify for legal aid.”

Funding for legal aid has been declining in real terms for almost twenty years now, ever since the first cuts made by the Howard government in 1997. In per capita terms, according to retired judge Betty King QC, legal aid funding has almost halved.

“We are an adversarial system of justice,” King told the crowd. “It cannot be a fair system of justice when only one side gets the money to be represented in court.” King spent forty years working in the criminal justice system, the last ten on the bench of Victoria’s Supreme Court. “As a Supreme Court judge, I had the power to direct legal aid to represent an accused person if it was in the interests of justice,” she told the rally. “But that doesn’t happen in the magistrate’s court.”

The result, says King, is that a magistrate is forced into the position of becoming a de facto advocate, obliged to protect the person facing charges from unfair questions, explain all the court processes to them and ensure those explanations are fully understood. This is a formidable challenge when the accused may be poorly educated, intellectually challenged or mentally unwell. “Trials take up to twice as long,” said King. “That is a big cost to the community, when you consider the expense of running a court for just an hour.”

It is a cost not just to budgets but also to fairness. A person on a low income is only likely to qualify for legal aid if he or she faces a significant risk of going to prison, but even a non-custodial sentence can have a huge impact on a person’s life. “People who may not actually be guilty of the offence or some of the offences they are charged with, may face terrible consequences from a conviction, like losing custody of their child or losing their government subsidised house,” said King. “These are the ripples in the pond.”

Barrister David Neal, who also spoke at the rally, said legal aid is now so restricted that a pensioner would be unlikely to qualify for assistance. Neal said that 14 per cent of the Australian population live below the poverty line, yet only 8 per cent of the population have incomes under the threshold that renders them eligible for legal aid. “Can we say to them that the Australian system delivers equality before the law?” Neal asked the crowd.

Legal aid is generally only available in criminal, not civil, matters, which can leave a victim of domestic violence without representation in disputes with a violent partner over property or the custody of children. The defunding of legal aid has been compounded by cuts to community, Aboriginal and family violence prevention legal services, which are also forced to turn away tens of thousands of people seeking help.

Tuesday’s protest was timed to coincide with the County Court’s open day of tours and mock hearings for Law Week. Teachers bringing school groups along to see the wheels of justice turning got more than they bargained for as they negotiated their way through a crowd liberally sprinkled with barristers resplendent in wigs, gowns and immaculately laundered jabots.

What the organisers hadn’t anticipated was that the protest would also fall in the second week of a federal election campaign. But speakers took full advantage of that coincidence. While noting that some election promises had been made in relation to funding community legal centres and family violence prevention services, Law Council of Australia president Stuart Clark declared that the sums on offer so far were far from adequate. “Lives are being destroyed because people are left to fend for themselves in front of the courts,” he said.

Clark called on both sides of politics to commit to an immediate injection of $200 million into legal aid, as recommended by the Productivity Commission’s inquiry into access to justice arrangements. He noted that the inquiry began under a Labor federal government in 2013 and reported to a Coalition government at the end of 2014, yet neither side of politics has responded to its funding recommendation. The economically dry Productivity Commission, which is not usually known for encouraging greater government spending, said the increase was needed to better align the means tests used by legal aid commissions with other measures of disadvantage, and to maintain existing frontline services that have a demonstrated benefit to the community.

A $120 million increase in federal money would be enough to return the Commonwealth to funding a half share of legal aid with the states and territories, rather than the one-third share it has fallen to. The Law Council would like to see a similar level of funding committed to providing assistance in civil matters.

An increase in funding may not seem to align well with promises of “budget repair,” but Clark says the fiscal benefits are potentially huge. Adequate legal aid brings long-term savings, not just in court costs but also in areas like health and corrections. “Every dollar spent on legal aid has an economic return,” he said.

Steve Hynes, who runs Britain’s Legal Action Group, agrees. He told the crowd that evidence around the world shows that a dollar spent on legal assistance generates at least seven dollars in savings on other services. In some studies, he says, the return is found to be as high as $27. “You know if you lose your house, your children can end up in care,” said Hynes. “Parents can end up on government benefits. There are knock-on effects to the state. It makes sense to invest in legal aid.”

Hynes led a campaign against the Cameron government’s cuts to legal aid. There, barristers and solicitors didn’t stop at protests outside courthouses, but went as far as withdrawing their labour, refusing to appear in cases. “It was the poshest strike I’ve ever seen,” says Hynes. “There were wigs on the picket lines.” Hynes notes that it was described as a boycott, rather than a strike, since lawyers are essentially self-employed, but he says it got serious attention from the government, and the worst of the government’s funding cuts were reversed. Per capita, legal aid funding in Britain today is roughly double the allocation in Australia.

Whether Australia’s legal fraternity will go so far as boycotts or strikes remains to be seen, but it will certainly take determined action to achieve the vision outlined by the Whitlam government’s attorney-general, Lionel Murphy, in late 1973.

In a comprehensive statement on legal aid tabled in federal parliament, Murphy said that the government had decided to fund legal aid because “one of the basic causes of the inequality of citizens before the law is the absence of adequate and comprehensive legal aid arrangements throughout Australia.” An ordinary man or woman facing a legal problem should be able to get assistance “as readily as he or she would go to the garage with an ailing motor car,” said Murphy, noting that it is “usually the socially disadvantaged person who is unrepresented in magistrates’ courts and persons who are unrepresented are prejudiced.”

Today, legal aid funding has fallen so low that the situation appears little better than it was when Murphy tabled his statement almost forty-three years ago. Today, people who appear unrepresented before magistrates are “often downtrodden, life-weary, sad people, who don’t have a person to speak to about this crisis in their life,” said Betty King. “The removal of funding of this proportion is an erosion of people’s rights to be heard, to be listened to. It’s like saying their lives don’t matter.” •

The post Robes rally for fairer courts appeared first on Inside Story.

To his credit, Turnbull at least expressed sympathy for the misery and mental anguish of refugees and asylum seekers in Manus and Nauru. Unlike his immigration minister, Peter Dutton, he has not stooped to blaming “advocates and others” for encouraging self-harm as a way of pressuring the government to change its policy. But Turnbull held fast to the line that these refugees can never be allowed to settle in Australia. When Kelly posed the obvious question in response – “So what will we do with them?” – the prime minister floundered.

According to the government’s transcript of the interview, Turnbull answered, “The people that are on Nauru and on Manus will have the opportunity of settling.” But if you listen to the audio, this was an unfinished sentence. What he actually said was, “The people that are on Nauru and on Manus will have the opportunity of settling in…” Then he realised he was heading for the rocks and abruptly changed tack. Leaving the thought unfinished, he instead reminded Kelly that people found to be refugees in Nauru are free to move about the island, and that people assessed as refugees in Manus are free to settle in Papua New Guinea. These statements may be technically correct, but they are a manifestly inadequate response to Kelly’s question of what will happen to these refugees in the long term.

The memorandum of understanding signed between Australia and Nauru in August 2012 holds out the possibility that an “agreed number” of refugees will be settled in Nauru, but if any such number exists it seems not to have been made public. For now, the refugees are on temporary visas, and another clause in the memorandum requires Australia to “make all efforts to ensure that all transferees depart the Republic of Nauru within as short a time as is reasonably necessary…”

In Papua New Guinea, meanwhile, prime minister Peter O’Neill says that the Manus processing facility must close following the Supreme Court ruling that the detention of asylum seekers is illegal. Refugees who want to settle in Papua New Guinea are welcome to do so, but – recognising that most don’t want to – he asked Australia to make “alternative arrangements” for everyone else.

In other words, Australia needs to find somewhere else for both groups of refugees to settle. But the only third-country resettlement option tried so far – Cambodia – has proved an expensive failure.

This explains why Turnbull’s initial response to Kelly’s question remained unfinished. The government can’t say what it will do with the refugees in Manus and Nauru because it doesn’t know. Yet it steadfastly continues to rule out the only available, practical and safe option of New Zealand.

In 2013, as Inside Story reported late last year, NZ prime minister John Key offered to help out Australia by resettling up to 150 refugees each year over two years. In the wake of the decision to close the Manus detention centre last month, the office of New Zealand’s immigration minister confirmed that this offer is still on the table. While places for this year and the previous year have been allocated to humanitarian migrants from Syria and Iraq, New Zealand could make another 150 places available to Australia in the new financial year – that is, as soon as July.

Turnbull says Australia will not take up the offer because settlement “in a country like New Zealand would be used by the people smugglers as a marketing opportunity.” Dutton ran a similar line, describing New Zealand as “a back-door way to get into Australia.”

The idea that migrants can use New Zealand as a back door to Australia has a long and ignominious history. As an argument, it doesn’t stand much scrutiny. It’s certainly true that New Zealand citizens can enter Australia and live and work here as long as they want under what is known as the “special category visa” issued on arrival, and it’s true that they can also qualify for Medicare under reciprocal arrangements between the two countries. But to describe this as back-door migration is absurd. It suggests that refugees will simply step onto the tarmac at Auckland airport, do a quick turn through the transit lounge, and end up in Sydney or Melbourne.

The first thing to remember is that a refugee resettled in New Zealand can only move to Australia after becoming an NZ citizen, a process that takes a minimum of five years. It is quite a stretch to call this process, as Dutton does, a “green light” to people smugglers.

On top of that, it’s highly unlikely that a refugee-turned-NZ-citizen would decide to come to Australia after five years. Apart from healthcare, they would have almost no access to government services and payments. Under changes introduced by the Howard government in 2001, New Zealanders who move to Australia really are in a “special category” – the category of long-term migrants on temporary visas. They can’t get access to unemployment benefits, youth allowance, sickness benefits, sole parent payments, carer payments or special benefits. They are generally excluded from public or community housing under state and territory rules, and they must pay full up-front fees to study at university (unless they arrived in Australia before the age of eighteen and have been living here for at least ten years). Regardless of how long they live in Australia, New Zealanders can’t vote and have only restricted options for becoming permanent residents and taking out Australian citizenship.

It seems highly unlikely that refugees, having settled in New Zealand and gained access to its social safety net, would choose to bolt across the ditch the moment their Kiwi passport arrived in the mail. If they did end up coming here, it would be because, like other New Zealanders in Australia, they are in demand from Australian employers to fill gaps in the local labour market.

Since 1973, Australia and New Zealand have agreed to unrestricted trans-Tasman travel to promote the closer integration of the two countries’ economies. In this sense, it is a front door, not a back door, and both countries have decided that it is in their interests to keep that door propped open. If the Australian government thinks that the benefits of unrestricted trans-Tasman travel are outweighed by letting in tiny numbers of refugees who once tried to come here by boat, then it can kick the door closed again any time it wants.

If refugees in Manus and Nauru have aspirations to be resettled in New Zealand rather than Cambodia or Papua New Guinea, that is because it offers them a safe and secure future where they might rebuild their lives, not because it offers a circuitous route to Australia.

So if the government claims that we cannot allow refugees to be resettled in New Zealand because this encourages people smuggling, then the same argument must apply to settling these refugees in any other third country that could offer an enduring and dignified solution to their plight. This logic leaves us with only two options: either we keep these refugees in misery and mental anguish in Nauru and Manus indefinitely, or we send them to another country that offers them an equally uncertain and precarious future. Any other solution would be a green light to the people smugglers. •

The post Why not New Zealand? appeared first on Inside Story.

Tens of thousands of Australian-based New Zealanders do stand to gain from Turnbull’s new visa pathway. They must already live in Australia, satisfy health and character tests, and be able to show that they have paid tax on an income of at least $53,900 for five or more years. From 1 July next year, they will be able to gain permanent residence via the skilled independent category of the migration program. They can take the next step to citizenship after living in Australia for a further twelve months.

NZ prime minister John Key reckons up to 100,000 Australian Kiwis could take advantage of the new visa pathway, while the Department of Immigration and Border Protection offers a lower estimate of 60–70,000.

Making the transition to permanent residence will have a material impact on the lives of many New Zealanders, and offer them increased security and greater peace of mind. When they arrive in Australia they are granted a special category visa that enables them to live and work here indefinitely. They can also access Medicare, but they are denied most other forms of government assistance. If they fall on hard times, they can’t get unemployment benefits, youth allowance, sickness benefits or special benefits.

New Zealanders are required to pay levies for the National Disability Insurance Scheme but don’t have access to any of its services. NZ women who leave an abusive partner will find that domestic violence services can offer them only limited assistance. Refuges often require residents to be in receipt of specified Centrelink payments, which New Zealanders aren’t entitled to even if their children are Australian citizens. Securing longer-term housing requires evidence of some source of income, a requirement many New Zealanders can’t meet without access to government benefits. Even returning to New Zealand may not be an option, since a mother can’t legally take her children out of Australia without the consent of the father.

The children of New Zealanders who want to go on to tertiary study after school (or mature age New Zealanders who want to upgrade their qualifications) must pay upfront fees for university; they are excluded from the Commonwealth’s income-contingent Higher Education Loan Program. Fees are charged at the same rate as for domestic students, not at international rates, but for many people the financial barrier to study is still insurmountable. (A limited exception has been in place since the start of 2016: New Zealanders qualify for the concessional loans scheme if they arrived in Australia as “a dependent child aged under eighteen” and “have been ordinarily resident in Australia for the previous ten years.”)

Australians who move to New Zealand quickly gain more or less the same rights and responsibilities as locals. They can enrol to vote after living across the Tasman for just one year, and they can apply for a permanent residence visa after two years, which makes them eligible for welfare payments including unemployment benefits and student allowances. They can become citizens after five years.

New Zealanders who arrived in Australia prior to 2001 were treated in a similar way. They essentially had the same status as permanent residents and could access welfare payments after the relevant qualifying period. Since the Family and Community Services Legislation Amendment (New Zealand Citizens) Act 2001 came into force, however, New Zealanders have been treated very differently. They are denied access to government payments, regardless of how long they live here. Unless they are in an ongoing relationship with an Australian and can qualify for a partner visa, the only way to make the transition to permanent residence is as a skilled migrant. Until now, this required employer sponsorship and/or qualifications in an occupation deemed to be in demand in the Australian economy. Many New Zealanders could not meet this threshold, and were rendered, in effect, indefinitely temporary – allowed to live, work and pay taxes in Australia, but excluded from most forms of government support, and from becoming full members of the political community.

It is hard to be sure exactly how many New Zealanders are stuck in this situation. According to immigration department statistics, there were 661,550 New Zealanders in Australia on special category visas on 30 September 2015, but since every New Zealander who enters Australia is granted the same visa on arrival, this figure includes people here on short trips (who probably number more than 100,000). It also includes New Zealanders who were granted special category visas before the 2001 restrictions came into force and whose status as quasi-permanent residents is “protected” in legislation. Nevertheless, it’s estimated that between 200,000 and 250,000 Australian Kiwis could be long-term settlers who migrated after 2001.

As John Key put it in his joint media conference with Turnbull, these New Zealanders live in Australia “in a particular category that hasn’t allowed them to become Australian citizens.”

Turnbull’s announcement changes things by offering a lower threshold for New Zealanders to qualify as independent skilled migrants. From 1 July 2017, New Zealanders will have an additional pathway to permanent residence if they “have been living in Australia for the past five years, and have earned income at or above the Temporary Skilled Migration Income Threshold (TSMIT) as evidenced by their Australian Taxation Office Notice of Assessment throughout their qualifying residence period.”

The TSMIT is a legislative instrument used to set the minimum salary that can be paid to a temporary migrant worker on a 457 visa. It is intended to indicate “that an occupation is skilled and to ensure that a visa holder has reasonable means of support whilst in Australia.” The thinking behind using the TSMIT as a benchmark for New Zealanders to qualify for permanent residence thus appears to be twofold. First, it makes sure that they are filling skilled vacancies in the labour market, rather than taking entry-level jobs that Australian job-seekers could do. This lacks logic, though, because New Zealanders on low incomes can still live and work in Australia indefinitely under the Trans-Tasman Travel Agreement. They will continue to fill the jobs they hold whether they do so as permanent residents or special category visa holders. Second, using the TSMIT as a salary threshold appears to be designed to ensure that New Zealanders who become permanent residents have sufficient income to meet their needs without government support. Again, this lacks logic: there is no reason to expect New Zealanders on lower incomes who have been living in Australia for five years without accessing  government benefits to turn into “Bondi bludgers” the moment they get permanent status.

What the new policy does is penalise New Zealanders engaged in low-paid work. The “occupation matrix” in the Department of Employment’s annual overview of the labour market, Australian Jobs 2015, shows that the median full-time salary for many occupations falls below the current TSMIT threshold of $53,900. A quick scan of just the job headings from A to C reveals that New Zealanders who work as bakers, bar attendants, baristas, beauty therapists, bricklayers, cafe workers, car detailers, care workers (in child, aged, disability, personal or nursing care), checkout operators, cleaners, clothing trade workers and cooks may all struggle to meet the required salary threshold for Turnbull’s new path to residency.

Those who don’t earn enough to walk down the new pathway to permanent residence are more likely to be Kiwis of Māori or Pacific Islander heritage than Pākehā (New Zealanders of European descent). An analysis of the 2011 Australian census by University of Waikato researchers Tahu Kukutai and Shefali Pawar shows, for example, that less than half the NZ-born Māori in Australia of “prime working age” (between twenty-five and fifty-four years of age) had successfully completed Year 12 and only 40 per cent had a post-secondary qualification (compared to 60 per cent of non-Māori migrants from New Zealand). The labour market participation rate of New Zealand–born Māori is high – for Māori men, the employment rate was nearly three per cent higher than the Australian average – yet Māori are disproportionately concentrated in lower-skilled jobs, with four out of ten working as labourers, machinery operators or drivers. The intent of the new visa pathway may not be discriminatory, but its effect almost certainly will be.

The policy also disadvantages those who work part-time and don’t earn enough to meet the salary threshold because they care for children or other family members; and the health requirements will exclude many people with a disability or chronic illness. In its report on the Turnbull–Key announcement, New Zealand’s One News profiled Sydney Kiwi couple Kirk and Angela Bensemann, whose seven-year-old Australian-born son Toby has been diagnosed with autism. Although they have lived and worked in Australia since 2007 and meet the $53,900 earnings threshold, the Bensemanns anticipate that their son’s disability will render them ineligible for permanent residence on health grounds.

The immigration department says that the additional visa pathway to permanent residence is for New Zealanders who have “shown a commitment and contribution to Australia.” The implication of this statement is that childcare workers or cooks or single parents who work part-time and earn less than $53,900 per year, or families like the Bensemanns with a disabled child, are somehow lacking in commitment to Australia or failing to make a contribution to the nation.

Curiously, the new policy has also been time-limited: only those who were already living in Australia at the time of the announcement on 19 February 2016 can take advantage of the new pathway. Turnbull says that New Zealanders who arrive in the future who “wish to become Australian citizens, have got many other visa categories to use.” Put plainly, this means that future settlers from New Zealand will be subject to the same rules that have applied since 2001 and so will risk being caught in the same visa trap identified by John Key as the source of the problem Turnbull is supposedly trying to address: they will be living in Australia “in a particular category” that does not allow them “to become Australian citizens.”

In recent years, the unfair treatment of New Zealanders in Australia has become a major political issue across the Tasman, inflamed in the past twelve months by the impact of new character laws that resulted in the detention and deportation of hundreds of New Zealanders who have served time in Australian jails (even when they grew up here as children and are Australian in all aspects of their lives apart from their passports). The rights of New Zealanders in Australia is a perennial issue at annual talks between the two prime ministers, and John Key is the first NZ leader since 2001 to return home after securing a significant concession from Australia.

This may dampen protests about the treatment of New Zealanders in Australia for a time, but lobby groups like Oz Kiwi show no sign of giving up the fight. More stories are sure to emerge of Kiwis who fall on the wrong side of the new rules because they don’t earn enough money or have a health problem, and over time a new cohort of disenfranchised post–February 2016 arrivals will build up. Nor does Turnbull’s half-measure resolve an underlying problem of principle about the rights and entitlements of people in a democracy. If New Zealanders live in Australia long-term, abide by the law and pay taxes, is it ethically acceptable to deny them government support indefinitely and to permanently exclude them from the political life of the nation? It’s certainly inconsistent with the egalitarian ideals and democratic principles that Malcolm Turnbull himself espouses. •

The post Who gets to be Australian? appeared first on Inside Story.

After two years in Australia as a working backpacker she was hoping to settle permanently. She had a job offer from an employer willing to sponsor her on a four-year 457 skilled worker visa and sought expert migration advice to assist with the application. Thousands of dollars later, though, she was forced to leave Australia at short notice and was banned from coming back for three years.

Pivato was a twenty-nine-year-old costume designer, struggling to find steady work in her field, when she decided to take an extended break in Australia. Like more than 210,000 other young visitors in 2013–14, she arrived on a working holiday visa. Under reciprocal agreements with nineteen countries, Australia allows travellers aged between eighteen and thirty to live and work here for up to a year, with the possibility of a second twelve-month visa if they undertake at least eighty-eight days of “specified work” (in agriculture, forestry, fishing, mining or construction) in a regional area.

When Pivato arrived in March 2013 she intended to remain only until July, when her return flight was booked. But as the months ticked by she postponed her departure. With the expiry of her first working holiday visa drawing closer, she decided to work for eighty-eight days to secure a second year’s stay. She’s far from alone in making that decision: since the option of a second visa was introduced ten years ago, the number of travellers taking it up has grown steadily, from fewer than 8000 in 2006–07 to more than 45,000 in 2013–14.

Pivato took a job packing fruit in Shepparton in central Victoria – a town, as she puts it, with “more cows than people.” At the start of the harvest season she was packing cherries, then peaches and plums, and at the end of summer apples and pears. If not for the possibility of securing a second visa, she would never have considered doing this kind of work, let alone sharing accommodation and her private life with thirty other young women. “I thought I was too old for that,” she says. She was surprised to find herself enjoying both the job and the lifestyle.

Other Italian visitors have had this experience too. “I would never have imagined in my whole life that I would be working as a watermelon picker,” says a backpacker in 88 Giorni (88 Days), a film documenting the experiences of young Italians working in Australian agriculture. In Italy, he says, harvesting watermelons would be “discredited as a job that no one would do.” Harvest work is hot, dirty, difficult and poorly paid; in Italy, as in Australia, it is largely reserved for migrants. “I now understand how foreign workers feel,” says another visa holder in the film. “Here I am the immigrant.”

Like backpackers from other countries, some of the young Italians report being abused, exploited and underpaid. “Mildura’s farms are the worst thing that has ever happened in my life,” says Antonio in 88 Giorni. A young woman remarks that if you work this hard, at least you should be treated with respect.

Yet if the interviews for 88 Giorni are anything to go by, many young Italians find their work picking pumpkins or driving tractors enjoyable, in some cases even liberating. Some, like Camilla Pivato, who also features in 88 Giorni, decide they want to settle here. “Australia opens your horizons and makes you feel incredibly young,” she says in the film. “Australia has brought out things about myself that I thought wouldn’t exist, such as the ability to adapt that I thought I didn’t have any more.”

Young Italians are not just helping to harvest produce in rural Australia, they are also staffing city restaurants and cafes. Postwar migrants who came to Australia in the 1950s and 1960s gave the Melbourne suburb of Carlton its genuine Italian flavour. As the Italian community aged, though, the Lygon Street coffee strip risked becoming a caricature of its former self, its reputation hanging by a slender thread of marketing. But thanks to the latest wave of Italian migrants, Lygon Street is getting its zip back. When I ate lunch at a self-proclaimed Gastronomia Italiana in November, a waiter told me that all the stylish young staff in the establishment were recent Italian migrants. Some (I suspect most) are here on temporary visas; others have made the transition to permanent residence.

The same phenomenon is evident in Sydney. Over dinner in a chic new pizzeria in Walsh Bay, Michele (Mike) Grigoletti and his colleague Silvia Pianelli have fun guessing by their accents which regions of Italy the waiters hail from. Both Grigoletti and Pianelli settled in Australia relatively recently, and they devote much of their time to gathering data and stories from the new wave of Italian migration of which they are a part.

Grigoletti and Pianelli formed the independent study group Australia Solo Andata (Australia One Way), which has embarked on a research project called “From Temporary to Permanent: The New Migration of Young Italians in Australia.” With sponsorship from the Fondazione Migrantes, the Italian Bishops’ Conference’s reference body on migration, they have published reports on migration issues as well as shooting and editing 88 Giorni, which is due to be screened in Rome early this year.

Grigoletti links the surge in temporary migration to Australia to economic problems in Italy triggered by the global financial crisis, which left more than 40 per cent of under-twenty-fives unemployed. He points out that Italian backpackers are, on average, at the older end of the working holiday spectrum, and that many are highly qualified university graduates unable to find work in their chosen field. “They tend to come when they are twenty-eight, twenty-nine or thirty,” he says. “This shows that they are not taking a gap year, but come because they have given up. Their spirits have been crushed.”

This was Pianelli’s experience. She had several unpaid internships after graduating from university but none that led to ongoing work. So she came to Australia on a temporary visa. “I couldn’t live in Italy any more,” she says. “It is better to pick vegetables or do whatever basic job in Australia than to stay in Italy and be told you are too young and need to learn and not good enough to get a job.”

A recent report by the Migration Policy Institute supports this assessment. It says that southern European nations like Italy have “in some ways returned to their earlier, more traditional roles, as significant countries of emigration.” The difference is “that migrants today are younger, better educated, and more skilled than past waves, with a high proportion of professionals among those leaving.”

When she arrived in Shepparton, Camilla Pivato was the only Italian in town, but after clocking up her eighty-eight days and securing her second visa, she decided to stay on. “I didn’t mind Shep at all,” she says. “It’s a simple life. Why not? It was much easier than living in Melbourne.” Pivato had previously spent four months working in a cafe in Moonee Ponds. “It was fine but people were quite fussy about their coffee,” she says.

Life was also cheaper in Shepparton, enabling Pivato to save more towards the cost of a student visa. She was contemplating a degree in business management – a course that could put her on the path to permanent residency, something that neither fruit packing nor costume design was going to do.

The owners of the fruit-packing business came up with an alternative. They offered to engage Pivato as the company’s human resources coordinator and sponsor her for a four-year 457 temporary skilled work visa.

Pivato grabbed the opportunity and started work immediately. She travelled to Melbourne to help select workers and supervised all aspects of their employment in Shepparton. “I would choose the girls, hire girls, fire girls, train them in the work in the packing shed, do quality control, look after their wages and collect the rent every Monday,” she says. (The business runs two on-site hostels for its workers.)

She was very happy with the arrangement. “It was much easier than getting a student visa,” she says. “Besides, I am thirty-one and I have already studied a lot.” She liked and trusted her employers – European migrants from an earlier generation – who she says were like family to her. But they didn’t have much experience with sponsoring visa applicants, so, on the recommendation of a work colleague, she engaged registered migration agent Dennis Allan, owner of Prestige Migration Services in Melbourne, to help with the paperwork.

Pivato says that she first met with Allan in late January 2015, about six weeks before her second working holiday visa was due to expire, and that she signed the service agreement for him to prepare the 457 sponsorship and visa applications in his presence on 2 February 2015. She jumped through the other required hoops, like passing an English language test, and paid Allan $8000 in fees. Then she returned to work in Shepparton and waited for a call to say her visa had been lodged.

No news came. Pivato says she called Prestige Migration Services repeatedly and was told not to worry. When the 19 March expiry date of her existing visa passed she became more anxious, but she says Dennis Allan told her everything was in hand. When she repeatedly asked for a copy of her visa application, though, he gave a variety of reasons why that wasn’t possible, including computer problems and alleged difficulties with the departmental website, or promised he would send the documentation the next day. Finally, on 7 May, an exasperated Pivato called the immigration department directly to clarify the status of her application. An officer told her that no documentation had been lodged in her name and that she was in Australia unlawfully. Pivato was told to report immediately to the department’s Melbourne office, where she was given a four-week bridging visa and told to leave the country before 4 June.

When Pivato confronted Dennis Allan, she says he told her that it was “just a little mistake” and tried to convince her to pay him even more money to sort it out. Pivato refused, and demanded her $8000 back. In the weeks that remained to her, she turned up at Allan’s office almost daily asking for her refund. “He kept making up excuses,” she says. “Like he shows me a receipt, telling me that he had transferred the money into my bank account, but could not explain why I did not receive it.”

Allan was not the only person who sought to take advantage of Pivato’s desire to stay in Australia. One day, Pivato was pleading her case at the Department of Immigration and Border Protection in central Melbourne. The interaction left her distressed and tearful. At that moment a stranger approached and asked her what was going on. He then encouraged her to go outside, where he identified himself as a migration adviser and offered to lodge a partner visa on her behalf – for a fee of $12,000. Luckily, she didn’t take the bait. She was in a relationship at the time, but not one that would have met the relevant criteria.

Besides, says lawyer Melinda Jackson, who represented her at the time, Pivato’s application would have been rejected outright because by the time she got in touch with the department she had already overstayed her visa by more than twenty-eight days.

“Her timing was unfortunate,” says Jackson. If Pivato had called within those twenty-eight days, immigration department staff may have been able to make allowances for her circumstances and enable her to submit the 457 application late. Once that time threshold had passed, however, she fell foul of “public interest criterion 4014” of the migration regulations, which made it all but impossible for her to obtain any other visa onshore. What’s more, the over-stay activated an automatic three-year ban on her returning to Australia on any other temporary visa.

The ban can only be waived if there are “compelling circumstances” affecting Australia’s interests or “compassionate or compelling circumstances” affecting the interests of an Australian citizen or permanent resident. In the eyes of immigration department officials, being ripped off or deliberately misled by a migration agent does not meet this test.

Jackson tried to argue that Pivato’s case does affect Australia’s interests, because it involves potential fraud committed by a migration agent working in an industry regulated by the federal government. But her closely argued twenty-page submission was rejected with a dismissive half-page response. An internal appeal to the delegate’s manager also failed. After this, Pivato and her lawyer had nowhere left to turn.

“This is administrative decision-making with no recourse to the courts,” says Jackson. “You get arbitrary, terrible decisions and can’t do anything about it.” There is not even the possibility of intervention by the immigration minister, because ministerial discretion can only be triggered by the decision of a court or tribunal.

When I was growing up just outside Adelaide in the 1960s and 1970s, I would sometimes meet my father for lunch in the city. After the meal he would invariably take me to a small Italian cafe in the ornate Adelaide Arcade, where he would order a short black and I would have a cappuccino. In those days it was one of the rare places equipped with an espresso machine. If we went out in the city in the evening, my father might indulge me with tartufo or cassata from the Flash Gelati Bar in Hindley Street. Gelato and espresso were novelties – a gift to the tastebuds of Adelaide courtesy of the postwar wave of Italian migrants.

In the years between 1947 and 1954, Australia’s Italian-born population more than tripled in size. It doubled again between 1954 and 1961 and continued to grow for several more years, peaking at around 290,000 people in the 1971 census. For at least thirty years, the Italian-born were second only to the British as the largest overseas-born group in Australia.

When Mike Grigoletti tells me that the scale of temporary Italian migration to Australia today rivals the permanent migration that changed the flavours of my Adelaide childhood, I am surprised. But when I do my own calculations, I find the numbers bear him out, although the time frame to date is far shorter, and it remains to be seen if the trend will continue.

Over the two-and-a-half decades from 1947, Australia’s Italian-born population increased by an average of about 11,000 people per year; during the peak period between 1954 and 1961, that number was 15,000. By comparison, around 13,000 young Italians have come to Australia as first-time working holiday-makers annually since 2012. A few thousand more have been granted temporary visas as international students or skilled workers. And the data suggests that, like Camilla Pivato, a significant proportion of these young Italians will extend their stay or settle – if they can.

Pivato’s lawyer, Melinda Jackson, helped her to lodge a complaint against Dennis Allan with the Office of the Migration Agents Registration Authority, or OMARA, the immigration department’s division responsible for regulating professional standards and integrity in the migration advice industry. Six months later, the only evidence of progress on Pivato’s complaint is a letter from OMARA informing her that the regulator would “shortly be sending a notice to Mr Allan under Part 3 of the Migration Act 1958 and giving him the option of making a submission in response to the notice.”

Jackson suspects that Pivato isn’t alone, and that Allan has been “doing similar things to people in similar circumstances.” She believes it is quite possible that OMARA is compiling a set of complaints against the agent before proceeding. (When I attempted to confirm this I was told that the Privacy Act prevented OMARA from disclosing whether a complaint has been made about a migration agent because this is “personal information.”)

But even if OMARA upholds a complaint against Allan, it will be largely symbolic. The regulator can’t cancel Allan’s registration as a migration agent because that lapsed on 9 March 2015, ten days before Pivato’s visa expired. The best OMARA can do is bar Allan from re-registering as a migration agent.

“It’s a pretty feeble complaints investigative body,” says Jackson. OMARA cannot even get Pivato’s money back from Allan. In its letter to Pivato, OMARA noted that “the Authority can recommend a refund, but we cannot order it.” For that, Pivato must take civil action before the courts.

With the help of Melinda Jackson, Pivato tried to go down this route too, and on 4 September 2015 the Victorian Civil and Administrative Tribunal ordered Allan’s firm, Prestige Migration Services, to pay Pivato “the sum of $8000.” Her chances of ever seeing this money are remote.

“The order itself can’t do anything,” says Jackson. “In any civil process, enforcement becomes the question.” The next step would be to launch proceedings in the Magistrates’ Court to enforce the VCAT order. But this would require Pivato to be present in Australia.

Even if Pivato were able to return to Melbourne to commence court proceedings, tracking Allan down and serving him with court papers could be a challenge. Allan did not turn up to the VCAT hearing, and the Australian Securities and Investment Commission has since given notice that it is proposing to deregister his company.

An online search for Prestige Migration Services threw up two different business addresses and two different phone numbers, both of which had been disconnected. My calls to the mobile number listed on the company website went unanswered.

I did, however, get a response to my attempt to contact Dennis Allan via the company’s online contact form. A woman called Pauline called me back and, when I explained my inquiry, she told me that Allan was “not really working at the moment.” She said she would pass on my contact details when he came back. When I asked if Prestige Migration Services was still a going concern, she said it was, and that the threat of deregistration by ASIC was “being sorted out by the accountant.” She confirmed that Dennis Allan’s registration as a migration agent had lapsed and told me that other registered migration agents were now handling the firm’s work. My follow up calls and emails seeking comment from Allan himself did not elicit any response.

With two-and-a-half years of her ban on returning to Australia remaining, Pivato is finding it hard to live back in Italy. She feels stuck, as if her future is on hold. She misses her job, her friends, even the smells of Shepparton. “It is hard to live anywhere else after Australia,” she tells me. “Australia is just so organised and clean and fair.” Then she pauses and reconsiders. “Well, I thought it was fair, but I don’t think that anymore.”

If anyone has broken the rules, it is her migration agent. “All I have done, every single paper I have signed and money I have paid is legal,” she says. “But fine, the real criminal is me, and I have been punished.”

Despite her setbacks and disappointments, Pivato is determined to return. “It’s time to settle down for me,” she says. She has embarked on a master’s degree in Italian language teaching in the hope that this will give her a qualification that is in demand here. She is even planning to do her final six-month placement in New Zealand in order to be one step closer to returning when her ban expires.

“I can’t help it,” she says. “I miss Australia a lot. My life is there.” •

The post “Australia has brought out things about myself that I thought wouldn’t exist” appeared first on Inside Story.

New Zealand’s agreement to take up to 150 refugees each year from Australia’s offshore centres dates back to when Julia Gillard was prime minister. Announcing the deal in February 2013 after a meeting with her New Zealand counterpart, John Key, she said that the program would “start in 2014 and be ongoing.” The places were factored into a three-year rolling plan for refugee resettlement signed off by the NZ cabinet in June 2013.

Under the plan, New Zealand Immigration set aside 150 of the 750 resettlement places in its annual refugee quota for refugees “subject to offshore processing from Australia.” Places were reserved in both 2014–15 and 2015–16, but so far none have been taken up, and the NZ government doesn’t expect they ever will be.

A senior official has confirmed that the offer to resettle refugees from Australia’s offshore processing system remains on the table, but the view in Wellington is that Australia thinks resettling refugees in New Zealand would undercut one of the fundamentals of its current policy – that asylum seekers sent to Nauru and Manus will never come to Australia. Refugees resettled in New Zealand would be eligible to become New Zealand citizens after five years’ residence. Under the Trans-Tasman Travel Arrangement they would then be free to enter Australia, and to live and work here indefinitely.

According to the most recent monthly update from Operation Sovereign Borders, 815 people have been recognised as refugees on Nauru. It is thought this number includes around eighty children, though the Australian immigration department declined to provide an exact figure, saying enquiries on this point should be directed to the government of Nauru. Despite pressure from Australian authorities to agree to resettle in Cambodia, refugees in Nauru have proved extremely reluctant to take up the option.

“The attempt to get refugees to Cambodia has largely failed,” says Paul Power, CEO of the Refugee Council of Australia. Efforts to strike resettlement deals with other developing countries like the Philippines and Kyrgyzstan have also proved unsuccessful. Yet it is clear that the refugees cannot remain in Nauru indefinitely.

“The unequivocal position of Nauru is that residence is only temporary,” says Power. Very little appetite exists in the current international environment for other countries to help Australia with a problem of its own creation. “It’s hard to see an outcome that isn’t going to involve people coming to Australia and New Zealand.”

On Manus, where only adult men are detained, 446 people have been classified as refugees after an initial assessment. Another 268 men have been given “a positive final determination.” In theory, these refugees can be settled permanently in Papua New Guinea, but many of them seem deeply resistant to this idea. The 268 are entitled to move out of detention and into the East Lorengau Refugee Transit Centre, which offers them greater independence and better accommodation (although residents are still subject to a twelve-hour night curfew). Only fifty-two of then have taken up this option.

Most are reluctant to move, it appears, because this would constitute the first step towards settling in Papua New Guinea. They are holding out for an alternative resettlement option and so continue to live under the harsh detention conditions they have endured for more than two years.

Even if they choose to stay in that country, the process of resettlement remains uncertain and protracted. “PNG’s stated position is that they are offering permanent residency,” says Paul Power. “But from time to time we hear comments that appear to question that.” A National Refugee Resettlement Policy, belatedly approved by the PNG government in October, has done little to clarify matters. The vague general principles in the twelve-page document have created tensions and contradictions in practice.

The policy notes, for example, that refugees “must be able to support themselves” because “unemployment remains high and Papua New Guinea does not have a comprehensive social security system.” But it adds that if refugees are to be accepted within Papua New Guinea, then “they must not be perceived to be provided special treatment or distinct advantages over local people.” In practice, this means that refugees who move to the transit centre are unable either to work in Manus or to travel in search of a job in another part of Papua New Guinea.

On 11 December 2015, PNG media reported that a human resources company, JDA Wokman, has been engaged to help the refugees find jobs. In the same article, though, deputy chief migration officer Esther Gaegaming was quoted as saying that refugees would not be allowed to leave Manus until they were employed. This creates a Catch-22 situation: the refugees have to find a job outside Manus in order to settle in Papua New Guinea, but they can’t leave Manus in order to find a job.

The national refugee policy holds out the prospect of PNG citizenship after eight years’ residence and says that once refugees have “successfully established themselves and become self-sufficient they are permitted to sponsor their families to join them through regular migration processes.”

It is unclear whether the eight-year process is a necessary part of becoming “successfully established” and “self-sufficient,” or if a refugee with a secure income might be able to bring family to Papua New Guinea sooner than that. Either way, it could be a very long time before resettled refugees are reunited with a spouse or children who are stuck in precarious circumstances in a troubled homeland or transit country. If refugees from Manus or Nauru were resettled in New Zealand, by contrast, they would immediately be eligible to apply for family reunion.

Two-thirds of the asylum seekers so far assessed on Manus and Nauru have been found to be refugees. This is a similar proportion to the number found to be refugees when Australia detained asylum seekers offshore under the Howard government.

Of the refugees eventually resettled during the so-called Pacific Solution, 705 ended up coming to Australia, 401 were settled in New Zealand and forty-seven went to four other countries – Sweden, Canada, Denmark and Norway. With the exception of New Zealand, it is unlikely that even this limited help will be on offer to Australia again.

“There is no way Sweden will consider this issue given the numbers of refugees that country is dealing with now,” says Power. He thinks the Australian government has “painted itself into a corner” over the fate of the refugees on Manus and Nauru.

While the Refugee Council has concerns about New Zealand using its small resettlement quota to help out Australia, Power acknowledges that Wellington’s offer could secure a brighter future for at least some of the refugees in limbo on Manus and Nauru. •

Immigration minister Peter Dutton was approached for comment on this story but did not respond.

The post Another cruel twist in Australia’s refugee policy appeared first on Inside Story.

Close to 18,000 of these “priority five” applicants have waited four years or more for a decision, watching in frustration while other migrants jump ahead of them in the queue. All along, the government refused to give any indication of when the visas might be granted. Now the wait is over, and it has ended in disappointment.

Cash used little-known provisions in the Migration Act to “cap and cease” the 175 (skilled independent), 176 (skilled sponsored) and 475 (skilled regional sponsored) visa subclasses. Her ministerial determination, which came into effect on 22 September, fixes the maximum number of visas that can be issued in each subclass in the current financial year. Because the cap has already been reached, any other applications in the subclasses are null and void.

The pro forma letters sent out to inform applicants of the change use language reminiscent of Orwell’s 1984. Just as Winston Smith’s role in the Ministry of Truth was to rewrite history so that certain events never happened, recipients are told their visa application is “now taken to have never been made.” The determination draws on sections 85 and 39 of the Migration Act. Section 85 empowers the minister to set a limit on the number of any specified visas that can be issued in a financial year, while section 39 requires that once a cap has been reached outstanding applications “are taken not to have been made.”

A spokesperson for the Department of Immigration and Border Protection told Inside Story that about 16,000 people would have their visa applications “ceased” and that most had “occupations that are not currently in demand on the skilled occupation list” (the federal government’s schedule of occupations in demand in the Australian economy). This meant “that they would be less likely to get a job if they migrate to Australia permanently” and so the government “has determined that it is unfair to keep them waiting in the queue for many more years without being resolved.” The spokesperson added that affected applicants could apply for “other visas for which they may be eligible.”

The federal government will refund visa application charges paid up front, but many applicants will still be left significantly out of pocket. They may have run up thousands of dollars in migration advice, medical checks, skills assessments, validation of documents and other costs.

The immigration department says the decision to cap and cease the visas was a necessary consequence of changes in the way Australia’s skilled migrants are chosen. Since 1 July 2012, the SkillSelect system has become the dominant route to permanent residency. Under SkillSelect, prospective migrants don’t lodge an application for permanent residency or pay an upfront visa charge; instead, they lodge an expression of interest including all of their details – occupation, qualifications, work experience, age, language skills, family status and so on. SkillSelect then allocates them a score under the skilled migration points test.

If prospective candidates meet SkillSelect’s pass mark, they will receive an invitation to apply for a substantive visa. Invitations are issued in monthly batches, both by the federal government and by state and territory governments, and go to the highest-ranked candidates first. A migrant with a score of seventy on the points test, for instance, will receive an invitation before a candidate with a score of sixty-five. When candidates’ scores are equal, the invitation goes to the one whose expression of interest was lodged first. Employers can also use SkillSelect like a labour brokerage by trawling the talent pool for the skills they are seeking and then offering to sponsor the applicant’s visa.

Before SkillSelect was rolled out, anyone who reached the pass mark in the points test could lodge a valid application for a visa. That contributed to a dramatic blowout in application numbers, which was exacerbated by the Howard government’s injudicious decision to link study in Australia directly to permanent residence.

In 2009, when Australia’s annual skilled migration intake was capped at 108,000 places, 170,000 people lodged valid applications for permanent residency. At one stage, the backlog awaiting processing grew to 145,000. Under SkillSelect, blowouts like that can’t happen. The government limits the number of applications it receives for points-based skilled migration by controlling the numbers of invitations it issues in response to expressions of interest. If demand for places grows, the minister can raise the pass mark and knock out lower-ranked candidates.

The government also imposes occupational ceilings under SkillSelect, restricting the number of invitations that will be issued in specific sectors. In 2015–16, for example, there is a ceiling of 2525 invitations for accountants and a ceiling of 2475 invitations for chefs.

In its explanation of the cap-and-cease decision, the immigration department says that SkillSelect limited the number of skilled migration places available for applications lodged before 1 July 2012. “Consequently,” it says, “the time taken to process affected applications has continued to increase as the demand for GSM [general skilled migration] places continues to exceed the available supply.”

In an attempt to present its decision as in some way beneficial for disappointed migrants – some of whom have been waiting more than seven years – the department says the government “has decided to end the ongoing uncertainty” for those who have been permanently stuck at the end of the queue.

Such a gloss is only likely to sharpen the anger and disappointment of those whose applications have been culled. On a Facebook page for members of priority group 5, prospective Pakistani migrant Rehana Khan vented her frustration, saying Australian authorities “have not just done injustice with offshore applicants by taking our money, making us wait and then cancelling our application but they have also taken our sponsors, who are Australian citizens, voters and taxpayers, for a ride.” (Applicants for the 176 and 475 subclass visa were sponsored by an Australian relative or a state or territory government agency). Kahn demanded compensation on top of the refunded visa charge, but maintained that “no compensation can make up for our lost chances and time.” She also called on applicants to unite in legal action in the hope of having their visas processed.

Their chances of success are limited. The cap-and-cease provisions have been used before, and provided the minister’s determination in this case was carried out properly, it is likely to be lawful. The Migration Alliance has condemned the government’s actions; writing on the organisation’s blog, migration agent Robert Chelliah described the cap-and-cease determination as an “unjust, inequitable, abuse of ministerial power.” He demanded that the professional body representing migration agents, the Migration Institute of Australia, lodge a protest, seek redress for affected clients, and “explore how the minister can be called not to abuse his [sic] power by hiding behind lawful power to gazette.”

If there is anything positive to come out of the minister’s determination, it is that it did not affect onshore visa applicants in priority group 5. These people, mostly international student graduates, have been living in limbo at the wrong end of the queue, despite already having established their lives in Australia over a period of several years. While the government is using its cap-and-cease powers to cull unwanted offshore migrants from its books, it does at last seem to be moving to clear the much smaller backlog of onshore applicants by processing and granting their applications for permanent residency. •

After this article was published, the Migration Institute of Australia contacted Inside Story to say that it has obtained expert legal opinion that the legislative power Senator Cash used to cease and refund the visa applications is not valid. According to this opinion, Section 85 of the Migration Act 1958 only allows the minister to determine the number of visas that will be granted in a financial year. Remaining applications are usually “queued” for allocation in later years. The Explanatory Statement to the Minister’s Determination attempts to convert the unallocated applications to the status of “never being made” using section 39(2) of the Act. The legislative authority under section 85 does not have the power to “kill” outstanding applications. To have this effect, the section 39 power to “cap and cease” needed to be expressly stated in the Ministerial Determination (which it was not). As a result, the MIA believes that the minister will have to make a new legislative instrument if the government wants to cease outstanding visa applications in the affected subclasses.

The post Immigration’s disappearing visa applicants appeared first on Inside Story.

Six months earlier, the arrival of the first “safe haven” refugees from Kosovo had prompted a similar rush of unrestrained generosity. Again, Australians had watched in distant anguish as columns of displaced and dishevelled people streamed over the borders into rudimentary camps in neighbouring states.

Initially, the federal government was reluctant to act. On Easter Sunday, 4 April 1999, John Howard’s immigration minister, Philip Ruddock, flatly declared that “flying planeloads of refugees into Australia would not be an appropriate response” to the Kosovo crisis, despite pledges by the United States, Germany, Turkey and Britain to take in 100,000 people between them.

The United Nations High Commissioner for Refugees, or UNHCR, hadn’t asked Canberra for assistance and the minister was holding fast to established policy: that Australia offers places for the permanent resettlement of refugees, rather than for “temporary outcomes.” It was a rational position; it was probably good policy, but it was politically unsustainable. Over the Easter break senior government ministers were pressed to act by members of their own families. After watching distressing television footage from the Balkans, children asked their politician parents why Australia was doing so little to help. The media chastised the government for being mean and hard-hearted. Talkback lines ran hot.

When cabinet convened on the Tuesday after Easter, it was clear that something had to be done. Ruddock took a rough briefing paper to the meeting, canvassing a range of alternatives. One option was to offer permanent resettlement to a large number of Kosovars by “borrowing” places from the future annual refugee intake. This posed two problems: refugees from other regions would be unfairly squeezed out, and permanent resettlement could play into the hands of the Serb leader, Slobodan Milosevic, by inadvertently supporting his brutal policy of ethnic cleansing in Kosovo.

But providing short-term refuge for the Kosovars presented its own difficulties. There was no legislative basis for the measure and no established procedures for dealing with such an intake. It would put a huge strain on the bureaucracy and it would be very costly. The cabinet debate was protracted and passionate, but in the end temporary refuge appeared to be the only option. The safe-haven visa was born. Conceived amid intense domestic political pressure and designed to offer a humanitarian response to a specific crisis, it would take on a life of its own, evolving into a handy new option in the tool-kit of refugee policy.

John Howard announced the new visa and took the credit. “I’m not prepared to see Australia turn its back on these people,” he said. Ruddock, made to look the villain in the piece, stood stoically by his leader’s side, hiding his emotions behind a fixed grin. The prime minister was also on hand to greet and hug the first group of 400 refugees as they arrived in Australia. Offers to billet the refugees in private homes poured in from around the country; instead, they were accommodated at army barracks such as East Hills near Sydney, Puckapunyal in central Victoria, and Brighton on the outskirts of Hobart.

The open-hearted response of local communities, particularly in country towns, defied the image of Australia as a nation antagonistic to new immigrants. For many people, getting to know the Kosovars was a powerful experience and remarkable links were established with the refugees. When they taught English to the Kosovars, English-as-a-second-language teachers employed at the safe havens felt they were truly fulfilling their vocation. Tasmanian author Richard Flanagan described the response of his home state in moving terms:

It might be expected that Tasmanians would ignore, or even show hostility to the government-sponsored refugees, since the island is routinely portrayed as rednecked and reactionary. Yet when one beleaguered community looked into the eyes of another worse off, it perhaps saw something familiar… The Brighton Kosovars were flooded with offers of help and gestures of friendship. Business provided free clothes, free food, free meals, free tours. Cinemas offered free weekly tickets… The Hobart newspaper, the Mercury, ran articles in Albanian. A commercial television news broadcast began with an introduction in Albanian. Far from being outcast, the Kosovars were taken in.

Although John Howard basked in the initial glow of his government’s magnanimous decision to invite the Kosovars to stay, the official treatment of the refugees was ultimately shabby and mean. As legal academic Michael Head wrote, “The sites chosen for the refugees — disused and semi-used military barracks, usually in remote locations — seemed to be motivated by a desire to discourage the Kosovars from seeking to remain in Australia.”

When one family led a protest about conditions at the Singleton camp, 230 kilometres northwest of Sydney, they were portrayed as ingrates. With an invalid grandmother to care for, the family objected to the lack of privacy in shared facilities and the fact that bathroom and toilet facilities were hundreds of metres away from the wooden huts where they were to sleep. Government officials described the complaints as “totally unreasonable” and suggested that they could send the family back to Kosovo if they were dissatisfied with Australia. As David Brearly commented in the Australian, the charity on offer to the refugees was conditional: “A beggar’s gratitude is the prescribed response; anything less renders the whole deal suspect.”

Once the government decided that it was time for the Kosovars to return home, the situation became predictably messy. Many were reluctant to leave, despite the offer of a “winter reconstruction allowance” of $3000 per adult and $500 for each child, if refugees departed before 30 October 1999. Over subsequent months, reports of the desolate conditions confronting returnees once again made the government look hard-hearted. Critics noted that both Canada and the United States had taken in more Kosovars than Australia had, and offered them a permanent home. State premiers in Tasmania and South Australia began lobbying the federal government to allow the remaining Kosovars to stay.

In the face of intense criticism, Philip Ruddock agreed in late October 1999 to receive personal submissions from those safe-haven refugees who wanted to remain in Australia. But it seems many Kosovars did not really understand the process. According to Clare Cunnington, an English teacher who was employed at the Bandiana safe haven near Albury Wodonga, many Kosovars wrote polite letters thanking the government for its help, and outlining the fact that they had no homes to return to. She says they didn’t realise they needed to demonstrate a well-founded fear of persecution in their homeland in order to qualify for an ongoing protection visa, nor that it might aid their cause to get independent legal advice. Some Kosovars were ultimately allowed to apply for refugee status, and others were eventually granted permission to stay so that they could receive ongoing medical treatment or trauma counselling. But Cunnington says many Kosovars did not trust the confidentiality of the letter-writing process and were reluctant to fully document their personal stories and fears in that way.

By March 2000, there were fewer than 500 Kosovars left in Australia. Those without permission to remain came under sustained government pressure to sign “voluntary” consent forms and depart before the deadline of 8 April. They were told they would be transferred to detention in Port Hedland or Woomera if they refused to leave Australia. Citizens began hiding refugees who had absconded from the safe havens. Faced with imminent return, one Kosovar made her fear and confusion public in a letter to the Australian:

When, as Kosovo refugees, we arrived at Sydney airport hundreds of people were there to welcome us to Australia. We cried because we were happy to be safe and we couldn’t believe we were still alive… We are still tired, traumatised by our experiences and worried about our future and that of our innocent children. The problems in Kosovo have never stopped. Every day we read in the newspapers, see on the news and the Internet that things are still out of control. Today I learned my friend had been shot in a Pristina street. Pristina is supposed to be a safe place. We know that NATO and KFOR [NATO’s Kosovo Force] are in Kosovo to keep the peace, but they can’t be everywhere, in every house or in every street… I am scared for my future too. I have seen the killers; I know their names. I am a war crimes witness. Logic and experience tells me that I will not live to see my evidence heard.

As the departure deadline loomed, the mood at Bandiana safe haven became increasingly depressed. Elaine Mason was working at the primary school, teaching grades one and two. “The children became increasingly tired, distracted, excitable, irritable and confused,” she recalls. “Nightmares re-occurred more often. As their parents became more tired and distracted, the children haunted the school buildings before and after school. Children often burst into tears, something I hadn’t seen in months.”

The Kosovars twice marched several kilometres into Wodonga to protest against their removal. On 6 April, the immigration minister and his parliamentary secretary, Kaye Patterson, visited Bandiana. According to Elaine Mason, a spokesman for the Kosovars addressed the pair with dignity, gratitude and humility: “With trembling lips he spoke of the dangers and deprivation they were being told to return to, especially of the grave risks faced by babies and little children.”

Ruddock would not budge.

“I saw people’s faces turn pasty grey with shock and despair. I thought some would faint,” recalls Mason. “Quiet sobbing filled the room.” Over the next two days some of her Kosovar friends began to slide into despair. One young woman took to her room and refused to eat; a small boy suddenly developed a stutter and began to behave erratically; a teenage girl tried to commit suicide and ended up in a Melbourne hospital. But, despite the pressure to leave, by 8 April only a handful of the remaining Kosovars were willing to depart from Australia.

When Elaine Mason arrived to pack up the school equipment the following Monday, she found that the safe haven had been transformed into a detention centre. Two Australasian Correctional Management guards escorted her from the gate to the classroom. She was met by her remaining eleven pupils, who wanted to attend school as usual, keen to maintain some pattern in their now confused lives. But the guards told the children to go away. They were not allowed in the classroom. “The children were perplexed, stricken and hurt,” says Elaine. “I asked if they could help me pack up, but the request was denied. I was told not to talk to the children at all. The other teachers were told likewise.”

Later that day, Elaine and other teachers were called to attend a briefing with an immigration department official. “We were advised to avoid contact with the Kosovars, to withhold emotional and physical support and to speak with them only to advise them not to go to the Detention Centre,” she says. “He explained the ramifications of choosing the detention centre, the accrued expenses, the impossibility for them to come back to Australia within five years, if ever. I strongly felt that we were being pressured to smooth the department’s way in sending the Kosovars back as soon as possible without fuss or embarrassment to Minister Ruddock and the government.”

Three days later, on 13 April, Ruddock insisted on the 7.30 Report that it was safe for “most” Kosovars to return home, including those from Presevo, a Serbian town just outside the borders of Kosovo, which had been subjected to intensive ethnic cleansing. He said that he based his opinion on advice received from the UNHCR. But the UNHCR’s public pronouncements were much more cautious. On the same day as the Ruddock interview, the head of the UN mission in Kosovo, Bernard Kouchner, appealed for “an orderly and voluntary” return of refugees. In an open letter he said that host countries should allow people to return at a pace that would allow relief agencies to provide the necessary support. He urged governments to “minimise” forced returns, especially of those who are socially and ethnically vulnerable and warned that an influx of refugees would “tarnish” efforts to restore stability and law and order in Kosovo. “We already have problems with too many arriving simultaneously and with lack of regard for the dangers to ethnic minorities,” he said in a media release.

The federal government was undeterred. On Friday and Saturday, 14 and 15 April, the public address system in the camp was used every half-hour or so to call the Kosovars to come forward and sign their “voluntary” consent forms to return home. Heads of families were individually asked over and over again to sign the forms. Friends and supporters of the Kosovars gathered outside Bandiana and waited hours for permission to visit. They were eventually allowed in, but only in small, controlled groups. Each visitor had to nominate the particular family or person they wished to see.

On the Sunday, the government flew 116 people back to Kosovo, although group members had refused to sign the form officially consenting to their departure. Another twenty-one Kosovars were transferred to immigration detention at Port Hedland to await forced removal from Australia. The guests had outstayed their welcome; the safe-haven refugees had become that despised category of people — illegal immigrants. John Howard’s generosity had been expended, although it was Philip Ruddock who once again wore the opprobrium.

A few days later, in a letter written from Sarajevo, a member of the United Nations Mission in Bosnia Herzegovina expressed his distress at the Australian government’s forced removal of the Kosovars. Claiming first-hand experience of the situation in Kosovo, Joel Cohen wrote to the Age: “Ethnic tension, political instability and general distrust prevail. Landmines dot the countryside and violent crime is rampant. Homes have been destroyed and jobs are few. In short, the immediate future for returning refugees will be one of survival rather than peace and stability.”

Similar concerns were expressed about the early return of East Timorese “safe haven” refugees sent back to the smoking ruins of their homeland at the start of the wet season. This time there was no cash on offer. Instead of $3000, each Timorese family was supplied with a fifty-kilogram bag of rice, a blanket and a plastic sheet. According to a ministerial staff member, this “rudimentary kit” was designed to “tide them over for the first few days back in East Timor.”

Even so, it came with conditions attached; to receive this generous “starter pack” the refugees had to leave Australia before the expiry of their safe-haven visas on 8 December 1999. Many East Timorese were, indeed, keen to return, to seek out what was left of their homes, to search for lost relatives and to assist their nation on its path to independence. But some, especially single mothers with young children, were apprehensive. They asked if they could wait out the wet season and rebuild their strength in Australia before returning.

Refugees at the East Hills safe-haven near Sydney claim that officials pressured them to leave by alleging that revered resistance leader Xanana Gusmao was calling the centre every day and asking, “When are my people coming home?” In fact, Gusmao had asked the federal government to allow the refugees to remain in Australia until the situation in the territory stabilised. The refugees also claim that they were told to go back quickly or risk finding that all the best land in the territory had been settled in their absence.

The federal government had initially been reluctant to bring many of the East Timorese to Australia at all. As with the Kosovars, the government’s hand was forced by public opinion and by the resolute determination of UN staff. In the days of orchestrated violence that followed the UN-sponsored vote on East Timor’s future, the UN compound in Dili became a sanctuary. As the town was looted and torched by pro-Indonesian militia, local and expatriate United Nations staff sheltered behind its walls. They were joined by relatives, by the few remaining journalists left in East Timor and by hundreds of Dili residents unable to flee to the hills. Many of the East Timorese initially camped in the adjacent block of land where the United Nations kept its vehicles, but, as the militia and the Indonesian military continued their campaign of terror, they clambered, terrified, into the UN compound proper. My ABC colleague Diane Martin described how babies were tossed over the barbed wire to safety.

Initially, the federal government only wanted to provide entry to the 350 locally engaged UN staff and their immediate family members. The decision to evacuate everyone in the compound was forced upon them by circumstance; some UN staff refused to leave unless all the East Timorese in the compound were also included in the rescue mission.

After their arrival in Darwin, the inexperience of Australian health authorities in dealing with a large group of third world refugees quickly became apparent. The primary healthcheck used on all migrants to Australia is screening for tuberculosis and this approach was also used with the refugees from East Timor. In fact, a chest X-ray for all refugees over sixteen years of age was made mandatory under the safe-haven legislation. The key aim was to protect the broader Australian community from this infectious disease.

In normal circumstances TB screening makes good sense, but these were not normal circumstances. TB is a serious disease and proved to be a major health problem among the Timorese, but it does not kill quickly; there is usually a relatively long period in which effective intervention is possible. The most immediate and lethal threat to the refugees themselves was measles: in children with poor nutritional status, measles can have a 10 per cent mortality rate. Mass immunisation of refugee populations is the recommended course of action under internationally recognised emergency health guidelines. But because the measles vaccine interferes with the Mantoux test to detect the presence of TB in children, Australian health authorities planned to hold off on immunisation until after TB screening had been completed. It took strenuous argument from public health professionals to bring the immunisation forward. Their arguments gained greater force when the first case of child measles was identified in the Puckapunyal camp just one day after the refugees arrived in Victoria. Mass vaccinations began two days later. As one doctor commented later: “It’s just lucky there wasn’t a serious epidemic.”

Measles is more damaging in children suffering from vitamin A deficiency, and in such circumstances can easily lead to blindness. Current best practice in international refugee healthcare is to administer vitamin A supplements where there is evidence that children are malnourished. Paediatricians identified symptoms of vitamin A deficiency in the Timorese refugee children almost as soon as they arrived. Despite this, plans by public health professionals working in Puckapunyal to administer supplements initially encountered resistance on the basis of cost.

Neither was there any initial recommendation for blanket treatment for gut parasites despite strong grounds to assume that this was a primary cause of illness among the refugees. Although diarrhoea was immediately identified as a major health problem, blanket worming was only introduced after lobbying by public health staff at Puckapunyal, whose tests of 111 stool samples showed parasites, often of multiple types, were indeed being carried by almost half the population. The information revealed by the tests subsequently proved extremely valuable to health professionals working in East Timor itself, who had no ability to identify the types of parasites present in the local population.

To be fair, healthcare arrangements for the East Timorese had to be organised in a tremendous rush. Many of the medical staff deployed to Puckapunyal had only two days’ notice to prepare for the arrival of the refugees, while those already working at the camp had set them themselves up to provide healthcare to the previous residents, the Kosovars, who had been through initial screening and inoculation procedures in Europe. As refugees from a more developed country, they were generally in better health and better nourished than the Timorese; they were also more familiar with a Western medical regime, and more assertive, which meant that they were more likely to present themselves at a clinic to seek treatment for their ailments. The Timorese were reluctant to come forward and ask for help on their own behalf; providing them with adequate healthcare demanded a more pro-active, public-health approach.

Even taking these matters into account, the general approach was mean-spirited. Cost containment and protecting the Australian community from disease appear to have been the driving factors, rather than the health of the refugees themselves. “We were specifically told that we were not to undertake ‘screening,’” says one doctor. “We managed to get cooperation with microbiological and parasitic screening by arguing that it provided information needed to manage the population safely, but it was otherwise a struggle.” The doctor says that there was no systematic check on the health status of the 360 children at Puckapunyal and that in the end only about half the children were examined by nursing staff.

Medical staff at Puckapunyal were told from the outset that their brief was “immediately necessary healthcare.” Surgery was to be available in Category 1 and 2 cases as defined under federal health guidelines, which include conditions “causing some pain, dysfunction or disability.” Yet a paediatrician found himself running up against bureaucratic obstacles when he recommended a proper clinical assessment of a child with a cleft palate. A severe cleft palate can lead to chronic hearing problems and severely impeded speech. It can make it hard for a child to eat adequately because swallowing is inhibited and this, in turn, can stunt a child’s growth. In Australia a congenital defect of this nature would be corrected before a baby was twelve months old; in the case of the East Timorese refugee, the paediatrician had to counter official suspicion that he was recommending “cosmetic surgery” outside the treatment guidelines.

Pap smears were another issue of contention, as was anything to do with women’s health. Staff from the Mercy Hospital for Women carried out smears on twenty-eight women who displayed symptoms of reproductive ill-health. Three of the women were found to have cancer of the cervix, requiring surgery. This alarmingly high incidence led obstetrician Desiree Yap to conclude that there was “an absolute moral obligation” to offer screening to all the women at Puckapunyal. The recommendation was never acted on, as pap smears were judged to be a “screening test” and considered “non-acute.” This was at odds with the policy promise to provide “general practitioner services of the range available to the Australian community.” A pap smear has a total cost of about $40, from procedure to result.

Dr Yap has a postgraduate degree in public health and has undertaken specialist training in refugee healthcare. She says that in the end she felt morally and ethically compromised by her involvement in providing care at Puckapunyal. Considering that many of the women were now the heads of their households and would return to a hostile environment, and that most had the added burden of young children, she believes that the lack of directed health programs was both morally questionable and out of step with international recommendations.

She was not alone in her concern at the treatment meted out to the refugees from East Timor. “This is a very affluent country and we had the opportunity to do more for them than we actually did,” says another health professional who worked at Puckapunyal. “It was clear once the dust had settled, once DIMA had dusted themselves off, that the big focus was to get these people back out of the country again as soon as possible. They didn’t want them to put down roots.”

When it became apparent that the refugees would be repatriated to East Timor quickly, health workers began formulating an education program to prepare them for their return. The idea was to inform designated community members about issues such as basic hygiene, sanitation, disease identification and the use of insecticide-impregnated mosquito nets to prevent malaria. When the immigration department in Canberra got wind of the education program, it called an immediate halt. It then insisted on officially vetting all the educational material, and sought to prevent the inclusion of any information that might portray conditions in East Timor in a bad light. The trainers were expected to withhold accurate information about the physical conditions returnees would encounter in the territory, for fear that this might deter them from going back. Yet, such knowledge was obviously essential to properly prepare community members for their return.

There was also a great deal of secrecy surrounding the refugees. One professional says that he had to submit information for a military security clearance before he was employed at the camp. He was told not to speak to the media or anybody else without official clearance and told not to bring a camera or tape-recorder into the camp. It was made difficult for journalists to enter Puckapunyal and representatives from the International Commission of Jurists were prevented from visiting the camp to conduct interviews with the refugees. The Commission was hoping to assist United Nations efforts to inquire into human rights crimes in East Timor by inviting refugees to give personal testimony of any acts of violence that they had witnessed in the pre- and post-ballot period. To be useful, such testimony needs to be recorded as soon after the event as possible in interviews conducted by appropriately qualified legal practitioners. Ruddock turned down the access request, and when the Commission’s Victorian representative, Spencer Zifcak, went to Puckapunyal, he was met by a polite departmental official with specific instructions from head office to prohibit him from interviewing any East Timorese.

Ruddock claimed he wanted to spare the Timorese unwarranted intrusion in their already traumatised lives. One can hardly avoid the conclusion, though, that the ban on the International Commission of Jurists was really designed to prevent further strain on the relationship with Indonesia. Despite all that had occurred before, Canberra did not want to be seen to be providing any assistance to the process of identifying and prosecuting Indonesian military officers responsible for war crimes.

The ban accords with the overall approach to the refugees, which was paternalistic and disempowering rather than consultative and respectful, and suggestive of an official desire to control and contain their activities. The isolation of the camps made the refugees heavily reliant on the immigration department and reduced their capacity for independent action. Of course, they were free to leave the camps, although they would not have got far on the $27 per week per adult and $10 per week per child granted to each family to cover living expenses. The fact that many refugees did leave on excursions was mostly due to the hospitality extended to them by the Australian public, especially by members of the expatriate Timorese community.

Assisting the Kosovars alone cost at least $100 million; this is five times the amount of money Australia provided to the UNHCR global program in 1998. While it may appear miserly to question the spending of money on bringing Kosovars here, it is not unreasonable to suggest that the safe-haven money might have been better spent. For example, could more assistance have been given to more people if Australia had spent $100 million supporting refugee camps in Macedonia and other frontline states in the Balkans? Would it have been better to fund reconstruction efforts in Kosovo itself, given that the refugees are going back to a shattered society?

To cut the figures another way, Australia spent a minimum of $25,000 on each Kosovar refugee in 1999; in the same year Iran received less than $20 worth of UNHCR assistance for each one of the four million or so Afghan and Iraqi refugees living within its borders. Perhaps the $100 million would have been better spent there, reducing the motivation for refugees to leave Iran and turn up as boat people on Australia’s shores. This might, also, have spared us the additional cost of building new detention centres and processing asylum claims.

Australia had fewer options in relation to the East Timorese inside the UN compound in Dili. To refuse to evacuate them to Australia would have meant leaving unarmed civilians at the mercy of the pro-Jakarta militia. In the case of both the Kosovars and the East Timorese, once we took them in as refugees, we also assumed a duty of care towards them. According to the basic conventions of hospitality, they deserved better treatment.

Philip Ruddock praised the efforts of immigration department staff in managing the safe-haven program, saying that his officers “rendered an exceptionally outstanding performance in the national interest.” He pointed out that they had to develop and implement “a program to evacuate almost half as many people as we have under our whole refugee and humanitarian program, almost 6000 people, halfway around the world, and to manage them, that is to feed, keep, support, and to implement all of that… within weeks.” He noted that the safe-haven project was carried out when the department was already under great strain owing to the increase in unlawful boat-arrivals.

Certainly, many departmental staff showed great dedication and professionalism in assisting the refugees from both Kosovo and East Timor. Ultimately, however, the government’s response to the safe-haven refugees was framed by same basic concerns that dominate policy to all asylum seekers and refugees: the determination to strictly control Australia’s borders and carefully screen entry into the country. •

This is an edited extract from Borderline: Australia’s Response to Refugees and Asylum Seekers in the Wake of the Tampa by Peter Mares, published in 2002 by UNSW Press.

The post Safe havens: two cautionary tales appeared first on Inside Story.