Albanese’s housing ‘fix’ helps a tiny pool of voters. The rest will notice

Federal parliament tackled one of the mammoth challenges in Australian society this week. In a vote that split the House of Representatives and saw the Greens side with the Liberals, the lower house divided on whether to set up a new way to help people buy their first homes. Labor won the vote, but that does not mean it has won the argument.

Housing, the most pressing problem for so many voters, took its rightful place as the dominant debate in Canberra. Nobody could accuse federal politicians of ignoring the real pressures in the community.

Illustration: Andrew Dyson. Credit:

But there was an awkward aspect to the dispute over the government’s Help to Buy scheme, which promises to give aspiring home owners a financial boost when they head to a property auction. For all the hours devoted to the legislation, a basic truth stood out. Australia has a very big problem, and this is a very small solution.

The Help to Buy bill is merely one stage in a long conflict between all parties on housing policy, which is certain to define the next election because of the enormous strain on renters and buyers. But this particular policy only helps as many as 10,000 buyers a year. Its impact is modest.

That makes Help to Buy an unlikely bargaining chip and the Greens are refusing to vote for it in the Senate unless they get changes to negative gearing and other tax concessions for property investors. Prime Minister Anthony Albanese insists he must have the bill passed as soon as possible, while Opposition Leader Peter Dutton is a hard No.

It is a classic Senate stand-off. And, just maybe, a compromise might emerge after a few more weeks of wrangling. But the truth is that most Australians have no reason to care whether this bill gets approved at all. Ever.

That makes it a meagre bargaining chip indeed – a $5 token on the roulette wheel of politics. There is no good reason for Labor to trade any changes to negative gearing, with all the political risks attached, just to get this policy in place.

The explanation is in the design of the scheme. It is meant to work by letting the government take equity in someone’s home in order to help make that home affordable. Buyers would sacrifice some of their stake under a “shared equity” model with the Commonwealth owning up to 40 per cent of new homes or up to 30 per cent for existing dwellings.

The buyer would not need to borrow as much to buy the home and would gain a share of any capital gain over time, but would have to split that gain with the Commonwealth. He or she would simply need a deposit equivalent to 2 per cent of the purchase price. Most of the states, under Liberal and Labor governments, already offer something like this.

In theory, the scheme could help hordes of homebuyers. In practice, it is tightly controlled to keep the cost to $324.6 million over four years – which is, let’s face it, tiny in a property market with about $10.5 trillion in land and dwellings.

Only people with incomes of less than $90,000 can qualify for the scheme. The threshold is slightly higher for couples, at $120,000, but this is fairly modest for anyone hoping to buy in a big city.

The other restriction is the asset price. The original Labor policy set a maximum price cap of $950,000 for a home in Sydney and $550,000 for a property in, for example, regional Queensland or $850,000 for one in Melbourne. The caps are essential to limit the cost of the scheme, but they also restrict its scope. This explains why the government only expects 40,000 people to qualify over four years.

One final curiosity: the federal scheme will only work in states that pass matching laws to overcome a constitutional barrier to its operation. That raises a simple question: why not just offer money to the states to make their shared-equity schemes go further? Is this duplication merely about political bragging rights?

The Greens focus their efforts elsewhere – on rent controls, more generous rent assistance and bigger taxes on property investors. Their political advantage lies in turning a nation of renters into lifelong Greens voters.

Labor is not relying on Help to Buy to fix everything in housing. It has offered a $2 billion “accelerator” fund to the states to build more homes, set up a $3 billion “new homes bonus” for the states and has a $10 billion fund that will spend its annual earnings on housing.

What the government does not have is a truly bold agenda on housing supply. It relies on the premiers to take the lead on land release and planning reform, hoping that financial incentives from Canberra will encourage the states to overcome barriers to construction. Some of those barriers are building costs, labour supply and land-banking by big developers. And that’s before getting to the debate about protecting heritage suburbs or putting up apartment blocks.

The Coalition, meanwhile, is a blank page. It seems certain to go to the election with a revised version of its 2022 idea to let people dip into their super to buy their first homes, given backbenchers such as Andrew Bragg and Keith Wolahan are pressing for this and other moves on housing. The government sees this as an assault on compulsory super, Paul Keating’s iconic reform as Labor leader, setting up a sort of economic culture war for the year ahead.

The test of the Coalition’s policy will be whether it can prove that households would be better off with earlier access to their own homes when this comes at a measurable cost to their retirement savings.

For all its talk about having the better policies on housing, Labor is losing ground on the politics. The latest Resolve Political Monitor, published in this masthead on Monday, showed that 23 per cent of voters named Labor and Albanese when asked who was best to manage housing, while 29 per cent named the Coalition and Dutton. Labor led the Coalition by 12 percentage points on housing last July; now it is behind by six points.

Albanese gained a big dividend from the Help to Buy policy during the last election campaign. It gave him a talking point in the final phase of the campaign, just before the Coalition unveiled its super-for-housing policy. Housing Minister Julie Collins calls Help to Buy a life-changing plan.

Voters, however, seem underwhelmed. And their reaction makes sense. Most have no need to care if Help to Buy remains in limbo in parliament. Australia has a big problem with housing, and that means Labor needs a bigger solution.

David Crowe is chief political correspondent.