Finding a solution for Hobart’s housing crisis demands tough decisions be made
IT has been suggested we start calling the housing crisis a housing disaster and respond to it in the same way we would a natural disaster
Opinion
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IT has been suggested we start calling the housing crisis a housing disaster and respond to it in the same way we would a natural disaster, such as the 1967 bushfire, which displaced over one thousand Hobartians overnight.
The difference between 1967 and today is this is a slow burn that we should have seen coming.
The housing crisis came later to Tasmania than the mainland capitals, but the root causes are the same: policy settings, land supply issues, increased demand for particular areas and the listing of houses on Airbnb in those same areas.
Despite the warning signs, little has been done at any level of government to address the housing crisis.
The housing summit called for this week is timely and important, and it must involve all stakeholders, leave politics at the door and result in immediate action.
Two days after Saturday’s state election, The Australia Institute asked 1599 Tasmanians what they thought would most help get people into secure housing. The result? Reducing or removing tax breaks for investors and putting more money into public housing.
Tackling the federal tax system is particularly critical for Tasmania.
Tasmanians are suffering a double whammy, being priced out of home ownership while benefiting least from generous tax breaks like negative gearing and the capital gains tax discount.
Last year a report from The Australia Institute found that across Australia, people in higher income brackets receive the most benefit from negative gearing and the capital gains tax discount. As a state with lower than national average household income, Tasmanians are likely to be benefiting less from property speculation.
The report’s figures suggest that interstate property speculators could be inflating the Tasmanian property market, locking Tasmanians out of home ownership, with the profits leaving the state. This increase in property investment has not been matched by an increase in new housing.
That’s money that is not being reinvested back into the local economy. Economic investment in the state is obviously welcomed but not if the end result is that it makes life harder for Tasmanians. Changing tax incentives to favour owner occupiers rather than investors can help get more Tasmanians into their own home.
As more middle-income earners are priced out of home ownership, they are pushed down the housing continuum, competing for rental properties traditionally occupied by lower income earners. This in turn pushes lower income people into crisis and on to public housing waiting lists.
Investment in public housing in Tasmania is hampered by the state’s historic housing debt of around $170 million, which was borrowed from the federal government between the 1950s and mid-1980s to construct public housing.
The interest on this debt costs the state around $15 million a year and will not be paid off until 2042; an entire generation. Premier Will Hodgman has been lobbying to have this debt dropped since he took office in 2014. Dropping the debt is not without precedent — the South Australian government successfully negotiated it in 2013.
This week’s housing summit is an opportunity to push for the dropping of our federal housing debt and the reform of negative gearing and capital gains tax exemptions. Tasmanians should watch federal representatives at the summit as closely as we watch those from the state and local levels.
Leanne Minshull is director at the Australia Institute Tasmania