The Market Has Failed Renters In Australia
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We have had 40 years of people in power telling us that the market will take care of everything. That market forces are the most efficient means of regulating all aspects of our lives. This economic mantra has been repeated by those on both sides of the political divide. Admittedly with more fervour by those on the right with a conservative bent. Well, Australians cannot afford housing, with both renters and first home buyers struggling to put a roof over their heads. The market has not looked after the most basic needs of the many in this regard. Governments have failed Australians and seem powerless and hardly inclined to do anything about this state of affairs. The market has failed renters in Australia and is eating up the livelihoods of a third of Australians.
Renters Copping It In The Neck Via The Market
The market does not look after the interests of the many, when it comes to housing, but rather the vested interests of the wealthy and propertied few. In the current high inflationary period, banks are increasing their profits, as are government coffers too.
The economic system cannot correct itself without lining the pockets of the rich and making the working poor suffer much more than usual. This is the great centralised banking set up that we have here in Australia and around the Western world. Why do we have high inflation? Companies decided to put up their prices to recoup the losses of the global pandemic and the snowball effect meant everyone followed suit. A war in Ukraine spooked the international energy markets and on the back of this energy providers massively raised their prices, which further forced the hands of manufacturers everywhere. Governments have done little about this because they have been well trained to let the market look after everything. One wonders what governments are actually for in the 21C. They seem to provide spokespeople who state the bleeding obvious on camera but do little else of any real value.
Australian Housing Crisis Driven By Market Forces
There is a housing crisis happening in Australia. Meanwhile, the government is bringing in around a 1 000 new migrants per day.
The fact that this is making the rental crisis much worse seems lost on the government of the day. Philip Lowe, RBA Governor is merrily raising interest rates to dampen demand within the economy in his bid to strangle inflation. Lowe just raised the cash rate to 4.1%, making it his 12th increase in around a year, the fastest rate rising in history. Increasing the population at the same time is an economic cheap trick to avoid a technical recession by stimulating productivity and demand via more people in the mix. Life is tough for all of us at the bottom of the wealth pyramid in this country. Governments have overseen a social housing shortage for decades and this has reached a critical stage. The Albanese government is sitting on its hands in regard to the rental crisis. It is interesting how quickly the promises made in opposition seem to become forgotten and get left in some bottom cabinet drawer.
There are people living in tents on public reserves and in parkland. Landlords are merrily stuffing wads of cash into sock drawers and bank accounts.
Did you know that a third of all property purchases on the east coast of Australia are done in cash? That sounds very dodgy to me. Why else the secrecy of cash? The rorts going on in Oz and overseen by useless governments and toothless tiger agencies are legion. Privacy concerns protect these dodgy dealings by the rich. Philip Lowe does not support price controls on rent, he is ideologically against such things. Economists and bankers spruik the unrestricted flow of market forces, as they cream off their generous cut from each transaction. Poor people are merely the sheep that must be moved from paddock to paddock in lean times. The feed may not be there for them and the cost to feed them prohibitively expensive but some will survive the tough times. Fighting off inflation is far more important than a few dead sheep.
“A majority of voters support severe measures to tackle the housing crisis including freezing rents, capping migration and using superannuation for housing, according to the latest Guardian Essential poll.
The poll of 1,138 people, released on Tuesday, finds support for a range of signature policies of the Greens and Coalition, demonstrating the risk posed to the Albanese government if it is not seen to be doing enough to fight rising rents and property prices.
Half or more of respondents said the housing system was bad for: renters (63%), future generations of Australians (58%) and “Australia as a whole” (50%).”
(Paul Karp, The Guardian, 30 May 2023)
Robert Sudha Hamilton is the author of Money Matters: Navigating Credit, Debt & Financial Freedom, which is available from Amazon.
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