Renters let down by partisan politics

December 12, 2023

After six months investigating Australia’s rental crisis, a Senate committee failed to offer useful recommendations.

The final report of the Senate inquiry into the state of Australia’s rental market describes it as a human crisis: “Too many people are struggling to meet the rising costs of rent; paying too much for properties that are in disrepair; and living with the constant fear of eviction and homelessness, unable to plan for the future or put down roots in local communities.”

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.

Originally published by Inside Story contributing editor Peter Mares is an adjunct senior research fellow at Monash University’s School of Media, Film and Journalism and a fellow at the Centre for Policy Development. He sits on the advisory committee to the Centre for Equitable Housing, in Inside Story, 12 Dec 2023.