Labor’s latest non-solution to the housing crisis

You might think that Australia’s housing crisis is the fault of greedy developers, wealthy investors and a market that puts profit before people’s need for a home. Not so, according to Labor Minister for Housing Claire O’Neill. The problem is planning laws that allow selfish, “anti-development residents” to put their interests before those who need affordable homes.

“Planning laws at the state level are being used much too much to protect existing residents, and not enough to address the fact that we’ve got millions of people who are in housing distress”, O’Neill said in a recent interview in the Age. Apparently, this bureaucratic red tape is to blame for Labor likely falling at least 220,000 homes short of its target of 1.2 million built by 2029.

Harry Triguboff, owner of mega-developer Meriton and Australia’s second richest person, agrees. In a press release titled “We’re in a major housing crisis. So why do I find myself talking to brick walls rather than building them?”, Triguboff urged all levels of government to “work together to address the red tape” and stop sabotaging the housing industry. Things are so bad that “there is no profit” in building, leading Triguboff to ask, “Why would anyone choose to do it?”. The Australian Financial Review’s 2025 Rich List provides a clue: Triguboff’s wealth is up 12 percent and now stands at a staggering $29.65 billion.

O’Neill’s ire at “anti-development residents” is not aimed at the rich. Labor’s planning proposals target “middle ring” suburbs, particularly those close to transport corridors, which means predominantly middle-income working-class communities.

Despite what Labor and billionaires like Triguboff might say, the planning system is already heavily geared towards developer interests and has little or no impact on either the supply of housing or its price.

Current rules allow developers to build boxed-in housing in western Sydney with black roofs, contributing to soaring temperatures that experts say could make the region unlivable by 2050—no red tape getting in the way there. The Opal Towers in Sydney’s Olympic Park were approved as a major building project by the NSW government in 2015, but serious defects caused cracking in the building and the evacuation of more than 3,000 residents in 2018.

In a 2020 paper, economist Cameron Murphy showed that planning approvals for new properties far outstripped the number of houses built, with more than 100,000 surplus approvals since 2012. In Sydney and Melbourne, 94 percent of planning applications are approved, most within three to four months. As Murphy wrote in the Conversation in 2021, “planning regulations permit development, but it is the market price that determines if and where development occurs ... developers select their sites, build, and sell in strong markets and wait or avoid selling when markets are weak”. In other words, developers have no problems getting planning approvals, but they use the approvals only if building and selling will make enough profit.

Labor’s attack on planning “red tape” is part of its broader argument that lack of supply is responsible for housing unaffordability. But this is a myth, as economists like Murphy have demonstrated. Between 1996 and 2018, Murphy estimates that new supply exceeded demand by 458,000 dwellings, but house prices and rents went up, not down.

If more supply might reduce prices, developers don’t build. In March 2025, the Age reported that developers in Melbourne were holding back 8,000 apartments because they couldn’t sell them at a high enough profit. It’s the market and profits that have made housing in Australia unaffordable, not a lack of homes.

Labor and big developers like Triguboff want to blame anyone but themselves for Australia’s escalating housing crisis. Whether it’s international students, migrants, local residents or young people eating avocado on toast, anyone is a target as long as it’s not profit-gouging developers or the government. Labor’s plans to address the housing crisis by making it easier for developers to build low-quality unaffordable homes is like contracting employers to protect workers from wage theft.

If Labor was serious about ending the housing crisis, it would be taking on the developers, not giving them more handouts. The developers should be forced to build high-quality properties at affordable prices, and if that means they won’t build, then the government can and should do it instead by constructing the hundreds of thousands of public housing properties we need and building affordable homes for people to buy. It’s measures like those—in addition to controlling rents and mortgages, ending the massive tax concessions to wealthy investors and seizing empty homes—that would start to fix the crisis. But Labor doesn’t intend to do any of that; instead it is committed to lining the pockets of the rich while pouring fuel on to the bonfire of Australia’s housing crisis.