The federal Labor government has overseen the biggest fall in living standards in at least half a century. And Australian household income has dropped by more than in any comparable country in the last two years, <a>according to a recent report</a> published by the Organisation for Economic Co-operation and Development. Young people in particular <a>have been screwed</a> by rising rents and falling wages.
People are rightly pissed. According to <a>polling in mid-October</a>, Anthony Albanese’s net approval rating has fallen to a new low of negative 14 percent, and the ALP’s primary vote has sunk to 31 percent. 
Yet, if you took the Labor PR machine seriously, you’d think the government was doing all it could to help people economically. There is endless talk about “cost-of-living relief” and bragging about the measures Labor has implemented. But what has the government really done?
The prime minister’s website has a special “cost of living relief” page that highlights every policy Albanese is trying to promote. At first glance, the listed measures appear to be designed to put more money into the pockets of struggling people. But dig a little deeper and you’ll find a different story. Many big-ticket relief items are just handouts to big business—a transfer of tax dollars to mega-corporations already raking in super-profits from charging higher prices. 
Take the energy rebate, which reduces annual household energy bills by $300. While it has helped millions struggling with eye-watering bills, it is also a $3.5 billion gift from taxpayers to the energy companies that have been ripping us off in the first place. And it’s hardly one they need. AGL, Australia’s largest electricity generator, recorded a 189 percent increase in underlying profit to $812 million in the last financial year. Origin Energy’s profit surged 172 percent to $1.2 billion, on top of an 83.5 percent increase the previous year. They are raking it in. 
The government could have capped energy prices, or imposed a super-profits tax on the energy behemoths, and saved the tax money for something else, like housing. But it is too wedded to the idea that companies have an ordained right to extract as much profit as possible through the market, regardless of the social consequences. 
It took the same approach to child care. Last year, the Child Care Subsidy was lifted and broadened to include more households. Once again, the government is just handing stacks of money—$10.7 billion, to be precise—to, in many cases, private for-profit childcare centres.
A <a>report released at the end of last year</a> by the Australian Competition and Consumer Commission found that any financial benefits from increases to the government subsidy were largely, if not wholly, eroded by increased day-care fees. It also found that “childcare fees across all services have grown faster than inflation and wages since the introduction of the subsidy”.
Like the energy companies, childcare companies are rolling in cash. G8 Education, Australia’s biggest listed childcare company, posted a 53 percent profit increase in 2023 and paid its CEO a $3 million package. That same year, G8 increased its fees by nearly 25 percent. 
So the government’s great plan means that parents are out of pocket just the same, the Treasury is poorer, while the companies increase their margins. Great “relief” if you can get it.
Then there’s the housing crisis, which needs no introduction. Labor promises to fix it by building 1.2 million homes by the end of the decade through the $32 billion Homes for Australia plan. It’s already failing: forecasts from Oxford Economics in July showed that the government will miss its target by more than 20 percent. 
More to the point, Labor’s entire plan follows the same investor- and developer-first model that created the housing crisis in the first place.
This is most notable with the Housing Australia Future Fund (HAFF)—Labor’s answer to affordable housing. It’s another handout to private developers, construction firms and investors. The HAFF fact sheet repeatedly states that “one of the key objectives of the program is to encourage private investment in social and affordable housing”. The model is designed to get private investors to team up with a social housing provider to purchase, renovate or build new housing stock by handing over government money to ensure each project remains profitable. 
Take it from Conscious Investment Management chief investment officer Matthew Tominc, who has established a $200 million fund to cash in on the plan. He told the Financial Review that the HAFF would likely offer investors a net 8 to 12 percent return, guaranteeing no losses. So the big winner will again be—you guessed it, the investor class.
As for anyone not in the social housing sphere, which is most people, the government is basically hoping and praying that spending money on infrastructure will encourage developers to build more homes. But it’s doing nothing to ensure those homes will be affordable—the generous tax concessions and other incentives for investors remain untouched.
Another category of cost-of-living relief is the Stage 3 Tax Cuts, which could also be called “tax cuts that will help ordinary people a bit, but disproportionately benefit the rich and further entrench economic inequality”. Accurate, if a bit wordy. 
Finally, there are measures that aren’t objectionable but are so small that it’s almost like the government is playing a joke on the rest of us. 
For instance, the government claims it’s “delivering a better deal for renters” by raising Rent Assistance. The payment is available only to eligible welfare recipients—a fraction of the renting population. It’s also minuscule—it was raised by 10 percent to a maximum rate of $211 a fortnight for a single person with no children (the current median fortnightly rent is about $1,250). 
Eligibility for the single-parent payment has been extended to when the youngest child turns 14, up from 8, but still below 16—where it was when the Gillard Labor government reduced it in 2013. It’s also a maximum of $987.70 per fortnight. How anyone is supposed to live on that is one of society’s great mysteries. And despite a recommendation from the government’s own Economic Inclusion Advisory Committee, the below-the-poverty-line JobSeeker payment has hardly been touched.
Wage rises also slide into the “did you even notice?” category. The government congratulates itself for backing a 3.75 percent pay rise for minimum- and award-wage workers and a 15 percent pay rise for aged care workers. It’s good that the workers got a pay rise, but it’s hardly enough. 
Even with two significant wage increases, aged care workers will still receive only $25 to $30 an hour, depending on their role. We’re talking about small bumps to extremely low wages. As of July, average real wages for all workers were still nearly 5 percent lower than before the pandemic.
To top off this list of do-little policies, Labor’s latest offering is banning debit card transaction fees, which banks charge when you buy something with a debit card. Obviously, the move is supportable. But touting it as a game-changing measure is absurd. 
It’s like the Albanese government is parodying itself. In the last financial year, Australian banks made $40 billion in profit, an 8 percent increase on the previous year. Prolonged high interest rates have been a windfall for the so-called Big Four—the Commonwealth Bank, ANZ, NAB and Westpac—which charge a higher interest rate on loans than they pay into savings accounts. 
Debit fees range from 0.5 to 1 percent of the cost of a transaction. Sure, we should all hang on to that money, but will it make the slightest difference to the crushing weight of rising rents, mortgages, bills, groceries and everything else? No.
Labor is taking us for a ride. They know there’s a crippling cost-of-living crisis and they don’t want to take on big business, but they also want to win the next election. So they’re giving handouts to big business, throwing pennies at the rest of us and calling it relief.

Eleanor Morley

Labor’s ‘cost-of-living relief’ is a joke

If you have been following the commercial press, you would think that the Labor government is trying to fix the housing crisis. Headlines such as “Why this is the housing fight that Albanese had to have” and “Bulldozer PM blasts Senate in election clash on housing” in the Sydney Morning Herald were prompted by parliament blocking two bills that Labor says are “critical” to addressing the housing crisis. 
The Help to Buy scheme promises to assist up to 10,000 households a year to buy a house through a shared equity scheme, in which the government provides 30 to 40 percent of the purchase price. In a press release promoting the bill, Minister for Housing Julie Collins said, “Right across the country Help to Buy will be life-changing, bringing home ownership back into reach for thousands of Australians, particularly renters”. But the scheme is tiny and at best would help only 0.2 percent of renters or 8 percent of the estimated 120,000 first-home buyers each year. 
Government measures like these also push up house prices. The existing First Home Buyers Grant, which gives eligible purchasers $10,000 towards the price of their first property, is estimated by Deakin University academics to have increased the median price of a house by more than $57,000 between 2002 and 2012. The Grattan Institute has said that the effect of Help to Buy on house prices will be only a marginal 0.016 percent. But as economist Saul Eslake told SBS News: “The fact that it’s only a small percentage is a reflection of the fact that this scheme isn’t going to help many people”.
Far from being “life-changing” for renters, Labor’s flagship housing bill is a tiny drop in a vast ocean of housing unaffordability. It’s a scheme so insignificant that it will help only a tiny number of people buy a house, and so market oriented that if it did help more people, it would make housing more, not less, expensive. 
Labor’s other measure, the Build to Rent bill, is a handout to property developers wanting to cash in on the lucrative rental market. It offers tax concessions to multibillion-dollar companies like Mirvac and Meriton to build apartments that will be rented out at market rates. In return, developers must designate just 10 percent of apartments as “affordable housing”. The meaning of “affordable” is stretched to breaking point at 75 percent of market rents, which would be $558 a week if based on the median rent in Sydney—that’s 42 percent of the median weekly income. 
In case even that is too much of a drain on developer profits, they will have to keep the apartments “affordable” only for fifteen years, after which they can charge however much they want. A similar scheme, Kevin Rudd’s National Rental Affordability Scheme (NRAS), gave developers $11,000 for every $4,000 in “reduced” rents. The Grattan Institute estimates that one third of the $3 billion of public money spent on the scheme went to developers as windfall profits. Like the NRAS, Labor’s Build to Rent bill is a public subsidy for developers that will only increase rents, not lower them. 
Two reports released this week highlight the depth of the crisis that these schemes will fail to address. PropTrack data on the housing market reported in the Guardian showed that only 13 percent of homes across the country are affordable for a household with a median income, down from 40 percent only three years ago and the lowest share since records began in 1995. For those on low incomes, there is no prospect of being able to buy a home, an estimated 20 percent of Australian households being shut out of the housing market entirely. 
The Everybody’s Home campaign’s “Priced Out” report confirmed the dire situation for renters. Record rents, combined with stagnant wages and benefits payments, mean that those on the age pension would be left with just $8 a day if paying the median rent, while those on the minimum wage would be giving 68 percent of their income to a landlord. 
So far, the Greens have blocked Labor’s housing bills in the Senate and demanded that the government introduce rent caps and reduce tax breaks for investors. In response, Prime Minister Anthony Albanese has painted the Greens as “unreasonable” populists who are letting “the perfect be the enemy of the good” and siding with the Liberals to form a “No-alition” (yes, Albanese’s rhetoric really is that bad) of the “extreme right” and “extreme left” to stop young people buying a house. The government has even threatened an early election if these policies are not passed.
But the Greens were right to block the bills, and they should continue to refuse to pass them. Labor’s Help to Buy and Build to Rent are not small steps towards fixing the housing crisis, they are backward steps that hide Labor’s inaction, put more money in developers’ pockets and do nothing to help the millions struggling to pay for their homes.

Martin Barker

Labor’s housing bills do nothing to fix the crisis

When the Reserve Bank announced its latest decision not to cut interest rates, governor Michelle Bullock told homeowners struggling to pay their mortgages that “some may ultimately make the difficult decision to sell their homes”. Three weeks earlier, the Commonwealth Bank announced profits of $9.1 billion for 2023-24. This is the housing crisis in 2024. Millions of households are struggling to pay rising rents and mortgage repayments, while profits soar for the banks and wealthy landlords.
This dire situation for workers, students and the poor can seem uncontrollable, the result of market forces that we have no power to shape. But here are five things we could do to fix the housing crisis now. 
1. End tax concessions to investors
The federal budget is estimated to lose $165 billion over the next ten years in tax concessions to investors. The negative gearing and capital gains tax exemptions subsidise rich landlords by allowing them to write off interest payments and agent fees from their income tax and walk away with tax-free profits when they sell. 
When interest rates rise, a working-class family that owns only their own home bears the full cost of increased mortgage payments, while the government gives rich investors a subsidy by allowing them to claim the increased payments off their income tax. The tax concessions also drive up house prices by helping wealthy investors to outbid those trying to buy a home to live in. This entrenches the power of a tiny section of society whose main interest is for house prices to rise as high as possible so they can make a bigger profit when they sell. 
Ending the tax concessions to wealthy landlords wouldn’t cost a cent; instead, it would mean billions of extra dollars that could be used to build housing and result in cheaper house prices overall.
2. Freeze and cap rents
More than 30 percent of Australian households now rent, and an increasing number of people have no prospect of ever buying a home. Renters are at the mercy of price-gouging landlords who have increased prices to record levels over the past three years. The median price in Sydney is now $750 a week, up more than 11 percent in a year, and there are no properties in the entire country that are affordable for a person on Newstart or the Disability Support Pension. 
Instead of letting landlords fleece more money from people’s need for a home, the government could intervene to freeze rents for two years and limit future rent increases. This has been done before, when the federal government introduced rent and eviction controls during the Second World War. And such measures are popular, with 60 percent of people surveyed by the Guardian
in 2023 supporting a rent freeze. 
3. Build public housing
Over the past 40 years, governments across Australia, both Labor and Liberal, have gutted public housing. Years of underfunding and sell-offs have reduced public housing to only 4.2 percent of all housing stock, while the number of people urgently needing this housing has increased by 50 percent in just the past three years. There are hundreds of thousands of people on waiting lists across the country who face a ten or twenty-year wait for a property.
Building the 950,000 properties that the City Futures Research Centre estimates are required to satisfy demand would also put downward pressure on rents generally, as hundreds of thousands of tenants exited the private rental market. It would also be a step towards asserting that the government has a responsibility to meet people’s most basic needs and weaken the dominance of the market and profits as the sole determinants of whether a person has a home to live in. 
This would cost a lot, hundreds of billions of dollars, but the money is there. For instance, ending Labor’s commitment to building nuclear submarines would free up an estimated $500 billion, more than enough to build all the needed homes.
4. Seize the empty homes
A recent survey by Prosper Australia estimates that in Melbourne alone, there are 100,000 empty or underused properties, enough to house those on the public housing waiting list in Victoria twice over. It is a scandal that amid a housing crisis, wealthy investors can let homes sit empty, waiting for house prices to go up while people sleep on the street. But this is the madness of allowing the market and profit to determine whether people have a home, instead of building and distributing housing based on people’s needs. 
The only concern for rich property owners is how much money they can make, not whether the property gets used for its obvious purpose—to provide shelter. If investors can buy low and sell high, why deal with the inconvenience and expense of making the property liveable or dealing with tenants who cause wear and tear to their asset? These empty properties should be taken from the wealthy and used to house those living on the streets, or at the very least they should be taxed so much that they are forced either to rent or to sell the property. 
5. Build a fight to end the crisis
Albanese is not going to fix the housing crisis, nor are the state Labor governments, and appealing to them to do the right thing won’t get us anywhere. They are impervious to moral or rational arguments. The suffering of families living in their cars, parents skipping meals so they can make rent or mortgage payments, or thousands living on the streets has done nothing to tweak their consciences. The politicians won’t listen because they are there to protect the power and profits of the people they truly represent, the developers, the banks and the rich, not to ensure that government provides for people’s needs. 
Fixing the housing crisis would mean taking on the power of big business and the rich. We need to force the government to act, whether they want to or not. We can’t rely on a clever negotiating strategy or having the balance of power in parliament; we already saw that didn’t work when the Greens capitulated and passed the Housing Australia Future Fund, despite not having won any substantial changes to a policy that will not fix the crisis. 
Instead, we should look to what has worked in the past: the eviction riots of the 1930s that brought workers and the unemployed together to fight the landlords and their bailiffs; the Builders Labourers Federation in the 1970s, militant workers who used the power of the strike to protect working-class housing.
They showed that workers, students and the poor can challenge the power of the developers, the landlords and the politicians who do their bidding. We should take inspiration from their struggles when thinking about the kind of movement needed to end the housing crisis today.

Five things to fix the housing crisis

Australia’s run-for-the-rich economy is hammering young people.
Living standards for those aged 15 to 34 went backwards between 2004 and 2022, according to a <a href="https://www.burnouteconomics.com/p/the-profoundly-sick-australian-household">new analysis of Bureau of Statistics figures</a> by economist Tarric Brooker. That’s despite national wealth per person increasing nearly threefold in the same period.
As if that weren’t shocking enough, the situation has dramatically worsened in the last two years, real consumption spending collapsing by nearly 13 percent among 25 to 29-year-olds. 
“Given the size of the decline, it’s entirely possible that this is the largest sustained drop in real consumer spending for this vital demographic since the Great Depression”, <a href="https://www.burnouteconomics.com/p/burnout-economics-and-aussie-household">Brooker noted last month</a>. 
Consumption is also down by more than 7 percent among 30 to 34-year-olds, 6 percent among 35 to 39-year-olds, and 2.7 percent among 18 to 24-year-olds.
<a href="https://www.commbank.com.au/content/dam/caas/newsroom/dynamic-media/2024/CommBank%20iQ%20report_23%20May%202024.pdf">According to the Commonwealth Bank</a>, spending on essentials such as groceries and utilities has fallen significantly in real terms.
For several years, there have been warnings that, for the first time in living memory, a new generation could end up financially worse off than their parents. That prediction has now come to fruition. 
Real wages are down around 7 percent in four years. The federal Treasury says they won’t fully recover until sometime in the 2030s—and that’s certainly not guaranteed. While that affects all workers, renters—who are disproportionately young people—have been hardest hit because landlords have jacked up rents far faster than the rate of inflation. 
Capital city asking rents for units have climbed by around 50 percent, and asking rents for houses have jumped even more. 
Also, if they can afford a house in the first place, younger people are more likely to have larger mortgages because they have spent less time paying off their debts and have had to buy at the latest stratospheric prices. The increases in interest rates mean that they are also disproportionately hit in the current economy. 
Indeed, the Bureau of Statistics’ <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/latest-release">selected living costs indexes</a>—which, unlike the regular inflation measure, show the effects of rising interest rates—show that the cost of living has been much higher for working-class households than reported in the press over the last two years.
We are seeing a significant transfer of wealth from renters to landlords and from mortgaged homeowners to banks.
As an example, the Commonwealth Bank last week reported another $10 billion yearly profit. It’s doing so well that Mathew Hodge of investment adviser Morningstar said that the bank’s “excess capital” (its reserve of money) is growing so fast that it now “faces the high-quality problem of what to do with it”.
You read that right—analysts say the bank has more money than it knows what to do with.
Other asset holders are also riding a wave of prosperity. In fact, they are being treated to, in the words of the Financial Review’s Chanticleer column, “a deluge of dividends”—“the capital returns incentivised by Australia’s tax” system.
A bank with too much money. An investor class drowning in dividends. And young people enduring a Depression era-like collapse in living standards. 
Welcome to the Australian economy in 2024.

Ben Hillier

Young people are getting smashed—and not in the fun way

The astounding 21st-century transfer of wealth from workers to bosses continues. In fact, it seems to be gathering pace.
Australia’s richest 200 people now own $625 billion in personal wealth, equal to nearly one-quarter of the national economy—a threefold jump from 8 percent twenty years ago.
The figures were highlighted this week by the Australia Institute, a think tank, <a href="https://australiainstitute.org.au/wp-content/uploads/2024/08/P1689-Wealth-and-inequality.pdf">in a new analysis</a> showing that the top fifth of the country’s households are nearly 150 times better off than the poorest fifth. 
The report comes as the latest data from the Australian Bureau of Statistics show that real wages fell again in the latest quarter, having finally grown a little in the six months to March, following a <a href="https://redflag.org.au/article/australia-class-war">massive decline over the last few years</a>. 
The Bureau’s figures show that working-class households continue to be pummelled. When accounting for mortgage interest rate rises, the cost of living <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/selected-living-cost-indexes-australia/jun-2024">climbed by 6.2 percent over the last twelve months</a>. That’s well above the official <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release">inflation rate</a> and nominal <a href="https://www.abs.gov.au/media-centre/media-releases/annual-wages-rise-41-june-quarter-2024">wage rises</a>.
So while the rich are getting monumentally richer, the people who actually do the work to keep society functioning are getting poorer.
People who clean the streets and take away the rubbish, stack the shelves with groceries, transport the goods, build the houses and offices, teach the children, nurse the sick and injured—pretty much everyone who works for a living is getting clipped.
The Institute estimates that the top 20 percent own more than 60 percent of all household wealth, while the bottom 60 percent own less than 20 percent.
Most of the growth in wealth (and the rise in inequality) has come from “large increases in passive, unearned income” drawn from capital investments. 
So not from hard work. In fact, not from work at all. 
Perversely, the tax system treats this “unearned income” more favourably than it does workers’ declining real earned income. That’s one of the not-so-secrets of success the leisure class counts on.
“Currently, capital gains and wealth are either lightly taxed or completely untaxed in Australia”, the report’s authors note. “This results in the overall percentage of tax paid falling more heavily on the bulk of wage-earners, whose income is most visible but who can least afford the higher taxes.”
The government, led by a political machine still claiming to be a “party of labour”, has not proposed any change to the tax code to redress this unearned privileging of the already privileged. 

In part, that’s because Labor MPs are themselves part of the ultra-privileged minority that benefits from a tax system that favours those on high incomes holding capital investments. Federal politicians are in the top 2.5 percent of income earners—the base pay of a backbencher is <a href="https://www.theguardian.com/australia-news/article/2024/jun/17/australian-federal-politicians-pay-rise-3-5-remuneration-tribunal-pm-salary">more than $233,000 a year</a>; senior ALP ministers receive more than $400,000. 
It’s also because Labor’s entire approach to politics is to keep the ultra-wealthy onside. The only way it can do that is by governing in their interests. And what exactly are their interests? Getting richer at everyone else’s expense, of course.
It’s not just about making people who are already here richer. It’s about making sure they have more rich friends to huddle with—in their ghettos like Melbourne’s Brighton or Sydney’s Double Bay—and plot the immiseration of the rest of us. 
Indeed, the entire country has become a haven for the ultra-wealthy.
Australia is the 55th largest country in the world by population. But it consistently attracts some of the largest numbers of the world’s millionaires, who flock here in their tens of thousands to take advantage of the red-carpet welcome they receive.
Labor even introduced a scheme when last in government, often called the “golden ticket” visa, prioritising multi-millionaires. Some 100,000 took advantage of the ruse, which was recently scrapped after repeated allegations that it facilitated international money laundering.
Henley &amp; Partners, a private client immigration consultancy that specialises in helping the world’s wealthiest people relocate to the most favourable jurisdictions, includes Australia in what it calls the Safe Haven 8 countries, “which have all positively transformed their economies by encouraging wealthy people to move there”. 
By “positively transformed”, the company presumably means economies in which the wealthy breathe easy while everyone else sucks eggs.
“What is it about Australia that has it consistently mentioned as the millionaires’ migration destination of choice?” asks the firm. Part of its answer is the high-quality private health and education systems, which working-class taxpayers subsidise. 
Then there’s the fact that “unlike the UK and the USA, Australia has no inheritance taxes or death duties”. This means that once wealth is accumulated, it can be more easily retained by the ultra-wealthy. There is no spirit of “giving back” here.
So the billionaires already here grow richer by the day, and more and more of their privileged kinfolk arrive every week to join Labor politicians at the apex of a scam economy ripping off the working class.

Editors

Australia, the parasite’s paradise

The annual Australian Financial Review (AFR) Rich List has, for the last 41 years, tracked the obscene accumulation of wealth by the capitalist class. <a href="https://www.afr.com/rich-list">The 2024 list</a>, published in June, shows that Australia’s richest 200 people now have a collective fortune of $625 billion, up 11 percent in a year.
Compare that to the experience of workers, pensioners and the unemployed. Australian Bureau of Statistics figures released in February show that, in the year to September 2023, Australian workers <a href="https://www.macrobusiness.com.au/2024/02/australians-suffer-worlds-biggest-living-standards-collapse/">suffered the biggest drop</a> in household disposable income per capita in the developed world. And <a href="https://povertyandinequality.acoss.org.au/news/new-data-shows-wealth-gap-widening/">research</a> published in April by ACOSS and the University of New South Wales on inequality in Australia showed that 45 percent of the increase in household wealth since 2003 has gone to the richest 10 percent (those with at least $2.6 million).
When reading the headlines about inflation, it’s easy for the real drivers of the cost of living crisis to be obscured. Media pundits talk about rising prices and stagnating wages as if these were natural processes over which no-one has any control. But inflation occurs because capitalists put prices up, and wages stagnate because they don’t raise them. The people who make these decisions have names and (prestige) addresses, and the AFR’s list provides a handy guide to some of the most heinous of them.
Five of the top ten fortunes have been built on extraction, with iron ore oligarch Gina Rinehart ($40.6 billion) sitting at the top of the list for the fifth year in a row. For the first time, Rinehart’s wealth has cracked the $40 billion mark, up $3.2 billion in a year—equivalent to “earning” the median Australian annual wage of $67,600 approximately every ten minutes, 24 hours a day, seven days a week.
Other miners in the top ten include recently separated pair Nicola ($16.9 billion) and Andrew Forrest ($16.8 billion) of Fortescue Metals, and Ivan Glasenberg ($14.9 billion), former head of Glencore, Australia’s largest coal producer. Joining them is Australia’s Trump-wannabe Clive Palmer ($22.8 billion), whose $40 million super yacht <a href="https://www.9news.com.au/national/clive-palmer-superyacht-australia-rescued-from-sandbank-after-grounding-gold-coast/87670a40-e621-4c00-8977-190ba3797cde">recently had to be towed to safety</a> after running aground on a sand bar for the second time in a year.
Clive’s laissez-faire attitude to steering boats is understandable. He’s enjoyed a more or less completely risk-free lifestyle for decades—safe in the knowledge that, as one of Australia’s richest mining bosses, the government will always have his back. Under current Labor Prime Minister Anthony Albanese, this has included record-breaking government subsidies for fossil fuels, which <a href="https://australiainstitute.org.au/report/fossil-fuel-subsidies-in-australia-2024/">increased by 31 percent</a> in 2023-24 to $14.5 billion. 
In the midst of a historic housing crisis, property developers continued to feature prominently in the Rich List. Coming in at number two is Australia’s biggest landlord Harry Triguboff ($26.5 billion) who, as head of Meriton, has a rental portfolio of 10,000 apartments. “I tried all my life to make housing affordable”, Harry <a href="https://www.abc.net.au/news/2015-08-07/harry-triguboff-billionaire-property-developer-building-meriton/6676962">told the ABC</a> in 2015. “The more affordable the house, the more money I make.” 
In Sydney, where an estimated 3 percent of people live in a unit built by Meriton, rents rose by 13.6 percent in the year to March. Meriton itself has contributed to this. It made headlines last year when its Sydney Waterloo complex hit renters with an increase of 45 percent. Around the same time, a<a href="https://www.dailymail.co.uk/news/article-11642127/Meriton-urges-landlords-raise-rents-amid-hot-rental-market-international-students-return.html"> leaked email Meriton bosses sent</a> its leasing and building management team called on agents to “ensure you’re pushing rents as hard as possible” at a time when “the market is on fire”. 
It seems (surprise, surprise) that “making housing more affordable” wasn’t quite so important to Triguboff or to his ability to make money as he made out.
Rich listers from the mining and property industries are being joined in increasing numbers by tech billionaires. The insufferable Mike and Annie Cannon-Brookes ($24.4 billion combined)—the self-styled “environmental investor activists” behind software-as-a-service company Atlassian—lead the pack. Atlassian’s profitability was helped along last year by the sacking of one in twenty of its employees. And it certainly doesn’t hurt that taxpayers are footing most of the bill for the company’s new headquarters—with the New South Wales government coughing up $48.2 million to help build “Tech Central” in Sydney’s CBD. 
Another recent addition to the AFR’s list from the tech sector is Ed Craven ($4.5 billion), whose wealth shot up by $1.4 billion, or 45 percent, in the past year. Craven’s company Stake.com has grown into one of the world’s biggest gambling enterprises off the back of crypto-currency deposits. It sounds shady, and it is shady—taking money from often desperate people, and providing a means of laundering money from criminal enterprises, just like regular casinos, but with the added benefit of getting around the kind of minimal regulations that apply when regular currency is used.
Craven <a href="https://www.forbes.com.au/news/billionaires/how-stake-made-australias-ed-craven-a-crypto-billionaire/">has been described</a> as a “self-made” billionaire. Yet, like so many other rich listers, this is at best a half-truth. Ed’s father Jamie Craven was a senior finance executive who was banned from working in the industry for five years and jailed for six months for his part in the <a href="https://www.afr.com/politics/what-happened-inside-spedley-19990318-jgk1l">downfall and bankruptcy of Spedley Securities</a> in the 1980s. It appears the apple didn’t fall far from the tree.
Admittedly, some members of the Rich List didn’t get a leg-up from wealthy parents. Some got one from the government—making their massive fortunes, among other things, by running privatised government services at insanely inflated prices. 
Take the Murphy family ($750 million), who scraped into the list at number 193. Robin Murphy and his sons Rory, Adrian and Daniel run Canstruct International, the company that built the Nauru Regional Processing Centre—a detention centre for refugees—on behalf of the Gillard Labor government in 2012. 
In 2017, under the Turnbull Liberal government, Canstruct was brought back to run the detention centre under a five-year contract. By the time its contract ended in 2022, it had been given $1.8 billion in public funds for its services, despite the number of refugees detained on Nauru having fallen from more than 1,000 to just 100. According to government figures, Canstruct was, by 2021, receiving almost $12,000 a day per refugee detained.
Torturing refugees is all in a (highly lucrative) day’s work for the kinds of upstanding characters who make up Australia’s richest 200 capitalists. 
The $625 billion these parasites collectively control is just a small fraction of the rapidly expanding wealth of Australia’s capitalist class as a whole. The market capitalisation of the top 200 companies listed on the ASX is more than $2.5 trillion. Imagine what could be done with that wealth, and the enormous productive infrastructure and human labour that went into making it, if we didn’t leave it all in the hands of people like Gina Rinehart, Clive Palmer and Robin Murphy.
These are people whose sole interest in life lies in amassing ever greater wealth for themselves—no matter the cost for everyone else. They are practically begging to be expropriated. If we’re to build a world of justice and equality, they’ll need to be.

Chloe Rafferty

Australia’s rich list: 200 capitalist parasites begging to be expropriated

Prime Minister Anthony Albanese says that the new budget is “a Labor party budget through and through because it is a budget for every Australian, not just some”.
That is the biggest lie. The Albanese government’s third budget provides the lion’s share of benefits to the well-off, the military and favoured sectors of the capitalist class and fails to address the major social problems facing the Australian working class—falling real wages and housing stress. 
Let’s start with the changes to income tax. According to the Parliamentary Budget Office, those in the top 20 percent of taxable incomes will benefit from the revised Stage 3 tax cuts by $148 billion over the next decade, just under half of the total benefit of $318 billion.
Then there are the handouts to big business. The Financial Review declared the biggest winners from the budget as “businesses involved in the green transition”. The government’s new industry assistance program, “A Future Made in Australia”, will provide $23 billion in tax concessions, direct subsidies and grants over the next decade for the renewable energy and critical minerals sectors. The government argues that this will make Australia a “renewable energy superpower”. 
The whole concept that Australia will lead the world in renewables is pretty rich, coming just days after the government announced it was all-in on a gas-fuelled future. Besides, the lucky businesses receiving this money will not be interested in fixing the escalating climate catastrophe, only lining their pockets. If they can turn a buck, they will. If not, it’s too bad for the climate. And this spending, like the Biden administration’s Inflation Reduction Act on which it is based, is aimed as much at building the infrastructure that can withstand a war with China as it is in responding to the escalating climate catastrophe. 
On the topic of war, the government boasts of its “generational investment” in the military, boosting defence spending by $6 billion to $53 billion this year. The budget projects this figure to rise to $100 billion by 2033-34. This splurge will take the military’s share of GDP to its highest for 40 years. These figures do not even factor in the hundreds of billions earmarked for the nuclear submarines that are part of the AUKUS pact, making the military a huge claim on public funds.
This budget ensures that big business and the well-off will keep their fortunes while the generals and arms manufacturers will wallow in money.
What about workers, students and the poor? 
Since 2019, real wages have fallen by 5 percent as inflation cuts into disposable incomes. For middle- and low-income wage earners, the drop has been even greater because they spend a bigger share of their incomes on essential goods and services, which have risen in price more than non-essential items. Those on JobSeeker are falling further behind.
Even though inflation has dropped over the past twelve months, wages are still not keeping up. Since the March quarter of last year, the cost of living for employees has gone up by 6.5 percent, while wages are up by only 4.2 percent. Rents are up by 8 percent, insurance is up by 16 percent, monthly mortgage payments have risen by hundreds of dollars, healthcare costs are up, and GP bulk billing is becoming rare.
This squeeze on working-class living standards comes on top of years of wage stagnation. Real wages are now no higher than they were in 2010.
What does the budget do to reverse this trend? Treasurer Jim Chalmers says that it will relieve cost-of-living pressures. The government’s press office, otherwise known as the Australian Council of Trade Unions, describes it as “a good budget for working people”. 
This is nonsense. For those on the lowest incomes, the budget offers no increase to JobSeeker, the age pension or sole parent allowances. The income tax cuts do nothing for those dependent on these payments since their taxable income is below the threshold. 
In refusing to lift these allowances, the government is ignoring the recommendations of its own advisory body which in April urged it to increase payments. 
Successive governments have treated the unemployed scandalously. The Albanese government has continued this shameful tradition, refusing to revert to the higher JobSeeker rate introduced early in the pandemic but cancelled after eighteen months.
There are also no measures in this budget to raise wages, nothing to stop companies from price gouging or landlords from raising rents, nothing to deal with lengthy waiting lists for elective surgery, and precious little for those with serious mental health needs.
Even the supposed goodies in the budget offer less on close examination.
<ul><li>The revised Stage 3 tax cuts will lift incomes for most workers. But for workers on annual incomes of less than $75,000, these only compensate them for the 2022 scrapping of the Low- and Middle-Income Tax Offset. For workers on higher salaries, the benefit is just a few hundred dollars a year, nothing like what is needed to restore real wages to where they were in 2019.</li><li>A 10 percent increase in rent assistance sounds good, but it only amounts to $19 a fortnight, far below the increase in rents. It only applies to those on social benefits, leaving millions to fend for themselves. It is also hemmed in by a range of restrictive eligibility criteria and does nothing to stop landlords from simply lifting rents again since the budget contained no measures to curb their greed.</li><li>Measures to encourage the construction of 1.2 million new homes by 2029 are meant to relieve the housing shortage. But this is all to be left to the private sector to deliver, and they won’t build homes unless they can make money from it. According to the budget figures, growth in dwelling investment will be zero next year after falling by 3.5 percent this year despite the government’s already-flagged funding commitments. The government’s own advisers predict that construction will fall short of the target by 300,000 homes. </li><li>A one-off $300 rebate on electricity bills for all households still leaves households paying more than before the hikes of recent years. The rebate is only for one year and does little more than artificially lower the inflation rate so the government can go into the next election boasting of its success in containing price increases. Gina Rinehart and her fellow billionaires are the recipients: a total waste of public money.</li><li>Funding for wage increases for aged care and childcare workers will help many low-paid workers, but because the government is staggering the payment of these funds and paying them to the operators rather than directly to the workers, there is no guarantee the workers will see the full amount.</li><li>A reduction in HECS/HELP indexation will reduce the outstanding debt, but it won’t affect annual debt repayments or prevent vice-chancellors and education ministers from raising fees and inflating student debt by thousands of dollars.</li></ul>
The Treasurer says that inflation is coming down and will fall further over the next year, relieving pressure on household budgets. The government hopes that falling inflation will encourage the Reserve Bank to relent on its high interest rate regime and give relief to mortgagees. 
But there is no certainty about this. 
Internationally, inflation is proving much stickier, and central banks are no longer set to cut interest rates at anything like the rate confidently predicted just six months ago. Those with mortgages can expect the interest squeeze to continue. And while inflation has fallen over the past year, the rate of wage increases is now tumbling, pulling down real wages. Even the bosses and the media have stopped screaming about the dangers of a (non-existent) “wage-price spiral”. 
The Albanese government’s third budget fails to alleviate the squeeze on working-class living standards. It is, as the Australian Council of Social Services argues, a budget with “a gaping hole in its heart”.
The problem is not just the dollar figures. 
For years, successive governments have white-anted public sector programs and handed them over to private companies. The Albanese government is now belatedly cutting back private sector consultants. Still, it leaves whole swathes of service provision, including aged care, childcare and disability services, in the hands of private operators. 
Government funding provides these private companies with a continuous flow of taxpayer money. None has any interest in meeting public need and for many, the real estate on which their property sits interests them more than those in their care. Government regulation of the sector is minimal, and private provision of services only leaves the public hostage to their price gouging. The lift in childcare subsidies to 90 percent of capped fees, for example, has done nothing to prevent operators from charging above the cap, taking parents back to square one.
The humiliation the unemployed face is not just the result of their low incomes but the poor treatment they receive at the hands of privatised employment services and the degrading and time-wasting mutual obligation requirements imposed on them.
Education, too, suffers from the private sector sucking resources from the public purse. The federal government pays more to private and religious schools than it does to public schools, only entrenching one of the most socially segregated education systems in the world.
So, too, with the housing policy, which is beholden to the private construction industry motivated by only one thing—their profit margins. This is obvious at the highest level. The Albanese government has set up the National Housing Supply and Affordability Council to provide it with “independent, evidence-based expert advice on matters affecting Australia’s housing supply and affordability”. Its chair? Susan Lloyd-Hurwitz, CEO of $5 billion property developer Mirvac from 2012 to 2023 and currently a non-executive director of Macquarie Bank, Macquarie Group and Rio Tinto. Under such leadership, we can expect this body to have as much sympathy for the plight of tenants as the parliamentarians with their multi-property investment portfolios.
Everything about service provision to the most vulnerable is left to the tender mercies of corporations motivated by returns on investment, shareholder dividends and executive salary packages.
What would a budget that seriously addressed these issues look like?
What follows are some of the most obvious things the government could do to address the cost-of-living crisis and general dysfunction in public services.
Overhaul the tax system to reduce the burden on the working class.
Lift social welfare payments to the minimum wage and index them to average weekly earnings or the Consumer Price Index, whichever is the greater.
Kick private providers out of childcare, aged care and disability care and bring these industries under public control, adequately funded and democratically accountable to staff, users and their families. 
Fund public schools properly and ban the levying of additional charges.
Restore free university education and provide non-means-tested income support for tertiary students.
Fund Medicare sufficiently to fulfil its initial promise of delivering medical care to users free at the point of delivery.
Set and fund annual public sector wage targets to provide above-inflation pay rises.
Establish and adequately resource a public employment service agency to help job seekers find work.
Launch a program of public-sector home-building to ensure everyone has the right to a roof over their heads and introduce a rent freeze in the private rental sector.
Take energy generation and retailing back into public hands so that everyone may power their homes without swelling the coffers of giant energy companies.
Establish public enterprises to oversee the transition to renewable energy and new environmentally friendly products.
That is a long list and will cost a lot of money. But we could pay for it by no longer handing money to those who don’t need it. We could do the following to free up the funds to make a real difference in the lives of millions of workers.
Scrap the Stage 3 tax cuts for those in the top 20 percent of income earners, freeing up more than $148 billion over the next decade.
Eliminate subsidies to fossil fuel companies, which amount to $14.5 billion a year, and implement a super profits tax on the resources sector.
Abolish the various tax lurks for investors, such as the discount on capital gains tax and negative gearing concessions. Cancelling capital gains tax concessions for the top 10 percent would free up nearly three times as much as it would cost to lift JobSeeker to the age pension.
Tax those with superannuation balances of more than $2 million who use their super for tax-advantaged wealth management rather than provision for old age.
Return the corporate tax rate to the 46 percent that was in place until the 1980s.
Introduce a wealth tax. According to the Australia Institute, 93 percent of the wealth accumulation in Australia between 2009 and 2019 went to the top 10 percent. Let’s take back our share of these gains.
Impose an inheritance tax on all estates of more than $2 million. Australia is one of the few Western nations that doesn’t have such a tax.
End federal support for private schools.
Eliminate subsidies to private health insurance.
Slash military spending.
Such measures, however, are the furthest thing from the Albanese government’s mind. It is wholeheartedly committed to the interests of big business, the wealthy and the military. In this respect, Albanese is right. It is a “Labor party budget through and through” because, like all Labor governments before his, serving the capitalists is its priority. The government has few but crumbs for the rest of us.

Tom Bramble

Labor’s budget fills pockets of the rich, crumbs for workers

China’s boom is well and truly over. Through the 2000s, the economy enjoyed double-digit annual growth. Now, few expect it to hit the 5 percent target announced at this year’s National People’s Congress, the dictatorship’s rubber-stamp parliament. Previous pillars of growth, property and infrastructure are teetering on mountains of debt, and the United States is trying to block the country’s advance into high-tech manufacturing.
In anticipation of an economic slowdown, President Xi Jinping has long centralised political power. “The current leadership believes that it can survive an economic downturn by tightening its control over society, eradicating autonomous elite factions, and adopting a more assertive posture on the international stage amid rising geopolitical tension”, Ho-fung Hung writes in New Left Review.
That assertive posture involves directing investment into “new quality productive forces”. The first group of outputs in this category includes solar panels, electric vehicles and lithium batteries, areas it already dominates in terms of global production. China hopes to remain the pre-eminent manufacturer of such goods. 
The second group includes silicon chips, IT systems and artificial intelligence. Here it faces sanctions and other obstacles because such technologies are crucial for military hardware and are of supreme importance in the country’s rivalry with the United States. With growth slowing and foreign investors leaving, a single-minded focus on technological innovation means squeezing greater profits from Chinese workers.
Modern China’s meteoric rise involved two phases. Through the 1990s and 2000s, the country welcomed a flood of foreign direct investment into low-end manufacturing and assembly plants, attracted by seemingly inexhaustible reserves of cheap labour held down by the “Communist” dictatorship. Deeply dependent on exports and foreign investment, China narrowly avoided being dragged down with the West during the Global Financial Crisis of 2008. 
It shifted rapidly to a second, domestic phase of growth: infrastructure development. In his book Ghost Cities of China, Wayne Shepard described the country in the 2010s as like a giant construction site. “The old is being replaced with the new, and the new is being replaced with the newer, in a cyclical process of creation and destruction”, he wrote. Local governments were given free rein to sell land and build bridges, roads, airports, shopping centres and apartment blocks. Beginning in 2002, the government built a high-speed rail network from scratch. By 2015 there were 12,000 kilometres of tracks; today, the network stretches 45,000 kilometres.
While the United States and Europe stagnated through what Marxist economist Michael Roberts called “the long depression” (beginning with the financial crisis), China enjoyed another decade of strong growth. Yet this led to enormous government debts, the world’s largest property bubble, and significant excess industrial capacity. The government is now banning new highway and building projects in ten of China’s most indebted provinces, according to documents viewed by the Financial Times.
Many Western commentators anticipate China falling like a house of cards under this debt burden. But Kevin Lin, a researcher specialising in China and its labour movement, is sceptical of such prognoses. “There have been predictions of an imminent economic crisis going back twenty years now”, he tells Red Flag. “It’s not just a prediction, it’s almost like a hope.” 
The regime keeps a tight grip on national banks, allowing it to simply “roll over” what is owed by local government and state-owned enterprises. This is something Shepard also noted. “When considering domestic ‘debt’ in China, what we’re really discussing is the amount of money the Communist Party owes to the Communist Party”, he wrote.
That the debt might indeed be manageable is evident in the country’s property sector. Housing has been the number one investment for China’s burgeoning middle classes. And decades of untrammelled private investment in urbanisation resulted in skyrocketing valuations, which reached US$52 trillion combined, according to US investment bank Goldman Sachs. The speculative bubble centred on the world’s largest property company, Evergrande. Rather than let it burst, the government began a controlled demolition of the firm before it was finally liquidated. The process has lowered property prices and squeezed many households. But it also prevented a financial crisis.
“It hasn’t eliminated the risks—some of them are structural to capitalism, so they won’t just go away because of better economic management”, Lin says. “But if we take the longer view, instead of a crash, the economic crisis may be a continual slowdown for years to come.”
There are undoubtedly additional problems. Depressed consumer spending and falling prices have hurt economic growth. But President Xi Jinping has no plan to expand service industries or increase welfare. That would mean raising wages, increasing holiday leave and taxing the rich to fund higher pensions for a rapidly ageing population. Instead, spending is being directed towards the “new productive forces”. So bosses are suppressing wage growth and increasing the number of hours worked, while Xi tells young people that they must be prepared to “eat bitterness”.
Unemployment, like bitterness, is growing. Twenty-one percent of young people were unemployed by June 2023, before the government suddenly stopped publishing figures (then changed its calculation method). The solar panel giant Longi will sack more than 20,000 workers due to a supply glut, according to Bloomberg, one consequence of capitalist over-investment.
Why is the government doubling down on investment in manufacturing? Over 30 years, the world has relinquished its manufacturing capacity to China, profiting from low wages and economies of scale. It’s not just shoes or iPhone assembly. Last year, the United States built ten commercial shipping vessels. China built more than 1,000.
The focus on “new productive forces” is about pressing this advantage. The regime under Xi Jinping is building what he calls “national champions” to dominate global markets. The “old trio” of textiles, furniture and appliances has given way to the “new trio” of solar panels, electric vehicles and lithium batteries.
So far, it is steamrolling the competition. The New York Times reports that China installed more solar panels in 2023 than the United States has in its history. Its ultra-cheap exports drove European solar companies out of business long ago. Electric vehicle company Tesla has fallen to second place behind China’s BYD in terms of global sales. “In many sectors such as EVs, [Western countries] are—for the first time in modern history—in a technological catch-up mode vis-a-vis a more advanced competitor, which they also consider a key geopolitical rival”, Paolo Gerbaudo wrote in a recent article for political economy website Phenomenal World.
The West is retaliating with what Lin calls “open economic warfare”. The US Congress’s vote to ban Chinese-owned app TikTok is only the latest move towards IT “decoupling”. As Intel, Dell and IBM pull out of Chinese markets, the Communist Party has announced a plan to “Delete A” (“A” being America) and replace all foreign software systems in government computers by 2027. The European Union is poised to impose tariffs on electric vehicles it accuses China of “dumping” into its markets. All this has culminated in foreign direct investment falling to a 30-year low. 
Crucially, Chinese capitalism faces the prospect of being blocked from buying the most advanced silicon chips from the United States, Taiwan, Japan, the Netherlands, Germany and South Korea. In response, the government has invested heavily to try to develop its own. Although lagging a generation behind Taiwanese nanochips, China has just released a new Huawei phone series powered by domestically produced chips.
This economic warfare is not only, or even primarily, about short-term profits. “More than the economic benefit to the US, the underlying motivation is to maintain US global hegemony”, Lin says. High-tech manufacturing, especially of semiconductors, is the foundation of military “innovation”. Any country whose missile components are produced in enemy territory has a big problem. The key reason that US imperialism is preventing China from accessing foreign technology is to prevent its military expansion. Mass reserves of foreign exchange will furnish China with the capital to build its own, so the US is trying to block Chinese exports as well. 
Beijing is not, however, entirely left out in the cold. Russia and Iran have forged closer economic ties with it to recover from Western sanctions. The Economist magazine estimates that Russia has become the largest importer of Chinese cars: sales have tripled since the invasion of Ukraine, and Russian gas exports to China have spiked in return.
China remains the major trading partner of 120 countries. Despite complaints of Chinese steel dumping, most countries are unlikely to block super-cheap cars, phones and laptop computers. Some middle-ranking powers are exploiting the rivalry between Washington and Beijing, moving politically closer to one and economically closer to the other.
But if the aim of economic strategy is to build military power, China has a long way to go. Military spending has more than doubled since 2015, and its nuclear stockpile is set to quadruple by 2035. This still puts it far behind the United States, which is shoring up its comprehensive system of alliances.
China has rapidly developed its navy (by some measures now the world’s biggest) but can barely project power past its own coastline. Aggressive moves into waters to the east and south have angered its US-allied neighbours along the “first island chain” of the Pacific. Japan is negotiating its first new security pact with the United States in 60 years, while the Philippines has granted the US military access to more of its bases. Taiwan, which faces almost daily intimidation by China’s navy and air force, launched its first domestically built submarine in February. 
Chinese armed forces also suffer from corruption, inefficiency and inexperience. “China’s military has definitely achieved a major upgrade from twenty years ago, but I don’t think the government leadership has full confidence in their military”, Lin says. “They have not engaged in any conflict since the invasion of Vietnam in the late 1970s.”
China’s economy is slowing and vulnerable—but not weak. Its high-tech export plan is a strategy to maintain growth and build military power. That’s because, as tensions increase between powerful countries, everything from electric cars to media apps is treated as a potential weapon.

April Holcombe

China after the slowdown

Australian capital city house rents have recorded their biggest quarterly increase in seventeen years—and the second-highest increase on record. 
According to a <a href="https://www.domain.com.au/research/rental-report/march-2024/#nationwide">recently published report</a> by property portal Domain, Sydney has the highest median rent, a whopping $750 per week. Perth experienced the largest year-on-year rent increase, median weekly housing rents jumping $100 to $650. 
The report revealed similarly bleak trends for units and apartments. Median rental prices climbed by another $20 across capital cities in the first three months of the year, the eleventh consecutive quarter of growth—another new record. 
The trends highlight the ongoing crisis for renters.
The price pressures have been compounded by low vacancy rates. According to the report, there are record low rates in Sydney, Melbourne and Perth. The national vacancy rate stands at only 1.08 percent. In Adelaide, it is down to just 0.83 percent, <a href="https://www.abc.net.au/news/2024-04-09/rental-market-in-adelaide-becomes-the-tightest-in-the-nation/103684532">the lowest in the country</a>. 
The result is intense competition for shelter. Viral videos proliferating on social media of <a href="https://www.news.com.au/finance/real-estate/renting/video-shows-australias-rental-crisis-as-dozens-queue-for-melbourne-rental-property/news-story/85eff02328e32c1863f540d6ae5d5e33">long queues for rental property viewings</a>
reflect the degrading scramble the rental market has created. 
While the situation has been deteriorating for renters, Labor has made the problem worse. In early April, the party blocked with the Liberals to <a href="https://www.canberratimes.com.au/story/8585247/act-greens-bill-for-a-rent-freeze-has-been-defeated/">shoot down a bill for a rent freeze</a>
moved by the Greens in the ACT Legislative Assembly. 
In Melbourne, the state Labor government <a href="https://www.theage.com.au/national/victoria/last-ditch-legal-action-to-stop-public-housing-towers-knockdowns-20240219-p5f62o.html">is demolishing</a> 44 public housing towers. It plans to replace them with a mix of private “affordable” apartments and social housing, in which tenants typically have fewer rights and higher rents. <a href="https://cityhub.com.au/public-housing-block-in-sydney-will-be-demolished-in-contentious-government-plan/">Similar moves</a> to destroy public housing have been approved in Sydney.
While state Labor governments are destroying public housing, federal Labor is promoting an insulting “Help to Buy” bill. The proposed legislation would establish a national shared equity scheme, through which eligible applicants would be helped by the government buying and jointly owning a share of their house. 
As a <a href="https://redflag.org.au/article/housing-market-class-war">previous Red Flag editorial</a> noted, the Help to Buy scheme is “available to only a tiny number of eligible households and will do nothing to address the general unaffordability of housing”. Although the Help to Buy bill passed the House of Representatives in March, it is yet to pass the Senate.
The Greens are apparently looking to capitalise on this. Speaking to the Guardian after the party supported the Housing Australia Future Fund in the Senate <a href="https://www.theguardian.com/australia-news/2023/sep/13/greens-housing-labor-help-to-buy-scheme-rent-caps">last year</a>, Greens leader Adam Bandt said: “We’re going to use our power to continue to push for a cap and freeze on rent increases”. 
But based on the Greens’ track record of <a href="https://redflag.org.au/article/greens-capitulate-housing">capitulation to the Future Fund</a> and to Labor’s <a href="https://redflag.org.au/article/greens-put-stamp-approval-labors-greenwashing-climate-plan">greenwashing safeguard mechanism reforms</a>, the party’s fighting words don’t inspire much confidence. The Greens have an established pattern of raising rhetorical opposition to Labor before eventually settling for very little.
The left must oppose Labor’s obsession with market-based reforms.
We need state and federal governments to expand massively the stock of public housing, to impose a national program of rent reductions and freezes and to end residential property investor tax concessions. Idle properties of the ultra-rich should be converted into emergency relief accommodation for the homeless and housing insecure. 
Why should some people be allowed to accumulate residential properties as wealth-generating assets while so many people struggle to get or to keep a roof over their head?
A solution to the housing crisis will not come through the market, but against it—by treating housing not as a commodity, but as a right.

Alevine Magila

No relief for tenants as rents record biggest jump in seventeen years

Australian workers have been hit with the biggest drop in living standards in half a century. Since the end of 2021, real household disposable income has fallen from $62,000 a year on average to $56,000, according to Australian Bureau of Statistics data. And little is being done to alleviate the hardship.
In the 2010s, living standards didn’t increase much. But they jumped during the pandemic because of increased financial support from governments and the inability of households to spend much under the lockdowns. But they’ve been rapidly falling in recent years, for several reasons.
First is rising consumer prices. Over the past three years, prices have risen by more than 16 percent, according to the latest quarterly consumer price index figures from the Bureau of Statistics. Non-discretionary items (things you generally must pay for, such as food, electricity and rent) have gone up by nearly 20 percent. While headline inflation has dropped in recent months, things aren’t getting cheaper—prices are just rising at a slower pace than they were twelve months ago.
More people are relying on charity to get by. One-third of households experienced moderate or severe food insecurity in 2023, meaning they compromised on their meal choices or skipped whole meals or days of eating, according to the latest Foodbank Hunger Report. Three-quarters of those experiencing food insecurity did so for the first time that year.
Inflated prices have been blamed on supply chain disruptions, Russia’s invasion of Ukraine and catastrophic weather events. But another major factor has been the opportunistic profiteering of business owners. An Australia Institute report found that, in 2022, Australian companies increased prices by $160 billion above their increased costs for wages, taxes and other inputs. That’s an extra $160 billion taken from consumers and pocketed as profits. The banks, supermarkets, energy companies and airlines are all in on it, recording record profits and payouts to shareholders. 
Second is the housing crisis. Twenty-five years ago, the average house was worth nine times the disposable household income per capita; now it’s sixteen and a half times, according to data from the Bureau of Statistics. Prices have risen astonishingly in some cities: 57 percent in Adelaide since the end of 2019, 51 percent in Brisbane and 38 percent in Sydney. 
So a lot of people are taking on a lot more debt, which has become more expensive to service. The average new mortgage nationally is about $620,000, according to the Bureau of Statistics. Increasingly, young people can’t buy into the market without help—parental assistance for new home purchases is up from 12 percent in 2010 to 75 percent today.
Repayments on expiring fixed rate mortgages taken out before interest rates started rising in 2022 have increased by an average of 64 percent. To take a whole set of averages, a single person with an average mortgage on the average income would need to spend 3.6 weeks of every month’s wage on mortgage repayments—this is clearly impossible. 
What do you do if you can’t buy a house? You rent, of course. But there’s serious trouble there as well. On average, rents have gone up by about one-third since mid-2020. And forking out a significant chunk of your income to a landlord is now a perverse privilege; rental vacancies are at a record low of 1 percent.
Again, this is a crime with a culprit. Decades of Labor and Liberal housing policy have encouraged speculative investment in housing. Extensive tax concessions have helped a small minority purchase an increasing share of dwellings, while public housing stock has been annihilated, forcing an upward trend in prices for the rest of the housing market. 
Third, wages have not kept up with inflation. Rising prices wouldn’t be such an issue if wages were keeping pace. But since March 2021, wages have risen on average by 9 percent, while inflation rose 14.6 percent. The last three years have wiped out more than a decade of wage growth. As house prices jumped 30-50 percent over the last five years, wages rose only 12 percent.
Real wages (wages adjusted for inflation) started to rise a little last year, but they have not risen more than inflation on non-discretionary items, and they have not risen for all workers.
Consequently, household savings are rapidly being depleted. Many households built savings buffers during the lockdowns, which helped to soften the financial blow of the last few years. But a report by comparison website Finder estimates that almost half of all households have less than $1,000 saved, and one in five have nothing at all. Only the top 20 percent of households have maintained their savings. 
The one small solace of the last few years has been that unemployment has not risen sharply. But it is starting to tick up, and many people with a job do not get paid enough to make ends meet—more than a half of those suffering from food insecurity have at least one family member in paid work. 
The only options available to people to deal with these financial pressures are to reduce their standard of living by reducing consumption, work more or take on debt. 
According to the Bureau of Statistics, household spending plateaued late last year, rising only 0.1 percent, while spending on discretionary items fell by 0.9 percent compared to the same period the previous year. In the December quarter, businesses ran down the amount of stock they had on shelves and in storage: why stock items no-one can buy? 
The number of people working more than one job has increased to a record high of almost 1 million, and credit card debt is up 17 percent since September 2021, according to Reserve Bank figures. 
The overall picture of the last few years is that prices have gone up, real wages have gone down and people are taking on larger amounts of debt. 
Meanwhile, the total wealth of Australia’s billionaires increased by 70 percent in the first three years of this decade, according to the latest Oxfam Inequality Report, and fully doubled for the richest three Australians.
The Labor government has done little to ease the cost-of-living crisis. It has claimed the tiniest of measures as great victories, for instance a $40 increase to fortnightly welfare payments and $500 energy subsidy for very-low-income households. But these apply only to a minority of those feeling the pressure, and the households that receive them are still worse off than they were three years ago.
Labor has also trumpeted the Housing Australia Future Fund as a major step in tackling the housing crisis. But when you crunch the numbers, the new funding is enough to build around 6,000 homes a year. There are currently 175,000 people on the social housing waitlist, and it’s increasing by 10-15,000 a year. 
It’s easy to think of policies that would ease the burden: cap prices on essential items, substantially lift welfare payments, limit the number of houses any individual can buy, build more public housing, cap rents.
And it’s not as though Labor isn’t spending any money. It has committed $370 billion to purchasing nuclear-powered submarines, provides more than $11 billion a year in subsidies and tax breaks to the fossil fuel industry, forgoes $50 billion a year with its property investor tax incentives and is cutting income taxes to benefit high income earners disproportionately.
None of this should come as a surprise. On the eve of the 2022 federal election, future Treasurer Jim Chalmers told the National Press Club that Labor wants to be a “pro-business, pro-employer party”.
Since Labor took office, the Greens have publicly criticised some of the worst aspects of the government. They have positioned themselves as the party of renters, opposed the regressive stage 3 tax cuts and called for Labor to raise the rate of welfare to $88 a day. 
But political parties must be judged not just by what they say, but by what they do. And the Greens have done little. Despite holding the balance of power in the Senate, the Greens have not used this to force substantial concessions out of Labor. After criticising key policies like the HAFF, they have folded and ended up voting them through. This is no way to mount a challenge to a right-wing government.
The other institution one might expect to fight for workers in a time like this is the trade union movement. Again, things have been sadly lacking on this front. Union density is at an all-time low of 12.5 percent—which drops to 5 percent for workers in their early- to mid-20s—but there are still around 1.4 million union members in Australia. If mobilised, this power would be formidable. 
But the approach of the Australian Council of Trade Unions has not been to organise and fight. Instead, it has pumped out endless surveys, inquiries and press releases. This is an elaborate way of doing nothing. 
There was an uptick in industrial disputes in 2021, largely due to a few big public sector strikes such as by teachers and nurses in NSW. But the outcome was dismal. The unions wrapped up their campaign in the lead-up to the 2023 NSW state election and jumped on board Chris Minns’ Labor campaign. Only the teachers won a pay rise above inflation, which was partly reflective of the fact they were the worst paid teachers in the country and there were serious concerns that too many would leave the state during a teaching crisis.
It’s been a long time since there was a genuinely combative union movement in Australia, but it’s even worse under an ALP government. The union leaders are structurally and politically tied to the Labor Party and basically function as a wing of the government when Labor is in office. The unions talk a lot about the cost-of-living crisis, but their fire is aimed solely at major corporations, without a peep about the government. 
We need to rebuild a genuine fighting left, in politics and in the unions. A left that won’t capitulate, compromise and sell out.

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