The more our housing crisis changes, the more it stays the same

Since the Australian dream of owning your own home became a kind of reality in the 1950s, federal governments have been united in fear of taking decisive action to solve housing crisis after housing crisis.

We are now in the middle of a national housing crisis brought about by interest rates, real estate booms, the treatment of housing as investment, unplanned population growth and the inertia of authorities, with another federal government content to tinker around the edges of reform.

But the Albanese government is far from alone. Documents released today by the National Archives from John Howard’s cabinet of 2004 reveal a report it had commissioned into problems facing first home buyers recommended winding back capitals gains tax discounts and means-testing homebuyer grants, but Howard and Treasurer Peter Costello feared large property price swings and public anger, and they shelved the report.

The Herald’s senior economics editor, Shane Wright, said in an eerie preview of current debates about housing that the cabinet was briefed in June 2004 on the recommendations to improve supply and demand. They included getting states and territories to remove stamp duty and replace that revenue source through another impost such as a land tax. Twenty years on, the ACT is the only jurisdiction to have seriously started to axe stamp duty.

The report recommended encouraging states to release more land while improving planning laws to allow higher densities in sought-after parts of the nation’s major cities. But the commission also called for a review of the tax system, particularly the Howard government’s 1999 change to capital gains tax.

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In a draft media release put to cabinet, Howard and Costello stood by the capital gains tax changes, saying “they had improved incentives to save and invest by introducing an internationally competitive capital gains tax regime”. They also argued most of the commission’s proposals were aimed at states and territories.

How is that going? Fast-forward 20 years to our report on Tuesday about how one of the Minns government’s signature reforms to boost housing density around train stations has resulted in just one development application for an extra 16 apartments in 2024.

Announced in late 2023, the Transport Oriented Development zones applications feature two tiers, but one has been slower to bear fruit: In addition to the 18 sites gazetted in April, another five have been in place since July. But, other than Ku-ring-gai, none of the councils affected by the scheme said they had received any applications.