How Labor can win the debate about housing

It looks like Labor’s plan to repeal negative gearing and the capital gains tax is going to be a key issue in this election. From the moment Malcolm Turnbull appeared in a Peakhurst front yard the Coalition’s scare campaign was clear, Labor’s plan means that property prices will fall.

Because of the unusual role of property in the Australian political psyche — remember that Howard won in 2004 mostly off a scare campaign about interest rates — telling swinging voters in marginal seats that their homes will be worth less is a powerful message. It will bite.

There’s a tendency in Labor to retreat from an issue that they know they are struggling to prosecute; it’s why Labor was desperate not to talk about climate change in 2013 (or 2010 for that matter). There’s a case for spending its political capital on its more traditional issues, of which Health and Education are the most immediate.

I think that would be a mistake. I think that Labor needs to win the debate about housing and I think that they can.

Here’s the thing: this is not really a debate about negative gearing. If Labor gets into a messy technical debate about the policy merits of changing negative gearing and the capital gains tax it will lose. Waving Grattan Institute reports, however persuasive they are to nerds like me, isn’t going to beat an old-fashioned Liberal scare campaign.

Labor needs to recognise that this debate is part of a bigger, more ideological question that we’re facing as a country: what is housing and who is it for. If we make that a central question of this election we can win it — because I believe we’re on the right side of this.

This graph is important because it represents when, as a country, our understanding of housing changed. The Howard Government decision to introduce the Capital Gains Tax Discount made property speculation far more profitable than it had been in the past.

This decision turbocharged the property market. It made a lot of people incredibly wealthy, especially people in Blue-Ribbon Liberal electorates. But it’s led to the situation we have today: a profoundly unequal and unaffordable property market that will be out of the reach of young people.

When the Liberal party talks about changes to negative gearing and capital gains tax as a threat to ‘investment’ they’re showing this belief in its starkest form. To them and their supporters, that’s what property is. And they’re not wrong, Labor’s plan will mean less speculative investment in our property market. But that means that speculative investment will stop pricing out first-home buyers.

But what we’re seeing at the moment is a conflict between that ideological understanding of property and a broader, more social democratic understanding of housing.

The symbolism of Turnbull’s trip to Peakhurst is worth considering. The couple with the one-year-old were investing in property to make sure that their kid could afford a house. Many people have commented on the irony of this situation but the upshot is this: Labor needs to use this profound desire for social mobility to its advantage.

I believe that Labor can articulate that we should make home ownership available as many Australians as possible; that owing a home is not merely a source of investment but a source of stability and pride that offers people a better life. That’s a powerful and emotional message if we get it right.

Here’s something that is worth considering: young Australians are incredibly aware that they are being screwed out of owning a home. According to ReachTel, one in five Australians aged 18–35 described housing affordability as their number one issue at this election.

In his essay for the monthly, The Boomer Ascendancy, Richard Cooke links the issue of Sydney’s lockout laws, housing affordability and lack of job prospects of symptomatic of a broader political malaise among young Australians. We know from the Keep Sydney Open protests that this malaise is a potent political force.

Labor should be talking explicitly to young people about this, because young people will convince their parents that this is an issue that matters to them. I know this from my own life: my Dad didn’t take housing affordability seriously as an issue until I stared him dead in the eyes and told him that I will never be able to afford a home.

The concept of inter-generational opportunity is a powerful force in Australian politics. The concept of housing is a powerful force in Australian politics. If we get this right we can create the kind of political energy we saw around the rejection of university deregulation in 2014.

But we build that by winning the fight about what housing is. Houses are not instruments of investment to be bought and sold on a supercharged market. They’re where people feel happy and stable, where they can have kids and watch them grow up.

Giving people the opportunity to own their own home gives them a better life, and by doing nothing we are denying that life to our children and grandchildren. That’s a message we can take to swinging voters.