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Australian renters' hardship demonstrates need for European-style tenancy laws

The letter below appeared in Brisbane's Courier Mail of Saturday 18 October.

As the rental crisis continues to push people and families into more difficult circumstances, I am not hearing any debate or talk about implementing a system in Australia similar to that in Europe to provide people on average incomes with long-term rental accommodation security.

I have friends in Europe who have rented their abodes for more than 10 years. They can plan ahead and raise their children knowing they will be able to go to the same school, have the same friends and live in the same neighbourhood.

This stability contributes to balanced, successful, adults and better communities in the longer term.

In Australia, we are subjected to six or twelve-monthly leases, two weeks' notice (without grounds, under a fixed term agreement), indeterminable increases each time a lease ends and lack of affordable and quality property.

There are many decent people who rent, yet we are treated as second-class citizens who can't be trusted; and children are raised in these environments.

I am an employed professional. I work part-time and raise a child on my own. Our rent recently increased by almost $100 a week (last year the increase was $50 a week). We have two weeks to decide what to do. Surely, as a society, we can do better than this.

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We are becoming more like Europe with their high rise apartments full of foreign workers and immigrants. They provide cheap labour. Prosperity will be for the already wealthy, but not for the general public. Children will be brought up in apartments with no room to play outside, and no privacy or pets. This globalisation is part of economic growth, our government's main aim! They have forgotten about preserving our wonderful Australian life-styles, our housing crisis, our vulnerability to climate change and drought, and the fact that we only have limited fresh water supplies. Wall to wall people is good for businesses, but detrimental to the average person.

A well-written column about Australia's housing affordability crisis and the stupid policies which caused it:

Built for shelter, not prosperity

I WAS a tad grumpy after my superannuation statement showed I had kept my head above water only because I was standing on tippy-toes atop a small mountain of my own contributions.

So, I wasn't really in the right frame of mind to learn that my taxes - including the contribution taxes that penalise me for providing for my own old age - were being used to subsidise first-home buyers indulge their flights of fancy.

"We'll be able to buy the house we really wanted," said one beaming gent, who appeared in this paper to declare the $14,000 first homeowners grant was sufficient incentive to sign on the dotted line for a house.

Good luck to him, but I know plenty of others 30 and 40 years his senior who are still waiting for the house they really want. They quite possibly will die waiting for it.

I understand the need to prime the economic pump but is $1.5 billion in grants for first-home buyers - a subsidised ticket to indebtedness - the most efficient and sensible way to do it?

The grants are an exercise in market gimmickry - sort of like "buy now, no repayments until 2010" - rather than an instrument to providing affordable housing.

Grants were popular but dumb policy under John Howard and none the smarter coming from Kevin Rudd. Circumstances do not necessarily make good policy out of bad.

Despite the breezy optimism of Housing Minister Jenny Macklin, I think all the new grants will do is push up prices and do nothing to make housing more affordable.

Smarter people than me agree. RP Data's Michael McNamara noted this week that when the $7000 first home owners grant was introduced in 2000, median prices for houses in Australian capital cities rose by an average $32,000 in the following 12 months. It was an exercise in futility, he concluded.

Even ANZ economist Saul Eastlake has conceded the grants might simply top up house prices.

When the average mortgage is about $300,000, anyone who thinks $14,000 to $21,000 will make a huge long-term difference in an inflated market should maybe do their sums again. It might help secure them a mortgage but it won't put them all that much closer to ownership.

In fact, for many it will be an inducement to enter into mortgage commitments they can no more afford today than they could on Tuesday morning before Prime Minister Rudd threw open the Commonwealth vaults and began ladling out the dough.

By targeting middle-class recipients and without means-testing, the Government has plundered the collective surplus to benefit a comparative few.

It is a strangely sectional way to build unity in the face of a national emergency.

It is a shamelessly political response given that burgeoning debt was one of the warning signals of an economic day of reckoning.

And it is a peculiarly Australian indulgence in middle-class welfare but, taken to its ludicrous extreme, it is the sort of dippy social engineering that led to the sub-prime crisis in the United States in the first place.

If there was a bright side to the financial meltdown in Australia it was that it gave us the opportunity to break the vicious cycle of ridiculously inflated house prices and again make ownership practical.

That might not have been an overly attractive prospect for those whose fortunes and dinner party conversations were tied to rising real estate prices but there was at least a whiff of reality on the breeze.

We may have squandered that opportunity by launching another real estate frenzy.

The purpose of housing, surely, is to provide shelter for people, not to become a commodity; the purpose of government investment should be to put people into accommodation not into mortgages.

But, instead of people rejoicing in the mere fact of home ownership or affordable rental accommodation, spirits soar or crash on the basis of projected market prices.

How extraordinary that we celebrate the rising costs of shelter, one of the most basic of human needs. Would we be so delighted if food and clothing were similarly placed beyond the reach of so many citizens?

What happened to the affordability debate that was so loud during the last federal election campaign?

But if the subsidies are part of a strategy to fend off recession, why single out the housing industry, notorious for boom and bust?

The motor industry is warning of 7000 job losses in the downturn, so maybe we could make an equally compelling case to subsidise car buyers.

If we're suddenly feeling sorry for pensioners and poor people, why not hand over grants to repaint their houses or put in new kitchens? Presumably that would equally benefit the building industry (but leave real estate agents and banks out in the cold).

More to the point, why not invest that $1.5 billion subsidy fund in public housing or use it to improve infrastructure in developmental badlands?

In the US, Barack Obama has been climbing up the presidential opinion polls with a crusade to break his country's addiction to credit.

Here we prefer to feed the addiction with public money.

www.news.com.au/story/0,23599,24506936-5007146,00.html