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Paul Keating once famously said that you should never get between a premier and a bucket of money.
That insight was a key part of the Hawke-Keating government’s approach to getting reticent states to take on desperately needed reforms. It reached its crescendo with payments to states if they increased competition within their boundaries.
Anthony Albanese announcing plans to encourage states to get more homes built through a $3 billion incentive package.Credit: Alex Ellinghausen
Unashamedly, Anthony Albanese is following down that same path to get the states to take real action to boost housing supply.
A $3 billion pot of cash is on offer for states and territories that do better than the federal government’s plan for one million homes to be built across the country by mid-2029.
The target is now 1.2 million homes. As Albanese noted, for every one of the extra 200,000 properties that a state delivers, it gets $15,000 from the Commonwealth.
In the case of NSW, for instance, that means if it provides about a third of those 200,000 dwellings it could get a near $1 billion windfall out of Canberra.
Local councils, which in many cases have gone out of their way to become NIMBY enclaves, also have an incentive to lift their game. There’s $500 million for them and the states to carve up for necessary changes around connecting services to potential land release areas or fast-tracking planning reforms.
None of this cash will flow unless the states (and local councils) actually get the work done.
Hawke and Keating knew the way to a premier’s heart was through their wallet. John Howard continued that through the National Competition payment process. As treasurer, Joe Hockey tried to encourage states to sell public assets and use that money to build new ones to help improve the nation’s infrastructure.
This package goes further. National planning reform is part of the plan with shibboleths such as land release timing, increasing density, more use of state call-in powers to get developments under way, and the promotion of medium- and high-density properties on the agenda.
And Australia’s renters have been given some hope of real changes that will improve their lives.
The states and Albanese refused to follow the Greens down a financial fantasy of rent freezes which, as the Grattan Institute’s Brendan Coates and Joey Moloney noted in this masthead’s pages earlier this week, would “blunt the incentive to build more housing, leaving us with fewer, poorer-quality dwellings”.
Instead, the states may finally give some real rights to the third of the population who rent.
That includes minimum quality standards for rental properties (such as stoves that actually work), bans on soliciting rent bidding, allow a person experiencing domestic violence to change the locks on the property without informing a landlord, and reducing the amount of personal information collected by estate agents as they vet potential customers.
Housing policy in Australia has let down the country, hurt the economy and left most people trapped in a financial Ponzi scheme.
Giving the states a kick up the bum while offering them cash to really put more housing stock into the market is one step to repairing the damage caused by decades of poor policy.
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