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ANGE:

From Schwartz Media, I’m Ange McCormack. This is 7am.

Australian housing is in crisis. The country doesn’t have enough affordable homes to house the number of people who need them.

This week, the Albanese government will begin trying, once again, to pass its key housing policy. The government needs the support of the Greens, who blocked it last time in the Senate.

The bill is being reintroduced to Parliament unchanged, and neither has the Greens position. So, all signs point to another political stalemate.

Today, contributing editor of The Politics and The Monthly online Rachel Withers, on an idea to fix the housing crisis that’s gaining traction, and why it could break through the paralysis in Canberra.

It’s Monday July 31.

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ANGE:

So, Rachel, we know housing is in a bit of a deadlock at the moment. Australia clearly needs more affordable housing, but policies to address that have kind of been held up for a while now. Last week though, we heard a pretty bold idea to fund housing. Can you tell me what it is?

RACHEL:

Right. So this proposal is for a super profits tax. The idea is introducing a 40% tax on excess profits of corporations that have a turnover above $100 million. And that money could be used to plug the shortfall on affordable and social housing, which is estimated to be around 760,000 properties at least.

Closing that gap would cost more than $500 billion, but it would be comfortably covered by a super profits tax.

So a few people have floated this idea in the past. The Australia Institute has been advocating for it for some time. And the Greens actually ran on it at the last federal election, right down to the exact 40% and $100 million figure. But what was really interesting is the most recent voice to be calling for this wasn't one you might necessarily expect. It's come from one of Australia's biggest unions, the CFMEU.

Archival tape – Speaker 1:

“Our guest today is Zach Smith, the National Secretary and ACT branch secretary at the CFMEU, to make his address to the National Press Club of Australia. Zach Smith, officially…”

RACHEL:

The new national secretary of the Union, Zach Smith, called for this proposal when he gave an address to the National Press Club last week.

ANGE:

Right, and so this was Zach Smith's first big speech, moving into the role. Can you tell me more about who he is and why he's now speaking up about housing policy?

RACHEL:

Yeah. So Zach Smith moved into the role of National secretary in April this year.

Archival tape – Speaker 1:

“At 35, he's one of the youngest national leaders of the union movement, and became National Secretary after leaving the ACT branch position…”

RACHEL:

And the CFMEU is a very powerful union. It represents over 100,000 workers in just the construction sector, and it's always been very closely affiliated with the Labor Party. It's one of the most powerful unions in the Labor left faction. And I would say this speech signalled a bit of a shift in the way the CFMEU is operating.

Smith spent quite a lot of time in this speech laying out just how unfair Australia has become, as a country,

Archival tape – Zach Smith:

“Wages for most Australians are either stagnant or going backwards in real terms. Prices are soaring everywhere. And yet, at the same time, senior executives at our largest listed companies are celebrating pay rises, sometimes more than double the rate of inflation.”

RACHEL:

And he called on Labor to be more bold in its approach to addressing inequality.

The real focus of his speech was on housing.

Archival tape – Zach Smith:

“And today, we see no problem more pressing, more dire, than the incapacity of our nation to house all its people. So today I want to explain why we...”

RACHEL:

Smith said that this is a crisis, and one that will be really corrosive to our society if it isn't urgently addressed.

Archival tape – Zach Smith:

“Let's be clear about the problem. In 2022, rents rose by 10.2% nationally. And as we sit here today, two thirds of all Australians are in housing stress. Four in five are in rental stress.”

RACHEL:

He was quite passionate about the fact that everyday people can't afford housing in this country.

Archival tape – Zach Smith:

“Now these workers are telling us about how they've had to sleep in their cars during the freezing Canberra winter, before they get up all day to clean public toilets.”

RACHEL:

Even people who are on good salaries, such as construction workers on $100,000 a year, can't afford to buy a home without going into serious mortgage stress.

Archival tape – Zach Smith:

“To service an 80% loan on the average Sydney home, without going into mortgage stress, you now need to be making $250,000. In Melbourne, you need to be raking in $180,000 or more to afford the median house.”

RACHEL:

And so the issue isn't that there isn't the money for this, it's that we're not actually channelling it in the right way.

And he didn't just throw his weight behind this proposal, he also announced a national ad campaign for the plan, and the CFMEU has already begun releasing videos.

Archival tape – Voiceover:

“There's something very wrong in Australia when the corporate profits of our largest companies are the biggest they've ever been, while too many Australians can barely afford rent. We can fix the housing crisis with a super profits tax…”

ANGE:

Right, and I guess on one hand, it's not exactly surprising to see the head of the construction union calling for more construction. But how unusual is it to hear from someone in the broader union movement, talk so directly about inequality and housing policy?

RACHEL:

Look, I wouldn't say it's completely unusual, but I think hearing from somebody in the union making these points, when the government doesn't necessarily want to talk about big, bold ideas, was very interesting.

Archival tape – Speaker 2:

So we haven’t heard a fulsome response from Anthony Albanese yet. Did you get his blessing to raise such a controversial issue? And…

RACHEL:

Smith was asked whether he had spoken to Prime Minister Anthony Albanese before making the speech to seek his permission or to give him a heads up that the CFMEU was going to criticise the Labor Government's approach.

Archival tape – Zach Smith:

“Well, dealing with your first question, it may come as a great surprise to many of you that no, the CFMEU didn't seek the Prime Minister's blessing.”

RACHEL:

And you know, I think there really was quite a strong reaction and strong support for the speech in some corners of social media. I think for a good reason. Zach Smith was tapping into something very real in calling bullshit on the idea that we can't, quote unquote, spook the goose that's been laying the golden eggs.

Archival tape – Zach Smith:

“A modern Australian economy is a complex machine. And maybe, just maybe, everything is currently in a very fine balance. A balance that only ivory tower economists, scolding politicians and noisy billionaires understand.”

RACHEL:

He said we can't keep telling struggling people that corporate profits are off the table for taxing. And he sounded to me a bit like Green's housing spokesperson, Max Chandler-Mather, in a way.

Archival tape – Max Chandler-Mather:

“They can guarantee $16 Billion in tax concessions for property investors, but they can't guarantee a cent for public and affordable housing, in the middle of the worst housing crisis we have seen in generations.”

RACHEL:

You know, he's another 30 something-year-old who's speaking frankly about this housing crisis and how it feels, and just how unfair our economy has become.

And I also think it was the kind of speech that might have stirred a young Anthony Albanese, who likes to remind us about how, as a boy, he grew up in public housing, with a single mum on the disability pension.

But I guess it remains to be seen just how much the Albanese Government is paying attention.

ANGE:

Coming up, whether a tax on big corporations could break the stalemate on housing policy.

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ANGE:

So Rachel, Labor has been quite firm in their position of not wanting to compromise with the Greens, particularly in this fight over housing policy. So does this statement from a major union perhaps give Labor an opportunity to shift their housing policy to be more ambitious, without looking like they're caving to the Greens?

RACHEL:

Yeah, look, I think when it comes to the stoush with the Greens over the Housing Australia Future Fund, Labor is not willing to cave. And nor was Zach Smith calling for that. He actually did call for that to be passed. But in terms of being more ambitious, in terms of looking at this housing crisis as a serious issue that needs serious funding, I do think they are more likely to listen to a Zach Smith instead of a Max Chandler-Mather.

ANGE:

Even though the policy is kind of borrowed from the Greens, in a way.

RACHEL:

In a way.

ANGE:

It’s very similar.

RACHEL:

Yeah. Look, the super profits tax comes from the Greens, but in terms of the Housing Australia Future Fund, I think Labor is very set on that policy remaining as it is. But it could do something else here, if it was brave enough to listen to Smith and to use a tax on corporations excess profits to fund a really big solution to this problem. This idea from the CFMEU is now going to be on the agenda for Labor's national conference in August, where the party gets together and debates policy. So it's a relief to hear that there will be some actual policies being debated, because Anthony Albanese has really wanted to be and remain a small target, and people have been kind of concerned that Albanese, being from the left, has kind of quashed the left in all this. There are reports that he is already warning left delegates not to bring up certain issues that usually make waves at national conference, because he is trying to put forward this united front on things like AUKUS.

Archival tape – Reporter:

“A member of the Labor Caucus for housing, Juliana Todorovic, and she tells me that she's concerned by the draft position that Labor has on housing. She's pushing for negative gearing to be capped at one investment property, and to classify…”

RACHEL:

It's also worth noting that back in May, a Labor delegate named Juliana Todorovic, who runs a group called Labor for Housing, called for some quite modest reforms to negative gearing that she plans to bring to a conference.

Archival tape – Juliana Todorovic:

“A house in any metropolitan city is over ten times someone's annual wage. So, to think then that we have a whole lot of people who are owning three, four, five properties and getting money back from the government, I just don't buy that there’s no money for housing, when we have that kind of scenario.”

RACHEL:

And Anthony Albanese very quickly shot that one down in the media. You know, was quite dismissive of the idea that things like this will be talked about at conference, because he said a conference talks about everything. Sort of confirming what we know, which is that cabinet really decides the direction of the policy of the party.

ANGE:

Well, let's talk about what happens if Labor doesn't budge on housing policy. Because it seems like the Greens, the Australia Institute, and now you've got players like the CFMEU, all saying that the housing crisis can't be fixed without some type of tax reform. What do you think Labor risks by not listening to that?

RACHEL:

Yeah, I think we've already seen this play out, to some degree, with the decision to not even look at negative gearing. The Labor Party did run on reforming negative gearing in 2019, and so it has acknowledged that it is clearly something that needs addressing. But they lost that election and so all of a sudden they won’t go near that policy. And every time ideas around tax reform come up, the media very quickly asks the Prime Minister, the Treasurer, to rule out changes to certain tax concessions that, you know, really benefit the wealthy in this country. There has been a bit of an internal push within Labor to take some more ambitious policies here. Three Labor MPs, in particular, who face a serious threat of losing their seats to the Greens at the next election, and all represent seats with a high proportion of renters, have sort of also made small noises in the media and, you know, have raised concerns about tax breaks for investors. So, this idea that Labor could be outflanked by the Greens on housing is a serious one for those in those kinds of seats.

ANGE:

And Rachel, housing policy, as you say, is going to be on the agenda at the Labor National conference in August. But housing has been a perennially difficult issue to solve in this country, because it usually involves taking something away from wealthy voters or homeowners. Is there a world in which Labor does decide to confront housing policy, do you think, or will this stalemate continue?

RACHEL:

I would say, in this country, it is really difficult to touch certain conditions around housing and housing affordability because, as you mentioned, there's this idea that some people will lose out if house prices go down or certain concessions for property investors are taken away. But I do think, with something like what Zach Smith and the CFMEU are proposing, we're talking here about taking money from big, big corporations and, you know, not taking from mum and dad investors. I think, potentially, that idea may be a little bit more palatable. It is still something that is going to terrify the Albanese Government, which, you know, Labor governments have struggled with bringing in big taxes but it is a little bit easier than things like negative gearing, you might say. And you know, I think that having the push come from within the Labor movement may be a more effective strategy to get Albanese to actually pay attention to what people are saying.

Labor does need to learn to listen and negotiate and play nice with the Greens and independents. Or it needs to neutralise their threat by listening to the concerns of those voters. And that is what Zach Smith appears to be doing.

As Smith pointed out in his National Press Club address, a tax on excess profits of corporations would be a powerful signal to voters that Labor cares about them and cares about solving the housing crisis. And so it will be interesting to see if they listen this time, because the calls are now coming from inside the house.

ANGE:

Rachel, thanks so much for your time today.

RACHEL:

Thanks for having me.

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ANGE:

Also in the news today…

Over the weekend, the case of Julian Assange was raised directly with the US secretary of state, Anthony Blinken.

America’s top diplomat indicated he was unmoved on the issue, saying that it was important Australians understood that Assange’s publication of documents, quote, risked very serious harm to our national security.

Blinken was in Brisbane for high-level talks with his counterpart, Foreign Minister Penny Wong, and defence minister Richard Marles.

And,

Authorities in Paris are planning to remove booksellers from the streets of the city during the Olympics next year.

The over-500 booksellers along the River Seine form the largest open-air book market in Europe. They say they’ve been blindsided by the move, which threatens to erase the iconic book trade from the streets.

I’m Ange McCormack, this is 7am. We’ll be back tomorrow.

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