News Time to build momentum, confidence and hope with back-to-basics approach
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Time to build momentum, confidence and hope with back-to-basics approach

Constructing affordable housing could have long-term benefits for Australia. Photo: AAP
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The coronavirus does not discriminate.

Whether you are black or white, rich or poor, this pandemic makes us all realise we are equal and consequently all vulnerable to the invisible virus that has declared war on humanity.

When a society is under threat, we abandon our normal divisions and work together to focus on a common purpose: our mutual vulnerabilities.

Political views are put to the side.

The Left is working with the Right and business is working with unions.

And the heroes that have emerged during this “war” are the everyday workers. The workers in our medical system, supermarkets, cleaners, police officers and teachers … the list goes on.

They are our key workers in this time of crisis. It is a real awakening and confirms that everybody has an important role in a fully functioning society. And it takes a crisis to bring this into our consciousness.

I believe there is a general mood, from both the public and business, that we do not want this collaboration to stop.

The Team Australia approach is something that the majority of us want to belong to.

But once this crisis is over, we will probably go back to our fighting and divisions.

But what if we don’t?

What if we use what we have discovered to reset our priorities as a nation and reframe new foundations upon which to build Australia’s future? And do that collectively.

 

Yes, we have discovered that we should not be outsourcing all production of key medical equipment offshore as it is in our national interest to keep a reasonable degree of this manufacturing capability in Australia.

And we have also managed to take the majority of our homeless off our streets to ensure they too are protected.

We have recognised that everyone in our Australian society needs to be protected and have their basic needs met, and we did this because it reflected our underlying Australian values of fairness and caring for each other.

It’s part of the Aussie Anzac spirit.

The reality is that if the basic need of shelter is not met, there are longer-term economic consequences and the significant associated costs are pushed to a future generations.

The need for shelter for all Australians is finally being recognised, as are the significant long-term benefits of construction. Photo: AAP

These costs are a result of an increase in mental and physical health issues, family violence, policing, the justice system and manifests itself into long-term welfare dependency.

There are long-term cost savings to society if we provide housing for all.

Last year, Reserve Bank governor Phillip Lowe said we must use the unique opportunity in this economic cycle of low interest rates to invest in the right infrastructure for Australia that will provide a sound long-term economic foundation for our future.

You cannot get a more basic and more fundamental infrastructure than housing.

And with the need to stimulate economic activity post COVID-19, the current and significant shortage of public, social and affordable housing is a great place to start.

If we are to maximise the job creation opportunities then we need to broaden our focus beyond roads and rail to include non-market housing.

Large infrastructure projects will not employ anywhere near the same number of people.

We need to keep the residential construction sector gainfully employed so that the multiplier effect to other industries is maximised so that job opportunities are maximised.

And why not do this in an area that will also result in long-term cost savings to future taxpayers?

Before COVID-19, the economic health of our cities was at crisis point due to the dire shortage of affordable, social and public housing.

Housing for all was seen historically, by visionary governments, as a fundamental requirement in building a prosperous country.

Now, it is seen purely as welfare issue, a view that distorts the central role that stable housing plays in the life of an individual.

Without stable housing, the flow-on effects on that person’s ability to contribute economically (or not), to society varies greatly.

Study after study around the world has shown that a “housing first” approach works to reduce homelessness and improve the lives of those living with housing insecurity and it is the lowest cost to the economy and consequently taxpayers.

For every dollar spent on housing people, there is a multiplier effect in terms of reduced future costs for managing the consequential impacts that result from lack of housing and a positive gain in terms of workforce participation.

Analysis by SGS Economics indicates a cost benefit ratio of 7:1 in respect to the economic benefit to the community of providing public, social and affordable housing in the right locations. What other kind of investment offers a seven-fold return in this era of record low interest rates?

By understanding the central role that stable housing plays in the productivity of an individual, and recognising it as key economic infrastructure, the business case becomes very clear and compelling.

The goal is to ensure everyone has somewhere they can afford to call home. The value proposition is becoming more obvious every day.

By reframing social and affordable housing as economic infrastructure, we can start to mobilise private sector capital needed to really make a difference at scale.

The problem is so significant that governments cannot fund it alone.

But the private sector needs the appropriate financial settings and frameworks in place to achieve the required returns relative to the risk.

As well as addressing the long-term economic impact of the housing crisis, the investment will have flow-on benefits in terms of generating jobs, post COVID-19, in the construction sector – the nation’s largest employer.

It will also stimulate uptake of innovative approaches such as prefabrication, which in turn creates jobs for the embattled manufacturing sector.

Let’s get back to basics.

Let’s recognise that housing for all Australians is a fundamental economic platform upon which to build a successful future.

Robert Pradolin is the former general manager of Frasers Property Australia and founder of Housing All Australians