Australia is now a nation that “a nation that can no longer house its own children”, says shadow treasurer Chris Bowen.
Mr Bowen believes young Australians are in the midst of a home-ownership crisis, with soaring home prices cutting young people out of the market and a generation facing a crisis in affordability.
In a speech to the McKell Institute in Melbourne, Mr Bowen said housing policies were working against the middle class and preventing entrepreneurs from borrowing equity against their homes in order to innovate.
“The inability of young people in particular to buy a home to accommodate to them has reached, I say calmly and soberly, crisis levels,” he said on Thursday.
The Sydney Morning Herald suggested his speech, The Case for the Middle Class, was designed to position Labor squarely in the political middle ground, setting out “Labor’s philosophical approach in the next term to economic management, inclusive growth and, crucially, the case for winding back negative gearing tax breaks”.
“Overall home ownership in Australia is at a 60-year low,” Bowen said. “In 1982, 62 per cent of people aged 25-34 owned their own home. By 2012, this had collapsed down to just 42 per cent.
“Over the last 25 years, young people have gone from having to pay just five times, to now having to pay up to 15 times their annual income to purchase a new home.”
Mr Bowen nominated three reasons for protecting the middle class:
* They have a high propensity to spend any income boost, driving economic growth
* They are the voice that signs off on openness policies, like trade and immigration agreements
* Middle-income parents invest in their children
“Middle-income families feeling the squeeze, chasing extra hours and second and third jobs have less time to read to their kids, less money to invest in their education,” Mr Bowen says.
He blamed the decline of unions for increased inequality and warns against cutting the minimum wage saying it’s falling as a percentage of the median wage.
And those who work weekends deserve to be compensated with penalty rates until parliament, cabinet and company boards met routinely on Sundays.