00:00 The Federal Budget had a whole new section on housing, which is fair enough since it's
00:06 the real underlying cause of the cost of living crisis.
00:11 And it was clearly displayed by these two charts in that section of the Budget Papers.
00:15 The poorest tenants are now paying 54% of their income in rent, an historic high.
00:21 And for those who buy a house, the average share of income to service a new loan is almost
00:26 50%, well above the long-term average of 36%.
00:31 But as usual, the solutions presented for housing affordability are all about supply.
00:36 The Government's central target is 1.2 million new homes between now and 2029.
00:42 But as the new National Housing Supply and Affordability Council pointed out two weeks
00:46 ago, completions are running well short of what's needed, and the target is unlikely
00:51 to be met.
00:53 The presumption is that demand is a given, and the only way to improve affordability
00:57 is to increase the number of new houses.
00:59 But supply is inelastic, because houses are expensive and take time to build.
01:05 And in any case, there's not much capacity in the construction industry at the moment
01:09 because of the huge increase in infrastructure spending going on.
01:13 Demand for housing can be limited, but that takes political courage, and there was none
01:17 of that sort of courage in the Budget.
01:19 And the other thing to bear in mind is that there are 11 million houses in Australia,
01:23 but 27 million people.
01:25 The last Census revealed that more than a million of them were empty on Census night,
01:29 and also close to 30% of two-person households are rattling around in four-bedroom houses.
01:36 Given the cost and difficulty of building new houses, maybe there should be a little
01:39 bit more focus on using the existing ones.
01:42 [BLANK_AUDIO]
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