Late last year The Australian columnist, Bernard Salt, claimed young Australians should give up their ‘smashed avo on toast’ brunches in order to save for a home deposit. Amused, yet still outraged, commentary and a savvy media campaign by ME Bank followed. While good comedy fodder, the image of an avocado being the great stumbling block to homeownership for the so called Millennials or Gen Y (those born approximately between 1982-2004) was a simplistic stab at a much maligned generation that perpetuated the pernicious myth that it is this generation’s own fault that they cannot afford to buy a home.
It’s pernicious because it is demonstrably untrue. Research paper after research paper over the last decade has shown that national housing costs in relation to incomes are the highest they have been since WWII and the increase in the proportion of the lending market being taken up by investors is at an all time high of about 50 per cent compared to 10 per cent for first home buyers. That young people now routinely have to spend 10-11 times the national average annual salary to own a home in Sydney, and that they have been squeezed out of the market by investors and the tax arrangements that incentivise them is no longer a credibly negotiable fact.
But the perniciousness of this myth goes deeper. By continually playing the moralistic blame game we allow ourselves to be divided across generations and so play our part in policy stagnation and stymied political will to act at every level of government. It also means we fail to see that this is not a problem unique to Millennials but one that actually plagues people up to age 55. In failing to see this, we wilfully neglect the terrible economic burden these people, but also the State, will face in the next three decades as the cohort of people currently aged 25-55 move into retirement without owning a home.
A report by the Australian Institute of Superannuation Trustees released in March this year laid out this grim future scenario of the current housing affordability crisis. The report, No Place Like Home: The Impact of Declining Home Ownership on Retirement, shows that not only are more Australians reaching retirement still having to service a mortgage but a greater proportion of 25-34, 35-44 and 45-54 year olds are now renting for longer. Between 1995-96 and 2013-14 those figures rose from 47.8% to 59.5%, 27.1% to 35.7% and 18.4% to 25% for each of those age groups, respectively. A great many of this group will have to privately rent long into or for the entirety of their retirement. This is so troublesome because outright home ownership has long been the informal ‘fourth pillar’ of our country’s retirement strategy alongside superannuation, voluntary savings and the Age Pension.
This, combined with sharp decreases in social housing stock, will mean a significant number of Australians will need to rely almost entirely on the Age Pension, and further draw on government programmes for rental assistance to meet housing costs in old age. Add to this the inability to use the capital from the sale of the family home to place a bond for a position in an aged care facility and we are looking at a very deep well government budgets will have to fill. This, at a time when there will be fewer workers proportionate to retirees so they will have to carry a higher tax burden to cover the swelling costs.
And this is the salient point we miss when we buy into didactic stories that pit generation against generation – for every Australian currently under the age of 55 it is almost a certainty that irrespective of your own housing situation you will feel the economic cost of so many Australians being denied access to the housing market with our retirement system geared as it is.
There are many debates about how we can fix housing and there are many well founded policy approaches that would likely ameliorate or reverse the affordability crisis. They don’t need to be reiterated here. What is important is not the lack of possible solutions but rather the suggestion, evident in the ‘avo on toast’ kind of rhetoric, that we do not owe it to each other to commit to any or all of the proposed solutions. It suggests that we do not owe it to each other to level the playing field of opportunity to own a home, or to radically overhaul our retirement system so that owning a home will no longer be the key to a dignified old age.
In this year’s Social Justice Statement, A Place at the Table, Australia’s Bishops spoke about the need for more care, justice and genuine participation of older Australians in our communities. They noted that older people are already facing homelessness in increasing numbers, especially older women. In response they urged for a passionate turning away from a ‘throwaway culture’ that makes people irrelevant and literally disposable when they have nothing to contribute or are a ‘burden’ economically. Yet by condemning multiple generations of Australians to almost certain poverty in old age, we seem intent not on turning away but running vigorously towards a culture of disdaining and discarding those who haven’t earned or owned enough in an unfair system to matter.
To move the housing system into a more just space requires a commitment to allow our Gospel values to come to bear heavily on our economic lives so that we make and demand decisions, personally and publicly, that are about more than individual wealth accumulation. Right now, policy change is sluggish and edge-nibbling because that is the sensible electoral bet as more Australians of voting age are home owners rather than renters and so benefit from government policies that keep house prices high and the market distorted towards investors. Many of us will have to act of our Christianity and principles of sacrifice rather than direct self-interest if we want to see real change for the common good.
We are beginning to see some shifts in this direction as many people are starting to realise that their adult children will never own a home and that many are delaying marriage and children because of the cost of housing. Yet until we are willing to fully accept and live a truth beyond selfishness and recognise that the earth’s goods are for the benefit of every person, all the policy options and all the screaming about the unmanageable economic burden looming just over the horizon will not make a difference.
Until we each decide we will not accept generations of current young and middle aged Australians working towards their own impoverishment in old age simply because it is wrong and affront to their human dignity, this conversation will continue to be stunted by the kind of individualistic generational mud-throwing so typified by that smashed avo on toast.