If The Government Had Frozen Rents A Year Ago We Could’ve Saved $8 Billion
If the Labor government had imposed a rent freeze in July 2022 — and continued to freeze them for the next year — renters could have saved over $8 billion, according to new research from the Parliamentary Library. Ah yes, wouldn’t that have been nice?
We all know the current rental situation in Australia is in shambles. I don’t need to get into the nitty gritty of just how grim things are getting because well, we are all living in it. But the research conducted by the Parliamentary Library — as brought about by the Greens — reveals just how much a rent freeze would have helped people save in the face of the ongoing cost of living increase.
From data analysis provided to Junkee and conducted by the Parliamentary Library, renters across Australia could have saved over $3 billion in the last 12 months alone had the government implemented a rent freeze in July 2022. We already know that a rent freeze is something that the Labor government is strongly opposed to. Prime Minister Anthony Albanese says it would “destroy supply”. Labor’s housing minister, Julie Collins, has also said that rental caps have only done “a little” and that it won’t work to address the housing crisis in the long run because the “quality of the stock diminishes over time.” Labor said they are rather focusing on boosting housing supply as opposed to a rent freeze.
But that’s a tough pill to swallow given how heavily young people are impacted by rent increases. The research also revealed that if rents were to rise another 10 percent over the next 12 months — as predicted by the Reserve Bank of Australia — then renters will see a $4.9 billion increase over the next year. This means that by next year, if rents keep going up, we will have lost the opportunity to save an estimated $8 billion.
If you want to know how much of the $8 billion pie you individually would have saved in rent, the Library figured that out too. If a rent freeze were implemented this year — and based on the RBA’s projected future rent increases — the average household could have saved $2261 over the next year alone. At the same time, if a freeze had been implemented last year there would have been a saving of $1427 for the average household. This totals up to an average cost saving of $3688 per average renter household over the two years. You know what, maybe I was better off not knowing this — now I’m just in despair thinking about the three full bags of groceries I could’ve bought instead. Anyways, moving on.
“These aren’t just numbers, a two year saving of $3688 per household is food on the table, a desperately needed trip to the dentist or it’s the electricity bills for two years,” Max Chandler-Mather — Greens spokesperson for housing and homelessness — said about the research.
This has all come about because the National Cabinet is currently attempting to address national renters rights and imposing potential caps on rents. Recently, 80 housing, legal and welfare organisations called upon the Federal Government to coordinate with the states and territories to impose rent caps and give renters stronger rights as the housing crisis worsens. Earlier this week, a report by the Australian Institute revealed that 75 percent of Australians either “strongly agree or agree” that the Federal Government should impose rent caps nationwide by working with the National Cabinet.
“The Prime Minister has an historic opportunity to save the one third of this country who rents $4.9 billion over the next twelve months by putting $1 billion on the National Cabinet table to coordinate a national freeze on rent increases and ongoing caps,” Chandler-Mather said.
It will be interesting to see what happens with the National Cabinet meeting and if the data found by the Parliamentary Library is enough to convince state and territory leaders to implement a rent freeze. At the very least, hopefully it can further push discussions around the rental crisis.
Ky is a proud Kamilaroi and Dharug person and writer at Junkee. Follow them on X.
Image credit: AAP Image / Joel Carrett