Like other emergencies now harming the electorate, the current housing crisis grew because we – the electorate – failed to hold those accountable for their inaction. Times appear to be changing.
It seems the ants are now marching.
Sumeyya Ilanbey reports recent corporate governance events marked by sharply elevated shareholder disgruntlement at poor management behaviour and performance.
Shareholders are now placing much higher stock on demonstrable corporate, and by extension, public accountability.
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Summarising this new sentiment, she reprises comments from the former chair of the Australian Competition and Consumer Commission, “last year’s federal election results and the outrage at Robodebt should … send a clear message to organisations that Australians care about integrity and want people – whether they are politicians or public servants – and corporations held accountable for their actions” (emphasis added).
Increased accountability is now “a thing”
Though directed at the cartel-like behaviour of some specialists, the subliminal fury of Shaw’s epithet – “professions are a conspiracy against the laity” – could also express the seething public resentment of the accountability-deficit inflicted by many urban policy makers.
Consider WestConnex again.
The project failed to deliver on its headline promise of grand city-shaping benefits; consumed close to $20 billion of our taxes to relocate a traffic jam; and taxpayers will forever pay tolls – a form of taxation – to the now private owners of a monopoly state asset.
Any eventual traffic congestion relief is likely to be fleeting until “induced demand” generates even more congestion somewhere else and road-boosters will again rise from their caskets and try to foist the whole dumb cycle on a reliably forgetful electorate.
Just like the building-site prank of sending a gullible apprentice to buy a can of spotted paint, building roads to rid ourselves of congestion is a notorious fool’s errand.
As Greg Baker points out, we will never be able to build enough roads no matter how much we spend.
All this was predicted before a dollar was spent, so why do we tolerate it?
As we previously explored it is because a climate of moral hazard pervades too much urban policy making.
This climate persists because there is a lack of proportionate accountability applying to those who claim to act on our behalf.
Dumb things – rational thinking versus belief
The WestConnex example begs the question, why do we insist on doing dumb things?
Part of the answer is that we are encouraged to do so by trusted leaders.
In the context of foreign policy, Keren Yarhi-Milo reviews the work of two academics striving to explain why many supposedly smart leaders do stupid things.
She reviews two competing theories – the dispassionate calculations of hard-nosed realpolitick practitioners versus deep psychological predilections of flawed or malign leaders.
Though the authors she reviews plunk for the supposedly rational “great power theory” she explains why very personal psychological motivations are the more likely culprits – particularly when autocrats decide.
To illustrate, consider on the one hand the obvious and rational unattractiveness of modelling a nation on the GULAG’s and, on the other, Russia’s justification to forcibly export the idea to Ukraine at gunpoint based on its luridly bizarre self-beliefs and manufactured narratives grounded in its seemingly ineradicable instinct for tyranny.
Those who track climate crisis responses are also very familiar with the failure of rational thinking to cut through and dislodge strongly held beliefs.
Liam Mannix reports that recent research examined why climate policy inaction persists despite rapidly mounting evidence for more urgent abatement.
The reason, apparently, is a dearth of easy solutions, prompting decision makers and waverers to explore irrational cul-de-sacs and then express almost suicidal preference for the deadly status quo.
This is why it is appropriate to examine not just the overt narratives they generate –policy rationales – but also search for hidden motivations for political decisions.
The financialisation of housing – amid most other things
As Mariana Mazzucato points out, the detrimental wealth-transfer effects ensuing from the financialisation of everything, including housing, have been clearly understood for some time, yet well understood policy remedies were and are stubbornly resisted.
And as Alan Kohler and many others have surmised of housing unaffordability, our decision makers and their significant constituents have skin in the game; they benefit more if the problem is not solved so any solutions are little more than magical misdirection.
For example, consider the current headline NSW affordable housing policy offering planning incentives to for-profit housing providers, whose entire business model depends on elevating profit and price, in preference to encouraging those sectors already devoted to reducing the cost of housing.
Accountability is the key
Yet the explanatory loop in these descriptions is not complete without reflecting on why these policy failings persist.
This is where accountability comes in.
It is because we have failed to exercise our own responsibility to hold to account those who advised and acted on our behalf.
Accountability can be considered as comprising two temporal vectors that require conceptually different treatments.
The harsh corporate accountability reported by Sumeyya Ilanbey casts its attention to past events, and its reckoning is in the nature of punishment for damage inflicted on shareholders by senior management.
But for current policy makers, future accountability requires us or them to foreshadow the terms by which their actions will be held accountable – and then hold them to account.
Accountability for what has happened in housing
Looking backwards, consider again the broad arc of the housing crisis in Australia.
Alan Kohler attributes its origins to the Menzies government, which sought to steer a post WW-2 quasi-socialist consensus of housing-for-all towards a more individualistic position of a home-of-one’s-own, all in the hope of generating a more conservative electorate that he led.
Many will recall Margaret Thatcher successfully applied the same strategy in the UK.
Over the ensuing decades and mostly by Menzies’ heirs, policy tweaks like taxation settings favouring investment, and slow erosion of government housing stocks, were stepping stones laid towards the current crisis.
These steps include conservative government practices of selling government housing estates to build more social housing elsewhere, called the “cross subsidy” approach, which as Anna Minton observes in the UK, has failed.
Instead, the wealthy have displaced those in formerly secure social housing. Millers Point and The Rocks now exemplify this policy failure in Australia, for which the Sirius building redevelopment has become a potent symbol.
Accountability and the forward view
Punishment or reward for past actions is conceptually straightforward but how can future actions be made accountable?
Mulling what is required to address the current housing crisis, a recent AHURI report examined existing policy architecture and recommended new national and state arrangements thought essential to adopt if affordable housing can ever be delivered across Australia at sufficient scale.
Key amongst its summary observations is that “Accountability is crucial in national approaches to policy reform. This means more than accounting for the expenditure of public money, or for value for money in outcomes; it is about demonstrating commitment to the objectives of the reform process, both to the other agencies and stakeholders in the process and to the people it is intended to serve” (emphases added).
A maddening feature of housing policy is that decision-makers seem incapable or unwilling to commit to what is necessary – or worse.
One of the authors of the AHURI report, Hal Pawson, has appraised the efforts of the current federal government at its mid-term.
He gives them a “must try harder” mark; “… announced measures are somewhat disparate and many are extremely modest alongside the scale of (the housing) problems … (but if they) prove to be a down payment on ambitious and purposeful future action, they may come to be seen as significant. If not, policy analysts of the 2030s will deem them of little importance”.
This is why accountability for future action needs to be explicit and measurable, as it would foreshadow appropriate electoral reckoning, and therefore focus the mind of policy makers very sharply.
How should accountability be exercised?
We regard ourselves to be civilised, so biblical accountability – such as mortgaging the corneas and kidneys of leaders’ first-born – is no longer tolerated.
Just as Ilanbey reports of shareholder votes expressing intolerance of repeated corporate failings, regular elections exist so that those we entrust can be held accountable for the harms they cause – or the benefits they confer on us all.
Thus, if as Kohler has suggested, the origins of the current housing crisis can be traced back to decisions by the Menzies government, and exacerbated since by its heirs, then should we rationally continue to support those heirs electorally? Does their regular claim to be the best managers of our collective resources really stack up?
Casting a forward-looking view, if proposed housing affordability remedies are not adequate or remain unaccompanied by accountability benchmarks – as seems to be case for those proposed in South Australia and New South Wales – then should we rationally continue to support those governments?
And, as Pawson has observed, should we support the current federal government if it squibs on its promise to solve the housing crisis?
