Democracy needs reform: Human rights, housing policy – Australia and China compared
Housing affordability is an issue of basic human rights. A recent report in the UK, A Silent Killer by Sheffield University commissioned by a charity organisation, Crisis (21 Dec 2011) reveals that:
“People who live on the streets die an average of 30 years before the general population” due to:
- “Drug and alcohol abuse account for just over a third of all deaths;”
- “Homeless people are over nine times more likely to commit suicide than the general population;” and
- “Deaths as a result of traffic accidents are three times as likely, infections twice as likely and falls over three times as likely.”
If you are in your daily routine of moving around between your home and work place, shopping centre, cinema, visiting friends and holidaying, you are likely not to notice the suffering of the hundreds of thousands of your fellow country’s men, women, elderly and children sleeping rough every night on the streets, in a park, underneath a bridge or at construction sites in your neighbourhood across the country.
There are many reasons that caused homelessness: unemployment, broken family, sickness, injuries, rising cost of living, rental affordability, as well as housing affordability, just to name a few.
In this article, we will focus on the issue of rental and housing affordability as basic human rights by comparing the government attitude towards such issues between Australia and China:
Australia is a Western ‘democracy’ and by definition, we would imagine that the Australian government should be a more caring government than the government of a socialist country like China.
We would imagine that, Australia as the sixth largest country in the world (7,692,024 square kilometres) with 0.33% of the world humanity (22,821,017 people) as of 3 February, 2012. The population density is less than 3 people per square kilometres and the per capital GDP is USD40,800. Given the advantages of having such physical and financial conditions, it would be very easy for the Australian government to run a human right program for the entire population with affordable housing and rent.
Severe Housing Shortage in the Land of the Plenty
The cruel reality is that over the years, despite of severe housing shortages resulted in artificially inflated property prices, the respective Australian governments hardly pay any attention to ratify the appalling situation across the country. They have escalated the situation by allowing the problem of housing shortages to continue with little intention to allocate more land to alleviate the pressure; At time, when land was allocated, there was no following up of investment on basic infrastructure to support the construction on those lands; ANZ Bank estimated that there is a shortage of about 230,000 dwellings across Australia. As a result the median house prices in Australia grew 147% between 2001 and 2011 to an average of $417.000. Despite of the existing of government assistant package offer to first home buyer, the amount was so miserable that many failed to take up the offer; and those who took up the offer may find it hard to finance their mortgages – a 2011 survey by the Mortgage Choice reveals that “10% of first-home owners who bought their property in the past two years have now either sold their homes, or are considering selling, because the financial stress has become too great”; As a result, home ownership in the country of plenty has become an elusive dream, with many people forced into the rental market; however, the cost of renting also soaring faster than inflation - gaining 40% in the five year to 2010; Such trend has continued to flow on to 2011; The fundamental problem is, there aren’t enough cheap home to rent, and the private rental has become too much for many families with the percentage of income spent on rent at a proportion as high as 60.7%.
The general trend is, according to the National Housing Supply Council (NHSC) report, “housing shortfall is expected to blow out to more than 640,000 in 20 years”.
Despite of all the suffering by the average Australians, as far as the 1% elites in this country is concerned, high property price may not be a bad thing. Some may regard this as “hitting the jackpot” and are richer than ever; simply by looking at the aggregate figure, they may be right to claim that: “Feeling poor but Australians truly rich.”
Making thing worst, The Australian Reserve Bank Board (RBA) was chaired by wealthy people and CEOs, whom very often unconcern about the well being of the average people – a report on 19 Oct 2010 revealed that “half of Reserve Bank Board absent at rate meeting.” The RBA governor, an out of touch bureaucrat under the tax payer funded payroll of more than $1 million a year, who appear to be unable to understand the society and the economy beyond the aggregate monthly figures shown on his computer screen, has the tendency of favouring a higher interest rate from time to time.
Despite a warning from the IMF that “Inflation goals are wrong for economic management,” RBA continue to use inflation as one of the core elements in its interest rate decision. A sudden and drastic increment in banana price in the after match of a natural disaster may trigger a rate hike or prevent a rate cut due to the fact that banana is one of the core items use to measure inflation in Australia. Leading up to the 2008 Global Financial Crisis (GFC), RBA has a series of around 9 consecutive interest rate hiked followed by a series of a sudden and drastic interest rate cut at the beginning of the GFC; with the government economic stimulus package still continue to roll out artificially popping up the GDP figure over the subsequent months, our textbook RBA begin to be alerted by the figure shown on the computer screen again, and make a mark internationally by been the first to rise interest rate in the middle of the GFC. With a total of 7 consecutive rates hiked (3 in 2009 and 4 in 2010) and the forecast of a ‘Robust Economic Outlook’ due to the aggregate figure reflected on the computer screen contributed by the mining sector, RBA can never understand the actual suffering of the average Australians as there isn’t any representative from the ‘main street’ at the RBA board. Therefore, RBA only begin to cut rate by a quarter % each in November and December 2011, when figure on the computer screen indicated a rise in unemployment level to 5.3% with 40,000 full-time job been shed.
Despite the number of home buyers continue to decline due to high interest rate; and the shocking rise in the number of mortgage fault cases; with thousands of people raid their superannuation to pay for their mortgage to prevent losing their home; and the report that one in five Australian struggling with debt repayments; and the reality that, Australian homeowners among the world most indebted, I doubt that our textbook RBA have the insights and courage to drastically move the rate down before any more negative economic indicators shown on the computer screen. Regardless of whether it is true or not, Martin Whetton, an interest rate strategist at Nomura Group believes that, our highly paid RBA may have “followed Israel’s central bank on 16 of the past 19 occasions it moved rate.”
The current situation is that the supply side of the property market in Australia is still in a stage of massive shortages, but the property price across the country has begun to come down. Despite the fact that this has been one of the worst property slumps in two decades, “many first-home buyers are still finding it harder than ever to enter the market.” The common sense reasons are that the property price and interest repayment rate are simply beyond the reach of the average Australians.
The irony is, there are now full of empty homes in many parts of Australia including Sydney, Melbourne, and Brisbane but many people are still unable to afford them. The situation is just like the description in the recent heading on the Age Newspaper: “Nests emptier than ever but owning a home still a dream.”
The homeless situation in Australia has been worsening dramatically in recent years:
Homeless Situation Worsen
During a 2006 ABS counting, there were more than 105,000 homeless across the country; by 30 April 2010 the ABC report revealed that it is now more than ‘1 in 100 homeless in past year’. That is, the number of homeless in Australia has been more than doubled within 3 years since the last count in 2006. The situation has being deteriorating further with a report in January 2012 reveals that in the state of Queensland alone, there are “70,000 'homeless' as housing lies vacant across Queensland”. Whereas in New South Wales, a report on November 2011 revealed that, “80 houses are seized by bank each month … In the 10 months to November, 2011 the Supreme Court issued 2,466 writs of possession, with 825 executed.”
The problem is so serious that, according to the Australian Institute of Health and Welfare, “as many as 80 per cent of new applications for temporary housing by couples with children cannot be met on a daily basis.” The report also indicated that “of the total new requests for housing, 62 per cent of people were turned away, a rate stable with previous years”. (Brisbane Times, 22 July 2010 - ‘Homeless families are being turned away’). A recent report by the Courier Mail indicated that, in one of the cases of applications for public housing, the Queensland government “refused public housing” for a homeless couple with five children. The family were told to live in their car.
There are reports of homeless people been run over and killed by sleeping under a truck on the West of Brisbane; or been assaulted and badly injured while sleeping outside a bank; or been murdered on the street of Sydney; or been killed during a transient riding of a train from Sydney to Newcastle and back to keep warm; Despite the dire situation, there are still incident where homeless people been deprived the right to sleep rough in parks owned by some local councils; or been chased away ahead of President Obama visit the following day.
China is the third largest country in the world (9,640,011 square kilometres) with 19.16% of the world humanity (1,339,724,852 people) as of 1 November 2010. The population density in China is 139 people per square kilometre and the per capital GDP is USD8, 400.
As a developing country, China is limited by the amount of resources available at its disposal. However, the government attitude towards the issue of housing affordability is in sharp contrast to the government in Australia.
In China, there is a comprehensive National Human Rights Action Plan to protect the human rights of all social groups including the issue of homelessness and affordable housing. Due to the enormous amount of government effort and investment, it took China only 30 years to lift 400 million people out of poverty; and the government is in the process of lifting another few hundred million people out of poverty through a development-oriented poverty reduction plan. In March 2011, the Chinese government raised the poverty line to a new standard with an objective to “basically eradicate poverty in 10 years”;
Keeping the price of daily necessity low, and free from corporate profit driven manipulation are just some of the steps taken by China government to ensure basic human rights in the country; As a result, Australia as a developed country may have a per person GDP of USD40, 800, whereas China is only at USD8, 400, but when one measure GDP using the concept of Purchasing Power Parity (i.e., measuring GDP by every dollar you can buy in China as compare to Australia), China has become the world number three in GDP per person, whereas, Australia only rank at 19. This is the kind of massive human rights achievement in China that was largely ignored by western human rights agencies.
The Chinese media were rather open in reporting many social issues including showing pictures of homeless migrant workers in the country; the issue of homelessness in China is a complicated one. One of the major factors in homelessness is the movement of people from rural areas to the urban cities seeking for better opportunity. In the year 2011 alone, there were 271 million people (12 times the size of the entire Australia population) not living in the places of their registered residence for more than six months. This has caused enormous amount of pressure on Chinese property market in the urban cities.
To curb property price, China government invested heavily in rural development so that rural residences are now able to find opportunity closer to where they live; such strategy already showing sign of success with reports of increasing number of migrant workers returning home for Chinese New Year since 2010 and decided to stay in their villages. This causes labour shortages in some parts of the coastal regions and forced upon an increment in the average wages in the urban regions which are what the government hopping for.
Unlike the Australian government and the RBA, China government and their central bank have been doing whatever they could with high level of creativity over the last two years aiming to bring down property prices without adding too much cost pressure to the existing and new first home buyers on their mortgage repayment; These strategies, just to name a few include:
3) China affordable housing program is genuinely affordable with a 40 meter low-rent house may cost as little as 22.9 RMB (3.48 U.S. dollars) per month with government assistance;
4) In order to raise fund in support of the government affordable housing policy, China government allow local authority to raise fund through multiple channels including through the issuing of corporate bonds.
5) Contrary to the Australian policy towards ‘investment property’ and the introduction of negative gearing policy to encourage second home buyers for profit purpose – which has contributed to the current situation of an inflated property price in Australia, China seeks to control property price through combating property speculative investments via a series of strategies:
- China demands 50% down payment for those who buy their second home at a mortgage rate of no less than 1.1 times the benchmark rates;
- China also suspends loan and imposes property tax on third home buyers to make sure that if investors simply sit on their property waiting for the value to rise, the property tax works in a way that the longer one keeps the property idle, the more tax they would have to pay;
- China also imposed regulation to ban Public Housing Fund (PHF) mortgage for third home buyers;
- To effectively imposed the policy of limiting the number of housing purchase by individuals, officials are reportedly building a database, to be shared among 40 cities, where information about property ownership will be readily accessible;
- As a policy to put people basic human right ahead of corporate profit, China government also introduced a new regulation on 1 May 2011 that “demanding property developers to sell homes at mark prices.”
- Another measure in curbing the property price is to force developers to set the price of the housing before bidding for a piece of land. Under such policy, the cost of the land will be set and the developer who offers to sell the homes at the lowest price will get the plot.
- China also introduce policy to discourage International hot money (funds that flow from one country to another to earn a short-term profit) from entering China property market;
As a temporary measure to cope with the issue of affordable housing, China government also allow the flowering of the so-called “snail houses” to house the poor; This is a bit like the cage dwellers in Hong Kong which has been demonised by the Australian media as the dark-side of China without comparing the humane side of such policy against the dire conditions of the homeless families in Australia.
Unlike the behaviour of the RBA in Australia, China Central Bank only hike rate for first home buyer as last resort to control inflation. As a measure to control bank credit to the market to curb inflation, in the first four month of 2011, China central bank raises the required reserve ratio for China's banks four times to a record level of 20.5 percent; just as Al Jazeera economist Samah el-Shahat put it, China has a policy in putting the well being of the “people before the big banks.”
As a result, after two years of creative policies and hard work, property prices across China have begun to drop since the second half of 2011.
Human rights should also be measure by the amount of resources at the disposal of the government at the time an issue arise. Australia is comparatively at a much stronger position than China to offer affordable housing policy. However, as Michael Pascoe (a Business Day contributing editor) rightly observed in September 2010 that, “With the major parties concentrating on a few big lies during the election campaign, housing policy barely surfaced as an issue, except perhaps for the hugely irrelevant matter of housing a few boat people … Both parties had policies, if you went digging for them, a Regional Better Cities program here, a National Home Affordability Compact there, whatever that meant, but it seemed no-one wants to take responsibility for something as tricky as affordability.”
Without prejudice, China is an old civilisation with many philosophies on the issues of humanity dating back thousands of years, their concepts and meaning are far deeper than the West; While China begin to adopt a policy of building the Great Wall as self defence and marrying their princesses to foster peace with its neighbours more than 2,000 years ago, the West is still in the stage of endless aggression against its surrounding countries with brutal invasion, colonialism, slavery, exploitation, bullying with economic sanctions and endless military actions till this day.
Dr. Thorsten Pattberg, a German scholar at the Institute of World Literature of Peking University and author of "The East-West Dichotomy" (2009) and "Shengren" (2011) recently wrote an article in the Japan Times, China Daily and Global Research comparing the linguistic concepts of civilisation, humanity and democracy between China and the West, and advice that the West should adopt some of the Chinese language concepts of ‘humanity’, ‘democracy’ and ‘civilisation’ so that: “next time in international relations we could discuss how we're going to improve minzhu in Europe, and how to help America's transition into a descent wenming.”
According to Dr. Pattberg, “While in China we still see a family-value based social order; in the West we find an interest group-based social order. In your family, you do not apply strict laws or make contracts; instead you induce a moral code. When among strangers who fight against other interest groups, you simply cannot trust them like your own family, so you need laws.”
Chinese leadership has a genuine culture of caring for the wellbeing of the average people, while in the western society like Australia, without the backing of a caring culture the political system is nothing more than the skeleton structure of an election system. There is hardly any genuine sense of humanity beyond the exchange of interest between voters and politicians. Very often, social welfare is simply a tool used by politicians to win votes.
As homeless people may be among the 2.5 million voters not casting their vote in the 2010 election, so there should be no surprise to anybody on why their well beings have not being a priority among the political elites in Australia. One should note that, in the West, they called the population ‘citizens’ or ‘residents’, while in China, the population were called ‘子民 (zi min)’, meaning the Children of the nation. Perhaps this is the reason why China has selected a socialist economy rather than a capitalist one.
Democracy in the West needs to absorb the culture of humanity from China in order to function with accordance to the wishes of the general population; Otherwise, just like my earlier article comparing the way the three governments (Australia, China and USA) handling of their respective natural disasters and demonstrated that, if we define the objective of democracy as government “listening to and caring for the people in needs,” China government will be in practices more democratic than the government of Australia and the United States of America.
From the recent news on the Independent Media Centre, I realise that there will be a rally in Sydney on the 16th February 2012 calling upon the Australian government to learn from China on the issue of affordable housing. I would urge that all Australians who wish to promote the concept of housing affordability as basic human rights to encourage their friends and family members to show up at the rally. The voices of the hundreds of thousands of homeless people across the country need your help to be heart by our heartless ruling elites.
Written on 7 Feb 2012 by
Wei Ling Chua, Author of the book: Racism in Australia—The Causes, Incidents, Reasoning and Solutions
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