Is Australia’s Unaffordable Housing a Foreign Policy Problem?

At first glance, housing may not seem like a foreign policy concern. Yet if the current Australian government is serious about its “whole-of-nation” approach to foreign policy, then it needs to pay serious attention to the country’s unaffordable housing. A lack of access to affordable housing has considerable knock-on effects on the country’s overall capabilities, its global reputation, and how it uses key strategic industries like international education to advance its interests. 

Secure housing for all is the bedrock on which a society’s capabilities are built. A country’s primary resource will always be its people, but without a platform of necessities on which to flourish, Australia’s human capital is being restrained. Access to affordable housing is also a compact the country should make with its youth – one where opportunities should be presented in abundance and where younger people feel they have a positive stake in the future. 

Unfortunately, there is a demographic impasse blocking Australia’s political parties from actively caring about youth opportunity. With homeownership rates around 67 percent at the 2021 census, the democratic calculations aren’t favorable enough for political parties to consider the cost of housing in their own interests to seriously address. In general, politicians are also a landlord class with no personal interest in lowering the value of property. 

As the country ages, democratic calculations become even less favorable. Low birth rates mean that there are fewer young people for political parties to be concerned about the future of. While migration may off-set this national aging slightly, the median age of permanent migrants is 37 years old, and the path to citizenship – with its right to vote – is at earliest another four years. This is pretty bleak stuff if you are in your 20s waving your arms around expecting public representatives to notice you.

We also shouldn’t underestimate the frustration and resentment this breeds. Instability is not solely the creation of radical political actors. It needs fertile soil within individuals to feed upon, and it spirals up from insecure households to national politics. Australia’s internal stability is vital for its international reputation. In an era where many other Western states are experiencing domestic political turbulence, Australia must see its stability as an essential national asset. 

The federal government has sought to ease the demand for housing with a new cap of 270,000 international students per annum. Alongside this, new restrictions on graduate visas have also been put in place to limit numbers. Both these measures will create considerable costs on Australia’s capabilities as well as its diplomatic reach. 

Alongside the considerable money that international students pump into universities and local economies, Australia’s international student strategy has been based on a pair of incredibly important features. The first is related to graduate visas, with Australia trying to permanently capture those with skills that the country needs. For those students who return to their countries of origin, the hope is that they develop strong professional connections with Australia – as well as rise to positions of great power and influence. Alongside this, the objective is for returnees to maintain a positive view of the country that they infuse back into their societies. 

Limiting student numbers obviously limits the cohort of people who can perform these roles – undermining Australia’s capabilities and influence. However, negative student experiences can be highly influential in painting perceptions about the country. The government’s calculations may be that limiting student numbers takes pressure off housing and therefore seeking to avoid the problem of harming the student experience.

Foreign students are a particularly vulnerable group who may lack local connections, have no local rental history, and may be unaware of their rights. This can make them easily exposed to exploitation in the form of substandard accommodation, high rents, and the cramming of multiple students into single rooms.

Yet this is less of a problem of student numbers than it is part of the overarching problem of housing supply. The government has decided it is far easier to try to limit the symptoms of housing unaffordability, rather than address the actual cause. The problem with this approach is that it is a stark failure of the kind of statecraft that the government claims is its approach to governing. 

A “whole-of-nation” approach to foreign policy would understand how each element of domestic policy is critical to enhancing the country’s overall capabilities and international power. It would understand that as the federal government raises around 81 percent of total tax revenue in the country it has a massive carrot (or stick) to wave in front of state governments and local councils to increase the supply of housing. But this, of course, would rely on governments (at all levels) actually believing housing unaffordability is a genuine problem. It doesn’t seem like they do.