Labor’s Policy Backflip

In fact, far from implementing Labor’s policy, Minns and Jackson are openly defying it. And worse, they are backtracking on their own, much more modest, election promises.

In the lead-up to the March election, NSW Labor promised residents of Sydney’s iconic Redfern and Waterloo public housing estates — which were at the epicenter of the Aboriginal self-determination and land rights movements — that a Minns government would tear up the Coalition government’s plans to “socially cleanse” these estates.

After taking the reins, however, Minns sought to redefine his election commitments. As he explained, his promise to “freeze the sale of all public and social housing” didn’t mean freezing existing plans to partially privatize an estate in Waterloo South.

Housing Minister Jackson has also attempted to spin away broken promises. At a recent town hall meeting, Jackson assured attendees that she “considered the NSW Labor conference motion to be the policy of the NSW government.” Despite this, Jackson has greenlit plans to demolish 749 public homes in Waterloo to make way for 1,938 private apartments and 847 social housing homes. Unlike public housing, social housing may be managed by nongovernment providers, offering tenants fewer protections and charging higher rents.

The NSW government has also announced a similar plan to redevelop forty-six Eveleigh town houses into 420 apartments, 70 percent of which will be privatized. The fact that the government is planning to sell off over two-thirds of the planned apartments belies Minns’s claim that “mixed housing” developments are anything but privatization. And to add insult to injury, the remaining 30 percent of apartments won’t be public housing either. Rather, the government has reclassified them as social housing, giving it the right to outsource them to non-profit housing providers in the future.

Given these developments, there’s every reason to fear that under the Minns Labor government, estates like Waterloo South, which are presently 100 percent public housing, will be entirely privatized under the guise of social and mixed housing.

NSW Labor Embraces Developers

For public housing advocates, NSW Labor’s policy commitment to safeguard public housing wasn’t just about affordability. It was also about enshrining a “right to the city” for everyone. And in the lead-up to the election, Minns’s campaign gave many cause to hope as residents found themselves awash with ALP letters, social media posts, and public statements opposing the Coalition’s plan to demolish inner-city estates. At no point did Minns place caveats on Labor’s unambiguous commitment to stop the demolition of public housing.

Less than six months out from the election, the Minns Labor government has broken its promises spectacularly.

Jackson has tried to shift the blame, claiming that contracts signed by the former Coalition government tie NSW Labor’s hands. For public housing residents facing eviction, this is cold comfort, and many are understandably outraged. As Waterloo resident Norrie May-Welby explained, “That the tune changes the moment they are in power is just crushingly disappointing to anyone not sensibly cynical about politicians.”

The reasons for Minns’s betrayal are depressingly predictable. For decades, NSW Labor has prioritized developers over public housing residents. Indeed, NSW Labor’s cozy relationship with property developers has been the subject of multiple Independent Commission Against Corruption probes. For example, in 2021–22, property developers donated over $1 million to the national ALP. Although NSW state law prohibits property developers from donating to the state party, it’s entirely legal for them to donate to the federal Labor Party. Given the close connection between Labor’s state and federal factional, administrative, and policymaking processes, it defies credulity to claim that such donations don’t buy political influence.

Nowhere is NSW Labor’s sweetheart relationship with developers more apparent than in the revolving door between Labor staffers, lobbyists, and the property development industry. It’s no exaggeration to say that Australia’s parliaments — state and federal — are littered with former property consultants and lobbyists.

Indeed, Minns’s newly minted transport secretary, Josh Murray, is emblematic of the sordid pipeline. Prior to his appointment, Murray was an executive for international engineering and construction firm Laing O’Rourke. And prior to that, he served as chief adviser to former NSW Labor premier Morris Iemma.

Trickle Down Housing Affordability

NSW Labor’s backflip on public housing also points to the impossible line that the Minns government is attempting to walk. Given the severity of the housing crisis, the party is aware that if it isn’t seen to be taking action, it will pay a hefty electoral price.

At the same time, NSW Labor has repeatedly committed itself to repairing the budget without raising taxes. Given this, shy of a bailout from Anthony Albanese’s federal government, even if the Minns wanted to build public housing, it’s hard to see where his government could find the necessary funds.

For Sydney’s infamous property development industry, however, Labor’s predicament is an opportunity, and they have seized the opportunity to shift the narrative. Under the guise of the nascent “Yes In My Backyard” (YIMBY) movement, developers are claiming that excessive planning regulations on medium and high-density developments are to blame for the housing shortfall.

NSW Labor has been only too happy to play along, parroting developers’ YIMBY narrative and maintaining the fiction that more for-profit private developments will lead to lower housing prices. On this justification, the state government has granted itself the power to override local government opposition to housing developments that include 15 percent affordable housing. And controversially, Minns has granted developers a 30 percent increase in the allowable height and footprint of housing projects.

The changes will be a boon for property developers — but evidence suggests they are unlikely to “trickle down” to lower-income groups as price relief. They will, however, guarantee developers higher profits at the expense of the community’s right to have a say over planning, via local governments.

Labor Backed Into a Corner

Recent data from the Australian Taxation Office points to the real roots of the housing crisis. One percent of Australian taxpayers now own a quarter of the nation’s investment properties. This obscene concentration of wealth has given a small class of landlords power to determine rents. And while property investors’ earnings are bolstered by lucrative tax breaks, real wages continue to fall.

This means that unless Labor moves to curtail investor profiteering, it will struggle to bring down the cost of living or housing prices. Rent controls and large-scale construction of public housing could do this — but these measures would put Minns at odds with the property investors and developers.

This is why while Minns may have bought himself some time with voters, as the housing crisis worsens, his government will ultimately pay the political price. Indeed, the corner that NSW Labor has backed itself into is a familiar one. Already, Minns’s election promise to increase spending while repairing the budget is proving impossible. After all, NSW’s debt is already set to increase when Minns repeals the Coalition’s public sector wage cap.

Given that the NSW budget mostly relies on the federal government — which collects around 81 percent of Australian taxes — consecutive Coalition and Labor governments have tended to fill budget gaps by privatizing state assets, borrowing, and with spending cuts. NSW Labor’s slated budget cuts and below-inflation wage offers suggest that the Minns will continue this tradition, albeit less aggressively than his conservative predecessor, Dominic Perrottet.

The alternative is to break from neoliberal orthodoxy by implementing progressive taxes. For example, Minns could increase taxes that both target the ultrarich and are almost impossible to avoid. Higher payroll taxes for large companies could fund higher-wage offers for public sector workers. Punitive charges on vacant investment properties would raise revenue and help free up housing stock. Or, Minns could balance the budget by cutting state funding for elite private schools — and in so doing, redistribute money away from the Liberal Party’s base toward Labor’s lower-income supporters.

But these policies would require a return to the kind of genuinely social democratic approach that has not been seen in Australian Labor government since the Gough Whitlam years. While this project would likely prove popular with many of the eight hundred NSW Labor delegates who voted last year to defend public housing, it would find itself pitted against property developers and their allies in the NSW Labor government.