In the Australian federal election that is being held today, none of the parliamentary parties are advancing policies to address the deepening social crisis facing millions of working people. Instead, the official campaign has been dominated by a contest between Labor and the Liberal-Nationals, pitched to the corporate elite, over which party is best placed to implement social spending cuts and a further assault on living standards.

Suburban houses in Hobart, Tasmania (Credit: Wikimedia Commons)

The gulf between the political establishment and masses of ordinary people is starkly demonstrated on the issue of housing. The measures proposed by Labor and the Liberal-Nationals are aimed solely at maintaining record house prices and ensuring the profits of the banks, under conditions in which broad sections of the population are increasingly unable to afford their mortgages and rents.

In the midst of the campaign, the Reserve Bank of Australia (RBA) lifted the official interest rate to 0.35 percent, its first rise in 11 years. It has foreshadowed multiple further increases over the coming months.

Rising interest rates threaten catastrophic consequences for many working-class households. earlier this month modeled the impact on a borrower with a $500,000 home loan fixed at 2 percent. When the fixed rate ends, a sudden increase of their interest rate of between 2 and 3 percent would increase their monthly mortgage payment by between $539 and $836.

Leith van Onselen, the chief economist at MacroBusiness Fund (MB) and MB Super, told that if the interest rate was to rise to 3.4 percent by August 2023, then average mortgage payments would skyrocket by 46 percent, adding a massive $1,250 to monthly mortgage repayments for a median-priced Australian home.

Already, an estimated 10 percent of homeowners are in mortgage stress, defined as spending 30 percent or more of household income to service a mortgage. On the back of interest rate increases, experts have warned that mortgage stress could rapidly rise to 20 percent of all mortgage holders. The Australian Broadcasting Corporation reported at the beginning of the month that some 300,000 households are now at “significant risk” of defaulting on their loan.

The crisis extends to renters, who have been hit with average rental increases across the country of 10 percent over the past year. Rent is becoming unaffordable and homelessness is rising. An ever greater proportion of society is living a precarious existence.

An Anglicare Australia National Report provided a snapshot of 45,992 nationwide rental listings. Only eight were affordable for a single person on the sub-poverty JobSeeker unemployment payment, all of them rooms in shared houses.

The crisis is particularly stark with youth—where there was only one listing (in a share house) that was affordable for a person on Youth Allowance anywhere in the country. Couples out of work, single parents on Centrelink payments, and people on the Disability Support Pension could only afford 0.1 percent of all rental properties in the snapshot.

For a couple living on the aged pension, just 1.4 percent of rentals were affordable, most of which are rooms in shared houses. Finding an affordable rental is even harder for single aged pensioners, with 0.1 percent of listings affordable.