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Abstract
This article connects homeowner subjectivities and state practice to specify how the post-war homeownership-welfare dynamic has radically transformed since the 1980s. Specifically, this article revisits, 35 years on and against the onset of financialized capitalism, Jim Kemeny’s seminal thesis on the relationship between homeownership and welfare. Focusing on Australia, as a less considered case in the liberal Anglophone cluster, it traces how the state actively overhauled the local post-war homeownership-welfare dynamic from the late 1970s. The analysis establishes how this refurbishment outdates Kemeny’s thesis by rendering features of the post-war homeownership model ineffective and, more significantly, by fashioning new homeowner subjectivities—namely, the investor subject. By bringing together Foucauldian perspectives (mortgage biopolitics) with Marxian political economy, this state-sensitive account both responds to Kemeny’s unexpected silence on the active hand of the Australian state in structuring its homeownership-welfare dynamic, and contributes to the asset-based welfare critique by emphasizing its post-1980s features and the structural drivers that explain its persistence, despite its unequal wealth and welfare outcomes.
Acknowledgements
The author thanks the editors and three reviewers for their valuable feedback.
Notes
1. I refer throughout to the imperatives of the capitalist state to protect the systems of capital accumulation, but reiterate Jessop’s (Citation2002, p. 11) argument that these imperatives do not ‘explain everything significant about the architecture and operation of states and the modern state system, let alone every last detail of their development. On the contrary it is precisely because capitalism cannot secure through market forces alone all the conditions needed for its own reproduction that it cannot exercise any sort of economic determination in the last instance over the rest of the social formation’.
2. This silence is unexpected given Kemeny’s legacy of inspiring housing research with greater awareness of social and political contexts, and one that he himself has acknowledged. In particular, Kemeny recognized that despite calling for a theory of the state in Housing and Social Theory, that ‘for me the state remained a black box and I have never tried to examine the way the state works on a more detailed level’ (Allen, Citation2005).
3. Chester (Citation2012, p. 173) argues: ‘The rate of change of Australia’s GDP has not generally eclipsed wages and price growth. […] Australian wages growth, from the late 1990s, developed a constant inverse relationship with economic growth until 2009 and 2010—and that relationship shows year-on-year reversals. The same relationship is not present in the US, UK or Canada which all tends to exhibit a pattern of wages growth generally mirroring economic growth’.
4. Titmuss’ (Citation1963) social division of welfare comprised: (1) social welfare (distributed by state), but also forms of (2) occupational welfare (benefits to workers) and (3) fiscal welfare (benefits secured through taxation frameworks).
5. Fenna and Tapper (Citation2012) argue, for example, that state ‘retrenchment’ in Australia has been ‘modest or non-existent’ and its welfare state is ‘far from dead and buried’ but rather demonstrates a ‘great inertia or resilience’. The most compelling data are net social expenditure which provides a quantitative indication of state retrenchment or expansion. Fenna and Tapper (Citation2012, pp. 158, 164) provide fiscal incidence evidence—which considers the effects of government social expenditure and taxation on household income, rather than simplistically looking at direct social payments—(…) that ‘allows no room for the idea that, in aggregate, the welfare state has been cut back over this period [1984–2004]’ but rather suggests 30% growth in social expenditure in real terms (with the exception of education). Means-tested support has expanded since the 1980s, in ways that surpass the support for the poor generally associated with liberal models. The fuller picture is less rosy however since tax has also increased, and when both taxes and expenditure are accounted for, ‘there was little net growth’ in social expenditure (Fenna & Tapper, Citation2012, p. 169). Wilson et al., (Citation2013) further report how income support and other benefits to the unemployed are slipping below living costs, and thus shifting previous protections against poverty under the post-war model (detailed later).
6. Under this Keynesian paradigm the Australian government could manipulate interest and exchange rates to manipulate the economy; financial repression (i.e. measures to hold down interest rates) was a means to transfer benefits to borrowers from savers, thus allowing redistribution as required.
7. ‘Solution’ refers to ‘the particular sets of institutions, processes and outcomes which describe the ways in which housing is provided in time and space’ (Berry, Citation1999, p. 107).
8. In Australia, unemployment has historically been relatively low, and minimum wages relatively high, compared with much of Europe and the US, but unemployment and underemployment are higher than in the post-war boom. De-industrialization and technological advances have reduced unskilled manual jobs associated with manufacturing, and so together with ‘cheap’ international labour and casualization the workforce has become more precarious, especially for semi-skilled and unskilled workers, whose jobs are more insecure (e.g. zero-hour contracts) (Wilson et al., Citation2013).
9. By 2007, 90% of wage earners were covered by private pensions (superannuation) after compulsory contributions were introduced in 1992, and government investments in private superannuation rose from $123 million to $1.3 billion between 1990 and 2011 (Wilson et al., Citation2013).
10. This aligns with the broader withdrawal of social security protections from ‘any pretence of social citizenship rights’, and fractured the dependent population back into the categories of deserving and undeserving poor’ (McDonald & Chenoweth, Citation2006, p. 113). This focus on ‘obligations’ over citizens’ rights is most evident in Workfare policies or Indigenous affairs reforms, though it also filters through to housing consumption.
11. As Stebbing and Spies-Butcher (Citation2010) qualify, this dual tier model is a heuristic, and in practice policies often combine social expenditure and tax expenditure. This tendency to develop ‘dualistic tendencies’ was indeed recognized by Esping-Andersen (Citation[1990] 2013) in his liberal welfare typology, and is now receiving more attention.
12. Such accolades reflect Australia’s relatively progressive tax and spend (via GST) framework, which has helped preserve vertical equity within the Australian welfare state, notwithstanding slippage (Fenna & Tapper, Citation2012).
13. While record low interest rates have provided some reprieve, just less than a fifth of mortgage holders remain ‘at risk’ (18.4%), of which a majority are at ‘extreme risk’ (13.9%) (Roy Morgan, Citation2016, 13). Mortgage stress is particularly high in low income households (earning less than $60 K) (83% ‘at risk’, and 69% at ‘extreme risk’), single income households (37% ‘at risk’, 26% at ‘extreme risk’), and older Australians (60+) (34% ‘at risk’, and 20% at ‘extreme risk’). Housing welfare has meanwhile shifted from public provision (with declining public housing funding and stock) to private rental assistance, resulting in long waiting lists for public housing and residualization, whilst private renters face rising housing stress (Troy, Citation2012).
14. Australia abandoned inheritance taxes in the 1980s. This, together with effects of the CGT concessions on wealth, suggest intergenerational wealth transmission is also significant, and facilitated by tax settings.
15. A variation of this account provided by Stebbing and Spies-Butcher (Citation2010) posits STEs expansion as an inheritance of fiscal austerity (real and perceived fiscal constraint from the late 1970s) which made the expansion of social spending unviable practically, especially during the 1980s and 1990s because of concern about expanding current account deficits, and limited revenue from an ageing population, slowing economic growth and economic globalization. Stebbing and Spies-Butcher (Citation2010) argue that STE expansion provided the Australian government with an ‘invisible’ or ‘policy back door’, and therefore politically favourable, route to increase social provision.