By Dr Oliver Villar, Lecturer in History, Politics and Sociology, and Professor in Political Science Dominic O’Sullivan, both in the Charles Sturt School of Social Work and Arts. Professor O’Sullivan is also a researcher in the Charles Sturt Gulbali Institute of Agriculture, Water and Environment.

Dr Villar said the Labor government’s Housing Australia Future Fund Bill is nothing new; it is designed to allow tax breaks for property investors and developers, and to prop up the stock market at a time of likely recession.

The problem is that there are presently 640,000 people that need social housing, with demand projected to rise to nearly one million by 2041, so the Greens are right to ask for more money, even if they are, in effect, agreeing to market solutions.

Market solutions such as the one proposed will ensure that prices remain high. It is also strange that Labor would invest $10 billion in the stock market in the (perhaps vain) hope of a $500 million return that will fund only 30,000 homes.

Why not spend the $10 billion on housing instead? This is a gamble, with the likely beneficiaries being the usual suspects, namely traded foreign and Australian companies.

What needs to be done is to stop the subsidies which support the property sector, introduce an extra stamp duty for foreign buyers, and tax AirBNB businesses and other multinationals.

There is also a need to address ‘land banking’ by developers who want to keep supply tight.

The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms currently underway are a step in the right direction, as the impact of money laundering in driving up property prices has been another factor in the housing crisis.

In 2011, I co-authored a major study on the cocaine trade, examining the links between the global drug trade and the ‘legitimate’ global economy, including banks, real estate, corporations and the New York Stock Exchange.

I argued that drug cartels from Latin America have historically laundered their profits through, among other sectors, real estate.

It should not come as a surprise then, that cartels have penetrated the Australian cocaine market as an ABC Four Corners investigation in May showed. This comes at a time when Australians are the highest per capita users of cocaine in the world.

I also describe the dynamics of the housing crisis in a previous commentary where I critique the American neoliberal ‘investment approach’ to social and economic policy and how risk is transferred to the public for private profit.

Professor O’Sullivan said the housing affordability problem, both in terms of purchasing houses and the availability of rental accommodation, is causing major social upheaval and problems for people which the Government wants to address.

From the Greens point-of-view, the Government’s proposals don’t go far enough, and there are also philosophical differences between the Greens and the Government.

It’s important to remember that the make-up of the Senate is such that the Government can only pass legislation with the support of either the Greens or the Coalition.

If it doesn’t have one of those groups on side, there just aren’t enough members on the crossbench for the Government to turn to, which is why the Greens are so important to them.

The Government’s plan is to invest a large sum of money - $10 billion - then invest up to $500 million in returns on that in social housing each year.

That means that if the return on investment is less than $500 million, then the pool available for social housing would be less than $500 million.

As a concession to the Greens, the Government has agreed, no matter what, it will invest $500 million and there will be scope for that to increase with inflation.

While that’s a concession, the Greens say that’s not enough money and they have also been critical of the Government ‘gambling’ money on the stock market and relying on this gamble to fund housing.

All that really tells us is the Greens don’t understand the stock market, and that really detracts from their argument that the fund isn’t big enough to do what needs to be done.

The other concession the Greens seek is they want the Government to work with the states and territories to implement a rent freeze, and from the Government's point-of-view there are two problems with that.

Firstly, it’s not a federal government power so they would have to work with the states and territories. Secondly, there is ample evidence that all rent freezes do is discourage landlords from making their properties available for rent, or it discourages new investors from getting into the property market, and that reduces supply.

We already have a big housing supply problem, and we don’t want to make it worse.

The government seems to regard the Coalition as a lost cause on this issue, given social housing isn’t something the Coalition traditionally supports very strongly.

The Coalition is also worried that this could be an inflationary measure. It’s a lot of money going into public spending at a time when the economy is rather fragile.

That’s consistent with Coalition philosophy more broadly, being more cautious about spending public money than Labor governments traditionally are.

Labor supporters tend to expect Labor governments to do more; Coalition supporters expect the Coalition to do less, and we’re seeing that in this issue.

Although the Greens opposed this legislation for very different reasons than the Coalition, one imagines that the Coalition will still be pleased to be seeing the Government struggling on this.

If the bill gets through, then it’s a win for the Government and it can go to the next election saying ‘Look, we’ve had an impact on housing policy, we haven’t solved it, but we’ve put thousands of people into homes, we’ve lifted this number of kids out of homelessness’, and then all those things are good stories for the Government to tell.

Even for a party that you know isn’t too keen on too much public spending, it still doesn’t want the other side to have good stories to tell to its potential supporters.

The Opposition should be rather pleased by this present impasse; it shows the Government is not really in control of the legislative agenda.

Normally with a few concessions and negotiation, and perhaps some trade-offs, governments do tend to get their legislation through parliament eventually, but the Greens are holding firm on this.

We might see some movement from the Government on increasing the size of the fund. But I’d be very surprised to see any movement on the issue of rent freezes, because the economic arguments against it are just so compelling and the risks of exacerbating a housing supply problem are just so strong that it really could cause problems down the track.

Of course, the political negotiations needed to get the states and territories to agree to it mean they will be worried about not wanting to exacerbate a supply problem in their jurisdictions.