Comment

Renters shouldn’t take the right to vote for granted

Property ownership and voter turnout tend to go in tandem. Thomas Coughlan harks back to a time when renters weren't allowed to vote and wonders why renters are so cavalier about voting now.

Comment: This year the United Kingdom celebrates a century of women’s suffrage. A series of public events, theatre performances and museum exhibitions is planned and buildings around the country have flown flags of suffragette purple in celebration. 

The legislation that enfranchised the first women also enfranchised the last men.

There are few more important milestones in the lifetime of a democracy to celebrate. No democracy worth its name should restrict voting based on gender or any other qualification. But as with most public commemorations, one or two important details have been lost to history or conveniently forgotten. 

The Representation of the People Act did not give the vote to all British women. Only women over 30 who held more than £5 of property, or were married to men who had that amount of property, could vote. Women would have to wait another 10 years before winning the same voting rights as men.

A fact much less well known is that the legislation that enfranchised the first women also enfranchised the last men.

In 1918, men over the age of 21 were still required to own at least £10 of property or pay an annual rent of at least £10. When this reform was passed in 1884, it still meant that only 60 percent of men could vote. 

New Zealand has a dark history of restricting the vote too. Our early elections excluded all women, most Maori and a decent minority of non-Maori men too. The male franchise was again restricted to those who owned or leased a certain amount of property. 

Universal suffrage was finally extended to all Māori men in 1867 and all European men in 1879. Even then, wealthy property owners loaded the deck. Māori could only vote in Māori seats, which diluted the power of their vote. Freeholders and leaseholders could vote in any electorate where they held land. As there was no single standardised election day until 1881, freeholders and leaseholders could quite legally tour the electorates in which they held land, voting in each one. A man who owned a lot of properties could vote several times. 

When men finally won the universal franchise, a full 91 percent of adult Pakeha turned out to vote. Sadly, it’s been a rather downhill journey from there. Voter turnout has been declining for at least 20 years, bar a slight uptick last year. Turnout among youth has seen a dramatic drop off.

It is tempting to read some correlation between the fall in voter turnout and declining rates of home ownership. Work from Victoria University's Political Science Professor Jack Vowles has connected declining rates of home ownership with falling voter turnout by the young.

Why should we care about voter turnout and property ownership falling in tandem? Because the two are so indelibly linked and government policy inevitably follows the votes. As Newsroom has covered in depth, government policy favours homeowners to an almost absurd degree. Just look at the effective marginal tax rate on savings in a bank account versus equity in a home.

The marginal effective rate on money in a bank account, PIE, superannuation fund, company, or foreign shares sits between 47.2 percent and 55.7 percent. By contrast the effective marginal tax rate on equity in property is 11.3 percent on owner-occupied property and 29.4 percent on a rental property.

Last week, the Government made two significant announcements on housing. First, that landlords will no longer be able to pass on letting fees to tenants, and second, that the first Kiwibuild homes would be constructed in Auckland. 

The first announcement was the most significant. Home ownership has fallen in New Zealand as prices have risen. They are unlikely to ever fall back to a position where home ownership is affordable. Since 2012, when average house prices rose through the $600,000s, the volume of houses sold in Auckland each month has fluctuated between 2000 and 3000, only occasionally dipping below 2000 transactions a month. That’s a lot of people deeply invested in keeping prices stable. House prices dropping to ‘affordable’ levels would create as many problems as it solves.

That means governments should look at using their other policy levers to extend some of the benefits traditionally afforded to homeowners to the wider population, benefits like stable accommodation and the ability to save. 

The first of the Government’s announcements gestures towards stability. Letting fees can be used as bargaining tools by landlords, with tenants who offer to pay them (rather than have the cost included in their rent), given an advantage over those who do not. Housing Minister Phil Twyford has said he hopes to review the Residential Tenancies Act by the end of the year.

The reform will include a requirement that rents can be raised only once a year instead of every six months, an end to no-reason terminations, and a formula for how rent increases are calculated included on every tenancy agreement. While stopping short of the rent controls seen in the United States and Europe, these changes will provide some stability to what could be New Zealand’s largest sizeable generation of lifelong renters. 

A tax switch?

There is speculation that the Tax Working Group may propose a tax 'switch' that lowers taxes on certain forms of savings and imposes a capital gains tax on housing (but not the family home). This too, would be a signal to New Zealanders that it is possible to save well and live a stable, rooted life without being tied to home ownership.

So long as you are governed by something, you should have a say in what that government should be. 

The Government should note the small but noticeable uptick in youth turnout in the last election. Today’s youth will struggle to own homes, but that should not mean that governments should ignore their need for policy that extends economic and housing stability to them, without them needing to own homes. To get these benefits, of course, they would have to vote. 

We should never forget the reason why land owners restricted voting and government to themselves. The struggle for the franchise has a long history.

In 1647, at the height of the English Civil Wars, radicals debated whether to allow universal male suffrage in England. The episode, now called the Putney debates, might have resulted in universal suffrage in the New Zealand elections in 1853 had the outcome been different. Thomas Rainsborough memorably said that, "the poorest he that is in England hath a life to live as the greatest he".

“I think it clear that every man that is to live under a government, ought first by his own consent to put himself under the government,” he said. 

In other words, so long as you are governed by something, you should have a say in what that government should be. 

But the opposition, the so-called “Grandees”, won the day. Their leader, Henry Ireton, said that “no man hath a right to an interest or share in the disposing of the affairs of the kingdom… that hath not a permanent fixed interest in this kingdom".

Should non-taxpayers have the vote?

He meant that people who didn’t own anything had no stake in what the government decided. Why should the poor have a say in government? After all, they paid no taxes and had no economic stake in its outcome.

The sad trends in home ownership and voter turnout suggest that unpropertied voters are disenfranchising themselves. But they might be putting the cart before the horse. Their falling turnout might encourage future governments to ignore their needs.

The 2013 census showed only 63.2 percent of New Zealanders own their homes, the lowest percentage since 1951. If the other 36.8 percent showed up in greater numbers on polling days, they could become a force that local and central governments couldn't ignore.

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