Unions blind to their own hypocrisy
The ACTU's case against wage freezes rests on logic that should kill its own rent freeze proposal — so why isn't it applying that logic consistently?
Headline: Unions blind to their own hypocrisy
Source: ABC News RSS — https://www.abc.net.au/news/2026-08-18/two-year-rental-lease-minimum-union-public-housing/107047316
There is a principle unions hold as close to sacred as anything in the industrial relations tradition: that workers should not have their pay frozen. The logic is sound. A wage freeze means your real income falls as prices rise. It shifts value from the person doing the work to the entity calling the shots. It is, in the union framing, exploitation dressed up as policy. The Australian Council of Trade Unions has spent decades making exactly this case, and making it well.
The mechanism hurts the renters trying to get in, not just the landlords
Which makes the ACTU's latest housing proposal genuinely puzzling. The peak union body is pushing for a mandatory two-year minimum lease for all renters nationally, with rent terms locked in for that period. The stated goal is stability and security for tenants, and that goal is real. Australian renters are among the most insecure in the developed world. In New South Wales there is currently no minimum lease standard at all. The problem the ACTU is pointing at is not invented.
But the mechanism it is proposing is a price and term freeze applied to a market already suffering from inadequate supply. Landlords would be required to hold their properties in the rental market, on fixed terms, for longer than the market currently demands. The question is not whether renters need more security. It is whether this instrument delivers it, and who pays when it does not.
The supply side is where rent control arguments, in any form, tend to collapse. AHURI, the Australian Housing and Urban Research Institute, notes that rent freezes, caps, and stabilisation measures all carry meaningful supply-side risks in a low-vacancy market. The mechanism is not complicated: reduce the flexibility and profitability of a rental property, and some owners at the margin will exit the market, sell, or redirect to short-term platforms. The renters who benefit are those already holding a lease. The renters who pay are those trying to get one. We have covered this pattern in detail in why rent control keeps failing the renters it's meant to help.
The renters who benefit are those already holding a lease. The renters who pay are those trying to get one.
O'Neil's confidence sits in tension with the bank's own modelling
ACTU president Michele O'Neil says she is confident the proposed two-year minimum would not drive landlords away. She may be right that the effect is smaller than critics fear. A two-year minimum lease is not the same as a rent cap. Landlords can still adjust rents between tenancies, and the ACTU proposal allows renters to opt for a shorter period if they prefer. It is a softer intervention than an outright freeze. But O'Neil's confidence sits in tension with NAB modelling, circulated to investors this week, which found that tax changes to negative gearing and capital gains tax, also backed by the ACTU, could push rents up by as much as 30 per cent as landlords seek to restore yields. The bank later described this as a scenario rather than a forecast, but the underlying dynamic it identified is real.
The inconsistency is structural, not moral
The hypocrisy charge is worth examining precisely rather than just asserting. The ACTU's objection to a wage freeze is not merely moral. It is structural: freezing wages in a market where labour costs are rising causes real harm to the worker, because their purchasing power falls. The ACTU's case for a rent freeze is similarly structural: rental costs are rising and renters are suffering. Both claims can be true simultaneously. The inconsistency is not that the ACTU cares about one group and not the other. It is that the economic logic used to oppose one instrument is identical to the logic that undermines the other, and the ACTU is not applying it consistently.
The public housing target is the coherent part of this platform
There is a version of the ACTU housing platform that is economically coherent. The push to return public housing construction to one in every 10 new dwellings, up from the current one in 50, is the most substantive element of the plan. Public housing stock actually declined by more than 1,100 rental units last year despite a 32 per cent increase in completions, because the rate of disposals outpaced new supply. If the ACTU's energy were concentrated on expanding the stock of non-market housing rather than controlling the terms of private rental agreements, it would be harder to criticise and more likely to help the renters it says it is trying to reach.
Instead, the flagship proposal is a term freeze. It will help some tenants. It will make the market harder for others to enter. And it is being advocated by an organisation that has never once applied the same reasoning to a wage freeze and liked what it saw.
Sources
ABC News — Unions push for two-year rental lease minimum and massive new public housing build
AHURI — Understanding what rent freeze, rent cap or rent control means
The Conversation — Rent freezes and rent caps will only worsen, not solve, Australia's rental crisis
CEDA — Why rent control isn't a silver bullet for our housing crisis
The Bearing — Why rent control keeps failing the renters it's meant to help
Frequently Asked Questions
What is the ACTU proposing for rental leases in Australia?
The ACTU is pushing the federal government to mandate a minimum two-year lease for all renters nationally, with rent terms locked in for that period. Renters would retain the option to choose a shorter lease if they prefer.
Why would a minimum two-year lease make renting harder to access?
Locking landlords into longer fixed terms reduces the flexibility and profitability of rental properties, which can push some owners at the margin to sell, exit the market, or shift to short-term platforms. Tenants already in a lease benefit from the stability; tenants trying to find one face a tighter market with fewer properties available.
How is a rent term freeze different from a rent cap?
A rent cap limits how much landlords can charge or increase rents. A term freeze, like the ACTU's proposal, fixes the duration and conditions of leases rather than the price directly. Landlords under the ACTU model can still raise rents between tenancies, making it a softer intervention — but it still reduces market flexibility and carries similar supply-side risks.
What did NAB modelling find about rents and negative gearing changes?
NAB modelling circulated to investors found that proposed changes to negative gearing and capital gains tax — also backed by the ACTU — could push rents up by as much as 30 per cent as landlords seek to restore yields. The bank later described this as a scenario rather than a forecast, but the underlying pressure on landlord returns is real.
Is Australia building enough public housing?
No. Public housing stock declined by more than 1,100 rental units last year even as completions rose by 32 per cent, because the rate of disposals outpaced new supply. The ACTU's own platform calls for public housing to return to one in every 10 new dwellings, up from roughly one in 50 today.