A Qualitative Examination of Jim Kemeny’s Arguments on High Home Ownership, the Retirement Pension and the Dualist Rental System Focusing on Australia

Abstract

ABSTRACTA key aspect of Jim Kemeny’s argument is that in advanced economies that have high levels of home ownership, the age pension is only adequate if you have low accommodation costs. A related argument is that these societies will be dominated by what he calls a dualist rental market. In this rental market regulation is minimal and landlords hold sway. Kemeny’s thesis, was given added support by Castles’ (1998) more extensive comparative analysis. He concluded that his findings were ‘extremely supportive’ of Kemeny’s conclusion. In this paper, I use in-depth interviews to test Kemeny’s thesis. The circumstances of older homeowners and older private renters in Australia are compared. All of the interviewees were dependent solely or primarily on the government age pension. The interviews indicated that almost all of the older homeowners felt that the age pension was adequate. They were able to consume adequately, engage in leisure activities, run a car, go on holiday and they had little anxiety about their financial situation. This was especially so in the case of those interviewees drawing the couples pension. In contrast, most of the older private renters suffered from severe financial stress. Invariably they had to use a large proportion of their income to pay for accommodation, and as a result, they found it difficult to purchase basic items and any unexpected expense precipitated much anxiety. Their limited resources severely impacted on their capacity to sustain social contacts, engage in leisure activities and look after their health. In addition to having limited resources, many had minimal security of occupancy. The interviews strongly substantiated Kemeny’s original thesis. They illustrated that within a dualist rental market the housing tenure and attendant accommodation costs of a person dependent on the government age pension are crucial determinants of their capacity to live a decent life.