More than eight years ago, when platforms like Airbnb and Uber were still in their infancy, few were considering the potential downsides of these exciting new disruptors.
Most were focused on the benefits of cracking open competition in the hotel and taxi industries. Who didn’t want a cheaper holiday or ride home?
One of those expressing caution, however, was then shadow assistant treasurer Andrew Leigh. In 2015, he released a discussion paper acknowledging the “huge potential” of the share economy, but also warning of the downsides in the rush to new platforms that weren’t constrained by the rules and standards of existing industries.
At the time, Leigh’s main concern was the exploitation of gig economy workers, particularly food delivery riders. He was right to highlight the problem. Eight years later, the Albanese government is now seeking to give them some minimum standards through its “Closing Loopholes” industrial relations bill.
Other challenges, barely considered at the time, have since emerged.
When Airbnb first launched, it was primarily about renting out a spare room. Now the platform offers all levels of accommodation and is having a significant impact on the rental market.
Major global destinations, from New York to Paris, have moved to limit the ability of landlords to chase high-paying holiday-makers at the expense of struggling tenants looking for a long-term rental amidst a housing crisis.
Yesterday, Victorian Premier Daniel Andrews unveiled his plans for a short-stay tax. From 2025, visitors to Victoria will pay a 7.5 per cent tax when using Airbnb, Stayz or other similar sites, raising an estimated $70 million per year for more public and social housing. It will replace ad hoc levies imposed by local councils scrambling to deal with the problem.
“Every single dollar that is raised from that $7.50 per $100 paid will be sent to Homes Victoria to maintain housing and build new housing,” Andrews says. “So, it’s a direct link between a group of homes that can’t be leased out and aren’t being leased out long-term and those that will be.”
The tourism industry says it will be “disastrous” for Victoria, and the state opposition says it’s the “50th tax” introduced by the Andrews government.
Airbnb itself is taking a more pragmatic view, arguing a 3 to 5 per cent levy would be more appropriate. The company is having this fight the world over. Its quibble with Andrews is over the detail.
The Victorian short-stay tax is unlikely to be the last step taken to deal with the evolving disruption of the gig economy.
