Mike Symon (Deakin, Australian Labor Party) Share this | Hansard source

I speak today in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. There is a shortage of affordable housing in Australia and many families are struggling to find and keep a roof over their heads. This problem is not confined to less well-off areas or regions; it is spread across our nation. There may be different causes for the shortage, but the effect is the same. Many people are moving house or cutting back on essentials to keep a roof over their head. They are renting in a private rental market where rent rises are outstripping wages growth and inflation.

The data in the 2006 census reveals that 28.1 per cent of Australian household dwellings are rented. That is more than two million houses, flats, units, townhouses and the like. In my electorate of Deakin this figure sits at 10,367 dwellings. This comes in below the national average as a percentage, with 22.3 per cent of dwellings in this category. Of this amount, though, there are only 1,062 state housing authority dwellings in Deakin recorded in the census figures. The rental stress figure in Deakin has been measured at 32.6 per cent. For those who are not aware of how it is measured, it is a situation where the renter is paying more than 30 per cent of their income in housing costs every week or month as the case may be. In Victoria, the state average of renters experiencing rental stress is 35.6 per cent. The proportion of people spending more than 30 per cent of their disposable income on housing increased from 19 per cent to 23 per cent in the 10 years from 1995-96, according to the 2008 AMP.NATSEM income and wealth report. There are 1,037,652 households in Australia that are under housing stress when rental and mortgage stress are combined. Approximately 700,000 of these households are renters. Australia wide, renters tend to be younger than those in owner occupied households.

Rates of renting are higher among those people without partners. And lower income is associated with higher rates of renting, except for households with people over 65. So, as income rises, the likelihood of renting decreases and, of course, the likelihood of owning your own home increases. Many working families are stuck in the private rental market without a way to move into home purchase, and it is even worse for low-income earners. The AMP.NATSEM report of 18 March this year shows that the price of a typical house in 2005-06 was about 27 times the annual disposable income of the poorest renters. In 1995-96 the median house price was only 16 times the disposable income of the poorest renters. This same report found that, of all English-speaking, industrialised countries, Australia had one of the least affordable housing markets, with nearly 90 per cent of the areas considered severely unaffordable. In the period from 1995-96 to 2005-06 there was little change in the proportions of householders who were renters for most age groups, except for those in the 35-44 year age group. For this group the proportion who were renting increased form 27 per cent in 1995 to 32 per cent in 2005-06.

Many people who want to own their own homes cannot because they are priced out of the market due to the rising cost of housing. And it is the entry price of the market for homes in the eastern suburbs of Melbourne that is the first step in the problem in my electorate of Deakin. A check of these figures shows the scale of the barrier when it comes to buying property in the electorate of Deakin. For instance, in Blackburn the median house price in June 2008 was $646,000. That was up from $561,000 in June 2007. A little bit further out, in Mitcham, the median house price in June 2008 was $468,000, up from $440,000 in June 2007. Out in my area of the electorate, in Heathmont, the median house price in June 2008 was $450,000, up from $380,000 in June 2007. At the eastern end of the electorate of Deakin, in Croydon, the median house price in June 2008 was $360,000, up from $343,000 in June 2007. These are not inner city suburbs. These are areas up to 30 kilometres outside the Melbourne CBD.

The alternative to buying is to rent, but the knock-on effect is that people on lower incomes can be pushed out of the market as those with higher incomes soak up rental vacancies. This pushes up the entry point for rental accommodation, especially for larger accommodation such as three bedroom houses which are suitable for families with children. A check with local real estate agents last week revealed the following range for average rental prices of a three bedroom house in Deakin: in Blackburn it was between $300 and $400 a week; in Mitcham between $330 and $350 a week; in Heathmont over $300 a week; and in Croydon between $350 and $380 a week. Further to that, the agent contacted in Heathmont said they only had a total of four rental vacancies on their books anyway.

Affordable housing was the top of the agenda when the Minister for Housing, Tanya Plibersek, addressed a local social and affordable housing summit hosted by the City of Whitehorse, the member for Chisholm and me earlier this month, on Tuesday 7 October. This forum included over 60 local community members and stakeholders. Included were representatives from housing community groups like Melbourne Affordable Housing, disability groups, developers, Victorian state government representatives, social service providers like Family Access Network, welfare groups such as Wesley Central Mission and church groups. The forum heard about federal, state and local governments’ plans for tackling the crisis in affordability in the eastern suburbs of Melbourne.

The state government representatives highlighted the statistics that reinforced that vacancies are at an all time low and that the public and community housing sector is overloaded with demand for accommodation. Mr John Trimmer and Mr Rob McGauran from Melbourne Affordable Housing both gave presentations about how their not-for-profit organisation acts as developers, owners and managers of affordable rental housing for people in need. Melbourne Affordable Housing was formed in 2001 and has 300 properties tenanted with a forecast of an additional 200 properties over the next 18 to 24 months. The properties they have developed are small in number with a couple of examples being their Lion Garden development in Melbourne where they have partnered with the Collins Street Baptist Church, and the Melbourne City Mission to develop nine one bedroom units. They have also delivered a 52 unit apartment complex in Preston developed in partnership with Buildcorp.

Both John Trimmer and Rob McGauran highlighted the particular problem that housing is unaffordable in areas with opportunities for employment, learning, services and low-cost living. Hence, in inner city areas and those suburban areas with good public transport, the availability of affordable rental accommodation is below two per cent. The local press in my electorate of Deakin have reported a rental vacancy figure as low as one per cent, which makes it almost impossible to find a home to rent once time for turnover of tenants is taken into account.

Melbourne Affordable Housing is an organisation that takes a community development approach and seeks to build diverse and sustainable communities through the provision of appropriate and affordable social housing. This includes redeveloping vacant car park sites so that the car parking is still there but, for instance, the units may be built above so that there is no loss of public amenity. Melbourne Affordable Housing uses a joint venture model and forms partnerships with churches, local government and community groups.

The forum heard that public housing in both the Whitehorse and Maroondah local government areas is stretched to the limit. As the Senate Select Committee on Housing Affordability in Australia recorded in their report of June 2008, the number of public housing dwellings nationally declined from 372,134 in 1996 to 341,378 in 2006. During this time, Australia’s population increased by around 13 per cent, therefore producing an even larger decline in real terms.

The steady decline in public housing stock over the last 10 years has led to an increase in waiting lists which flows over into the private rental market, affecting vacancy rates and rental prices. The 2008 Productivity Commission report on government services found that, in 2006-07, the Australian state and territory governments provided $1.3 billion for housing assistance under the Commonwealth-State Housing Agreement. The bulk of this funding was for public and community housing, but this was a reduction in funding in real terms of 16.7 per cent between 1997-98 and 2006-07. That is a reduction in real terms of nearly $300 million per year.

The National Rental Affordability Scheme will increase the supply of affordable housing and reduce rental costs for many low- and moderate-income families. As housing affordability problems are fundamentally driven by a lack of housing supply, there are incentives to increase the supply of privately constructed rental dwellings. This scheme encourages large-scale investment in affordable rental housing by offering an incentive to providers of new housing on the condition that dwellings are rented to low- and moderate-income households at 20 per cent below market rates. These incentives comprise a Commonwealth contribution of $6,000 per dwelling per year, but they also include a state or territory contribution of $2,000 per dwelling per year, either as a direct financial support or an in-kind contribution such as reduced stamp duty, infrastructure charges or fast-tracked development approvals.

Incentive can be in the form of a refundable tax offset or a payment for 10 years, which will be indexed to the rental component of the CPI. All up, $622.7 million over four years is to be allocated to create up to 50,000 new rental properties across Australia. And if the market demand for the scheme remains strong, the Rudd government will make a further 50,000 incentives available from July 2012. This would help build another 50,000 affordable rental dwellings on top of the funding for 50,000 rental dwellings delivered in this bill.

This scheme is a key part of the government’s $2.2 billion affordable housing package. More than 1.5 million households will be eligible for tenancies under the scheme, including key workers such as entry-level police officers, teachers, carers, apprentices, cleaners, hospitality staff and childcare workers, to name just a few. The National Rental Affordability Scheme will be of great assistance to low- and moderate-income renters in Deakin and Australia as a whole. I commend the bills to the House.

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