Belinda Neal (Robertson, Australian Labor Party) Share this | Hansard source

I rise in the House in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. These bills provide the legislative basis to implement the Australian government’s National Rental Affordability Scheme. NRAS is a key component of the Rudd government’s $2.2 billion affordable housing package, which will boost rental stocks, help people save for their first home and lower housing infrastructure costs. There is acute housing stress being felt at this time by many people across Australia.

The National Rental Affordability scheme is a $623 million investment in the provision of 50,000 new and affordable rental properties within four years to address this need. The objective of the scheme is to encourage large-scale investment in affordable rental housing through incentives to providers of new dwellings. The homes must be rented to low- and moderate-income households at 20 per cent below market rates. The incentives include both a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution in the form of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year. The Commonwealth contribution can be in the form of a refundable tax offset or direct payment. The incentive will be provided each year, for 10 years, to those people who satisfy the criteria. It will be indexed in accordance with the rental component of the Consumer Price Index.

The associated National Rental Affordability Scheme (Consequential Amendments) Bill 2008 will make amendments to the Income Tax Assessment Act 1997. This will provide for the refundable tax offset and ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for taxation purposes. For partnerships envisioned under this scheme to work, there must be surety and clarity regarding the tax implications of the legislation. This bill ensures that there are no capital gains tax consequences from the receipt of incentives under the scheme.

The structure of the bill allows certain details of the scheme to be administered by regulation. This gives the government the scope and flexibility to address any issues that may arise for potential partnerships between investors and the not-for-profit sector. That is why there will be a review of the scheme in its early years of implementation. This will ensure that the scheme is having its intended impact. The review will also assess the possibility of lightening the administrative burden of the proposals and make recommendations on possible improvements.

The government is open to the possibilities that come from creative partnerships between investors and the not-for-profit sector. We are more than willing to work with potential partners to iron out details to make this policy a world-class innovation in the provision of affordable housing. Already in my electorate, community housing providers have begun talks with developers specialising in environmental housing. The opportunities for affordable environmentally friendly housing to flourish under the National Rental Affordability Scheme cannot be understated. These creative partnerships are crucial to the success of the scheme, and the government looks forward with confidence to the affordable housing outcomes that will arise from the goodwill and creative enterprise already in motion as a result of this Labor government policy.

These bills address fundamental problems in the supply of affordable rental accommodation, which are being felt Australia wide. In my electorate of Robertson, those who have not yet bought their own home are experiencing unprecedented pressure as rental prices skyrocket in a period of low supply. With median house prices in New South Wales now reaching $385,000—even on the Central Coast the median house price is $364,000—the 10 per cent deposit required is often far beyond the reach of many people, particularly young people, families and pensioners. Their only option in these circumstances is to rent.

On the Central Coast, rental vacancy rates are at 1.1 per cent, and below that from time to time. In Robertson the proportion of renters under stress—that is, those paying more than 30 per cent of their net income on rent—is a staggering 44.5 per cent. That is more than 4,000 households in my electorate experiencing rental stress. Nearly 30 per cent of mortgage holders are likewise under financial stress. In some cases this unfortunately leads to repossessions, forcing more families to rent in a market of diminished supply. The effect of this on pensioners, seniors, families and young people trying to make ends meet is devastating. More and more income is being used just to put a roof over their heads.

This situation is emblematic of a crisis that has been building within the housing sector over the past decade. The average price of housing has exceeded income by an average seven times the average annual wage and represents a far greater proportion of income than is acceptable and feasible for many potential homebuyers. Australia needs practical solutions to this problem, and the Rudd government is delivering this very practical solution. It has the additional benefit of providing a stimulus to the housing industry and will add to economic activity.

If we fail to address the housing needs of young people and young families, we are at risk of developing a generational divide, where those who already own homes grow more affluent on capital gains while future generations are locked out of the market for good. A lack of affordable rental properties is only adding to this pressure, making it even less likely that people will be in a position to save a deposit for their own home.

I noted with optimism the announcement last week to triple the First Home Owner Grant to $21,000 for people buying a newly constructed home. This will certainly provide a substantial support to young people on the Central Coast seeking to enter the homebuyers market for the first time. This measure will also complement the impact that the National Rental Affordability Scheme will have on the supply of housing.

Young people are effectively locked out of the market unless they are assisted by a parent or relative who is in a financial position to act as a guarantor for a loan or provide financial support in paying the mortgage. The flow-on effect of this is to entrench disadvantage in homeownership, despite any gains that may have been made in the areas of school retention and higher education. For example, a young professional who has had the benefit of a higher education may be better off in their career options than, say, their parents but would still find it difficult or impossible to break into the homeownership market on a single income.

Another crisis coalescing in the housing sector is the effect of rising land values on residential home parks. Residential home parks often become the last-ditch option for seniors or pensioners to own their own home. The catch is, of course, that they do not own the land upon which their home resides, only the structure of their home, paying strata fees—in effect, rent—to the park owner. As land values increase, residential park owners seek to realise their capital gains and develop these parcels of land. The flow-on effect is that the last bastions of affordable housing evaporate as the land is developed into housing that costs far more than the previous tenants could possibly afford. A very large proportion of residential home park tenants are elderly, many of them pensioners, both age and disability pensioners. Worse still, as values rise in any given area, the problem becomes compounded as multiple park owners seek to realise these capital gains at the same time, leaving people who have lived in a particular area maybe all their lives or for a very long period with nowhere viable to shift locally that they can afford.

Imagine, then, a pensioner who has lived in a particular area their entire life. This pensioner may have overlapping medical conditions, as many do, being managed by their local GP. They know their local GP well; this is the same GP who has treated them for years and understands their condition—so do the home care service providers who visit this pensioner from time to time. This senior Australian, possibly a pensioner with limited resources, is then made to relocate as a result of a residential home park closure. The home park down the road may have closed months ago, and the state department of housing premises are already occupied. In fact, on the Central Coast, in my electorate, there is a 10-year waiting period for state housing. There are no local options to relocate to. The only option then is to be moved out of the area—moved away from family, friends and community, away from services and local networks that they are accustomed to.

This is as a result of the housing shortage that was allowed to occur by the previous government due to their drastic failure to commit resources to housing. Relocating a pensioner or senior Australian under such circumstances has the potential to cause tangible and detrimental health effects. This is a real and present danger for many pensioners exposed to this housing crisis as a result of the lack of foresight by the previous government. They simply failed to respond to this obvious emerging housing crisis.

The situation I presented to you is not merely hypothetical, as we can see. I note with concern the difficulties faced by the 80-plus residents of Karalta Court Residential Home Park in Erina, again in my electorate. The park residents are seeking a way to relocate their homes and to continue to live together as a community in an area that they can afford. The residents own their homes, or the structures, and are currently seeking partnership models by which to relocate and re-establish their small community within reach of the essential services required by the park’s residents. Many of them are elderly and must be within reasonable reach of medical services. The residents, as I said, own the structures but not the land. They are therefore not strictly seeking to build new affordable rental properties within the scale of this proposal before us in the legislation. They are, however, seeking land for affordable housing that they already have—the buildings themselves. While applauding the present legislation, I encourage the government to look further at this issue of residential home parks and to bear in mind that this area needs further work.

These are just some of the scenarios presented to me in my electorate of Robertson. I am immensely proud of the steps we are taking as a government to address the supply of affordable housing for all Australians. I particularly thank the minister, Tanya Plibersek, for her commitment and hard work in implementing the raft of housing policies which is designed to restore balance to the housing sector and to boost affordability. Affordable housing is the foundation stone of a just and equitable society, and it is an objective that this government is pursuing with great passion. I commend these bills to the House.

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