Maxine McKew (Bennelong, Australian Labor Party, Parliamentary Secretary for Early Childhood Education and Child Care) Share this | Hansard source

There has never been a more important time for governments to be proactive in providing for the very basics of human existence. No area is more critical than the ability of a society to provide adequate, affordable housing for its citizens. As Professor Julian Disney, the Director of the Social Justice Project from the University of New South Wales has been pointing out for many years, a lack of affordable housing strikes at the heart of our lives, our communities and Australia’s future prosperity. He says that it erodes families, destroys jobs, weakens the economy and damages the environment. On the other hand, a sound housing strategy, driven by governments, is what has been sadly lacking in recent years and we are now paying the price.

The Rudd government, as we have heard, is changing that and we now have a comprehensive approach to housing in this country. The government’s policies support people in a range of circumstances—people who are buying their first home, people who are renting and people who are homeless—and the National Rental Affordability Scheme Bill 2008 and associated bill address the needs of the families who rent their homes.

In many of our metropolitan cities, and especially in Sydney, we have seen newspaper reports suggesting that the rental squeeze is such that stressed-out applicants are turning on real estate agents and abusing them for lack of availability of rental stock at an affordable price. While I feel for real estate agents, the frustration of those desperate to find a home is understandable. The research on rental vacancy rates explains why prospective tenants in Sydney are so frustrated. In the 12 months to March 2008, the Australian Bureau of Statistics reported that Sydney had an average rental vacancy rate of only 1.2 per cent. This is significantly lower than the rate of three per cent, which is the generally accepted benchmark indicating fully-utilised rental supply. But we should not be in this position. The fact is that for many years the former government was a bystander, a passive player, with no housing strategy and certainly no minister sitting around the cabinet table with principal responsibility for promoting the interests of affordable housing and sound urban development.

The Rudd government has changed that. Certainly, as a new member I feel it is one of our great strengths so that, as a new representative, I can now talk to my local government authorities, for instance, as I have done in my local community with both Ryde and Hornsby councillors, about the fresh opportunities there are for partnership that the federal government is making available through a range of ambitious housing initiatives. It is why I am an enthusiast for this particular bill, the National Rental Affordability Scheme, which is a key component of the government’s overall $2.2 billion package.

Included in this package is the $623 million National Rental Affordability Scheme, with other key measures including a $1.2 billion investment in new first home saver accounts to help aspiring first home buyers save a bigger deposit through low tax savings accounts. There is also a $512 million Housing Affordability Fund. This will lower the cost of building new homes by tackling the critical supply side issues of the length of time taken to bring new houses to sale and the impact of infrastructure charges. As the minister said when she introduced this legislation last month, all up, our combined measures will increase the supply of affordable rental homes and help people to save for and purchase their first home. It will lower infrastructure costs and build new homes for homeless Australians.

Further to these measures, last week the government announced an additional $1.5 billion investment in the first home owners grant. This means that Australians buying an existing home between 14 October this year and 30 June next year will have their first home owners grant doubled from $7,000 to $14,000. Those purchasing or building brand new homes will see their grant trebled from $7,000 to $21,000.

I think Australians can see even more clearly now—and I know this is certainly true in my own electorate of Bennelong—that at a time of unprecedented global economic turmoil it has never been more important for governments to be key drivers of basic services, and of course housing is an absolutely essential service. I am proud to be a member of a party that was farsighted enough to be considering substantial supply-side housing initiatives long before the present crisis. I was a participant in the National Housing Summit convened by Kevin Rudd during last year’s election campaign. It attracted all the leading players—the peak industry groups, major developers, local government officials and public policy intellectuals such as the aforementioned Julian Disney. The dilemma that was universally expressed was this: how is it that, with so much bounty, we have comprehensively failed to provide a better supply of quality affordable housing for Australian families? It really is a major indictment of the previous government that on this, as on so many other areas of social policy, so many senior ministers remained cavalier about housing and the needs of families right through the years of maximum prosperity. Those struggling to put a roof over their head or pay an ever larger slice of their income on weekly rental payments will not thank them.

But the Rudd government, as I say, is acting. It is acting swiftly and decisively with practical, fresh solutions to today’s housing problems. With this legislation the government is delivering on one of its key election commitments—that is, to increase the supply of affordable rental housing for Australians and their families. This is not before time. I am sorry to say there are an estimated 700,000 householders in the rental market experiencing rental stress. Rental stress is defined where those on low or moderate incomes are incurring housing costs above 30 per cent of their overall income. This group makes up a significant component of the estimated 1.1 million Australian households in some form of housing stress. Again, in my own area of Bennelong the proportion of people suffering significant rental stress is estimated to be around 38 per cent. That represents over 4,000 individual households.

Many of Australia’s renting households are our low and moderate income earners. The Australian Bureau of Statistics reports that in 2005-06 around 30 per cent of households in the middle-income quintile were in rental accommodation and around half of the households in the lowest quintile of household incomes were in rental accommodation. The only option for many families with young children is to live long distances from work opportunities and, in many cases, from community services. This adds of course to social stress, family stress and can lead to increased dependency on welfare. The problem is particularly acute for those who are already marginalised. Many low-income and Indigenous Australians find themselves actively discriminated against when it comes to access to rental accommodation.

As well the rental situation is now so dire that the problem is travelling up the income scale. What we are now having to cope with is the struggling middle. Those starting out in the workforce, childcare workers, retail workers, entry level teachers—many of our essential workers—find it increasingly difficult to afford a decent dwelling in reasonable approximation to where they work. This is unsustainable and it is why the Rudd government is acting.

The National Rental Affordability Scheme will help to build up to 50,000 new rental homes across Australia. It represents an investment of $623 million over the next four years. If market demands remain strong, there is room for a further 50,000 rental dwellings over five years from July 2012. Up to 1½ million households will be eligible to be tenants under the scheme and this is how it works. With incentives to be indexed to the rental component of the CPI the National Rental Affordability Scheme will offer institutional investors and other eligible entities annual incentives every year for 10 years provided conditions continue to be met.

As the Minister for Housing has said this is a new way of doing business in Australia and it will create a new asset class for institutional investors in affordable residential housing. The two main elements are an annual Commonwealth government incentive to the value of $6,000 for each dwelling each year in the form of a refundable tax offset and, as well, an annual state or territory government incentive to the value of $2,000 for each dwelling each year, which will be provided through cash payments or in kind financial support. The incentives are for developers, builders and the community housing sector which will help manage tenancies. Central to the scheme is the provision of this $8,000 combined incentive and that will be available for every new home that is built and rented out at 20 per cent below the market rent for a particular area.

This is long overdue, as I say, and it is a welcome initiative that will help meet the needs of many who now struggle with high rents. Of course, it is not the only answer but it is the start of a different kind of approach, one that recognises that no one party can solve this problem, an approach that recognises, I think, that creative collaboration is the only way to help more of our citizens with a need as basic as affordable housing.

To conclude, at a time when I think we need to do everything we can to maintain growth in the economy, this is a scheme that is about as timely as it gets. It will bring substantial growth to the community housing sector and it will support those Australians who carry out the invaluable work on which a healthy community depends—our teachers, our childcare educators, our police officers and our retail workers. It will help them by reducing the costs of renting in the private market. It is time all of these people had the housing break they deserve and this bill certainly helps to deliver on that promise.

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