Ms Catherine King (Ballarat, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, which establish the National Rental Affordability Scheme. During the 2007 election there was a great deal of focus on the cost of living for many families, and rental accommodation and affordable housing were absolutely central to that. I and the Labor Party made a commitment to the residents of my electorate that if we were elected we would work to introduce a scheme and do all we could to improve the area of housing affordability. The bills before the House deliver on that promise. The bills deliver on the commitment that we made to the people in my own electorate and across Australia to provide affordable housing to low-income Australians.

This legislation establishes the National Rental Affordability Scheme. The scheme is an innovative way of easing the burden of high rents on low-income Australians and is a key component of the government’s $2.2 billion affordable housing package. The affordable housing package is aimed at providing affordable homes at affordable rental prices. It will increase the number of homes available for rent, helping people save for their first home, lower housing infrastructure costs and build new homes for homeless people.

I have stood in this parliament on a number of occasions and outlined the urgency for the federal government to act on behalf of the Australian people to assist them with rising costs of living. For a long time Australia was governed by a national government that believed ‘we had never been better off’. We were told that by the former Prime Minister. The former government insisted that they were the best friend of hard-working families. They did not have a housing minister. They did not in fact do anything to ease the issue of housing affordability for Australians, let alone Australian families.

In the relatively short period of time since being elected, compared to the last 11 years of the Howard government, the Rudd government has acted very quickly in a variety of ways to provide much needed relief for families into the future. We have been proactive in implementing major reform that is in the best interests of the nation. Over recent weeks that has become even more important. We have seen a volatile world financial market, and although the RBA’s decision to reduce interest rates is welcomed, many families within my electorate continue to experience some level of uncertainty, making it difficult to budget with confidence into the future.

Our international economy is facing unique challenges. The Rudd government is working with our global partners to come up with global solutions and domestically is showing leadership. The introduction of the National Rental Affordability Scheme is just one example of this government’s commitment to Australian families but also to dealing with the issue of housing affordability across the nation. It is an example of a significant reform that can provide confidence to Australian families at a time when confidence is most needed.

The major contributors to housing stress in Australia are, firstly, the cost of housing and, secondly, the lack of housing supply. The National Rental Affordability Scheme aims to stimulate the construction of 50,000 additional rental dwellings over the next four years—50,000 new homes available in the private rental market for low- and moderate-income households across Australia. The scheme will ease rental affordability pressures throughout Australia by increasing the supply of new homes for those who are in grave need of affordable rental properties. This scheme will cost $623 million in the first four years. An initiative of this magnitude will be delivered with assistance from the states and territories. It is yet another example of the benefit to the Australian people of having governments at different levels working in harmony with one another.

The National Rental Affordability Scheme was a major outcome from the March 2008 COAG meeting, and I commend the Minister for Housing, Tanya Plibersek, and the Treasurer, Wayne Swan, for their hard work with the state and territory governments to get this right. Under the scheme, incentives will be provided to applicants to build new homes. And, once built, these homes will be made available to low- and moderate-income households at 20 per cent below the market rate. The major incentive to applicants is a contribution from the Commonwealth government of $6,000 per dwelling per year for 10 years in tax incentives. This incentive is backed by the support of the state and territory governments to the value of $2,000 per dwelling per year.

Both Commonwealth and state and territory contributions will be indexed annually to the rental component of the CPI. This will ensure the level of incentive this scheme offers to developers today remains consistent over the 10-year period. The National Rental Affordability Scheme primarily targets large organisations, such as financial institutions, that are interested in this residential property investment option. It is also a worthy option for not-for-profit organisations experienced in property management. The scheme is not targeted at small, individual investors as such. However, it does allow interested small investors to invest in a participating investor company.

Rental prices have surged at a higher rate than the consumer price index for some time now and at a higher rate than wage growth. This has seen an increasing number of Australian families finding themselves in mortgage stress. As house prices have continued to increase in recent years, so too have rental prices. It is not only home buyers finding it harder to make ends meet as a result of the housing boom. This comes on top of continual interest rate hikes that were seen under the previous government.

This government will be watching closely over the coming years to make sure everything is being done to combat the current high levels of market demand for housing. That is why, if market demand remains strong over the next four years, this government will make a further 50,000 National Rental Affordability Scheme rental incentives available from July 2012. This will help build an additional 50,000 affordable rental dwellings to accommodate low- to moderate-income-earning Australians. If demand warrants these additional 50,000 properties, in total the National Rental Affordability Scheme will deliver 100,000 new affordable rental properties for our low- and moderate-income families.

I am excited about the possibilities that this legislation brings for our nation. I represent an electorate where many families struggle to keep a roof over their heads. In my electorate the median income is $404 per week for an individual, $860 for a household and $1,076 for a family. These incomes are all below the national average. The median weekly rent in my electorate is $155 per week. I must admit that I do not know of many properties that are actually available at that—they must be at the lower end of the market—but they are the figures that we got from the local real estate agents. Based on these figures, weekly rent equates to more than 38 per cent of an individual’s weekly income. It leaves less than $250 per week for groceries, household expenses, transportation costs and social activities. In public housing it is deemed too expensive if 20 per cent of people’s incomes are consumed in rental—that is seen as the benchmark to take in relation to these things. So 38 per cent of an individual’s weekly income is far too high for anyone to be able to live on the rest, but unfortunately, with the tight rental market we have in my electorate and right across the country at the moment, it is the only option many people have. Even the most financially prudent of us would find it hard to make ends meet under these circumstances, and these are the median figures. Just imagine how tough it is for people in my electorate who earn below the median weekly income. When you consider all the expenses associated with day-to-day life, it is easy to see how families in my electorate who have a median income of $1,076 are finding it tough, let alone if they are at the lower end. In addition to household expenses faced by individuals, they also have added expenses such as child care and schooling, and it all adds up very quickly.

Currently over 22 per cent of dwellings in my electorate are rental properties—that is over 11,000 rental properties in my electorate alone—but available rental properties are really scarce. Vacancy rates are currently below one per cent. The demand for rentals far outweighs supply, and there is absolutely no relief in sight in the immediate short term. Our real estate agents receive constant requests from people seeking available rental properties, and with such high demand we are also seeing rent increases of an average of $5 to $10 per week on new tenancies. This is relevant to the market demand for rentals in my electorate.

I am confident that this legislation will be warmly welcomed by people in my district. I know the scheme will provide for additional rental properties in my electorate at 20 per cent lower than market rent, which will make a significant difference to our low- to moderate-income earners. I certainly encourage some of the larger property development and investment companies that are investing in my electorate to look very seriously at this scheme and the potential it provides for their investors to gain a substantial benefit from this particular scheme and, at the same time, to provide cheaper rental properties in my own electorate. Using the median rental price of $155 per week as an example, properties available for rent through the National Rental Affordability Scheme will be rented for 20 per cent less, potentially a reduction in rent of over $30 per week based on the median price in my own electorate, and savings like these will provide much-needed financial assistance to people in my community. The package not only provides the opportunity of lower rents but also boosts the amount of private rental stock that is available in an area. The scheme will not only benefit our renters but also help to retain a robust building industry, something that is critically important in the current economic times. As I said, I certainly hope property developers building in the Ballarat region will take advantage of the scheme, and I will certainly be out there encouraging them to do so.

Affordable housing is one of the most important things to Australian families, and over one million households across Australia are now classed as being in housing stress. Housing stress puts a significant strain on the standard of living for the majority of low- and moderate-income earners, and it is the responsibility of government to try to ease that burden in a responsible manner. That is why, at a time of international financial uncertainty, we require economic responsibility from the Commonwealth government. The National Rental Affordability Scheme is just one of a number of ways the Rudd government is working to relieve the housing stress and financial burdens placed on many Australians. The government is so committed to providing affordable housing to Australians that it has appointed a Minister for Housing, whom I mentioned earlier, something the previous government did not do.

The government has committed $2.2 billion towards increasing the number of affordable houses available for rent, helping people save for their first home, reducing housing infrastructure costs and constructing new homes for the homeless. The Rudd government has already called for expressions of interest for the Housing Affordability Fund, a fund established to help make building a new home more affordable through reducing infrastructure costs and streamlining the process for development approvals. It is a $512 million investment over five years and will assist people entering the housing market.

On 1 October 2008 the government offered first home saver accounts to Australians to help them save for their first homes. The new accounts provide a simple, tax effective way to save a deposit for a first home through a combination of a government contribution and low taxes. Account holders will receive a cash contribution of up to $850 a year from the government to help them save for a home deposit.

First home saver accounts are a terrific way of saving for a deposit for a house, and I would certainly encourage all young Australians to look at this incentive program. Present in the chamber is my sister-in-law. I have mentioned to her that she may like to tell her boys, who are now over 18 and would be eligible for such an account, to take advantage of that.

Another initiative is the first home owners boost, announced last week. It is part of our economic security strategy, which raises the first home owners grant from $7,000 to $14,000 for first home buyers of an existing home and from $7,000 to $21,000 for first home buyers of a new home, in addition to any contributions under the state first home owners grant programs. It is a substantial contribution to assist people either to get a deposit or to purchase a home. The incentive is available for the remainder of this financial year, and I would again encourage Australia’s first home buyers to look closely at it. It has received great local support from my electorate. On the day of the announcement I received an email from Stuart Benjamin, a director of the Elmstone Property Group in Ballarat, praising the government for introducing this initiative. He said:

I just wanted to write and say thank you once again for the strong economic leadership being shown by the Government.

Our Prime Minister continues to lead from the front and provide a stabilising image in these uncertain times.

The impact of the first home owners grant announcement today will be profound for Ballarat. The building industry has come to a grinding halt (although no one will admit it), with tradesman starting to lay off staff and desperately seek any kind of construction work. We have been receiving 10 calls a week since August from tradespeople looking for work. These are not nice phone calls to have to manage ... Our builders are screaming for work.

Once again thank you for your continued hard work for our community.

The National Rental Affordability Scheme will go some way to relieving the stress that families face in struggling to keep a roof over their heads. It is a pleasure to be part of a government that recognises everybody’s right to have a place they can call home, a place that feels like home.

The nation deserves a government which is willing to fight for the rights of everyday Australians, and the National Rental Affordability Scheme is another measure that the Rudd government is taking to ease financial hardship. This scheme will encourage significant investment in affordable housing and, although we still have a long way to go, I am proud to say that we are taking steps in the right direction. I commend these bills to the House.

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