Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise to speak on the National Housing Finance and Investment Corporation Amendment Bill 2018, and I can indicate to the chamber that Labor will be supporting this bill. The original National Housing Finance and Investment Corporation Bill passed parliament on 28 June 2018, with Labor's support. At that time, no opportunity remained for the House to consider any amendments to the bill put forward by the Senate given that the National Housing Finance and Investment Corporation was slated to be established on 1 July 2018. Labor didn't want to delay the establishment of the body and the board being put in place, so we reached agreement with the government to withdraw our amendments and allow for the bill's expedited package. But that was contingent on the government providing a written undertaking to introduce and support a new bill in the spring sittings containing the amendments we'd intended to put forward in the Senate, and this bill honours that commitment.

Labor were pleased to see the National Housing Finance and Investment Corporation established and begin preparatory work in the lead-up to its first bond issuance, expected next year. This, of course, represents the realisation of Labor policy. It's important to note that, while the coalition government flagged its intention to establish the National Housing Finance and Investment Corporation in the 2017-18 budget, that was a month after Labor's plan for housing affordability and jobs in April 2017. That plan built on our existing policies to reform negative gearing and capital gains tax and contained Labor's commitment to establish a bond aggregator to drive increased investments in affordable housing.

Labor's commitment to establish an aggregator recognised that, while the community housing sector in Australia has grown significantly in recent years, it still remains relatively small. We have a chronic shortfall of affordable rental and social housing, and that means that sector has to achieve greater scale and sophistication. Among the constraints have been restrictive loan tenor from lending institutions, the high cost of financing and organisational fragmentation. Labor, having established the benefit bond aggregators have delivered in comparable countries, such as Britain, determined that a body of this nature in Australia would help community housing providers access cheaper finance, secure longer loan terms and help the sector build up institutional capacity and scale. This was again another case of Labor leading the policy debate on a critical debate for Australia and the government playing catch-up.

The bill we're currently debating contains three amendments, including Labor's two sensible amendments agreed to by the government. Our amendments include a requirement that at least one director on the board of the National Housing Finance and Investment Corporation have relevant skills and experience in affordable housing gained in the community. This was proposed by numerous community housing providers during the Senate inquiry. For example, St George Community Housing Ltd stated:

… we would suggest that it benefits the objective of the NHFIC to have a Director or Directors with experience and expertise related directly to social and affordable housing and the economics and social benefits of related projects …

that is, in the housing provider sector.

A further amendment will bring forward the review of the operation of this act to as soon as possible after a period of two years beginning when this act commences. Such a review will allow for key issues surrounding the loan cap, funding for capacity building and the use of the National Housing Infrastructure Facility to be canvassed.

The third remaining amendment contained in schedule 1 establishes a $1 billion special account for the purposes of the Affordable Housing Bond Aggregator. This amendment will allow the National Housing Finance and Investment Corporation to draw down on a $1 billion line of credit to support the Affordable Housing Bond Aggregator. The existing $150 million appointed to the bond aggregator will be credited to the special account. Regrettably, while Labor sees considerable benefit in a bond aggregator, the government is stubbornly refusing to address the related but fundamental issue that'll hold back community housing providers from using the aggregator to deliver affordable rental housing at scale, and that is that they have neglected to address the yield gap. Policies to address the yield gap are necessary to complement the work of a bond aggregator and they're a key feature of successful schemes overseas. This isn't just Labor's view; it's also a view widely shared among community housing providers and other key stakeholders.

Launch Housing, in its inaugural Australian homelessness monitor report, welcomed the establishment of a National Housing Finance and Investment Corporation but made clear that, as a stand-alone initiative without additional support, 'it will not provide a sufficient subsidy to increase the level of social housing'. The community Housing Industry Association, in their submission to the Senate inquiry, stated:

CHIA agrees that while the bond aggregator will reduce the cost of financing social and affordable housing, it will not be sufficient to address the funding gap between the operating costs and the rental income. This is because, by design, community housing providers ... charge rents below market rates to make housing more affordable for tenants.

The Australian Housing and Urban Research Institute was similarly forthright on the government's submission. It said:

AHURI research has argued that there is a need to address a funding gap in the context of new finance:

Whether involving new finance or the redirection of existing housing subsidies, government financial support is essential to complement private financing of additional affordable housing supply. Inadequate government co-funding is the primary capacity constraint that providers currently face in their efforts to expand affordable housing ...

In taking no action on this issue, the Liberals have ignored calls from the Senate Standing Committee on Economics, their own Affordable Housing Working Group, and key experts and stakeholders to urgently address the yield gap. Labor have been consistent in our calls for the government to develop, as a matter of urgency, a policy framework that bridges the yield gap to address housing affordability and get better outcomes for Australians.

If you want to increase housing supply, improve productivity and help assist the disadvantaged, then the government must address the yield gap. It's abundantly clear that the coalition has no intention of doing so. Only a Labor government will tackle the housing affordability crisis. The fact is that our home ownership rate is now as low as it's been in six decades. Only a Labor government will increase the home ownership rate and put the great Australian dream within reach of low- and middle-income Australian families. Labor have announced a comprehensive series of policies to this end. Labor will have more to say on this issue in the lead-up to the next election. I commend the bill to the House.

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