Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise today to support the National Housing Finance and Investment Corporation Amendment Bill 2018. I know that the federal government is working with states and territories in this space and that states mainly are the providers of social housing, as we know, but this is a $1 billion facility. The National Housing Finance and Investment Corporation, NHFIC, was established on 1 July 2018 as an independent corporate Commonwealth entity. NHFIC works in conjunction with the bond aggregator to provide cost-effective and longer term finance for community housing providers. NHFIC was formed primarily to increase the availability of rental and mixed development affordable housing stock available in the market through community housing providers.

There are four main amendments to the NHFIC Act, which commenced earlier this year. The current act provides that the board of NHFIC must collectively have an appropriate balance of qualifications, skills and experience in a relevant field, those being banking and finance, law, housing, infrastructure planning and financing, local government and public policy. The amendment includes a new requirement that at least one board member must have appropriate qualifications, skills or experience in social or affordable housing. This amendment is critically important, as it acknowledges that specialist knowledge is required to successfully operate in a field that is outside the usual experience of bankers, lawyers and property developers. The skill set required is significantly different, and demands are greater for people who run not-for-profit community housing providers, those with tenants who are financially disadvantaged and may also have special needs.

The easy answer from property developers, at times, is to build affordable housing on low-cost land on the fringes of urban areas, which can be far from jobs, schools, medical facilities, public transport and shops, and this therefore compounds the problems faced by financially vulnerable people, who need this housing. Board members with social and affordable housing experience know that increasing the distance from services creates problems of intergenerational unemployment and poor health and education outcomes. Our focus should be on infield development—that's what should be their aim—the creation of affordable housing in middle-ring suburbs. This will help to provide the most vulnerable members of our community with improved access to jobs and services, with the hope that, over time, they or their children may be lifted out of the poverty trap. We also need affordable housing of this type in rural and regional areas, which have people with similar needs.

The bill provides for the statutory review of the operation of the NHFIC Act to occur after a period of two years, rather than three. The bill also provides that NHFIC may now redraw amounts repaid by community housing providers to the Commonwealth government. The bill does this by bringing forward planned annual appropriations, and by the creation of a special account for the purpose of the Affordable Housing Bond Aggregator. The amendments therefore, in practical terms, provide for the $1 billion to be reused and reused, and avoids the lapsing of any undrawn funds three years after the appropriation.

The provision of government funding for affordable housing through community housing providers is not new, of course. Previously, state governments provided financial assistance and land releases to facilitate affordable housing. Victoria has a long history of providing affordable rental accommodation through community housing providers. Successful examples of those operating in the field for decades include Common Equity Housing Limited and SouthEeast Housing Cooperative. New South Wales has a more diverse history, with both owner-occupied and rental affordable housing having been provided by a range of different organisations, using a variety of different means. Starr-Bowketts and terminating building societies provided members with low-cost housing finance based on a regular ballot system. Housing cooperatives historically borrowed state funds, supported by bond issues, to provide low-cost finance for the first home buyer members. These housing co-ops also previously ran ballots for first home buyer members for the release of state owned land at affordable prices.

The funds available through NHFIC will be provided for affordable rental housing and mixed developments. However, there's also a capacity for community housing providers to enter into arrangements to support affordable mixed owner-occupier and rental housing—the combination. As members would be aware, the price of owner-occupied housing in the market is gradually decreasing. However, as The Australian Financial Review online explained in its article of 5 September:

The proportion of household income taken to meet mortgage repayments widened nationally to 32.2 per cent in the second quarter from 31.5 per cent a year earlier as the average loan burden to first home buyers - whose numbers increased in most states - rose from a year earlier.

And further:

NSW remained the worst state for housing affordability in the June quarter, with the proportion of household income needed to meet mortgage payments rising to 38.1 per cent from 36.5 per cent in March and 38 per cent a year earlier.

In Victoria, the figure rose to 34.3 per cent from 33.4 per cent a year earlier.

So what are our options? There are many models that attempt to address the problem of affordability for owner occupiers. Low interest rates and stamp duty concessions for first home buyers can sometimes fuel higher prices. Rising interest rates increase mortgage stress and foreclosures. And so the question is, how is it possible to reduce the construction cost of affordable housing without reducing the value of existing housing? I'm aware that a number of community housing providers are working together with groups of potential owner-occupiers to project-manage and build their own affordable strata-title or community-title projects.

Community title is best described as horizontal strata title. The completed apartments or dwellings are available at cost to the owner-occupiers who committed their funds, time and skills to the project and to the community housing provider, who acquires a number of apartments or dwellings for affordable rental purposes. The funds may potentially be borrowed through the NHFIC. At the completion of the project, the NHFIC could be repaid or, alternatively, the funds could be re-used by the community housing provider to finance the next mixed-development project. There could be a continuous build. What we need is more affordable housing.

Discussions are currently happening with banks to gauge their interest in working with the community housing providers to support these types of proposals. This proposed mixed-development model focuses on affordable owner-occupier housing for people like police, teachers, healthcare and social welfare workers, low- to medium-income first home buyers and low- to medium-income people over the age of 55 who have previously owned a home but are no longer owner-occupiers due to life experiences, such as divorce, illness, unemployment or the death of a partner. Whilst the number of older women who are no longer homeowners is of particular concern, older men are also included in this category.

The aim is to provide owner-occupier housing for people who are currently priced out of the market and exclude people who have the income to purchase housing at market prices. The aim is not to reduce the price of existing housing but to provide a limited amount of housing for people who are on the margins of the market who would not otherwise be able to afford to own their own home. This really is a good opportunity for those who meet the criteria. It will require time and work over a two- to three-year period. The mixed-development proposal is just one of the options out there. I look forward to seeing more of that as the NHFIC moves on.

I want to briefly talk about the effects on housing of Labor's negative-gearing policy. We saw today that this could lead to a fall in new housing construction of up to 42,000 dwellings and 32,000 fewer jobs over five years. Australian Bureau of Statistics figures released in August this year show a nine per cent fall in new dwelling approvals over the previous 12 months, so we know that Labor's policy will not actually boost the supply of housing or jobs in the construction sector at all. They forecast 8,000 fewer houses and 34,000 fewer apartments in the first five years.

We know that Labor is proposing to further reduce the attractiveness of investing in rental accommodation by abolishing negative gearing, as we heard. I don't know whether Labor quite understands that this will actually increase the number of investors leaving the housing market, thereby reducing the price of existing housing and decreasing the amount of housing stock available for rental. Changes to negative gearing and the reduction of interest-only loans will mean that investors will pull out of the rental housing market, further reducing the stock of rental housing and driving up rents.

Perhaps Labor should speak to Paul Keating about the 1985 Labor experiment with negative gearing. The Hawke Labor government changed negative-gearing laws in July 1985, only to reinstate negative-gearing laws shortly prior to the 1987 financial crash. What happened? As investors sold out of the market the availability of rental accommodation in Sydney and Perth plummeted, vacancy rates dropped to approximately one per cent and the price of rental accommodation in those cities surged.

Australians in rental accommodation are vulnerable if their landlords sell their houses or apartments due to the increased principal-and-interest mortgage payments or the loss of negative gearing. We know that in most states there are restrictions on the amount that rent can increase year on year, but there's no price protection when the renter moves from one home to another. The increase in rental stock being dumped into the housing market at a time of falling house prices would destabilise the housing market even further. If the value of the house drops below the value of the mortgage, past experience and prudent lending practices indicate that the banks would foreclose on the property and potentially bankrupt the former homeowner, who cannot pay the shortfall.

I want to finish by speaking on how important home security is. For a lot of the migrants who came to this country, the one thing that was an absolute priority was to own a home. They would go without in many other parts of their life, because they came from a country where they perhaps had lived in a landlord's property and never ever had the opportunity, as some of the Italians found, to actually own a home. When they came to Australia and they saw this wonderful land of opportunity, where they could get a job, be paid well for that job, save their money and use it, so often their priority was to put a roof over their family's head. That was an absolute driver. They saved and they saved, and they took abiding pride in being able to put a roof over their family's head and pay that house off simply by working hard. They were committed to the laws of this country and the opportunities that this country gave. So many of them were grateful to this country for the opportunity it gave them. But one of the most important parts of their security, and their security in older age, was having a roof over their head and having that home paid off. The NHFIC bill gives a further opportunity to Australians to do exactly that—to own their own home, to have access to affordable housing.

I met some young people recently when I was speaking at the Cape Naturaliste College graduation ceremony. It was interesting to hear those young people talking about how they aspired to having a smaller home than their parents had because they were determined to get into a position to own that home earlier. They wanted to have a range of opportunities along the way but they saw home ownership as a critical part of their security. When we get to later years, Mr Deputy Speaker, an important thing for all of us is to own the roof over our head. We're then in a position to manage whatever health or other personal challenges come before us. It's a key part of our security. I'm very pleased that the government is making further moves towards that through the National Housing Finance and Investment Corporation. (Time expired)

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