Henry Pike (Bowman, Liberal National Party) Share this | Hansard source

I'm a bit worried, after listening to the previous speaker and to the minister who introduced the Housing Australia Future Fund Bill 2023 and related bills, that the government is offering these bills as a solution to a problem it doesn't quite fully understand. The assumption is there is a market failure in homebuilding. But the failure doesn't sit with the market; it sits with government. If there's one thing the Australian economy knows how to do, it's build homes. Home construction is not an emerging or declining industry, and we have been world leaders at this for a very long time. We have millions of Australians who want to buy homes or rent homes. We have thousands operating in the property sector keen to build homes. We have ample capital that wants to be invested. Yet we find ourselves in the midst of an ongoing affordability and rental crisis in most parts of the country. What we really need is for governments to get out of the way of homebuilding rather than interfere further in the market.

These bills have been wrapped up in many empty platitudes about this being the beginning of a golden era for Australian homebuilding. But behind the rhetoric these bills essentially do three things: they create the Housing Australia Future Fund; they rename NHFIC to Housing Australia, making some modest changes to the operations of that agency; and they formally establish the National Housing Supply and Affordability Council.

The coalition has in-principle concerns for the establishment of funds such as the Housing Australia Future Fund due to the increased debt burden on the Commonwealth. The Housing Australia Future Fund will be an additional $10 billion in borrowing, requiring hundreds of millions in interest repayments each year. With a 10-year government bond rate at approximately 3.6 per cent and rising, the $10 billion drawdown will cost the Commonwealth approximately $360 million per annum in interest on the debt. The IMF has already warned the government that the proliferation of these sorts of funds is something that should be avoided. At latest count, this means $45 billion in off-budget spending from the Labor government—a staggering amount of money. And all this has inflationary pressure and will have an impact on the cost of living for Australian households.

The shadow minister made an important point this morning: had the fund been established in the last financial year, the Commonwealth would have lost approximately $370 million in addition to the approximate $400 million in interest on borrowing. This total loss of approximately $770 million would mean not one dollar would be available for social and affordable housing projects under this scheme, if the conditions of the last 12 months were repeated over the next 12 months.

Labor's plan to build 30,000 homes over five years is less per year than the coalition delivered in social and affordable housing through the National Housing Finance and Investment Corporation. The stark reality of the government's policy is that we could easily get to the end of this term of government and have none of these 30,000 homes delivered. In contrast, it is important to remember that the policies introduced by the former coalition government have supported more than 300,000 Australians into homeownership.

Clause 41(1) of the bill provides the housing minister, Treasurer and finance minister—or the responsible ministers, as referred to in the bill—the power to provide the Future Fund Board with written directions regarding the performance of its investment functions and the exercise of its powers. Direction under clause 41(1) is not subject to disallowance or subject to sunsetting.

The Housing Australia Future Fund investment mandate may comprise of multiple directions issued at different times. Given that the investment mandate is yet to be released, it's hard to scrutinise the fund's capability to actually deliver the government's election commitments. Without an investment mandate, this legislation is effectively just an empty shell, with all aspects of the operations of the fund likely to be contained in the investment mandate, which has not been released publicly yet. It is also customary for the investment mandate to undergo a public consultation process, which of course has not occurred to date.

With this in mind, the coalition will not be supporting the Housing Australia Future Fund Bill. Of course, many stakeholders have outlined concerns with the bill, including the limited capacity for conferring grants under the Housing Australia Future Fund and failure to define key terms. I've worked in the property sector and I know that a lot of the key terms that are used in different legislation and regulations really do make or break it. We haven't yet got a definition of what social housing is and of what affordable housing is. And what definition is going to be used for acute housing? There are also, of course, the limitations on the annual drawdown, which has been highlighted by some stakeholders. There is no mechanism or performance criteria to assess the effectiveness of the grants and there is no guarantee that grants started under the Housing Australia Future Fund will continue. Importantly, there is the small number of social and affordable homes that the fund will actually provide.

An aspect of the government's approach that I find odd is the intense focus on just one element of the housing continuum. I'm going to attempt a metaphor here, or an analogy, so bear with me while I torture this for a bit. Consider Australia's housing market like a swimming pool. There's the shallow end—this is where people often start out and perhaps need to remain, if they need assistance. And then there's the deep end, where you'll find those who can confidently move around without support. When the supply of housing is meeting demand, it's like a pool that's full of water: everyone's comfortable no matter in which part of the pool they are swimming, and whether they are a new home buyer or a renter or a social housing tenant, or even someone who finds themselves in need of emergency accommodation. But, when the market gets tight, when the water level starts going down, the natural way the market works means that those in the shallow end—those needing rental assistance and those receiving government support—are the ones who'll be first to feel the pain. Conversely, when the pool gets filled, the water goes up from the deepest point.

It seems to me a pretty odd approach for the federal government to be targeting a very limited element of the whole market and neglecting the bigger picture and the bigger problems. Saying that the government will focus on well-located social and affordable homes, even going so far as to identify the professions and the genders of people they want in these properties, is as mad as saying you're going to put a litre of water into the pool to take care of the particular needs of one section of the shallow end. You may fill the pool up from the shallow end or the deep end, and, as long as it is adequately filled, it doesn't matter. Just focus on filling it up as quickly and efficiently as possible. What I'm trying to say is that the affordability and access issues are all issues of supply.

If you want an example of how surface-level the Albanese government's approach to our nation's housing shortage is, you only have to look at the cover of their National housing accord, which boasts a stock image of Wynyard Central apartments, one of the most sought-after addresses in Auckland's Viaduct Harbour. Overseas luxury apartments seem to me a strange choice to adorn the Australian government's affordability manifesto, but it is emblematic of how their approach is more about style than substance: pretty pictures and pretty words but no real solutions to the core problem.

The much-heralded new accord sets a target to build a million new homes from 2024-29. This is not exactly a 'stretch target', given that this is par performance for pre-pandemic home construction. The National Housing Finance and Investment Corporation, the entity that one of these bills seeks to rebrand and that will be relied upon for advice by the government moving forward, is expecting that 1.7 million new households will be formed in Australia over this period. So we've got the Labor government saying that they will create the settings for a million new homes, but the experts are saying, 'Excuse me, Minister; we will actually need 1.7 million just to stay even.' The Labor government's goals are unambitious and dangerously so. Even if they are met, housing in Australia will be significantly less affordable at the end of this decade than it is today.

I'll turn my comments now to the National Housing Supply and Affordability Council. These bills provide for the establishment of the National Housing Supply and Affordability Council as a statutory body. The explanatory memorandum has estimated that this will come at a cost of $4.4 million each year over the forward estimates. Given how much external help this government clearly needs to understand this area of public policy, I welcome this move. But I do warn the government not to fill this council with union reps, academics or former Labor members. I note that the Treasurer's new Investor Roundtable, which is informing policy in this space, contains five current or former Labor ministers. On this body we need people from industry, people who understand the planning and tax obstacles that prevent the market from meeting demand.

The coalition will be supporting the Treasury Laws Amendment (Housing Measures No. 1) Bill, but we'll seek an amendment to remove schedule 4 from this bill. As I've outlined, we're opposing the Housing Australia Future Fund Bill.

The bills will also rename NHFIC to Housing Australia. This rebranding exercise is estimated to cost half a million dollars, but I'm sure it will cost a lot more than that all told. This is largely a vanity exercise, I feel, trying to recast NHFIC as a Labor initiative. But it is important to reflect on the short history of NHFIC and all that it has achieved to date. NHFIC was established by the former coalition government to operate two key activities: the National Housing Infrastructure Facility and the Affordable Housing Bond Aggregator, providing cheaper and longer-term finance to registered community housing providers. NHFIC has been a landmark coalition achievement and, since its creation, it has delivered $2.9 billion of low-cost loans to community housing providers to support 15,000 social and affordable dwellings, saving $470 million in interest payments to be reinvested in more affordable housing. It has unlocked 6,900 social, affordable and market dwellings through the coalition's $1 billion infrastructure facility, to make housing supply more responsive to demand.

It's important to remember that investor interest has never been an obstacle to housing supply in Australia. Supply is currently not being constrained by a lack of capital but by a lack of land. Our states and territories control most of the policy levers which currently restrict supply, and the Albanese government's approach to housing only makes fleeting reference to any focus on streamlining planning systems, not to mention the removal of inefficient property taxes. The minister has celebrated the re-establishment of regular meetings of the Housing and Homelessness Ministerial Council. I'm sure there will be many good things discussed between these ministers, who are primarily responsible in their jurisdictions for building regulations and public housing stock; however, where we really need ministerial collaboration and discussion to boost housing supply is between state planning ministers and treasurers. Without Commonwealth-led reform in the areas of planning and property taxes, we will never get housing supply in this country to a point where it meets demand. This is where I would encourage the government to invest their time and taxpayers' money.

Far from being a $10 billion investment in social housing, as we heard in question time today and from the earlier speakers—it's certainly not a $10 billion investment in social housing—this is a structure to invest the potential returns of borrowed money. As the shadow minister pointed out, there is no guarantee on that return. In fact, the Future Fund lost money last year, so we have no way of telling how much this investment will be or how many homes it will create, but we do know it will be no time soon and it will be nowhere near enough.

I'll finish with the point I try to convey to the minister whenever she reaches the dispatch box in question time: more government is never going to be the answer to housing affordability. The government's new approach to housing has so far established two new strategy documents, two new government bodies, and four new funds and amended financial facilities. The Commonwealth has a role to play here, but it certainly isn't this. We need governments to get out of the way and let the Australian construction industry do exactly what it does best: building homes for Australian families.

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