Jerome Laxale (Bennelong, Australian Labor Party) Share this | Hansard source

As we've heard, the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 is a number of schedules—I think seven—which deal with a range of financial measures and changes to the way our laws work to ensure that we can deliver on our election commitments and our commitments in government. I will be talking in detail on two of the schedules and then might touch on some others towards the end. I believe two schedules in particular are really important for dealing with some financial matters and our housing crisis. This legislation represents a crucial step forward in addressing the urgent housing crisis. One of the schedules also deals with greater consumer protections in the buy-now pay-later sector. By focusing on the critical area of build-to-rent developments in the regulation of buy-now pay-later services, we're trying to create more affordable housing options for Australians and ensuring that Australians are not left vulnerable to unregulated credit practices, which seem to exist in the buy-now pay-later sector at the moment. This bill is about fairness, security and future wellbeing for all Australians.

On schedule 1: it's no surprise to anyone in this place that Australia is grappling with a housing and rental crisis. The availability of affordable rental housing is at an all-time low, and many Australians are struggling to find secure, long-term rental housing. This government has made the decision on a policy front for all housing to increase supply, because we know that increasing supply is one of the best ways to help with affordability. In the last two years, we've introduced $32 billion in measures as part of our Homes for Australia Plan, primarily to increase supply. An important part of providing more housing supply is that we provide a range of different housing types.

So pervasive is this crisis that we need all types of homes in all areas. We need houses that people can buy. We need houses that people can rent. We need social housing right across the country and we need affordable housing. We need market rates. We need non-market rates for housing.

An important part of the housing mix is build-to-rent, so schedule 1 of this bill introduces critical incentives for the build-to-rent sector, a model that has proven very successful in countries such as the United States and the United Kingdom and one that is just getting off the ground here in Australia. Build-to-rent housing provides flexible housing types where one development can have both affordable rental properties and market rental properties and will provide much-needed rental stock for Australians. As the housing stock in build-to-rent can only be rented, it is often the case that rental agreements favour tenants much more than traditional rental arrangements. Build-to-rent enables tenants to have longer-term rents, which works very well for families who want to establish themselves in a neighbourhood, particularly when sending their kids to a local school. With one-year tenancies it is really hard to establish yourself in a neighbourhood, and build-to-rent can provide longer-term tenancies, like five- or 10-year tenancies.

I am sure build-to-rent will become a really important part of our housing mix, and this bill provides two significant tax incentives to encourage investment in this housing type. This bill increases the depreciation rate for capital works in eligible build-to-rent projects to four per cent per annum and reduces the depreciation period from 40 years to 25 years. It also reduces the final withholding tax rate on eligible fund payments from managed investment trust to 15 per cent from 30 per cent. It halves it. Therefore, it increases the after-tax returns for foreign investors in these projects. These tax withholding rate changes that are proposed in this bill—as I mentioned, halving them—puts build-to-rent, puts housing, on the same footing as other important infrastructure investments. This is important because Labor sees housing as critical infrastructure. These tax withholding changes will treat build-to-rent housing just as they usually would railway lines or highways, really important nation-building infrastructure.

Measures in this bill are designed to make build-to-rent developments more financially attractive, encouraging an increase in rental housing supply, which we desperately need. In my electorate of Bennelong, Macquarie Park stands as a prime example, soon to be Sydney's home of build-to-rent. The Goodman Group has proposed two major build-to-rent projects in my electorate, featuring a total of 1,236 apartments, as well as retail spaces, recreational facilities and parking. These developments aim to repurpose underutilised commercial land to address housing demand. Additionally, Stockland have put forward a new proposal for the second stage of their MPark precinct, in Macquarie Park, to include build-to-rent as part of a commercial and residential housing mix. Their proposal includes approximately 485 apartments, delivering a mixed-use precinct that includes build-to-rent, retail and commercial.

Since the pandemic, people want to live close to where they work, and I'm not surprised that Macquarie Park will be home to build-to-rent in the future. These developments are not just about increasing the number of available rental properties to help with the housing crisis but also about creating vibrant, balanced communities with both residential and commercial spaces supported by enhanced public transport, as we have in Bennelong.

Importantly, this bill mandates that at least 10 per cent of the new dwellings in a build-to-rent development that takes advantage of these tax concessions need to be tenanted on an affordable basis. That means the rent for these units must be set at a 25 per cent discount from the market rental rate. Traditionally those affordable rental dwellings have gone to key workers and people on low to moderate incomes, which is really important. This measure ensures that more long-term affordable rental options are available, directly addressing the needs of key workers like nurses and teachers and those on low to medium incomes. By providing these tax incentives and by requiring that affordable housing forms part of these developments, this bill strikes a balance between encouraging investment in this new housing type and ensuring that the benefits of these investments are shared with the entire community. Diversity of housing is incredibly important, and build-to-rent will help with that.

I'll now go to schedule 2, which makes some long-overdue and important changes to buy-now pay-later products like Afterpay, Zip Pay and humm—there are quite a few of them now. Buy-now pay-later is a great Aussie invention and one that we should be pretty proud of. It has provided much-needed disruption in the short-term credit market, which has been typically dominated by credit cards and in some instances by payday lenders—and we've all dealt with some constituents who have had issues with payday lenders, and that led to reform in that sector. Buy-now pay-later has helped small businesses sell more and has provided an affordable short-term credit option for consumers who would have otherwise only had payday loans at ridiculously high interest rates or credit cards as their options.

However, like all good innovations, it has avoided regulation. Essentially buy-now pay-later is a credit product, and, rightly, the government should regulate this sector, and that's what this schedule seeks to do. To their credit the buy-now pay-later sector have worked with government to ensure that they are appropriately covered by this credit regulation. Schedule 2 brings buy-now pay-later products into line with other credit products by ensuring that they are regulated under the National Consumer Credit Protection Act 2009. Without proper regulations on these services, many people could face poor product disclosure, leaving them unaware of the true cost of the services they use. Additionally, inadequate dispute resolution processes mean that, when problems arise, consumers often struggle to get fair and timely resolutions. Excessive default fees, as we know, can quickly escalate, turning a convenient service into a financial burden.

By bringing these buy-now pay-later products under the credit act, the government's aim is to protect consumers, ensuring that they have clear information, fair resources in disputes and access to credit that does not compromise their financial stability. The amendments in schedule 2 will require buy-now pay-later providers like Afterpay and Zip Pay to hold an Australian credit licence and comply with existing requirements under the credit act, including product disclosure, dispute resolution and hardship assistance. Many of those providers are doing elements of this already, but regulating it is an incredibly important step.

Buy-now pay-later providers will also be subject to responsible lending obligations, which is an important reform. Providers of products that meet strict fee caps and are categorised as low-cost credit will have the option to comply with a modified responsible lending framework, and this will ensure that, while consumers continue to benefit from buy-now pay-later—something that I know is really popular, particularly for younger people—they will be protected from potential financial distress. They are accessing a credit product. That product should be treated as such. This approach provides appropriate and proportionate consumer protections, while maintaining the accessibility of buy-now pay-later and ensuring that the sector continues to innovate.

In conclusion: lots of people find these TLABs pretty boring and dry—there are lots of numbers, lots of schedules, lots of stats—but this one here today shows that we are about supporting housing and that we want to support people who are accessing credit products. There are even measures in there to help small business, with the extension of the instant asset tax write-off. Ensuring that we encourage more investment in housing is about helping families right across the country—but particularly in Bennelong—who are struggling to find affordable rent. It's about helping families move into great places like Macquarie Park, where they will have access to amazing jobs, amazing public transport and more rental housing options. And, of course, as I mentioned, the bill will help people who use the very popular buy-now pay-later services and ensure that they have some protection afforded to them by regulation. I commend the bill to the House.

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