Max Chandler-Mather (Griffith, Australian Greens) Share this | Hansard source

I move the amendment circulated in my name:

That all words after "House" be omitted with a view to substituting the following words:

"(1) notes that:

(a) the Government gives billions of dollars in tax handouts to property investors, driving up the price of housing and denying millions of renters the chance to buy a home;

(b) the Housing Australia Future Fund has not built a single home; and

(c) the median rent in Australia is now $621 and capital city rents have increased 9.5 per cent over the past year; and

(2) calls on the Government to:

(a) freeze rent increases for two years followed by ongoing caps of 2 per cent every two years;

(b) phase out negative gearing and the capital gains tax discount; and

(c) establish a publicly-owned developer to build hundreds of thousands of good quality homes to be sold and rented at prices people can actually afford".

There are a lot of things in the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 that Labor has bundled together that are completely unrelated to each other, which in itself seems to be a way to avoid scrutiny of key elements of it. Some of the things in this bill the Greens support, but I want to focus in particular on the build-to-rent component of this bill.

Once again Labor is not only tinkering around the edges of this housing crisis; it is bowling up plans that will make this housing crisis worse. How is it that, in the middle of the worst housing crisis that we have seen in generations—millions of renters and mortgage holders falling into severe financial stress, millions of first home buyers unable to buy their first home—Labor's proposal is to give more tax handouts to property developers and investment funds to build rental apartments that almost no-one will be able to afford?

Labor's so-called build-to-rent plan is really just a developer tax break plan that will see developers receive tax handouts for building unaffordable rentals. Labor's claim is that 10 per cent of these apartments have to be affordable. But, before we get to that—even if that were true, which it's not—that means the other 90 per cent, by definition, will be unaffordable. In fact, we know how build-to-rent projects work in this country. We've had plenty of evidence to demonstrate just how unaffordable they are.

Mirvac, in Sydney, is one of the biggest property developers in Australia. The outgoing CEO of Mirvac, by the way, is now the head of Labor's National Housing Supply and Affordability Council, the body that's meant to advise the government on housing affordability. When Mirvac did build-to-rent in Sydney, they bragged to their shareholders about the fact that their rentals were between 15 and 20 per cent above market rent, which basically means that they have a build-to-rent scheme that is driving up rents in the area in which they're building.

Another build-to-rent project, down in Melbourne, saw tenants evicted out of those apartments, and then the apartments were relisted, with $185-a-week rent increases, to over $1,000 a week in rent. This is the scheme that Labor wants to give public money to developers to continue. It has seen 15 to 20 per cent premiums on rent, increases on market rent in that area and tenants evicted so that then the property developer can put the apartments back on the market with massive increases in the rent.

Let's get to the 10 per cent affordable. Labor's definition of 'affordable' in this bill is 74.9 per cent of market rent. That might work if it weren't for the fact that market rents over the last four years have skyrocketed. Let's take an example. For a two-bedroom unit in Marrickville or around there, currently the market rent is around $878 a week. Under Labor's definition of affordable, that rent would be $657 a week. That means a nurse living in an 'affordable' rental under the scheme, earning a gross income of about $80,000 a year, would still have to spend over 50 per cent of their take-home pay on rent—and that's meant to be affordable! I would argue that this definition of affordable demonstrates again just how out of touch Labor are with the experience that renters live day to day. Spending over half of your income on rent is not affordable.

The other thing here is that, in the bill—and this is remarkable—Labor propose to impose forms of regulation on how the rentals can function. They've said that, the first time that these apartments are rented out, they need to be rented out on a minimum three-year lease. This is crucial, because Labor have repeatedly claimed that they can't actually impose any regulations on rentals. But here they are admitting that they could. What they've proposed is a bill where they do have the power and could put caps and freezes on rents that are funded out of this scheme, but they refuse to.

So we have a scheme where public money will go to a property developer in the form of tax handouts to build apartments that almost no-one will be able to afford, which in the past have been rented out at 15 to 20 per cent above market rent. They will then go onto the market, and presumably a renter might be able to rent them—already probably in financial stress. While this developer is receiving public money, they will then be able to increase the rent by as much as they want at the end of that three-year lease period—maybe even during, depending on the agreement. That's 90 per cent of rentals in those apartments.

The other component here is that the bill says that 50 of those rentals have to be rented out at any one time. If a developer builds an apartment block of 100 or 150 rentals, they could literally only rent out 50 and the drip-feed the rest of the apartments onto the market, depending on how much they can get for them. Again we could have a situation where developers are receiving public tax handouts from the government while they are sitting on over a hundred vacant apartments. This demonstrates again that Labor keeps trying to avoid the clear solutions to this housing crisis. They keep trying to find ways to give public money to developers and give out tax handouts, ignoring the fact that property investors already get billions of dollars in tax handouts every year in the form of negative gearing and capital gains tax discount, but they deny millions of renters a chance to buy a home. The sick thing about it is that their solution to the housing crisis, where renters are already paying too much on rent and already facing completely unfair rent increases, is to bowl up a bill where they give tax handouts to property investors to build rentals where they can put up the rent by as much as they want on 90 per cent of the rentals and still get to charge exorbitant rent on the others, especially if they're in places like Sydney.

The reality is that the best form of build-to-rent is government built housing where they build it themselves and rent it out at prices that people can actually afford. There are countries around the world that do this. For instance, in Vienna, in Austria, we have the government and city council helping to build affordable rentals were they rent them out at capped prices, which means that tenants in these beautifully designed rentals that the government helps build and sometimes builds itself rent them at proportions of their income such that they are not paying any more than 10 to 15 per cent of their income on rent.

If the government wanted to solve this crisis—especially the rental crisis—there are three clear things they could do. On this bill, at the very least they could include the idea that, if a developer receives public money, 100 per cent of the apartments could be affordable. They could put a freeze and cap on rent increases on the apartments that are being built under this scheme so that, if a developer is receiving public money, at the very least they're not allowed to jack up the rent by as much as they want. They could do all that but have decided they're not going to, because apparently this seems to be about funnelling more cash into the pockets of property developers, who dictate the government's policy on housing.

Overall, if they want to deal with the rental crisis, there are three clear things the government could do. In coordination with National Cabinet, they could introduce a nationwide freeze and cap on rent increases across the entire rental market in Australia. We know that, if the government had taken their chance when under Greens pressure National Cabinet met last year in August to discuss national rental plans, where all but one person at the table was from the Labor Party. They could have decided to introduce a national freeze and cap on rent increases. It would have saved the average renter over $4,000 on rent, but, more importantly, it would have stopped millions of renters falling into financial stress. It would have stopped thousands, if not hundreds of thousands of people being evicted onto the streets or into their cars, forcing people to choose between paying the rent and feeding their kids. That's what a freeze and cap on rent increases can do. We know it works, because in the government's own housing reports they found that Europe—Europe, which has the most widespread use of rent caps—has the lowest rent increases in the developed world. Australia, with no rent caps outside of the ACT, has the second-highest rent increases in the developed world.

The second thing they could do is phase out the tax handouts for property investors that are denying millions of renters the chance to buy a home. We know right now that the income you need to buy a house and avoid mortgage stress is $164,000 a year. What is a teacher meant to do with that? What is a nurse meant to do with that? What is someone who's just graduated from university meant to do with that? What is a middle-income family meant to do with that? Until we phase out those tax handouts, renters who could buy a home will be trapped in a dodgy rental market where there are unlimited rent increases.

So phase out the tax handouts for property investors that mean, when a renter goes to an auction, they're beaten out by a property investor because they can't afford to compete with a property investor who has thousands, if not tens of thousands, of dollars of tax handouts in their back pocket from this government. Phase out those tax handouts and save the government billions of dollars in revenue that they could then invest in setting up a government owned developer—like they do in Europe, like Australia basically did in the past and like they do across the world, including Singapore—and build hundreds of thousands of good-quality homes and rent them out at prices people can afford.

We're not saying the government has to do it all, but why not get involved in the same way that countries across Europe do, with beautifully designed apartments and houses? Those are solutions to the housing crisis. None of it is radical, because it's done all around the world. All we're proposing are solutions that other countries have used to tackle the housing crisis and ensure that anyone, regardless of their income and background, is able to move in to a good-quality home with rent capped or, at the very least, pay housing costs that they can actually afford and that allow them to go on and live a good life.

None of this is impossible. It's been done around the world. It appears that the only barrier is the power that property developers, banks and the property industry wield over this government, who time and again choose the financial interests of banks, property developers and investors over the interests of mortgage holders, renters and the millions of people being screwed over by a housing system that always puts them last.

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