Zali Steggall (Warringah, Independent) Share this | Hansard source

Before us we have a very large omnibus bill, the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024, packed with seven very distinct schedules. I would say it's a bad habit that the minister has of putting together very disparate issues, which ultimately means you avoid scrutiny on those individual schedules and parts.

There are three of the seven schedules that I will speak to today; three key areas. First, there are the build-to-rent incentives. Although I'm not necessarily confident that Warringah residents will see benefits from these incentives for more affordable housing, they are, nonetheless, very important. Secondly, the bill legislates a $20,000 instant asset write-off for small businesses for the new financial year, starting 1 July, even though it should be noted that the write-off promise for this current financial year has not been legislated. It urgently needs to be done because, ultimately, it misleads small businesses into thinking they have an asset write-off available to them. Also, the scope of that asset write-off, at $20,000, is, I would argue, not sufficient.

Thirdly, there is the schedule concerning buy-now pay-later operators, who will finally be better regulated under the credit act. This will help stem the tide of abuse by some partners or spouses, for example, through these operators. It is a form of family and domestic violence when debts are racked up on behalf of partners. It is also an area where people are unknowingly accumulating huge amounts of debt that have a serious impact on their capacity to meet the costs of living and other areas.

I will turn to the schedule in relation to build-to-rent. We desperately need more houses in the country. There is no doubt. It is very much an issue topical in every corner of the country. I continue to get a huge amount of correspondence from constituents in Warringah worried about housing. It's a generational thing as well, where young people, having grown up in the area, face a situation where it is completely unaffordable to stay anywhere near where they grew up. I'll be hosting a forum on this in a few months, because of course it is incredibly complex to solve this problem of getting more housing supply but also having it affordable.

In Warringah we have some of the highest property price increases when it comes to purchasing a property but also some of the most expensive rents in the country. We know there is a significant amount of housing stress, and it is incredibly difficult, because we are also bound by an ocean on one side, and we do not have the public transport infrastructure necessary to go into any kind of higher-density building in our area. We know housing and cost-of-living stress are biting, especially with those high rents. One of our local charities, One Meal Northern Beaches, is providing record numbers of meals to those facing food insecurity as a result of soaring rental and energy costs and many other aspects. We know households and young people are under stress. They are incredibly burdened with HECS debts and other areas of debt. We simply must be doing more.

As I've said a number of times, every tool and lever need to be looked at to alleviate the housing crisis that we're currently in. It is—make no mistake—a result of years and years of policies, from both sides of government, that have incentivised people to view housing as an investment strategy. Unfortunately, with that has come now a situation where housing supply has not kept up with the population. We need systematic reform or it will get very much worse. I agree that we must have policies from government that ensure that housing is available to everyone in our society.

The government has committed, through this bill and this schedule, to build 1.2 million houses by the end of the decade, and reducing the acute shortage of new rental stock is absolutely fundamental to achieving this. The government has been unveiling several new initiatives to help tackle the crisis, and this bill provides another piece of the puzzle—build-to-rent tax incentives. These provisions will go some way to alleviate the lack of supply of rental properties, at least in some parts of the country.

Some aspects of this bill are encouraging, including the eligibility criteria—that is, a minimum number of dwellings of 50 or more, and minimum lease terms required to be for three years. These build-to-rent developments must be held under single ownership for a minimum of 15 years, providing stability and certainty to renters—something very few renters experience in the market currently.

It should be clear that the current build-to-rent market in Australia is basically at a standing start. It just hasn't had focus. It makes up a tiny 0.2 per cent of the current housing market. Compared to other countries, we are just way behind. In the UK, it's at five per cent of investment, and in the US it's at 12 per cent of housing supply. There the model has helped expand housing supply.

In Australia, to date, the build-to-rent market has been focused more on the higher end of the market. It is encouraging that this bill intends to increase rental supply more broadly—including in the affordable housing area, with a requirement for 10 per cent of the dwellings to be tenanted on an affordable basis. Of course the question of 'an affordable basis' is very dependent on regions and geography.

That is where the difficulty is for Warringah. We have some of the highest rents in the country, and so that 'affordable basis' is unlikely to be of much assistance here. CoreLogic data shows that renters in Warringah are paying a median rent of over $1,100 per week, compared to $627 per week across Australia. Affordable housing is defined as the rent payable being set at 74.9 per cent of rent payable in a comparable dwelling in an open market. Given the astronomical levels of rents in Warringah, a rent set at that 74.9 per cent may still not be affordable for people on lower incomes, especially for the frontline service workers and essential service workers who we are ultimately trying to incentivise with this scheme. I'm concerned that they are likely not to get that benefit in Warringah. So I would encourage the government to start showing more precision in its policy-making on housing.

I'd encourage the government to do more when it comes to other areas. For example, this legislation is—as is other legislation from the government—consistently silent on housing initiatives and building standards. So, if we're going to be putting public money and tax incentives towards these kinds of projects, I would ask the government, urgently, to consider that, right around the country, we must take into account climate resilience in everything we build. Everything we are paying for, everything we are incentivising, must be climate resilient, or we will have a situation where it will be short-term supply that will be at risk, and then we will have public money needing to come in because of emergency funding when disasters strike.

We know housing is a wicked policy area. The government talks up the big numbers that they have been investing, but I think there needs to be a reality check on how much will actually be delivered when it comes to some of the building projects and the supply.

The government needs to remember that places such as Warringah—higher socioeconomic areas—as well as others have a variety of need for housing and that cookie-cutter solutions won't always work during this crisis. Things like going back to thinking about having boarders—having rooms for rent within homes—and having a tax incentive that incentivises, for example, granny flats, and those kinds of things, can also assist with supply. So I would urge the government to think outside the square and have more solutions on the table.

Another schedule in this legislation is the small business instant asset write-off. It's interesting. We now have it back on the table. It was announced in the budget again for this next financial year. Ironically, a year ago, we had the same announcement in the budget; that asset write-off was there and promised to small businesses. But that legislation hasn't passed in this financial year. So, if a business did a purchase, hoping to be able to rely on that measure, it has essentially got a couple of weeks—it has run out of time, essentially.

It's been quite disappointing to see that there have been political games played on this, where the government has refused to negotiate or to put anything more on the table, and, on the other hand, we have seen the coalition and the Greens move for it to be amended, which obviously has budgeting issues as well. I support that it be increased. We know small businesses are suffering enormously, with high interest rates and high and rising insurance costs—and I should note that the highest inflationary items for small businesses and households are in fact those rises in insurance premiums—and high energy prices, staff shortages and low consumer confidence. There is just a perfect storm.

Small businesses are the backbone of our economy. They make up 97.3 per cent of businesses in Australia. In Warringah we have a vibrant hub of economic activity. We have over 8,000 small businesses, which employ many people, and some 12,000 sole traders.

My office and volunteers recently undertook a survey of small businesses in the electorate, and, whilst it's not finished yet, there are some clear issues that have come out. Those are around taxation, cash flow, inflation, red tape and government regulation. The IR changes have certainly made it more difficult for small businesses, and, of course, everything has been going up, including rent, utilities, insurance and wages. Recruiting and keeping qualified staff is an issue, and, right now, 43 per cent of small businesses are not breaking even. So this should be at the forefront of the government's focus.

In March this year, COSBOA reported that 1,000 businesses became insolvent—the worst result on record since 2015. Approximately three in four business owners are taking home less than the average minimum wage, because usually, in small businesses, the business owner works in that business and, ultimately, does not take a wage for themselves. Organisations like COSBOA are reporting and advocating on behalf of small businesses that more needs to be done by the government to support them. So, whilst I welcome this relief measure, I am concerned that it wasn't available in this financial year, and we need to do more.

Instant asset write-off is undoubtedly a useful tool for enhancing small-business cashflow and encouraging investment. The feedback is generally positive. Small businesses in Warringah have expressed concerns, though, that the temporary nature of the provision makes long-term business planning incredibly difficult. I think this should be made more permanent, with a larger fixed amount to provide certainty and stability for small businesses. We absolutely need to support small businesses to electrify to become energy efficient and increase savings. We need to help them decarbonise, because that can make a huge difference on their way as well. Inclusion of the energy incentive, again, could have further assisted small businesses to buy heat pumps, cooling systems, batteries and more efficient appliances, like fridges and lighting—so many areas can, and should, be made better for them.

Finally, I welcome that buy-now pay-later is finally going to be regulated as a form of credit. Until now, these services have largely been unregulated, and they have caused harm amongst our most vulnerable. In particular—and it's quite frightening—these services have caused harm amongst those suffering from family and domestic violence. Good Shepherd, a provider of family violence and financial wellbeing services, have said that perpetrators may coerce women to sign up for a buy-now pay-later account or fraudulently use their personal details to accrue debts through buy-now pay-later. Equally, victims-survivors may be forced to turn to buy-now pay-later services when access to their money or ability to cover living expenses is controlled or restricted by an abusive partner.

In fact, in 2022 a University of Sydney study found that one participant had suffered financial abuse from a former partner who had accrued $9,000 of debt with 12 buy-now pay-later services. She told the study: 'I had a poor credit rating, but I was still approved for every provider. I missed so many payments and never received any assistance—just fees.' So it is incredibly important to now bring buy-now pay-later, a form of purchasing, under similar regulation to other forms of credit. We know there is still an issue with this current form of legislation. There's an assumption that debts of under $2,000 are okay or assumed to carry lower risk of harm, but the legislation could better protect people by limiting that $2,000 further. We know that we have to combat financial abuse, and this is a complex area.

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