Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Hansard source

There is no doubt that a lot of Australians are doing it tough right now when it comes to housing and there is no doubt that Australians have the previous government to thank for this predicament. The previous government, for nearly a decade, sat on their hands and did nothing despite desperate calls for action by community service organisations, homeless Australians and Australians under rental stress, so it has once again fallen to Labor the government to fix yet another crisis left by the previous government. I am pleased to say that, since forming government, that is exactly what we have been doing. Whether you are buying or renting, Labor is getting on with the job with making housing more affordable for all Australians through our ambitious housing reform agenda, squarely focused on boosting and streamlining the supply of housing. You don't need to be an economist to understand that when demand outstrips supply, prices go up and, conversely, when supply increases prices, go down.

The Albanese government has therefore prioritised a range of policy initiatives aimed at increasing the supply of all houses, including public, social and affordable housing, many more homes to buy and more homes to rent. Last month the Albanese government's signature in Housing Australia Future Fund was legislated by parliament, delivering on a key election promise from Labor. This $10 billion fund is the single-biggest investment in social and affordable housing in more than a decade, and it is anticipated that in the first five years alone we will be able to build 30,000 social and affordable homes. To put this in context, this is more social housing than was provided over the past decade from the combined contribution of the Commonwealth, state and territory governments.

In addition to the Housing Australia Future Fund I would like to remind my Senate colleagues of what the Albanese government has achieved on housing in the short time since forming government last year. We have provided an extra $1 billion to the expanded National Housing Infrastructure Facility so we can get more homes on the ground more quickly. We've dispersed a total of $2 billion to the states and territories under the Social Housing Accelerator, which will create thousands of new homes for Australians on social housing waiting lists. We've delivered a new national housing accord, bringing together all levels of government, investors and the building and construction sector in a shared ambition to build one million new well-located homes over five years, starting in 2024. The Grattan Institute has estimated this scheme could save renters up to $32 billion over the next 10 years.

Supporting the National Housing Accord is a $3 billion new homes bonus, a scheme designed to incentivise states and territories to build 1.2 million well-located homes where people need them, as well as the $500 million housing support program for initiatives to help kickstart housing supply. We've also brought together states and territories with an agreement on the National Planning Reform Blueprint to streamline planning, zoning, land release and other measures to accelerate housing supply and improve affordability.

Also provided in the housing legislation recently passed by the parliament is the establishment of the National Housing Supply and Affordability Council, an independent statutory advisory body. The council will not only provide independent advice to the government on ways to increase housing supply and affordability; it will also ensure that our investments in housing are underpinned by expert advice. The culmination of our housing policy has been a phenomenal effort, and I have to take this time to congratulate my friend the Minister for Housing and the Minister for Homelessness, Julie Collins, the member for Franklin, for her incredible hard work and conviction in tackling issues of housing head-on. She has certainly put a lot of effort into sorting this issue out.

In stark contrast to the responsible approach to housing and supply by the Albanese government, the Greens have proposed a bill to place a freeze on rent and interest rate increases. While this idea sounds like a quick and easy solution to the distress many tenants are facing, this proposal is nothing more than another cheap political stunt by the Greens. While we understand that many Australians are finding it tough to find an affordable place to rent and that interest rate rises are often a bitter pill to swallow for those with a mortgage, this government will not support policies which give false hope to Australians who are already feeling the considerable pinch of housing stress. After spending months in this place delaying the delivery of actual concrete action on housing, the Greens are once again putting forward a policy designed to do nothing more than bolster their brand in the run-up to the next election. This bill is not about helping or serving the people of Australia; it is about serving their own self-interested gain of political pointscoring. This fundamentally flawed policy on housing is just another clear example of how they work.

When it comes to the issue of interest rate control, this is nothing but pure electioneering fluff from the Greens. The proposed bill seeks to fundamentally undermine the independence of the Reserve Bank of Australia despite an RBA review in March this year recommending the complete opposite. In fact, the review recommended that the government bolster the RBA's independence by removing the power of government to override monetary policy decisions of the Reserve Bank. The government supports the independence of the RBA and has accepted in principle all recommendations from the March review.

As the Greens also know—or at least they ought to—the policy of rent control is just another red herring. After all, it was the Greens who called for a Senate inquiry into the worsening rental crisis in Australia, only to hear expert witness after expert witness attest to the negative impacts a rent freeze would have on the rental market. If that wasn't enough to convince them of their political folly, there is an absolute trove of academic literature and evidence from around the world highlighting the long-term damage this type of policy represents. Indeed, according to the Grattan Institute, such measures would end up doing more harm than good, resulting in more Australians, not fewer, becoming homeless. They say:

The cap would blunt the incentive to build more housing, leaving us with fewer, poorer-quality dwellings.

…   …   …   

Only when housing is plentiful will it also be affordable. That's the plan renters should get behind.

This is not just the opinion of the Grattan Institute. The Centre for Equitable Housing, a think tank that advocates for all Australians to have secure, affordable housing, recently published a report on the regulation of rentals in Australia, which states:

We find that first generation rent control, or a "rent freeze", would be a poor response to the real challenges facing Australia's housing system, almost certainly making the problem worse for those in real housing stress. Freezing rents has been shown to reduce supply at the lower end of the market, as investors shift to higher-yield property development and withdraw more affordable properties from the market altogether.

The report goes on to say:

In the medium- to long-term, increasing social housing stock is critical to resolving rental unaffordability and insecurity.

There is overwhelming evidence from all over the world that rent control strategies simply do not work and ultimately do nothing but make the crisis worse. Some examples—for the Greens' benefit—of failed rent control policies from around the world include New York. Since the 1940s, New York has restricted annual rent increases, resulting in rents significantly lower than market value. Landlords are left with little incentive to maintain or improve their properties, which has led to an ageing and deteriorating housing stock and the ultimate ghettoisation of many neighbourhoods. The consequence of this has been the emergence of a two-tiered system. While some tenants with long-term and often intergenerational leases pay artificially low rents, others, particularly newcomers, are forced to pay steep market rents. This is a failed experiment which has only led to further inequality and social division.

Well-meaning rigid rent control in Stockholm has unintentionally led to a chronic housing shortage, with waiting lists for controlled rent apartments stretching into decades. This has ultimately led to the emergence of a black market for rental contracts, resulting in further inequity and social division.

Rent regulation was introduced in Paris in 2015. With landlords unable to increase rents above a certain index, many chose to sell their properties rather than lease them. This resulted in increased rental demand and, unsurprisingly, an ultimate increase in rents. The failed experiment was short-lived, with the policy being repealed, after just two years, in 2017.

Berlin also experimented with rent caps by introducing a planned five-year rent freeze in 2020, which ended in disaster. Once again, the policy had the effect of disincentivising investment in the housing sector, ultimately worsening the city's housing problem. In a case which lasted nearly a year, the policy was eventually overturned in Germany's Federal Constitutional Court in 2021. Berlin landlords were subsequently entitled to demand rental back payments on previously frozen rents, resulting in countless evictions of tenants facing significant arrears. This was yet another failed experiment highlighting the legal complexities and pitfalls that rent controls present, once again leaving renters to pick up the pieces.

So the evidence is clear: rent control policies simply do not work. Not only do such policies fail to meet their objectives; invariably, they have the unintended consequence of leaving renters even worse off than before. There is no need for Australia to become yet another failed experiment in the world of rent control that this bill represents. Rather than distorting the housing market with below-market rental rates or removing the independence of the RBA, as the Greens have suggested, the Albanese government is taking the far more responsible and pragmatic approach of addressing the root cause of the problem: supply. The solution is building more homes, and, thanks to our comprehensive housing agenda, that is exactly what the Albanese Labor government is doing.