Marise Payne (NSW, Liberal Party, Shadow Parliamentary Secretary for Indigenous Affairs) Share this | Link to this | Hansard source

The opposition has noted previously in this place and in the other place that we support the government’s endeavours to address the very serious and sharp decline in housing supply in Australia and those associated endeavours to lower the cost of housing for Australian families. It is important to note, though, that both here and elsewhere we have expressed continuing concerns about the adequacy of that response. In the National Rental Affordability Scheme, the government is endeavouring to create a new asset class for institutional investors in the hope that the incentives, as they are referred to, offered will increase the supply of affordable housing. At a time when vacancy rates and building approvals are at an all time low, there is a very serious need for government to act to ensure that a chronic undersupply of housing does not see rents rising to even more extreme levels and, potentially, lock a generation of homebuyers out of the market. As I indicated and as has been stated in the other place, the opposition does not oppose these bills. However, we do have a number of reservations with regard to the design of the scheme, and to these we will be moving amendments.

There are two matters to which it is worth making reference and which are further threatening capacity for homeownership in Australia. With my colleagues, I have noted several times since the 2007 election that the previous coalition government handed this government an economy in good shape with close to full employment. Noting the impact, though, of the world financial situation on Australia, I want to make some passing reference to the capacity for the threat of rising unemployment to represent a very significant threat to renters, to homeowners and to potential homebuyers. If we do one thing to see our economy through the current global economic instability, it must be to keep as many Australians as possible employed. A regular pay packet is the one thing that will keep mortgage payments up to date, rental payments up to date and, most importantly, families in their homes—the foundation of so many people’s family lives.

Another factor that has a major impact on house prices and rental affordability in particular is the prolonged constriction in the supply of new housing. According to the Housing Industry Association the demand for housing in Australia will increase from approximately 170,000 new homes and units in 2007-08 to more than 195,000 by 2009-10. So, while demand for housing is trending up, forecast housing completions are on a downward spiral to less than 140,000 over the same period. The bottom line is that the cumulative forecast for the undersupply of homes by the next election is 200,000. If this forecast proves correct and market forces do come into play, we can expect a further deterioration in housing affordability nationwide. I note that in the work of the Senate Select Committee on Housing Affordability in Australia, which I had the privilege of chairing earlier this year, this was an issue which attracted a great deal of attention in submissions and in evidence provided to the committee during that process.

The coalition has identified five areas which we believe are key in addressing the prolonged undersupply of housing in Australia. I want to acknowledge the shadow minister, Scott Morrison, the member for Cook, and his work in this area since he took on the portfolio. Firstly and importantly, as has been acknowledged elsewhere, we have to protect the liquidity of our financial sector. It is capital that is ultimately the lifeblood of the economy and without it all our other efforts will be significantly undermined. The second area that must be addressed if we are to adequately confront the undersupply of housing is the supply of land for new housing from our city centres through to the metropolitan fringe. Again, I acknowledge evidence provided to the Senate Select Committee on Housing Affordability in Australia which was very compelling with regard to that issue. The third area identified in confronting the prolonged undersupply of housing is the way in which all layers of government, from local to state and federal, interact, particularly with the private sector, to make investment in new housing viable. It is our strong view that government needs to be supporting private sector investment by ensuring that infrastructure is brought online to new and existing communities. As a senator for New South Wales I can certainly make observations about the inadequacy of the state government’s efforts in that regard in my own state. Fourthly, the coalition acknowledges that both building and site development costs are rising, so we should be avoiding any effect of unnecessarily or unfairly burdening the housing sector with new costs. The final point that the coalition has identified and that really does deserve closer attention is the impact of demographics on the demand for housing. That would include a consideration of immigration, fertility rates and our ageing population, which will all have a significant impact on that matter. Immigration was a matter raised with the minister during the course of immigration estimates in the last round, a matter which he and Mr Metcalfe, the secretary of the department, indicated was one which will be in further consideration, armed with some newly appointed experts in the Department of Immigration and Citizenship, to address some of those particular aspects in that portfolio area.

With those aspects of the discussion in mind, I would like to turn to the bills which are currently before the Senate. It is gratifying to have such a large audience of interest in the National Rental Affordability Scheme, which is an entirely appropriate acknowledgement of the housing crisis which we currently face in Australia. I thank those senators for their interest. As I said before, these are the bills which establish the NRAS and which will provide over $600 million for investment in incentives for affordable housing over four years, for complying applicants for the construction of 50,000 affordable housing units for rent to low-income earners at 20 per cent below the market rate for that area. What the government is attempting to establish through this scheme is a new affordable housing asset class for institutional investors. As an incentive, the scheme will offer a $6,000 per year indexed flat rental incentive in the form of a refundable tax offset for 10 years to taxpaying entities, topped up by a $2,000 incentive from state or territory governments and direct financial assistance for each successful project. Registered charitable organisations and non-taxpaying entities will receive an annual cash grant from the Commonwealth as an incentive.

The primary bill deals with the establishment of the National Rental Affordability Scheme itself. The secondary bill deals with the refundable tax offset and other taxation measures, and we now have a consequential amendments bill which deals with aspects of an announcement by the Treasurer last evening in relation to charitable institutions.

John Hogg (President) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97.