Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. I well recall that, in the lead-up to the 2007 election, housing was a key election issue. That was not surprising given that there had been 10 interest rate rises in a row, inflation was running at something like a 16-year all-time high, the costs of living were increasing month by month and housing itself, over the period between 1984 and 2006, had increased by almost 500 per cent, according to Real Estate Institute of Australia data. So it was clearly the case that owning your own home was becoming more and more difficult for more and more people.

An interesting observation in all of that was the age at which first home buyers were buying their own home. About 25 years ago the average age was 27 years. At the turn of the century and the years that followed, the average age crept up to 32 years, and I suspect it is still rising. This is not because people want to buy their own homes when they get older but simply because homeownership has become so difficult for them.

The National Rental Affordability Scheme Bill 2008 is in fact another key Rudd government housing policy initiative. It is one of a number of initiatives that include special tax benefits for people who set money aside for their homes; and money that the federal government will provide to assist with infrastructure costs in local communities. Now there is this particular bill, which also provides funds directly to those people who want to invest in homes that will then be provided to the community at rental prices 20 per cent below the market price. The intent is to create an additional 50,000 new rental properties across Australia over the next four years, and 50,000 new homes across Australia will make a significant difference in meeting Australia’s housing needs and will certainly make a significant difference to the lives of those people who are struggling to put a roof over their head.

According to a BIS Shrapnel assessment, as of 30 June Australia was some 56,500 homes short of what it needs right now to house our population. According to other estimates, there are over 100,000 people who are homeless and 170,000 people on public housing waiting lists. Some of those people will probably never get into public housing because, by the time they move up the queue, they are likely to have made other arrangements.

Under this bill, the intent is to provide $6,000 of Commonwealth funds, complemented by $2,000 of state and territory governments funds or the equivalent in value, to investors who rent out houses to low- and moderate-income households at, as I said earlier, 20 per cent below market rates. The $6,000 incentive will be provided each year for a 10-year period and will be indexed in line with the rental component of the CPI and will be provided in the form of a refundable tax credit or grant.

It is estimated that about 1.1 million households are experiencing housing stress, and 700,000 of these are in rental accommodation. One of the reasons so many people are renting is simply that they cannot afford to buy their own home. That, in turn, drives up the rental market, with rental vacancies in most capital cities now at two per cent or below. In turn, that enables landlords to increase their rent. It becomes a vicious circle because, as the rents increase, the ability of tenants to save the necessary deposit for their own home diminishes. Industry estimates say that about 60 per cent of young people will never be able to own their own home. Creating an additional 50,000 homes will therefore have the flow-on benefit of housing people who presently do not have a roof over their head. It will make rental prices more affordable, for those who need to rent, by easing the demand for rental homes. Lower rental prices will, in turn, allow hopeful potential homeowners to save more money so that they can ultimately buy their own home.

For those people who are on low or moderate incomes, it will of course mean that, firstly, they will benefit from a lowering of the rental price across the market and, secondly, because the rent will be 20 per cent less than the market price, the net reduction in rental price is therefore likely to be greater than 20 per cent. If you have downward pressure on home rental prices, that brings down the average rental price. If you then deduct a further 20 per cent from that, it means that the net benefit is certainly worth while to those people who will be renting.

Of course, the announcement last week that the Rudd government will increase the first home owners grant from $7,000 to $14,000 and to $21,000 for newly constructed homes will boost the construction of new homes and that in turn will place downward pressure on rental charges, therefore indirectly bringing down home rental costs even further. Coupled with the reductions we have seen in bank interest rates the increase in the first home owners grant now means that home ownership is possible for so many Australians who were beginning to think that their aspirations of owning their own homes might never be achieved.

These bills are part of a $2.2 billion housing package announced by the Rudd Labor government. It is a package announced because we understand, certainly on this side of the House, the importance of people owning their own homes. As I said in a previous debate on housing, when people own their own homes it creates community spirit because people settle down, they become part of their local community and contribute to their local community. It creates stability not only for their own households but for the community in which they live in a general sense. That in turn leads to a stable home life for the children of the parents who live in those homes.

The measures that the Rudd government announced as part of the $2.2 billion package have been welcomed by the housing industry generally. It is important to note that the figures suggest that the industry provides something like 20 per cent of Australia’s gross domestic product and incorporates over one million housing related businesses. The housing industry sector creates jobs for tens of thousands of people directly and thousands more indirectly. Building homes is one of the most effective ways of stimulating the economy and so in these times of economic uncertainty the housing measures contained in these bills, combined with other measures announced by the Rudd government, could not come at a more needed time.

Of course, had the Howard government not cut funds to the states under the Commonwealth-State Housing Agreement much of these measures might not be needed today. Public housing numbers have declined over the last decade but the blame does not lie solely with the state governments. The federal government has a responsibility when it comes to housing, yet the previous Howard government cut public housing funding. So little importance did the Howard government place on housing that they did not even have a minister for housing in their ministry.

I want to touch on one section of our community that is particularly affected when it comes to housing, and that is many of the older people within our community. In the year 2007, $1.4 billion was spent on aged-care construction in Australia, a rise of 38 per cent on the year 2006, with most of that expenditure taking place in the states of South Australia and Tasmania because they are the two fastest ageing states in Australia.

Developers like Lend Lease and Stockland are positioning themselves for growth in retirement villages. Retirement villages certainly provide an opportunity for many older people in our community to move into more appropriate accommodation. Quite often, as people get older, they physically do not have the ability to maintain their own homes. Sometimes the homes that they live in are too large for their needs; their children have left home and they simply do not need the size of the house that they live in. But often the case is also that the homes that they are living in are the same homes that they have been living in for years and years, perhaps homes built in the fifties and sixties, which are in need of upgrade and renovation. The value of their homes, because of the state in which their homes are in, is not sufficient enough to allow them on selling their homes to move into one of the new more modern retirement village homes that are available. It puts many old people in a very difficult situation, particularly those old people who might be a single person because the other partner has passed away.

In particular, take the example of an elderly widow. Her partner has passed on and she is clearly incapable of carrying out the maintenance. The house becomes more run down and in turn loses more value. She is a in a bind where she cannot afford to pay for the maintenance costs because she is probably on a pension and she cannot afford to get out of the house because it will not raise sufficient funds to allow her to move into a retirement home. We need to ensure that those people are also provided with an opportunity to move from the home that they are in to a more appropriate home for their needs.

In respect of that, when I was the mayor of Salisbury before I was elected to this place, I proposed a scheme whereby there would be joint equity ownership in a housing development that was to take place in the city. The whole intent there was that the local council, who did have some land surplus to its requirements, would make the land available, the house would be built at the expense of the new owner and then they would both share in the ownership of it under an arrangement in which both would end up making any gains out of capital increases in future years. That was specifically promoted, firstly, to assist young people who could not get into their own homes and, secondly, to assist elderly people who were trying to move out of the home they were in but simply could not afford to buy into a new retirement village home. This would give them the opportunity to put their capital—the value of their home—into another property without losing any capital increase that might accrue in the years ahead. From my last contact with the council, I understand that they are still progressing through that scheme, and I am certainly very keen to see it occur because I believe it is another option that could be looked at. Councils across Australia might wish to do something similar once the model is put in place by the City of Salisbury.

The other matter I wish to speak on is the fact that some 800,000 homes around Australia are one-person households. These are sometimes the houses that I was alluding to just a moment ago: houses where single elderly people are quite often living. I will provide some information on this very issue. There are at least 793,653 or more bedroom dwellings in Australian in which only one person resides, according to Australian census data for 2006. Single person households are projected to show the greatest increase and families of couples with children the least. So we are going to see an increase in the number of single person households—an increase to the tune of about 75 per cent, I understand—and households with children in them are only going to increase by about five per cent. The current major influences include population ageing, the growing incidence of family breakdown, the declining birth rate, more people remaining single and young adults staying at home for longer. Some of these factors encourage household formation and some work against it. However, overall these trends are increasing the demand for housing. According to ABS projections of the growth of households, families and population from 2001 to 2026, the highest growth in family types will be of couples without children—they will grow by about 62 per cent—with lone parent family growth estimated to be the second-highest at 42.2 per cent. Embedded in the one person per household phenomenon are serious social, economic and environmental implications. More than 40 per cent of the single person households are people between the ages of 35 years and 54 years, with 30 per cent being between the ages of 55 years and 74 years. Governments have an obligation to explore policies that can meet compelling needs such as housing and make the best use of resources. Having nearly 800,000 homes that have only one person is very wasteful from a housing stock perspective.

Having done all that research, in a recent meeting with some residents in my electorate this very issue was raised with me and it was raised with me by some elderly people. They said, ‘Look, we have a home. We are the sole occupants of this home. We would dearly love to be able to make better use of our home provided there were some incentives for us to do so, or perhaps no penalties when we do so so that, if we take in or receive any income from renting out our home, our pension is not be reduced.’ So there is an opportunity, if we know that we face a housing shortage, to make better use of those 800,000 homes. Certainly it will be the case that not all of the people who own those homes will want to do anything more with them than remain single occupants. But I suspect that there are many people who would welcome the opportunity with the right kind of encouragement and incentive to share their homes with some of the people that are homeless today.

As I said at the outset, this bill is one of a number of measures taken by the Rudd Labor government to ensure that all Australians can ultimately own their own home. It is a bill which, I believe, makes an important contribution to both home ownership and to those people who perhaps do not want to own their own home and for a whole range of reasons may not aspire to owning their own home but have to pay rent. This bill will ensure that their rent is reduced by 20 per cent. It is my estimate that the figure will be lower than 20 per cent because the combined factors of all of the other measures implemented by this government will bring housing rental prices down and therefore the 20 per cent bottom line will be greater than that. I commend the legislation to the House.

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