Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Hansard source

I am very pleased to join with my colleagues here today in supporting these bills, the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 that goes with it. These bills are yet another example of the Rudd Labor government’s practice of acknowledging and identifying a problem and then coming up with a very practical solution to that problem—really trying to deliver better outcomes for families and households in Australia. This is a great solution, which uses the government’s resources to attract private sector investment to increase the stock of affordable rental accommodation units in the country.

All you need to do to get a rough idea of the scale and the extent of the problem of the lack of affordable rental accommodation in Australia is look at the speaking list. This debate has gone over two, or maybe three, sessions in the House so far, and if you look at the list today I think every single state, perhaps with the exception of the two territories, is represented here by the speakers on the list. So it is very clear that this is something that really goes across all parts of the country, whether you are talking about metropolitan areas or electorates like mine which have a regional and rural profile. There is no doubt in anyone’s mind about the need for this particular initiative.

To back that up in a more formal sense, I will cite some of the research that has come out this year. For example, the National Centre for Social and Economic Modelling released research that shows that 1.1 million low- to middle-income households spend more than one-third of their income on housing, and that is a figure that has increased by 220,000, or one-quarter, over the past three years.

The research showed that it is young families in particular who are feeling the pinch of increased housing costs. There has been a 55 per cent increase in the number of households headed by people aged under 29 who are experiencing housing stress. I believe, if I can just take the information from the previous speaker, the member for Dobell, that housing stress is defined as a household spending 30 per cent or more of their income on housing costs. Those figures cover the cost for households of both owning and also renting a house. Looking specifically at the rental market: the figures—again from NATSEM—show that 685,000 low- and middle-income households are experiencing rental stress. That figure accounts for more than 20 per cent of all renting households.

Coming specifically to what is happening in Queensland: the Minister for Public Works, Housing and Information and Communication Technology in Queensland, who is my state colleague in the seat of Rockhampton, has released figures showing that across Queensland the median weekly rent for a two-bedroom unit has leapt by 66 per cent in the past five years and the cost of a three-bedroom unit has jumped by 58 per cent over the past five years. The Queensland Residential Tenancies Authority says rents have increased by 35 per cent in my home city of Rockhampton over the past two years. So there is no surprise that families and low-income earners are finding it very difficult, first of all, to find rental accommodation but also, particularly, to find rental accommodation that they can afford to live in without seriously eating into their capacity to pay for other essentials.

The Queensland Community Housing Coalition have done a lot of work in this area both in mapping the extent of the problem and in being very strong advocates for the need to do something about it. They have produced figures on vacancy rates—and, again, the member for Dobell was talking about vacancy rates in capital cities of around two per cent for rental properties. In some regional markets, particularly those in Central Queensland where there is such huge activity associated with the mining industry and associated industries in that sector, vacancy rates are close to zero. It can be absolutely impossible to find accommodation.

It is not unusual for local people to send me photos of things like shipping containers that are being used for accommodation in some of the mining towns, and there are also stories of people having to live in their cars. They get a job in the mining towns and then find there is nowhere to live when they take up that position. It is really a very major problem in my electorate in Central Queensland. Even in the city of Rockhampton, while the problem is not quite as acute as people living in shipping containers or in the back of their utes, we have still seen that it is the affordable end of the private rental market that has been really squeezed in recent years. We have been enjoying good times in the city as a result of all the mining and industrial activity going on around us, so there has been quite a strong lift in housing development but again it is catering to the people who are employed in those industries, so much of it has been at the upper end of the market. There is a gap in the affordable end of the market.

To try to get an idea of what is affordable housing, I looked to the work done by the Queensland Community Housing Coalition, which held a summit on this question earlier in the year. They came up with the definition that affordable housing is: ‘Housing which is reasonably adequate in standard and location for a lower- or middle-income household and does not cost so much that a household is unlikely to be able to meet other basic needs on a sustainable basis.’

We are seeing in my area and probably right around the country a bigger pool of people who are struggling to find housing that would be defined as affordable housing. It is no longer simply the people who are on income support who cannot access the market; it is also the people who are on low to moderate incomes. They are not necessarily eligible for public or community housing and they cannot afford the rental stock at the higher end of the market. So we are seeing a situation where many workers on average award wages are finding themselves priced out of the rental market even if they can find appropriate accommodation.

In my area we are seeing that people who work in industries such as child care and hospitality and people in part-time and casual employment are finding it difficult to afford a place to live. This is exacerbated in the mining towns, where even if you are a full-time worker such as a mechanic at the service station or a truck driver for the council—you could have a pretty decent full-time job—you may not be able to afford the rents, which are pegged to the mining industry incomes in those towns.

The other group that have really come to the fore in the last year are old age pensioners who do not own their own homes and who find themselves in the private rental market. When debate has been going on about the need to lift the pension rate, most of the conversations I have had around this with callers to my electorate office have been with pensioners who are in the private rental market. They are the ones who are finding it absolutely impossible to survive with the cost of housing becoming so out of their reach.

I will read to the chamber a quote by Carol Croce, who is the Executive Director of the Community Housing Federation of Australia, a quote which really sums up what we are facing in Australia at the moment:

There is a crisis in the private rental market both in terms of affordability and availability of affordable properties. High rents and an insufficient number of lower cost rental properties make it particularly difficult for low and moderate income households to find a place to live that they can afford.

She goes on to say:

The National Rental Affordability Scheme (NRAS) targets people struggling in this market, and is part of the solution to address this housing crisis.

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The NRAS will boost the supply of housing for this population, including people who are presently unable to access public housing, but who are being hammered by ever-increasing rents in the private rental market.

We could ask ourselves: if this was going on for the period of time we are talking about, why was it so comprehensively ignored by the previous government? But I am very pleased to know that the government are addressing the problem through these bills, and it is good to get the endorsement of groups such as the Community Housing Federation of Australia for the path that we are taking.

These bills put into effect the government’s National Rental Affordability Scheme, which was announced during the 2007 election campaign. The object of the bills, when read together, is to increase the supply of affordable rental dwellings and to reduce rental costs for low- and moderate-income households. The scheme encourages investment in affordable rental housing by offering a financial incentive to providers of new dwellings on the condition that they are rented to low- and moderate-income households at 20 per cent below market rates. This scheme will create up to 50,000 new rental properties across Australia, at a cost of $623 million in the first four years.

The scheme that we have devised, which was one of our commitments at the last election, has been supported by COAG and by the state governments, which I am pleased to see. It is reflected in the fact that the financial incentive consists of a $6,000 Commonwealth contribution and a $2,000 contribution from state or territory governments. The state or territory contribution can be in the form of direct financial support or an in-kind contribution to the value of $2,000. It is great to get that cooperation from the states and territories to deal with this issue, which they are as well aware of as we in the Commonwealth parliament are.

The incentive, which can be in the form of a refundable tax offset or payment, will be provided each year for 10 years to complying participants and will be indexed in line with the consumer price index. This, of course, is part of a much bigger package of measures totalling $2.2 billion which we took to the last election and include not just the National Rental Affordability Scheme but also the First Home Saver Accounts scheme, both of which have already been debated in this parliament, and the scheme for helping councils and developers with infrastructure costs. A lot of the detail of the scheme will be left to regulations, and as we have heard from previous speakers this approach is being taken because we do want the scheme to be flexible and we do want it to be able to address changing circumstances and conditions in the rental market, including determining market rent, the tenant eligibility criteria and acceptable periods of vacancy. Those regulations are currently being drafted by the Office of Legislative Drafting and Publishing and an exposure draft will be made available as soon as it is prepared. This will assist with understanding the scope and operation of the scheme.

We have already signalled that if market demand remains strong we can make a further 50,000 incentives available from July 2012 to give a further boost to affordable rental accommodation. We really want this scheme to work and we want it to deliver for those people who have been feeling the pressure of increasing rents in the last few years. The scheme has received broad endorsement from across the housing sector. Harley Dale, from the Housing Industry Association, said:

If you talk about the next six to 12 months, then it hard to see any turnaround in tight rental conditions, and there is no doubt that is hammering the lower-income rental households the most. But if you didn’t have policies being implemented like the National Rental Affordability Scheme, then those same groups would still be being hammered in two, three, four years time ...

Gregor Macfie, from the Australian Council of Social Services, said:

... it is not the whole solution but this is certainly a positive step and the first large-scale private institutional investment in affordable rental accommodation in this country, so it is welcomed.

We agree with Gregor Macfie—together this is not the whole solution, which is why it is part of that larger $2.2 billion package.

Housing was one of the areas targeted in last week’s $10.4 billion economic security package, where we saw the announcement that the first home owners grant will receive a boost. First home buyers who are buying established homes will have their grant doubled from $7,000 to 14,000 and first home buyers who purchase a newly constructed home will receive an extra $14,000 to take their grant to $21,000. An estimated 150,000 first home buyers are expected to benefit from the scheme in the months leading up to 30 June next year. We hope that the boost to the first home owners scheme will also help those people who are currently renting take that next step into purchasing a home and that we will see some positive effect from that in the rental market.

I am pleased to commend these two bills to the House. The problem of inadequate supply of affordable rental properties and the subsequent rise in rents is not new. The Queensland Community Housing Coalition reports that in 2007 average rents in Queensland increased by over 10 per cent, yet by the time of the election this time last year there was still no acknowledgement of that by the previous government. In total contrast to that, Labor went to the election with a commitment to have a housing minister and with a commitment to ease the pressure on renters in Australia. These bills carry through on that promise.

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