Tony Zappia (Makin, Australian Labor Party) Share this | Link to 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.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to 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. Professor Julian Disney, the Director of the Social Justice Project at the University of New South Wales, said in an essay in 2008—and he was referring to affordable housing:

Without it, people are impoverished, families and communities eroded, jobs lost and the economy weakened and the environment damaged.

Hundreds of thousands of Australians are living in housing that they cannot afford. Julian Disney in his essay pointed out that perhaps a greater number are hidden victims of this crisis. These people can only find affordable housing by living long distances from work, family and friends, often on the urban outskirts of metropolitan areas and in neighbouring rural communities. These regions particularly lack infrastructure, ready access to health and adequate schooling facilities.

In part, the geography and history of our settlement in this country have concentrated our populations around the major capital cities—particularly Sydney and Melbourne and, more lately, Brisbane, Perth and Adelaide. With the exceptions of Geelong, Newcastle and the Illawarra region, my home state of Queensland, which is the most decentralised state in the country, has in South-East Queensland one in seven people living in the country. The South-East Queensland Regional Plan 2005-2026 of the Queensland state Labor government is a great document because it is about managing growth in South-East Queensland and it is a great fillip for my local community of Ipswich and its rural outskirts. It is in those areas that most of the growth in South-East Queensland will occur in the next 20 years.

When people cannot find affordable housing in the cities they pay a disproportionate cost in terms of transport in our country. They pay higher petrol prices than those who live in cities, who often use public transport which is readily available. I know that the people in my area, in particular the Lockyer Valley and the Boonah shire, readily commute to Ipswich, to Toowoomba and to Brisbane—long distances—to get to work. That puts pressure on families.

In my area the supply of rental housing is not sufficient. It simply is not sufficient to cope with the growth in population. And demand is acute, as people are spilling over into Ipswich and beyond as the Sunshine Coast, the Gold Coast and Brisbane fill up. That means that the price of housing has increased for first home owners and others and that the cost of rent has risen dramatically.

The lack of affordable housing in my area and nationally was aggravated by the previous, Howard government’s almost ideological aversion to public housing, and it is by the area of public housing that the Howard government are most disgraced and most shamed. Privatisation was their mantra. Discussions I had with a number of people in the public housing sector in Queensland and particularly the Labor government’s housing minister Robert Schwarten have shown me quite clearly the great frustration they had in getting the ear of government and an adequate response in terms of funding. Perhaps the deinstitutionalisation of people with mental health problems and other disabilities further aggravated the crisis; certainly, in the area of Ipswich—the Challinor Centre there was closed—that is the case.

Often for the families in my area a second job is absolutely required to be able to afford adequate housing. It is common to find single-income and single-person dwellings in our inner cities, such as in Brisbane, but most Australians with partners and children must work longer hours to meet the cost of living, to adequately clothe their children, to pay for their schooling and to meet their health needs, and so they live a long way from their places of work, and that puts enormous pressure on family life. The stress on relationships can be severe. Simply getting the children to school and to extracurricular activities is a real challenge—and I pay tribute to grandparents, who so often seem to help in that regard. If you do not believe me, have a look at any public school in my area between 3 pm and 3.30 pm every day.

It is common in the federal electorate of Blair for people to have to travel about 1.5 hours to work in Brisbane each day. That is three hours of the day taken out of family life, with the consequent cost to recreation, and civic and community life. And so our schools, our churches, our sporting and cultural clubs also suffer. Social inclusion suffers accordingly.

Tragically, the many warnings about the developing housing crisis in this country were ignored by the Howard government. The National Rental Affordability Scheme contained in this legislation is a very cost-effective method of increasing the stock of housing. Insisting on a reduction in the rent by providers of housing will mean no inflationary impact on the rental market. In my electorate, according to the latest statistics, 8,889 households are renting and it is the case that there are 3,413 households in rental stress—paying in excess of 30 per cent of their household income on the cost of housing. That is a figure of 38.4 per cent. You can see, Mr Deputy Speaker, what an impact any measure to reduce the cost of housing in terms of rent will have on my electorate.

I have spoken to a number of real estate agents in my area, and there are many. They tell me that the cost of housing in my area has gone up dramatically. Despite the fact that there has been a decrease in some of the major capital cities in this country, in Ipswich and the rural areas beyond somewhere between six and eight times the average weekly wage is needed to pay for a home. Typically, young couples are paying double what their parents paid in mortgage payments and rent, and that is sad.

The Rudd Labor government has invested in its housing package $2.2 billion over the next four years. I warmly welcome these initiatives, most of which were contained in the budget. There was $1.2 billion mentioned in the budget to help new home buyers save for a deposit, there is $623 million to create 50,000 new rental properties through the National Rental Affordability Scheme contained in the legislation before this House and there is the $512 million Housing Affordability Fund to deliver in terms of new entry-level housing more homes more quickly and at less cost with improved supply. I am looking forward to the green loans, which will help hundreds of thousands of people and many in my area to improve the energy and water efficiency of their dwellings.

An interesting thing that the Rudd government has done is allocate $30 million from the Housing Affordability Fund to fast-track the national rollout of a modern electronic development assessment system to replace the paper-based system. As someone who practised as a lawyer in his younger days and had to deal with the Registrar of Titles, various councils and other government bodies in Queensland, I assure you that using modern technology is a much improved way to do conveyancing and to establish new houses through the development process.

To show just how important this sort of legislation is to my area a few facts are necessary. By 2026 the Ipswich area could have as many as 418,000 people living in it. At the moment there are 155,000 people living in Ipswich. Simply getting new homes approved is crucial. The Queensland Times, the only daily local newspaper in my area, reported on 2 July 2008:

Up to 12,500 new homes need to be built over the next five years to cope with Ipswich’s growing population.

Housing Industry Association (HIA) assistant director of Industry Policy Ben Phillips said based on the latest ABS demographic regional figures, between 2006-2007 Ipswich had a population growth rate of 3.55 per cent ...

The latest figures have shown that growth is now in excess of four per cent. That means that we simply need to approve new dwellings all the time in Ipswich. The article continues:

Ipswich Mayor Paul Pisasale said the Ipswich Planning Scheme had the capacity to house about 500,000 people in designated urban areas …

“Priority growth areas at present are Springfield, Redbank Plains, Bellbird Park, Raceview, Flinders View, Yamanto and Brassall …

Brassall is the biggest suburb in my electorate. This all shows the need for more dwellings that people can buy and rent.

In my area, on 18 September 2008, the weekly newspaper the Ipswich News reported that two new housing developments worth $1.3 billion are to add 3,400 homes to the Ipswich rental and home-purchasing market to capitalise on the city’s population boom. In the eastern part of my electorate, on School Road, there will be 1,400 new dwellings, which, when completed, will have a value of $500 million.

The legislation before the House today goes hand in glove with our fight to ensure that the tragic problem of homelessness is addressed. I sincerely applaud the government’s announcement of $150 million to build 600 new homes for the homeless across the country.

I have travelled around Ipswich with the Booval Community Service. The people there are hardworking and dedicated. They provide emergency relief and rental accommodation, with no-interest loans and loans of up to $800 for whitegoods for low-income earners.

I recently had a meeting with the Ipswich Community Youth Service. It was a very sad meeting in many ways because I was told that the number of people availing themselves of their accommodation services and practical assistance has increased by up to three times in the last year. So you can see, Mr Deputy Speaker, in my area of Ipswich and the Lockyer Valley in Boonah just how important this legislation is.

I note that the Minister for Housing in her second reading speech on the National Rental Affordability Scheme Bill said:

The National Rental Affordability Scheme is a key part of the government’s $2.2 billion affordable housing package, which will increase the supply of affordable rental homes, help people save for their first home, lower housing infrastructure costs and build new homes for homeless Australians.

As former House of Representatives Speaker in the US Tip O’Neill said, all politics is local. This bill will have a huge local impact in my area.

I warmly welcome the legislation. I do so as I also welcome the Economic Security Strategy of the Rudd Labor government and the increase in the first home owners grant to $14,000 to purchase an established home and $21,000 to purchase a newly constructed home. This, along with the other assistance in that package, will help 43,701 households in my electorate. It shows me, and I hope it will show the people of my electorate, that the Rudd Labor government is caring for the people of South-East Queensland, for the people of Ipswich and its rural surrounds. I warmly welcome the legislation and I commend it to the chamber.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the National Rental Affordability Scheme Bill 2008 and cognate bill. The National Rental Affordability Scheme Bill 2008 is part of the government’s response to the housing affordability crisis which is besetting our country. Two-thirds of the private rental market are devoting more than 30 per cent of their income to housing costs and the vacancy rate in most capital cities is below two per cent. This is not a problem that is going to go away. The Australian Housing and Urban Research Institute estimate that the total number of households in the private rental market in Australia will increase by 80 per cent in the next 40 years. The number of low-income households in the private rental market is expected to increase by 120 per cent over the same period.

While the Australian housing market is much better capitalised than that in the United States and arrears rates on outstanding Australian loans are much lower than in most other countries, 1.1 million Australians are suffering from mortgage stress. The problem of housing affordability is very evident in my electorate of Isaacs. Mortgage stress data from the 2006 census shows that 5,141 households in Isaacs—or 30 per cent of all households in Isaacs with a mortgage—are spending more than 30 per cent of their income on housing costs. This is double the number of households that were in mortgage stress in Isaacs in 2001, when 17 per cent of all households in the electorate with a mortgage were under mortgage stress. In terms of rental accommodation, there are 3,318 renting households in Isaacs that spend more than 30 per cent of their income on rent—that is, 36.4 per cent of all renting households in the electorate and, with vacancy rates in Melbourne of one per cent, even if you can afford to rent, it can be extremely difficult just finding a property.

In southern Melbourne, which includes Carrum Downs, Carrum, Chelsea, Edithvale, Aspendale Gardens and Chelsea Heights in my electorate, rents rose by 3.2 per cent in the last quarter. Rents are higher in inner Melbourne than in my electorate but they tend to be more stable and thus registered no quarterly change in March 2008. Rents in Isaacs, by contrast, outstripped both wages and inflation. Comparatively, people in my electorate are some of the hardest hit in Victoria. The largest rises throughout Victoria have occurred in two- and three-bedroom houses, substantially increasing the pressure on young families. As of March 2008, only 3.2 per cent of available one-bedroom dwellings were classed as affordable for low-income singles, so students and single or widowed pensioners have an especially difficult time finding affordable housing. Similarly, between 60 per cent and 70 per cent of private rent, low-income households in Sydney, Melbourne and Adelaide are lone-person households or one-parent families. These families are twice as likely as the general population to live in flats.

The national housing affordability scheme is a direct response to these trends. The National Rental Affordability Scheme is designed to make the development of apartments more attractive so that students, single age pensioners and one-parent households can find affordable apartments without being pushed out of metropolitan areas. The scheme will also stimulate growth, providing investors with a new type of investment in low-income housing. It will guarantee a supply of affordable rental properties by providing incentives for landlords to rent to low- and moderate-income groups at 20 per cent below the market rate. Under the scheme the Commonwealth will provide $6,000 per dwelling in refundable tax offsets or a direct payment, which will be matched by a $2,000 contribution from the state and territory governments. The incentive will be paid each year for 10 years and indexed to the rental components of the CPI. It will only be provided for new dwellings or dwellings that were previously uninhabitable and have been restored. Up to 1.5 million households who are currently in the low-rent housing market will, potentially, be beneficiaries of this scheme.

This initiative builds on the increased cooperation between the Commonwealth and the states since November last year, especially the work done by the Council of Australian Governments Housing Working Group directed to better integration of federal and state housing policy initiatives. It will ensure the scheme results in new properties being released onto the market and does not simply subsidise homes that are already rented to low-income earners. If market demand remains strong, as seems very likely, the scheme will include a further 50,000 dwellings to be made available over five years from July 2012.

This scheme will provide real incentives to developers to invest in an often neglected part of the property market. During the inquiry of the Senate Select Committee on Housing Affordability in Australia, the Australian Council of Social Service said of this scheme:

We think that it is a big breakthrough, because it provides for the first time a real incentive for people to invest in low-income housing.

I know from talking to developers both within my electorate and further afield, particularly in Melbourne, that they too believe that the National Rental Affordability Scheme will provide them with incentives which are not presently there to start projects that they might not otherwise have undertaken.

The interest level that has been shown since the scheme was announced, the number of developers who have expressed interest in participating in the scheme, is in a very real sense evidence that the scheme is a well-pitched one and one which is likely to achieve its objective of providing a greater stock of housing in a part of the market that is presently woefully undersupplied.

The action that this government is taking to address the issue of housing affordability is particularly significant at this time of global financial crisis. In contrast, the previous government had what can only be described as an abysmal record on this issue. In 1996, when more than one in 10 families were under mortgage stress, the coalition government abolished the position of housing minister. This issue was of such little importance to the coalition that in 1997-98 the former government cut $92.7 million from the Commonwealth-State Housing Agreement based funding and, at the same time, put pressure on state governments to increase the rent for public housing at a time when working families were struggling to find affordable housing.

The $622 million in the National Rental Affordability Scheme, as well as the $1.5 billion directed at housing objectives in the Economic Security Strategy announced by the Prime Minister last week, provides a very clear distinction between the Rudd government and the 11 years of neglect of this policy area of housing and housing affordability under the Howard government. This initiative is a fulfilment of a commitment at the 2007 election but, more than that, it is a key part of the decisive action that this country needs on housing affordability. It will have a large and timely impact on housing affordability in my electorate. I commend the bills to the House.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

These bills, the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, will provide new principal legislation relating to the Australian government’s new National Rental Affordability Scheme. One of the bills will amend the Income Tax Assessment Act 1997 to enable eligible entities participating in the scheme to claim a refundable tax offset. One of the bills will also ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for taxation purposes and that there are no capital gains tax consequences from the receipt of incentives under the scheme. The fiscal cost of the National Rental Affordability Scheme package is estimated at $622.6 million over four years, including administration costs.

It is important that these bills are passed without delay to enable the first and second round calls for applications for National Rental Affordability Scheme incentives to have maximum effectiveness. The aim is also to provide certainty in relation to the taxation aspects of providing incentives to build affordable rental housing under the scheme. The object of the bills is to increase the supply of affordable rental dwellings and reduce rental costs for low- and moderate-income households. There will be a positive impact felt in rural and regional areas such as mine—particularly the northern areas of the New South Wales Central Coast—where incentives under the scheme support the building of affordable rental housing.

The scheme encourages large-scale investment in affordable rental housing by offering an 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. The incentive comprises a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution in the form of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year. The incentive can be in the form of a refundable tax offset or payment. The incentive will be provided each year for 10 years to complying participants and will be indexed in line with the rental component of the consumer price index.

The National Rental Affordability Scheme is a key part of the government’s $2.2 billion affordable housing package and will increase the supply of affordable rental homes. The package will also help people save for their first home. The package has also been designed to lower house infrastructure costs and build new homes for the homeless. What a contrast this bill and the approach by the Rudd government are to the previous government. The previous speaker, in his contribution to this debate, mentioned that one of the early actions of the Howard government on coming to office was to get rid of and no longer have a housing minister. We see there the complete contrast with one of the first things that the Rudd government did in responding to the pressures that people were under in terms of the affordability of housing: it was to make sure that we had a housing minister, someone who could drive policy in relation to this area and make sure that people who were doing it tough, struggling to find affordable housing would have a minister who would be in their court, fighting for them and pushing forward policies that make it easier for them to find a place that they can call home, a place that they can afford to live in.

On the Central Coast of New South Wales, where the electorate of Dobell is, we have seen the availability of rental properties decrease quite alarmingly. Earlier this year, the rental availability rate dropped from 2.7 per cent to 1.8 per cent, nearly a whole percentage point, in just one month. You only have to look in the classifieds of the local newspapers or online to see that there is a definite shortage of houses to rent at an affordable rate. Dobell has a high rate of unemployment compared to the rest of New South Wales—in fact, almost double the national unemployment rate; we are at over 7½ per cent. Dobell also has the lowest median income per capita in the whole state of New South Wales. So we have a lack of affordable housing, we have a high rate of unemployment, which affects people’s incomes, and those who are earning an income are getting the lowest median income in the state. So, in my electorate, it is easy to understand why a lack of affordable rental housing puts extra pressure on families and particularly low-income earners trying to find a place to live.

Key emergency accommodation agencies in the region face a constant dilemma. Some have had to turn away three out of every four people who come to them for help. This is a very disturbingly high rate. A lot of these people in need simply cannot afford rental housing and for them seeking emergency accommodation is the only hope they have of putting a roof over their heads, albeit a short-term solution. In terms of housing through the state government, the waiting list is now over 12 years for public housing in my area—12 years if you go through that scheme.

Pat Farmer (Macarthur, Liberal Party) Share this | Link to this | Hansard source

Mr Farmer interjecting

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

We have an interjection from a colleague from the other side, talking about the state government. Well, we simply have to look at the record of the previous government in slashing the budget in relation to this area, which put greater pressure on the state government in terms of public housing. So the former government’s contribution to this area was indeed a negative one and made it even harder for the state government to provide the sorts of services they do provide. Compare that again to where we are today with the Rudd government: taking positive steps and putting forward proposals that actually meet the needs of people in my electorate who are seeking affordable housing.

On the Central Coast it is still relatively cheap to rent when compared to, say, Western Sydney and many of the Sydney suburbs. You would have to add around $100 or $150 a week to rent a three-bedroom home in many parts of Sydney compared to the suburbs of the Central Coast. Still, for many people on lower incomes, paying $250 to $300 a week for a place to live is a lot of money out of their budget, given that we have the lowest median income in New South Wales.

The low rental availability rates on the Central Coast are unlikely to reach the extremes of those in Sydney, but because we are now considered to be one of the outer-metropolitan areas of that city and because one in three people work in the city the Central Coast region is always going to be influenced by Sydney’s housing pressures. Solutions that assist the Sydney market clearly have a flow-on effect in terms of the Central Coast.

Just last month, the Real Estate Institute of New South Wales put out a media release highlighting growing evidence of ‘rental rage’. The institute said:

The rental squeeze is now so bad that real estate agents are facing abuse and event threatening behaviour from prospective tenants who are unable to secure accommodation.

The institute at the same time released the latest rental vacancies data which showed, over one month, no improvement whatsoever in the number of available rental properties in Sydney. Rental vacancies for August 2008 stood at 1.2 per cent, which was unchanged from July. One in three real estate agents who participated in the survey by the real estate institute said that they or their staff had been threatened or abused over the phone by potential tenants within the period of the last month. And in an indication of just how strong demand is for rental properties, nine out of 10, or 90 per cent, of those surveyed said they received between five and 10 applications for every rental property. The institute also highlighted the disparity between demand and supply, citing figures from the Australian Bureau of Statistics which showed Sydney’s population growing at more than 1,400 people per week, almost double the number of rental properties available at the time, which was just 739.

Some of the more extreme examples of rental rage reported by institute members included constant abuse from irate prospective tenants; tenants making threats and abusing real estate office staff as a result of having their applications rejected; abuse happening on a daily basis; and, tenants abusing staff because of increasing rents. One client who was in arrears threatened to hang himself in a house if he was evicted, as that would ensure no-one else would want to live in it. There was a further example of a tenant harassing reception desk staff so much that police had to be called. These are symptoms of a market that clearly is causing so much stress for people who are seeking to either find a house to live in or to afford to remain in the house that they are renting at the moment.

The Real Estate Institute of New South Wales has drawn the conclusion that it is clear that much of the rental rage is being generated by the rental vacancy crisis which continues to grip the state. According to the institute, prospective tenants have become so desperate to secure a property that institute members have been offered bribes and have even had prospective tenants break down because they cannot compete with the number of people looking for properties.

The Rudd government is committed to helping to ease the pressure on struggling families and individuals who need somewhere affordable to live. The National Rental Affordability Scheme delivers on one of the government’s key 2007 election commitments. The Council of Australian Governments agreed to implement the scheme in March 2008. As I mentioned earlier, the scheme will cost $623 million in the first four years. From this investment, though, the National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia. There’s little doubt that this kind of a boost in rental stocks will go a long way towards easing the pressures of affordable housing. The scheme’s offering of incentives to participants to build new dwellings for renting to low and moderate income households at 20 per cent below market rent will help make the scheme a reality. For many struggling families and individuals in areas such as mine, 20 per cent less cost for rental accommodation would be a welcome saving.

The incentive is made up of a Commonwealth contribution of $6,000 per dwelling per year for 10 years and a state or territory contribution in the form of direct financial support or in-kind contribution to the value of $2,000 per dwelling per year for 10 years. The bill provides for the establishment of the National Rental Affordability Scheme by regulations. It is desirable for most of the administrative detail of the scheme to be in the regulations rather than in the bill. This provides the flexibility required to address changing circumstances and conditions in the rental market including, determining market rent, tenant eligibility criteria and acceptable periods of vacancy.

The regulations are currently being drafted by the Office of Legislative Drafting and Publishing and an exposure draft will be made available shortly. This will assist with understanding the scope and the operation of the scheme.

The associated National Rental Affordability Scheme (Consequential Amendments) Bill 2008 will make amendments to the Income Tax Assessment Act 1997 to provide for the refundable tax offset and to ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for taxation purposes and that there are no capital gains tax consequences from the receipt of incentives under the scheme.

It is expected that market demand will remain strong, and the Australian government in that case will make a further 50,000 incentives available from July 2012 to help build another 50,000 affordable rental dwellings. This is a long-term solution, a long-term strategy by the Rudd government to help ease the rental crisis.

The scheme will be reviewed in its early years of implementation to test whether the scheme is adequately focused on those who would otherwise be in a rental stress situation. We will also need to look at any scope for simplification of the scheme, reduction in the administrative burden and whether there are evolving issues of noncompliance that need to be addressed. The review may well indicate a need for improvements to the scheme.

On a scale of five levels of need, the local government areas of Gosford and Wyong, which fall in my electorate of Dobell, are both considered in the highest need category of affordable housing in New South Wales. This goes to the facts that I spoke about earlier about the high unemployment that we have in my area, the electorate having the lowest median income levels in New South Wales and there being a lack of affordable housing there.

Since 2004, demand for housing in Australia has outstripped supply. It is estimated that Australia currently has an annual housing supply deficit of up to 30,000 houses. The challenge of entering into homeownership has become more difficult and, notwithstanding the recent, most welcome interest rate cuts, interest rates and house prices have both increased in the past 10 years, as those on the opposite side well know. They presided over 10 interest rate rises in a row and it is only this year that we saw the first cut in interest rates in seven years.

Accordingly, prospective first home buyers are staying in the rental market much longer, increasing the demand for rental properties. This will probably partly explain why there are fewer rental properties available. Besides the increase in demand, there will always be a certain proportion of the population who prefer to rent rather than buy a property or who are in a situation where they will never be able to afford the deposit to enter the property market.

Australia has a shortage of residential rental properties. Limited access to affordable housing is constraining the ability of businesses to attract appropriate staff in capital cities and regional areas. As at June this year, rental vacancy rates were below three per cent in all capital cities. In Sydney, Melbourne, Perth, Adelaide and Darwin, they were at or below two per cent. As I referred to earlier, the drop in rental vacancies was reflected most clearly in my area, in the electorate of Dobell.

The rental component of the consumer price index increased by 7.1 per cent over the 12 months to March 2008, significantly higher than the general rate of inflation for the same period. The rate of rent increases is outstripping wages growth, making rental housing less affordable for Australians on low to moderate incomes. Data from the Australian Bureau of Statistics for 2006 indicates that, of all private rental households, almost one-third pay over 30 per cent of their income in housing costs, a widely accepted benchmark of rental stress. Given that rents have increased since then at a higher percentage than wages, those in private rentals are paying an even higher proportion of their pay packets for somewhere to live.

As these figures indicate, there is no doubt about the need to increase the supply of rental dwellings in all major real estate markets throughout Australia. This scheme is designed to make renting more affordable in two key ways: through an overall increase in the number of rental dwellings and through the fixed term rental discount of 20 per cent. But, in order to stimulate an increase in housing stock for rental, the scheme needs to be attractive for investors. Participation in the National Rental Affordability Scheme offers a number of benefits to investors in affordable residential rental properties.

First of all, there will be improved rental yields. The minimum annual $8,000 national rental incentive for each approved rental dwelling can improve rental yields over conventional residential investment properties in certain markets. The national rental incentive is income tax free, indexed to the rental component of the CPI and complemented by existing taxation arrangements, including depreciation. The scheme offers a reduced risk profile for investors. With rents set at 20 per cent below market value, and a large pool of eligible tenants, investors can expect a reduced vacancy risk.

Compliance with the scheme will offer investors certainty of contributions from the Australian and state or territory governments in the form of the national rental incentive over a 10-year period. The national rental incentive will be indexed to the rental component of the CPI.

As a result of the scheme, there will be a new asset class. The Australian government will allocate 50,000 incentives through the scheme over four financial years. As I said earlier, a further 50,000 incentives will be allocated from July 2012 if demand from investors and tenants remains strong, which we expect. These incentives aim to stimulate the creation of a new ongoing asset class and develop industry specialising in affordable rental housing. Potential applicants for incentives will be able to apply for allocations over forward rounds to allow for the staged rollout of affordable rental dwellings, providing certainty for successful applicants.

There are also opportunities for linkages with other affordable housing initiatives. Potential investors and developers are encouraged to take full advantage of possible linkages with other affordable housing initiatives, including the Commonwealth government’s Housing Affordability Fund. Under this scheme there will be a range and diverse pool of potential tenants. Up to 1.5 million individuals and families on low and moderate incomes will be eligible to be tenants in approved dwellings under the scheme. Income eligibility levels for prospective tenants include key workers and their families, who are vital to Australia’s continuing economic prosperity. It is also an ethical investment. Investing in affordable housing through the National Rental Affordability Scheme offers investment opportunities that may meet investors’ own criteria for building ethical investment portfolios.

There are clearly many positives in the National Rental Affordability Scheme, with its clear aims of increasing the supply of affordable rental dwellings and reducing rental costs for low- and moderate income households. Rural and regional areas such as mine on the New South Wales Central Coast cannot afford any delays in the implementation of this scheme. They need to start benefiting as soon as possible from possible impacts of the scheme, including increased investments, incentives to providers of new dwellings and a boost in rental housing stocks.

These bills are vital to make sure that those who are struggling to find a place that they can call home, struggling to put a roof over their heads and the heads of their families, are assisted. These are important bills, and I commend them to the House.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to 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.

          …            …            …

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.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, and I note that housing is such a critical issue because homes are important. They are centres of life for many Australian families and if you do not have a home you are in pretty dire circumstances. That is why in the Rudd government there is the Minister for Housing, who should be commended for the work she is doing. That is why we made housing affordability a key issue in last year’s election and a key plank of our platform. That is why housing has always been one of the top things on Labor’s agenda. That is why this legislation is before the House today. We desperately want to deliver on our election promise to increase the supply of affordable rental housing.

The National Rental Affordability Scheme is a key part of our overall $2.2 billion affordable housing package. The package in total will increase the supply of affordable rental housing, help people save for their first home, lower housing infrastructure costs and also build new homes for the homeless. On the matter of the homeless, Adelaide is one of the few capital cities to reduce its level of homelessness over the last few years and the state government in particular is to be commended for that.

The Rudd government’s economic stimulus package includes initiatives to support homeownership and to keep our property market healthy and active. I especially support the increase in the first home buyers grant for the construction of a new home to $21,000. There are many new suburbs in my electorate; it is a destination for new homeowners. Places like Blakeview, Hewett and Andrews Farm are going to have significant growth over the next couple of years, and I think that in the next 10 years there is going to be phenomenal growth both in the northern suburbs of Adelaide and also around the regional centre—it is not really a town anymore—of Gawler. I think that we are right at ground zero in terms of the provision of new housing.

This legislation focuses on the rental market. There is an extraordinary amount of housing stress out there. It is particularly true in Wakefield, where some 41 per cent of people renting in the private market are suffering from stress. Most of those people are on very modest incomes and have to cut back on essentials and luxuries just to keep a roof over their head. I have been to many places where old Housing Trust places have been sold off to private owners and now the rents on those houses have risen extraordinarily. We have seen areas where there has been traditional public ownership and moderate rents catering for low-income earners, age pensioners and disability pensioners, and we have seen a shift to the private rental market and an increase in rents. Obviously they have increased faster often than people’s incomes have increased. They have risen faster and higher than the costs of living and they are increasing because there is a lack of supply of housing, particularly affordable housing. The Rudd government is tackling that issue head-on.

The National Rental Affordability Scheme demonstrates the benefits of cooperation between the Commonwealth and the states in this area and encourages large-scale investment in affordable rental housing by offering incentives to the providers of new dwellings on the condition that they are rented to low- and moderate-income households at 20 per cent below market rates. The incentive comprises a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution in the form of either direct financial support or an in-kind contribution of $2,000 per dwelling per year. Obviously, this legislation provides for the Commonwealth incentives only.

The objective of these incentives is to create 50,000 more rental properties across Australia over the next four years specifically catering for those on low and moderate incomes. Looking to the future, if market demand remains strong the Rudd government can commit to making a further 50,000 incentives available from July 2012 to help build more affordable rental properties, and we hope that we are around to honour that commitment. These incentives could potentially leverage up to $13 billion in private investment and they represent an excellent opportunity for government, businesses, financial institutions and community housing to work together to really solve this problem. In my discussions with people in community housing, I find they have the expertise to provide housing; they often just do not have the capital, and I think that that is one of the big issues.

Another point that should be taken into account is that these families do pay their rent on time. Perhaps because they are so close to the margins of poverty they do value having a home, so generally they pay their rent on time every week. They know that they walk a tightrope.

Rental stress more often affects low-income families, pensioners and young people, and as rents rise fewer young families are able to make the transition from renting to saving up a deposit to buy a house in the great Australian tradition. People increasingly cannot afford to own a house and that is putting more and more stress on the rental market. To support these families and to ensure that the support is going to those who need it, we will have an eligibility test in place.

In Wakefield up to 7,000 families could be eligible under the current draft of the regulations and based on the income thresholds. Of course, many of those families already own their own homes or rent private dwellings and may not apply. For those that do, the regulations reflect good common sense. For families that come in under the income thresholds—currently proposed at $55,991 for couples with no dependent children and $69,423 for couples or sole parents with two children—there are provisions to allow for an increase in income by up to 25 per cent before families will be given a year to find other accommodation. This ensures that rental supply is being made available to those who need it but it gives some security of tenure to those people who do get it and whose circumstances change.

The scheme is governed by regulation rather than by specific provisions in a bill, because it is vital that the government be able to be responsive to movements in the property and rental market and flexible regarding the specific rules related to this scheme to make sure it has maximum impact. An example of this flexibility is the important fact that the legislation and the regulations will allow for eligibility under the scheme to be recognised retrospectively from 1 July 2008. This means that incentives will be in place immediately and, hopefully, we can get the ball rolling.

This scheme represents real leadership by the Rudd government on the issues that have been hurting working Australians for a long time. For too long the previous government did nothing—nothing was done to address the problem of spiralling rents and the lack of supply of low-income housing in particular. You could see this crisis coming a long way off. I remember when I was looking for a rental property in the northern suburbs about three or four years ago—I now own a place; I was renting at the time. I was on a good income but I had real trouble finding a decent rental property. That was a bit of a warning sign even then. You would see the same families going from inspection to inspection of rental properties. It was really quite extraordinary. That was a bit of a signal even four or five years ago. You could see this crisis coming. Unfortunately, the previous government did not act. It did not have a housing minister and really left it to the private market to provide these rental properties. Of course, what we have found is that the private market has not effectively catered for them.

We now have direct and effective action from the government, incorporating the private sector. This plan will provide the incentives for 50,000 new, affordable rental properties for low-income earners. This legislation means that young families will be able to find safe, secure and affordable rental accommodation. This means more young people and students will be able to make the transition to living away from home. This means more pensioners and working people—cleaners, nurses and retail workers—will be able to get out of rent stress and will be able to start saving, investing or spending some of their budgets on other necessities, just getting by. With this legislation we deliver yet another piece of ambitious reform, in this case to the rental market. We deliver on our commitment to the Australian people to address this issue and the rent stress crisis. I commend these bills to the House.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

I rise to support the National Rental Affordability Scheme Bill 2008 and cognate bill. Throughout Australia there is an extremely poor supply of affordable rental properties. As a result, rental stress is an epidemic affecting Australians right across the nation. There are now 1.1 million Australian households experiencing housing stress and it comes as no surprise that almost 700,000 of the people in these households are renters. These people are often low- or moderate-income earners who are forced to rent in the private market when rent rises are outstripping wages growth and inflation. It will probably come as a surprise to most people in the House that only 30 per cent of the population actually have a mortgage.

These problems are a significant concern to the Rudd government. The crisis is preventing thousands of Australians from renting properties on their way to buying their own homes. The realities of Australia’s rental crisis are incredibly dire. People are cutting back on vital necessities to avoid being forced into living in extremely cramped conditions or, even worse, out on the streets. Sadly, there are far too many cases where the latter eventuates and disadvantaged Australians have little choice but to confront the harsh realities of homelessness.

Even in my electorate of Chisholm, which is often referred to as the leafy, green suburbs of Melbourne—and we are pretty lucky in that it is a pretty leafy, green place—one of the issues that I was quite confronted with when I first became the member for Chisholm, 10 years ago now, was the number of people who came to our office over housing issues, over homelessness. In my electorate people think that this is not an issue and that people are doing quite well and coping. But people want to stay in an area because it is where their connection is to community, church and schooling for their children. Often in situations of marriage breakdowns it becomes a huge issue because two singles cannot afford to come back into the area, so it becomes compounded by this issue. Not a week goes by without somebody literally walking into our office seeking somewhere to live.

One of the worst occasions was on a Friday night. At about 5.30 pm a little man arrived with his worldly belongings in two milk crates and said he had nowhere to go that night. Although he was in full-time employment, he no longer could afford the rent on his property. The only thing we could do was put him on the train and send him into town to Ozanam House, which is a shelter for the homeless and people with alcohol problems. He certainly did not have those but there was nothing else going. He came back in a couple of weeks later and said he had found some crisis accommodation, but it is a fairly stark and confronting issue.

There is no doubt Australians need to have more affordable rental properties built. The Rudd government made a key election commitment to do just that—increase the supply of affordable rental housing for Australians and their families. I stand before the House today to speak about legislation that will serve to tackle this issue head-on and promote a more accessible rental market. The National Rental Affordability Scheme is a key component of the Rudd government’s $2.2 billion affordable housing package, which has just risen to a $3.7 billion package as a result of the extra measures announced for first home owners as part of the government’s Economic Security Strategy. This package will increase the supply of affordable rental houses, help people save for their first home, lower housing infrastructure costs and build new homes for the homeless.

The scheme I speak of today will encourage large-scale investment and innovative delivery of affordable housing. The government will offer an incentive to participants in the scheme so as to increase the supply of affordable rental dwellings and to reduce rental costs for low- and moderate-income households to 20 per cent below market rates. Specifically, what this means is a $623 million investment aimed at creating 50,000 affordable rental properties for low- and moderate-income earners in the first four years of the scheme.

There are two key elements to the National Rental Affordability Scheme that serve to assist renters amid this rental crisis. Under the government’s proposal, institutional investors and not-for-profit organisations will be offered tax incentives or grants. These will be provided on an annual basis for a maximum 10-year period, provided the dwelling is rented to low- and middle-income occupants. The incentive for investors comprises a $6,000 contribution per dwelling from the Australian government as a tax credit or grant and an additional $2,000 contribution from state or territory governments. Tenants will still be eligible for rental assistance, making it even more affordable for individuals and families. Provided the demand for rental property remains strong, as I suspect it will—indeed, I suspect it will grow—a further 50,000 affordable rental dwellings will be built from 2012 onwards.

Many constituents from my electorate of Chisholm, like others around Australia, are enduring the brunt of the national rental crisis. This scheme will be welcomed with open arms by the wonderful community in Chisholm that works tirelessly with the people who are affected by the crisis and are in need of significant assistance. I have been involved with a number of these community organisations in my electorate that serve to raise awareness on the very issues at the core of the National Rental Affordability Scheme: rental assistance, homelessness, and youth and family services. These issues deeply resonate with my electorate. If it were not for the tremendous efforts extended by these community groups, many of my constituents simply would not cope.

Indeed, last Friday some constituents came to visit me in my office. They are no longer living in my electorate but they are connected through schools. I have previously presented Renno with a Caroline Chisholm award for her tireless work in my community. Two weekends ago, for the first time in they cannot remember how long, she and family went on a holiday. Mum, dad and six kids went away on a fishing trip and, on the weekend, the house they were renting burnt down. They have returned home and everything is gone. The house is burnt to the ground. Trying to find a rental property when dad is a DSP recipient, mum is a cleaner at a motel and you have six kids is virtually impossible. Trying to find crisis accommodation was almost as difficult. We are still working with them now to find somewhere for them to live. People in the community are amazing. Someone from the footy club was going overseas and said they could move in for the two weeks they would be overseas. But that is coming to an end on Friday, so it looks like they will have to split up and live with various family members for the time being. We are still working on it at the moment. These people have been renting for the last 23 years. They have a phenomenal renting record but there is simply nowhere that is affordable at all. There is almost nothing going that can accommodate a family of this size. We are feeling their pain.

I would like to highlight some of these community groups and draw the House’s attention to the fantastic work they are doing in my electorate—and I spoke to most of them last Friday when I had to deal with this crisis in my electorate office to assist this family. We note the great work they do. Their work does not go unnoticed, although most of the time the people in SAAP, supported housing, feel that it does go unnoticed. We appreciate it. It goes a long way to improving the livelihoods of many of the community’s most disadvantaged individuals and families.

Connections UnitingCare is a community service agency that provides more than 40 programs offering support services to children, families and young people. To undertake this vital work, Connections UnitingCare receives funding from the Commonwealth, state and local governments. But it also generates much of its own funds through corporate and philanthropic support and community services. The agency delivers some key programs that tackle the issue of homelessness. The Rudd government is introducing a nationwide program to alleviate the problem of homelessness through the bill we are debating today. Starting Out is a program that has been run by Connections UnitingCare since 1992. It offers community based support for families with a parent aged 25 years or younger. Many of the families that access this program are facing some degree of homelessness or instability in their housing due to the rental crisis. The Starting Out program provides designated housing support to assist families to address their immediate housing needs, which means they can focus on other issues that have a long-term impact on health and social outcomes for parents and children and ultimately the wider community.

Connections UnitingCare runs an additional program, funded through Starting Out, which is aimed at supporting homelessness in the community. Supporting Homeless Individuals and Families in Transition, or SHIFT, provides support to homeless families and single adults aged 23 to 25 with complex needs. It aims to break the often inherent cycle of homelessness. SHIFT operates on limited resources but endeavours to provide the intensive and sometimes extensive support that is required by individuals and families who have little option but to live on the streets. The work being carried out by Connections UnitingCare in tackling homelessness is extremely noble and has a genuine impact on the lives of many disadvantaged people in our community. I would like to voice my support for this wonderful organisation and thank them for the vital work they are doing in my electorate.

I am proud to represent one of the most multicultural electorates in Australia. Many new migrants are welcomed into Chisholm every year, and they bring with them diverse cultures, ethnicity and experiences. Despite this, migrant refugee families face considerable disadvantage in their attempts to secure long-term affordable housing in the private rental market. Fortunately, my electorate is superbly served by community organisations that devote resources to assist newly arrived migrants and refugees to find rental accommodation. The Migrant Information Centre Eastern Melbourne and the New Hope Migrant and Refugee Centre offer intensive assistance to newly arrived families looking to secure affordable and appropriate accommodation in a highly constrained rental market. Given that many of the families now moving into the area are Sudanese and have extensive families, this is often a very great task. Many migrants and refugees are inhibited by the fact that they lack proficiency in English, have no rental history and receive Centrelink incomes. The role of these community organisations is therefore vital in supporting new arrivals. I am extremely grateful for the work they undertake in Chisholm in connection with the many great church organisations who are also supporting a lot of these families. Without them, I do not think these families would actually survive.

The Migrant Information Centre and the NHMRC released a project evaluation report in September 2007 titled Migrant and refugee rental housing assistance project. This report made a number of recommendations, the first of which stated:

For many newly arrived migrants and refugees, like many Australians on low incomes, renting privately is often the only housing option available. It is important that both State and Federal Governments focus attention on strategies that increase the stock of affordable housing in private, public and social housing sectors.

The Rudd government has heard this recommendation and many like it from community organisations right across Australia. That is why we are introducing the National Rental Affordability Scheme as one component of our affordable housing package. The scheme provides a new opportunity for all levels of government to work together with business and not-for-profit organisations to increase the supply of affordable rental houses for Australian families.

The Family Access Network, FAN, is another community organisation providing pivotal services to disadvantaged constituents in my electorate. FAN provides services right across Melbourne’s eastern metropolitan region, the area with the least affordable private rental accommodation and the least public housing in Victoria. FAN offers case managed homelessness support for young people in my electorate aged between 15 and 25 through its Private Rental Brokerage Program. These young homeless people are being forced to compete in a tight rental environment against people who might otherwise, in a more affordable market, purchase a home. The social support offered by organisations such as FAN goes a long way to assisting young people who are struggling to find affordable rental accommodation in the hostility of the current market. Many of the people supported by FAN are young mothers—and I am talking very young mothers—and without FAN’s phenomenal support, we would have not just those young individuals but their children falling through the net.

These people want to stay within the social confines of my electorate because of organisations like FAN, but it is virtually impossible because of the cost of housing in the area. This is compounded by rents being so high. My electorate is also a transport hub, so people come there because it is easy to get to and get out of. Once they get there, they work out that the trains, trams and buses, and Centrelink and DHS, are all there, which makes it easy—why would they go somewhere else when the services are all there? If they move further and further out their problems compound with transport costs and the difficulty of connecting back into the services. A lot of this goes round in circles.

Recently, in conjunction with the member for Deakin, I helped open a Social and Affordable Housing Summit facilitated by one of our municipalities, the City of Whitehorse. The City of Whitehorse does many innovative things and this was one of them. I want to congratulate them for running such a great forum. The summit involved identities from all three levels of government and representatives from peak housing associations, welfare groups and real estate agencies brought together to discuss ideas, concepts and initiatives relevant to the housing industry. Roundtable discussions were held to discuss the issues and provide feedback. I am currently anticipating a report from the findings from the summit’s facilitators. I would like to sincerely thank the Minister for Housing, Tanya Plibersek, for coming down to Box Hill and addressing the summit—her presence highlighted the government’s commitment to help tackle the issues and listen to community concerns. Initiatives such as this by local government bodies should not be underestimated: they facilitate dialogue between relevant bodies and often lead to agreed priorities and targets. I commend the City of Whitehorse, in particular Paul Kearsley, for showing initiative and hosting the summit, and I look forward to analysing its collated findings.

The day began with a group of very interesting speakers from Housing Sector Development in the Office of Housing talking about how small the supply of social housing is in our network but how many people are looking to come into the area. We had people from various groups. One was Reverend Graham Reynolds from the Anglican Church in Box Hill, who was helping the Sudanese community. He spoke about the issues around the Sudanese community, who are a very Christian group of people. A lot of them are Anglicans and they find one church and they stick to it, so people are coming to the Box Hill Church but they cannot find housing in the Box Hill area. So they are coming on a Sunday by bus with 12 kids from far-flung areas. The work they are doing to try and support these groups in the area is amazing.

We also had talks from the Melbourne Affordable Housing Trust and the Community Housing Ltd Housing Services Manager. These are terrific projects at a local level. We are doing great things. We do not hear about them. Sometimes it might be a 31-bed dwelling; sometimes it might be one house. But there are projects going on out there and we need to know about them and support them. A lot of this is not rocket science and we could really replicate some of the great things that they are doing.

Melbourne Affordable Housing is working in conjunction with the City of Whitehorse on a project looking at housing for the disability sector, which I think will be terrific if we can get it up and running. It is an issue we do not talk a lot about but, again, one of great concern in my electorate because we have so much transport and because there are so many community services there. A lot of disabled individuals come there because it is easy to get around and easy to access everything in one go, but the housing is too expensive to buy. This project, on council owned land and in conjunction with one of the local churches, would be a terrific thing. I am fully supportive of it and will be very excited if we can get it up and going.

I am sincerely grateful to all the service providers in my electorate who are helping to implement measures to assist my constituents through the rental crisis and to highlight the issue to the broader community. There are organisations such as these all over Australia performing vital work in this area in the hope of getting youth off the streets, making rental accommodation affordable for the disadvantaged and shielding families from the enormous impact of this crisis.

At the beginning of the year I held a roundtable discussion with most of the service providers in my electorate. Whilst I do not have a refugee service in my area, a lot of service providers are based in the electorate of Chisholm. St Vincent de Paul is there, Uniting Care is there, Anglicare is there, Community Housing is there, Wesley Mission is there—the list goes on. But it is an issue of stock and supply. It is not just about giving out more money but about actually building the houses. Build them and they will come! So I am very grateful and appreciative of the time and effort the groups put into coming to that roundtable, making submissions and letting me know of their concerns. I thank the Wesley Mission, who invited me out to see some of the support accommodation that they provide to homeless youth. It is outside but fairly close to my electorate. This is a great service that they are providing to young disadvantaged people. There are some phenomenal people working in this area, dealing with some issues that most of us would not want to confront, and I really want to congratulate them on the work they are doing.

There is a pivotal role here for the Australian government to play in easing the stress in the rental market. That is why we are introducing the National Rental Affordability Scheme, in the hope of increasing the supply of affordable rental dwellings, reducing rental costs for low- to moderate-income earners and encouraging large-scale investment in and innovative delivery of affordable housing. This is a scheme that is long overdue. Nearly 700,000 Australians on low and moderate incomes are spending more than 30 per cent of their limited incomes on rent. Implementing measures to address this crisis is a major priority for the Rudd government. The National Rental Affordability Scheme is a comprehensive response to the rental stress facing 1.1 million Australians across our nation. The $623 million scheme sees Labor delivering on a key election promise and providing a helping hand to those in dire need in our community.

As the member for Chisholm I welcome the assistance this scheme will provide to those in my electorate who are enduring the full brunt of the rental crisis. It will ease the burden faced by the community groups in Chisholm, who witness on a daily basis the devastating consequences that a tight rental market can have on individuals and families. This scheme will bring substantial growth to the community housing sector and will see more than 1.5 million households become eligible to rent at 20 per cent below the market rate. It is pivotal that this legislation gains the support of the House, as it directly addresses one of the key concerns facing Australians today through sensible and direct measures. This scheme enjoys my full support as the member for Chisholm and it should be implemented as a matter of priority. We owe it to our fellow Australians, who are battling just to keep a roof over their heads in a market that is inaccessible for far too many people.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to support the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, which deliver on the Rudd government’s election commitment to establish a National Rental Affordability Scheme. This initiative is an important part of the government’s $2.2 billion affordable housing package. The National Rental Affordability Scheme provides incentives to participants to build new dwellings and to rent these dwellings to low- to moderate-income households at 20 per cent less than the market rate. The incentive for participants is a very generous one, with a Commonwealth contribution of $6,000 per dwelling per year for 10 years and $2,000, either through direct financial support or in-kind contribution, from states and territories. The scheme will create up to 50,000 new affordable rental properties, which are desperately needed right across Australia.

The National Rental Affordability Scheme is designed to ease the pressure on millions of Australians struggling to maintain secure rental accommodation. This has been exacerbated by increasing cost-of-living pressures and a lack of supply of housing stock around Australia. This legislation is part of the Rudd government’s commitment to address the issue of affordable housing across the housing spectrum. For those who are homeless, we are acting; for those who are finding it hard to pay the rent, we are acting; for those who are trying to buy their first house, we are acting; and for those who are struggling to pay the mortgage, we are acting.

The previous government had 12 years to act on the developing housing crisis in Australia. They neglected to do anything about it or to deliver any respite for the millions of Australians doing it tough. Australians were facing increasing rental payments, increasing interest rates and less affordable rental homes. Vacancy rates are at critically low levels and rent is now rising faster than everyday living costs, with many families feeling the effect of housing stress, spending in excess of 30 per cent of their weekly income on housing. Research by the National Centre for Social and Economic Modelling found that there were over one million Australian households in economic housing stress in December 2007. Of these one million households, 700,000 Australians were paying more than 30 per cent of their limited income on rent, making it almost impossible for people to pay their rent and use rental accommodation as a stepping stone to purchasing their own home.

In my electorate of Kingston in South Australia rental accommodation has been particularly hard hit, with a poor supply of affordable rental housing. I have been actively involved with the Kingston community, trying to bring attention to this incredibly important issue. I have met with many struggling families, workers, students, young people and pensioners who are finding it hard to pay their rent each week. I have also met with community groups, local and state governments, churches and schools which have been affected by the housing crisis. They are all looking at ways to try and address this very worrying development in the Australian housing market. At present, a staggering 41 per cent of renters in Kingston are under rental stress. That is 2,987 households who are struggling each week to honour their rental commitments. More than 30 per cent of these households’ income is going to housing, leaving very little for these households to pay for other expenses such as food, petrol and education for kids.

A particular quote really struck home for me. Often we have a sense that homelessness is something that people who are in private rental accommodation or who have mortgages will not face. Roseanne Murphy, in an article published in the Record, made a very striking statement:

Homelessness, for many, is just two pays away. It only takes a company to merge, or go into receivership, or any other of many factors for a person from being happily employed and living in a flat, to being unemployed, unable to meet financial commitments and homeless.

I think this quote really summarises the situation that many households in my electorate of Kingston who are suffering from rental stress are facing. That is why this measure before us today is so important—because it increases the number of affordable rental properties available to many of these households.

It is not only charities and governments that are concerned about the rental stress that households are facing. Even private landlords have observed the increases in the rental market, and I have actually met landlords who, out of concern for their tenants, have not even increased their rent to keep up with inflation. One of these examples is Graham and Marie Stevens of Aldinga Beach, who decided not to raise the rent on their four properties in line with general indexation. They observed that the strain of rising inflation and elevated rental costs could adversely affect both the financial sustainability of their tenants and the long-term profitability of their property investments. As such, I have been advised that their tenants have not faced a significant increase in rent for over 10 years. This is certainly a contrast to the majority of tenants in Australia who have faced incremental rises in their rental rate.

The Stevenses contacted my office in March this year to inquire about any potential tax breaks to offset their decision to lease their rental properties at lower than the market value, and I am pleased that the passage of this bill will ensure that landlords like the Stevenses who choose to build rental properties and to provide these properties at 20 per cent lower than the market rate will benefit significantly.

Many families and many households are under rental stress—I think we have heard that quite significantly throughout this debate—and often are not able to afford basic household costs such as contents insurance and health insurance and, in extreme cases, as I have mentioned, basic provisions such as clothing and food. But, when it comes to housing, the Rudd government is acting. Whereas the previous government ignored the housing affordability crisis, which would have been quite evident if they had actually been listening to people in Australia, this government is acting. I do not think anything illustrates the indifference of the previous government to housing more than the fact that they did not have a housing minister while they were in office.

The housing affordability scheme also serves to consolidate many of the Rudd government’s key election goals, including to reduce homelessness, one of the key issues in Australia. There are some great community groups out there that I have met in my electorate and that the previous speaker and many other members in this debate have spoken about—the fact that these groups are well aware that there are so many people doing it tough. There are many different associations in my electorate. There is the Southern Junction’s Community Housing Association, Lutheran Community Care and the Southern Domestic Violence Service. I have been able to visit all of these services and hear first-hand about the issue of homelessness. The Southern Junction’s Community Housing Association is the type of organisation that will benefit from the measures in this bill. This organisation actively engages with key stakeholders, including the South Australian government’s Affordable Housing Innovations Unit, builders, financial institutions and other private organisations, to build houses, to make these houses rent out at less than 75 per cent of the private market rate. They do a significant amount to provide affordable rental accommodation. They have reacted like this because they have seen the huge, growing crisis that is occurring in the southern suburbs of Adelaide. It is groups such as the Southern Junction’s Community Housing Association that will further benefit from and be able to do a lot under the measures proposed in the National Rental Affordability Scheme Bill that is before us today.

This government’s strategy to address housing in Australia, as I mentioned, is a very comprehensive one, and the government have been very clear that we want to address both supply and demand constraints within the housing market. Addressing supply-side demand is very important. There is simply not enough housing stock available at the moment to meet the demands of Australian families, and this bill goes some way towards encouraging the increase of the supply of stock, as do a number of other measures.

One of these other measures that will address the supply-side issues—and it is already being rolled out—is the Housing Affordability Fund. This fund focuses on supply-side barriers to housing developments, principally by looking at things like holding costs of developers as well as funding infrastructure costs such as water, roads, sewerage, open space and community facilities. These are all things that are primarily provided by state and local governments and often hold back some of the housing developments that could contribute to the amount of housing stock available. These costs are usually incurred by homebuyers as well. With the government subsidisation under this program, it is expected that the savings will be passed on to new home owners, and this will act as a significant encouragement to building and ensuring that there is a new supply of affordable housing stock.

The Housing Affordability Fund will invest $512 million over five years to lower the cost of building new homes. The fund will target greenfield and infill developments where high dwelling demand currently exists or is forecast. I know that in my electorate of Kingston there has been significant discussion about infill. There is concern about housing continuing to stretch out the metropolitan area. State government and a lot of councils are looking at how we might infill around transport corridors, shopping centres and services that already exist. This is a key strategy for both the state government and the local council in my local area—looking at infilling developments around where the jobs, services and transport are.

This government is acting swiftly on its housing affordability initiatives. On 15 September, the Prime Minister and the Minister for Housing, the Hon. Tanya Plibersek, announced the first round of expressions of interest from local, state and territory governments and private companies wishing to apply for money from the Housing Affordability Fund. I saw some of the people representing South Australian local government today in the parliament. They have already put in their applications for many projects and are feeling very excited about how these projects will assist them to plan more affordable housing around their local areas.

This legislation and the Housing Affordability Fund build on many other announcements that the government has already made in its short term in office to ease the problem of housing affordability. As I mentioned previously, the Rudd government has taken the issue of homelessness very seriously. This government has commissioned a white paper about homelessness and has already committed $150 million to build hundreds of new homes for the homeless across Australia. The focus and the priority that this government has placed on homelessness has been welcomed by the many emergency accommodation places in my electorate and they have communicated that they are incredibly pleased to see that this government is putting this very important social issue on the agenda.

In addition, we have also seen our First Home Saver Accounts policy introduced to help first home buyers save for a deposit. Some of those accounts are starting to be set up and to collect money. That is a really positive thing that has been welcomed by a lot of people. Before the election, I spoke to a lot of people who were very concerned about being able to save for a deposit and to a lot of parents who were very concerned about how their children were going to save for a deposit. I am very pleased that first home saver accounts have been opened and that the policy does allow for parents to make contributions. I know that that has been very much welcomed in my electorate.

The most recent announcement aimed at helping first home buyers is an essential plank also of the Rudd government’s economic security package. That is the announcement to help first home owners purchase a home by the doubling of the first home owner grant to $14,000 for those buying existing homes and the tripling of it for those buying newly constructed houses. In light of the severe global financial crisis, this swift action is designed to stimulate the construction sector and target those who will benefit most from the injection of money into the economy, and that is first home owners.

The passing of this legislation, in conjunction with the many other reforms that we are making in the housing sector, is essential to the country and essential to many people in the area of Kingston. We as a government and as a parliament need to ensure that all Australians, regardless of their income, regardless of their previous circumstances, have access to basic accommodation. As I said previously, with over one million Australians facing rental stress, this situation could never be more urgent than it is now. Accordingly, I commend these bills to the House.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I stand to speak in support of the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 before the House. The initiatives contained within the National Rental Affordability Scheme are amongst some of the most innovative that this country has seen in relation to making provision for affordable rental housing for members of communities right across this country. There are a number of design elements to this scheme that really do justify the praise that I have just lavished on this policy, and I will come back to some of those a little bit later in my contribution. But it is worth examining the anatomy of the scheme as proposed, because it has elements that are worthy of further attention.

The scheme is fundamentally about attracting and delivering greater investment in affordable rental housing. One of the most attractive elements of the scheme is that there is a direct subsidy provided to institutional investors or other eligible bodies, which might include quasi-government related entities or community-housing providers. It provides a direct subsidy for the provision of the accommodation in the form of an annual payment which will be indexed and linked to the rental component of the CPI, which is important. That annual payment will involve a $6,000 contribution from the Commonwealth and $2,000, either directly or in kind or a combination of both, from the states, and it will be available for investors over a 10-year period. But the most important and, I think, the key element of this particular scheme is the requirement that in order to retain eligibility for those payments the investor or the provider must continue to make the premises available to low- or middle-income earners—importantly, at a rental 20 per cent below the market value.

The significance of this particular measure is that this policy is not just about attacking the supply issue. There are some real supply issues; in my electorate in Western Sydney rental affordability is equally as significant an issue as housing affordability for home ownership. A very large proportion of the population rent, and we have seen some real pressures driving up rents in recent times. Apart from the supply issue and the obvious increase in rental prices driven by the lack of supply, we have also seen in particular over the last few years consistent and consecutive increases in interest rates, which have attacked the incomes of the providers of this housing and also increased their costs. Landlords have sought to recoup those increased costs by passing them on in the form of increased rents. That has put many families in my electorate under considerable hardship. I draw particular attention to the plight of many single age pensioners within my electorate who have been finding that the cost of meeting their accommodation needs through their weekly and fortnightly rental payments puts additional pressure on their budgets.

Of course it is a matter of public record that we have taken some fairly decisive steps in recent times to make some additional assistance available to those people. But one of the issues that we always need to take into account is that where direct assistance is provided to the renter, where that assistance is made available directly to the person renting the property, there is always the danger that landlords can opportunistically see a chance of increasing rent whilst retaining the existing tenant. That is something that we always have to safeguard against and that has traditionally been one of the challenges that governments have faced with direct rental assistance.

That is why it makes this policy all the more innovative and all the more effective insofar as the very essence of the assistance that is to be provided to the developer or to the institutional investor requires as a minimum that they deliver that property to someone in the rental market—a low- or middle-income earner—at 20 per cent below the market value. So we actually have a mechanism here to constrain costs rather than to inflate them. This is one of the challenges that we have in a range of areas when it comes to investing in homeownership and housing affordability, whether it be in the rental or the homeowning markets. It is worth noting that more than 1.5 million households will be eligible for assistance in this particular set of initiatives.

One of the other design elements of the scheme that is worth commenting on is the fact that, because of the way in which the scheme will be structured, incentives will be made available and there will be provision for the secretary either to issue a certificate in relation to a refundable tax offset or to make a payment. The significance of this is that it is not just a question of making a tax offset available to those that pay tax. The community sector and the government sector, where income tax is not a consideration, will also get the benefit of this incentive. It will not be an incentive that is available only to those that have income tax obligations against which the payments and the tax value of those payments can be offset. That will be a very important design element that will drive greater participation from, I think, local government and, more particularly, community housing providers.

I certainly recognise the great efforts of the Wentworth Area Community Housing team in my local community. They provide great assistance to many local people and have been doing so for a long period of time. I know that recently they have teamed up and joined in partnership with a number of other community housing providers under the banner of Blue CHP. Blue CHP has received $6.4 million from the state government. Its members comprise the Argyle Community Housing Association Inc., the Hume Community Housing Association Company Ltd, South Coast Community Housing, Women’s Housing Company Ltd and also Wentworth Area Community Housing, whose operations are principally based around the Penrith and Hawkesbury area. Blue CHP will seek and create appropriate house development and acquisition opportunities that are value for money and are located in response to identified need. They will finance affordable housing projects from government funding, private lending institutions and donations of cash, land and other services.

I am advised that Blue CHP will be one of the organisations that will be putting themselves forward and seeking to obtain funds under this scheme. They are very excited about it. They have been doing some great work in the past but I know that their excitement as a result of this scheme really does demonstrate the enthusiasm within the community sector for the potential that this scheme does provide.

On the issue of affordable housing and the cost of rental accommodation, I think that when we are looking at policies designed to address accommodation needs within a community there are various approaches that we can take in terms of classifying those needs. But, crudely, the three classifications we might wish to draw upon to assist us in this discussion are those at the homelessness end of the market, those in the homeownership market and then those in the rental market, some of who may be upwardly or downwardly mobile throughout those three classifications, depending upon their circumstances. I noted with great interest the comments of the member for Kingston in relation to the quote that she cited and the general observation that most families are only two pay packets away from homelessness—particularly those that are in rental accommodation.

In commenting specifically on the housing needs within Penrith and the surrounding communities in my electorate, I recently had the opportunity to attend a very good conference—a local forum held by a number of organisations, including Wentworth Area Community Housing, Youth Accommodation Interagency Nepean and the Nepean SAP network. This conference was entitled ‘Towards ending homelessness in the Nepean’. The keynote speaker was our federal Minister for Housing, the Hon. Tanya Plibersek, who really provided a clear articulation of the government’s comprehensive policies right across the spectrum when it comes to affordable housing. The minister was very well received by the organisations that were participating. I think that is largely because those who work day to day within the community sector recognise the ongoing needs within their communities and are invigorated and refreshed by the new government’s agenda in this area. Not only are we interested, and that is something that they welcome, but we have an agenda and it is an agenda in which they see opportunities for their participation into the future.

On the occasion of the ‘Towards ending homelessness in the Nepean’ conference, I also had the great privilege of launching the housing help booklet produced by Wentworth Area Community Housing which provides important information on the options available to people facing accommodation difficulties. On 26 September this year, I opened the new premises of Wentworth Area Community Housing. That day was a great occasion. I think the great efforts of Wentworth Area Community Housing will continue to be built upon in their new premises and with a growing team. They are doing a great job in our local community and I certainly acknowledge their ongoing contribution to addressing the housing needs of local residents within my community.

I said earlier that there are several classifications in relation to housing and accommodation needs, including homelessness. I think one of the great things initiated by the Prime Minister was putting homelessness back on the national agenda. At the request of the Prime Minister, some would say ‘directive’, I and other Labor members went out into our local communities and engaged in extensive consultation with those who provide services and shelter for the homeless. It was something I did with great relish and it gave me the opportunity to maintain a close and ongoing dialogue with those service providers. It also opened my eyes to a range of other service providers doing much good work in my local community that I was not previously aware of. In fact, I recently provided some assistance at the Penrith community kitchen, which does some great work for people who are struggling to provide their next meal. They have some great volunteers at that centre and it was a real pleasure to spend some time with them and to see what great work they are doing.

Clearly, homelessness is an important part of the overall equation when considering providing for the accommodation needs of people throughout our communities. But, of course, there is the housing affordability-home ownership issue. Affordable rental is a key element of that. For many people trying to save the funds in order to move into home ownership, having access to affordable rental is necessary to free up some room in the household budget for the savings required to make that leap. I note the range of policies that this government has begun implementing in relation to affordable housing. I know the Housing Affordability Fund will go a significant way towards providing funding opportunities in those areas where infrastructure can be delivered with assistance from the Commonwealth government rather than having to directly pass on those infrastructure costs to the homebuyer. In the end that only pushes up home prices and makes housing less affordable for those trying to get into the market.

Our first home saver accounts are also a very positive initiative. Those initiatives, combined with our determination to see that we better utilise existing Commonwealth surplus landholdings throughout the country, make a contribution to addressing the supply side issues and will assist in tackling the overall housing affordability challenge that we confront. More recently, as part of the government’s economic strategy, we have seen the increase in the first home owners grant for existing dwellings from $7,000 to $14,000 and for new homes to the very significant sum of $21,000. This is significant. I have noted that in my community the real estate market—and this is probably the case more generally throughout Sydney—has been very slow in recent months and years, and I think this latest initiative will put a little bit more life back into the local real estate market.

I was very pleased to see in this week’s edition of the Penrith Press that there were comments from some local real estate agents. In particular, Mr Paul Dukes of Morris Dukes Real Estate expressed his delight with what he has observed as the positive response to the federal government’s initiatives in relation to the first home owners grant. He said:

It’s been phenomenal the past weekend, with Saturday being just amazing. Around 90 per cent of the inquiries have been from first-home buyers.

We have seen about a 70 per cent rise in inquiries and we hope to sell about five or six properties by this week.

That is significant. It is important. I am sure that it will also flow through to construction of new properties, which will contribute to the stimulus that this package was designed to inject into the national economy. I am sure that this will put a little bit of life back into the housing market in some of those areas that have not been experiencing growth in recent times, such as my local community, and ultimately that will be a good thing.

I saw a statistic recently that suggested that one in 10 jobs is related to the construction industry. If that is the case—and obviously there will always be arguments about statistical measurements of that nature—then that demonstrates in no small way the very significant role the construction industry plays in generating and sustaining economic development within the country. That is why these measures, combined with the broader measures that the government have announced in bringing forward our infrastructure programs, will go a long way towards providing an injection into a sector that is very much the backbone of our economy.

I conclude by saying that the National Rental Affordability Scheme is a fantastic policy. It is great not only to have been able to campaign on this during the last election but also to deliver on it by implementing the policy principles in the bills before the House now. I am very enthusiastic about it. I know many institutional investors who are enthusiastic about it. So too are community housing providers. Ultimately, I think that these proposals will deliver real and tangible benefits in the form of lower rental costs for many working families in my electorate and the many carers and pensioners also doing it tough. I am certain that that will be a great benefit to my local community and I commend the bills to the House.

Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to 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, which establish the National Rental Affordability Scheme. During the 2007 election there was a great deal of focus on the cost of living for many families, and rental accommodation and affordable housing were absolutely central to that. I and the Labor Party made a commitment to the residents of my electorate that if we were elected we would work to introduce a scheme and do all we could to improve the area of housing affordability. The bills before the House deliver on that promise. The bills deliver on the commitment that we made to the people in my own electorate and across Australia to provide affordable housing to low-income Australians.

This legislation establishes the National Rental Affordability Scheme. The scheme is an innovative way of easing the burden of high rents on low-income Australians and is a key component of the government’s $2.2 billion affordable housing package. The affordable housing package is aimed at providing affordable homes at affordable rental prices. It will increase the number of homes available for rent, helping people save for their first home, lower housing infrastructure costs and build new homes for homeless people.

I have stood in this parliament on a number of occasions and outlined the urgency for the federal government to act on behalf of the Australian people to assist them with rising costs of living. For a long time Australia was governed by a national government that believed ‘we had never been better off’. We were told that by the former Prime Minister. The former government insisted that they were the best friend of hard-working families. They did not have a housing minister. They did not in fact do anything to ease the issue of housing affordability for Australians, let alone Australian families.

In the relatively short period of time since being elected, compared to the last 11 years of the Howard government, the Rudd government has acted very quickly in a variety of ways to provide much needed relief for families into the future. We have been proactive in implementing major reform that is in the best interests of the nation. Over recent weeks that has become even more important. We have seen a volatile world financial market, and although the RBA’s decision to reduce interest rates is welcomed, many families within my electorate continue to experience some level of uncertainty, making it difficult to budget with confidence into the future.

Our international economy is facing unique challenges. The Rudd government is working with our global partners to come up with global solutions and domestically is showing leadership. The introduction of the National Rental Affordability Scheme is just one example of this government’s commitment to Australian families but also to dealing with the issue of housing affordability across the nation. It is an example of a significant reform that can provide confidence to Australian families at a time when confidence is most needed.

The major contributors to housing stress in Australia are, firstly, the cost of housing and, secondly, the lack of housing supply. The National Rental Affordability Scheme aims to stimulate the construction of 50,000 additional rental dwellings over the next four years—50,000 new homes available in the private rental market for low- and moderate-income households across Australia. The scheme will ease rental affordability pressures throughout Australia by increasing the supply of new homes for those who are in grave need of affordable rental properties. This scheme will cost $623 million in the first four years. An initiative of this magnitude will be delivered with assistance from the states and territories. It is yet another example of the benefit to the Australian people of having governments at different levels working in harmony with one another.

The National Rental Affordability Scheme was a major outcome from the March 2008 COAG meeting, and I commend the Minister for Housing, Tanya Plibersek, and the Treasurer, Wayne Swan, for their hard work with the state and territory governments to get this right. Under the scheme, incentives will be provided to applicants to build new homes. And, once built, these homes will be made available to low- and moderate-income households at 20 per cent below the market rate. The major incentive to applicants is a contribution from the Commonwealth government of $6,000 per dwelling per year for 10 years in tax incentives. This incentive is backed by the support of the state and territory governments to the value of $2,000 per dwelling per year.

Both Commonwealth and state and territory contributions will be indexed annually to the rental component of the CPI. This will ensure the level of incentive this scheme offers to developers today remains consistent over the 10-year period. The National Rental Affordability Scheme primarily targets large organisations, such as financial institutions, that are interested in this residential property investment option. It is also a worthy option for not-for-profit organisations experienced in property management. The scheme is not targeted at small, individual investors as such. However, it does allow interested small investors to invest in a participating investor company.

Rental prices have surged at a higher rate than the consumer price index for some time now and at a higher rate than wage growth. This has seen an increasing number of Australian families finding themselves in mortgage stress. As house prices have continued to increase in recent years, so too have rental prices. It is not only home buyers finding it harder to make ends meet as a result of the housing boom. This comes on top of continual interest rate hikes that were seen under the previous government.

This government will be watching closely over the coming years to make sure everything is being done to combat the current high levels of market demand for housing. That is why, if market demand remains strong over the next four years, this government will make a further 50,000 National Rental Affordability Scheme rental incentives available from July 2012. This will help build an additional 50,000 affordable rental dwellings to accommodate low- to moderate-income-earning Australians. If demand warrants these additional 50,000 properties, in total the National Rental Affordability Scheme will deliver 100,000 new affordable rental properties for our low- and moderate-income families.

I am excited about the possibilities that this legislation brings for our nation. I represent an electorate where many families struggle to keep a roof over their heads. In my electorate the median income is $404 per week for an individual, $860 for a household and $1,076 for a family. These incomes are all below the national average. The median weekly rent in my electorate is $155 per week. I must admit that I do not know of many properties that are actually available at that—they must be at the lower end of the market—but they are the figures that we got from the local real estate agents. Based on these figures, weekly rent equates to more than 38 per cent of an individual’s weekly income. It leaves less than $250 per week for groceries, household expenses, transportation costs and social activities. In public housing it is deemed too expensive if 20 per cent of people’s incomes are consumed in rental—that is seen as the benchmark to take in relation to these things. So 38 per cent of an individual’s weekly income is far too high for anyone to be able to live on the rest, but unfortunately, with the tight rental market we have in my electorate and right across the country at the moment, it is the only option many people have. Even the most financially prudent of us would find it hard to make ends meet under these circumstances, and these are the median figures. Just imagine how tough it is for people in my electorate who earn below the median weekly income. When you consider all the expenses associated with day-to-day life, it is easy to see how families in my electorate who have a median income of $1,076 are finding it tough, let alone if they are at the lower end. In addition to household expenses faced by individuals, they also have added expenses such as child care and schooling, and it all adds up very quickly.

Currently over 22 per cent of dwellings in my electorate are rental properties—that is over 11,000 rental properties in my electorate alone—but available rental properties are really scarce. Vacancy rates are currently below one per cent. The demand for rentals far outweighs supply, and there is absolutely no relief in sight in the immediate short term. Our real estate agents receive constant requests from people seeking available rental properties, and with such high demand we are also seeing rent increases of an average of $5 to $10 per week on new tenancies. This is relevant to the market demand for rentals in my electorate.

I am confident that this legislation will be warmly welcomed by people in my district. I know the scheme will provide for additional rental properties in my electorate at 20 per cent lower than market rent, which will make a significant difference to our low- to moderate-income earners. I certainly encourage some of the larger property development and investment companies that are investing in my electorate to look very seriously at this scheme and the potential it provides for their investors to gain a substantial benefit from this particular scheme and, at the same time, to provide cheaper rental properties in my own electorate. Using the median rental price of $155 per week as an example, properties available for rent through the National Rental Affordability Scheme will be rented for 20 per cent less, potentially a reduction in rent of over $30 per week based on the median price in my own electorate, and savings like these will provide much-needed financial assistance to people in my community. The package not only provides the opportunity of lower rents but also boosts the amount of private rental stock that is available in an area. The scheme will not only benefit our renters but also help to retain a robust building industry, something that is critically important in the current economic times. As I said, I certainly hope property developers building in the Ballarat region will take advantage of the scheme, and I will certainly be out there encouraging them to do so.

Affordable housing is one of the most important things to Australian families, and over one million households across Australia are now classed as being in housing stress. Housing stress puts a significant strain on the standard of living for the majority of low- and moderate-income earners, and it is the responsibility of government to try to ease that burden in a responsible manner. That is why, at a time of international financial uncertainty, we require economic responsibility from the Commonwealth government. The National Rental Affordability Scheme is just one of a number of ways the Rudd government is working to relieve the housing stress and financial burdens placed on many Australians. The government is so committed to providing affordable housing to Australians that it has appointed a Minister for Housing, whom I mentioned earlier, something the previous government did not do.

The government has committed $2.2 billion towards increasing the number of affordable houses available for rent, helping people save for their first home, reducing housing infrastructure costs and constructing new homes for the homeless. The Rudd government has already called for expressions of interest for the Housing Affordability Fund, a fund established to help make building a new home more affordable through reducing infrastructure costs and streamlining the process for development approvals. It is a $512 million investment over five years and will assist people entering the housing market.

On 1 October 2008 the government offered first home saver accounts to Australians to help them save for their first homes. The new accounts provide a simple, tax effective way to save a deposit for a first home through a combination of a government contribution and low taxes. Account holders will receive a cash contribution of up to $850 a year from the government to help them save for a home deposit.

First home saver accounts are a terrific way of saving for a deposit for a house, and I would certainly encourage all young Australians to look at this incentive program. Present in the chamber is my sister-in-law. I have mentioned to her that she may like to tell her boys, who are now over 18 and would be eligible for such an account, to take advantage of that.

Another initiative is the first home owners boost, announced last week. It is part of our economic security strategy, which raises the first home owners grant from $7,000 to $14,000 for first home buyers of an existing home and from $7,000 to $21,000 for first home buyers of a new home, in addition to any contributions under the state first home owners grant programs. It is a substantial contribution to assist people either to get a deposit or to purchase a home. The incentive is available for the remainder of this financial year, and I would again encourage Australia’s first home buyers to look closely at it. It has received great local support from my electorate. On the day of the announcement I received an email from Stuart Benjamin, a director of the Elmstone Property Group in Ballarat, praising the government for introducing this initiative. He said:

I just wanted to write and say thank you once again for the strong economic leadership being shown by the Government.

Our Prime Minister continues to lead from the front and provide a stabilising image in these uncertain times.

The impact of the first home owners grant announcement today will be profound for Ballarat. The building industry has come to a grinding halt (although no one will admit it), with tradesman starting to lay off staff and desperately seek any kind of construction work. We have been receiving 10 calls a week since August from tradespeople looking for work. These are not nice phone calls to have to manage ... Our builders are screaming for work.

Once again thank you for your continued hard work for our community.

The National Rental Affordability Scheme will go some way to relieving the stress that families face in struggling to keep a roof over their heads. It is a pleasure to be part of a government that recognises everybody’s right to have a place they can call home, a place that feels like home.

The nation deserves a government which is willing to fight for the rights of everyday Australians, and the National Rental Affordability Scheme is another measure that the Rudd government is taking to ease financial hardship. This scheme will encourage significant investment in affordable housing and, although we still have a long way to go, I am proud to say that we are taking steps in the right direction. I commend these bills to the House.

Jason Clare (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I commend the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 to the House. These are difficult economic times: stock markets are volatile and currency movements have been dramatic around the world. Governments have been taking unprecedented actions to arrest the crisis. The global financial crisis has dominated the nightly news. It makes for bleak watching, with boards of prices in the red, downhill graphs that represent quantifiable losses, stockbrokers shouting into phones and others staring numbly at the screens. This is the stuff that has dominated the news.

It is all immediately noticeable and it is dramatic. It is reported quickly and analysed as it is happening. Not all economic problems are like this. The crisis in rental affordability we are debating today is bad news—there is no doubt about it—but it is less immediately dramatic. It has been incremental over a number of years. Until recently it has been rarely mentioned on the nightly news. The effect of the rental affordability crisis, however, has been profound.

When housing costs are the biggest slice of the family budget, any change in housing costs has an immediate effect on Australian families. I have spoken a number of times in this House about the plague of mortgage stress in my electorate. There are plenty of other households in my electorate that suffer from rental stress. More households in the electorate of Blaxland are suffering from rental stress than in almost any electorate in the country. The Australian Bureau of Statistics reports that there are 8,475 households renting in the electorate of Blaxland and 4,130 of these are suffering from what is known as rental stress, or more than 48 per cent of renting households. That means, in simple terms, that they are paying more than one-third of their income in rent.

Workers on the front line, workers who help tenants with basic advice, can tell you just how serious the situation is. Mr Brij Datt of the South West Sydney Tenants Advice and Advocacy Service has seen a dramatic increase in the number of people coming to his service and asking for help. In 2004-05 the tenancy service received one or two inquiries a year from tenants who were facing eviction because the homes that they were renting were being repossessed from their landlords. They now receive one inquiry every two weeks; sometimes it is once a week. That is a big rise. That demonstrates the difficulty that everybody in the community faces when people cannot afford to pay for their homes.

Two main factors have contributed to put greater pressure on tenants: first, there is an increasing shortage of rental properties and, second, landlords are finding it increasingly difficult to meet their weekly mortgage repayments, leaving many tenants having to pay ever-increasing rents. Homeowners are finding it tough. This makes the situation even tougher for renters. Brij estimates that there has been a 30 or 40 per cent increase in calls to his service for help from people facing rent increases. He has dealt with many cases where the rent has gone up every three months, sometimes by as much as 30 per cent. This means that someone who was paying $150 a week at the beginning of the year has found themselves paying as much as $270 a week at the end of the year.

That is why I welcome these bills, which establish the National Rental Affordability Scheme. This is a supply-side measure. It seeks to make rental accommodation more affordable, bringing down the price by increasing the supply of available housing. It does this by offering incentives to the private sector and to community organisations to build affordable rental accommodation. The incentives will be in the form of a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution of $2,000 per dwelling per year in cash or in kind. This will be linked to the rental component of the CPI, therefore ensuring that these increases hold their value into the future. Provided that the conditions of the scheme are met, investors in affordable rental accommodation will be able to receive incentives every year for up to 10 years.

The scheme will allow for up to 50,000 new rental properties to be built across Australia over the coming four years. The Minister for Housing has announced that, if demand for the scheme is still strong in 2012, then the government will consider extending the scheme to another 50,000 dwellings, which is a good thing. I hope that many of those dwellings will be built in my electorate, where we need them, where demand for affordable rental accommodation is as high as it is anywhere in the country. The national vacancy rate currently stands at around two per cent, but in Bankstown, in my electorate, it is less than one per cent.

I am glad to see that demand for participation in this scheme has already been strong. I understand the government has already received 244 expressions of interest in the first funding round, with the potential to build 12,770 new affordable rental dwellings. Investors are interested, obviously, in becoming involved in the scheme. The effect is that more affordable rental accommodation will be built. More affordable housing means more families that are doing it tough at the moment will be just that little bit better off.

The scheme has been receiving support from all parties all across the country. Christopher Atkins, the Executive Director of the Tasmanian Master Builders Association, said:

… the scheme will put new homes on the ground in a reasonable time period and provide affordable rental accommodation for families on low incomes. … the Scheme will stimulate the supply side of the residential construction market; the Scheme will be a catalyst for an increased supply of affordable land and housing.

That is good news for families on low incomes and it is good news for builders. Real estate agents have also supported the scheme. I note that that the President of the Real Estate Institute of Australia, Mr Noel Dyett, said:

We need this because the private market is not going to cater for lower-income earners without some government incentives.

The scheme has also got the support of those who represent the interests of people that are doing it tough. The President of ACOSS, the Australian Council of Social Service, Lin Hatfield Dodds, described the scheme as:

… really a significant plank in terms of housing affordability. It is a good way of energising investment. … we think this is a very important initiative.

The support of these people is important and I value their opinions, but when it comes to housing there is one guy that I have a lot of confidence in. His name is Mark Newey and he has been a real estate agent in Bankstown for his whole working life. He has seen booms and he has seen busts and he knows the housing market in my local community like the back of his hand. I was talking to Mark about the scheme the other day and this is what he told me. In 2003 he usually had about 30 rental properties on his books every week. He had a regular banner ad in the Bankstown-Canterbury Torch newspaper, and each week he would advertise the best 10 properties that he had going. He told me that the weekly advertising meetings would be very colourful affairs. Each of his staff would argue for their accounts—the properties that they were trying to move—to be included in the ad. He does not have that problem anymore. Now he is lucky if he has four or five places that are available to rent.

Mark tells me that things began to change at the end of 2003. As interest rates rose, asset prices began to fall. People become less willing to invest in the housing market. Changes to superannuation arrangements, although worthy, also encouraged people to move away from investments in property. The result was that construction of new rental properties began to slow about the end of 2003. Eventually it got to the point where building just about stopped. This was occurring as demand for rental properties continued to grow. You do not need to be Nostradamus to see that in a market where supply is slowing and demand is increasing the price is going to move upwards. This trend began in late 2003.

There is no point in asking why no-one in government back then did anything about this emerging trend. There was not even a minister for housing. When the Rudd government were elected in November last year we promised to do all that we could to address diminishing rental affordability. We promised we would have a minister for housing, who would work hard to improve housing affordability more generally. These bills, which establish the National Rental Affordability Scheme, are an important part of keeping that promise. The scheme fits into the broader housing affordability plan that is being rolled out this year. That includes the first home saver accounts, the Housing Affordability Fund and $30 million to fast-track the national rollout of an electronic development assessment, or EDA, system.

Add to this the boost in support for first home owners: the first home owners grant being increased from $7,000 to $14,000, as announced by the Prime Minister just last week; and an increase in the grant to $21,000 for those first home owners who decide to purchase a new property in one of the new areas. That has the additional benefit of supporting the construction industry at its most desperate time. It has that multiplier effect, if you will, of supporting the retail industry, the manufacturing industry and all those who contribute to the construction of new houses. These grants will allow many renters to get into the housing market for the first time.

The Minister for Housing is doing a good job, but she is not developing this package on her own. Some of the credit for the shape of the National Rental Affordability Scheme needs to go to the National Summit on Housing Affordability group. The group has for the last few years helped in the development of this scheme. People like Professor Julian Disney, Adrian Pisarski, Dr Ron Silverberg, Grant Bellchamber, Carol Croce and Carrie Hamilton have all been part of making sure that this scheme makes a real difference in the affordable rental accommodation market.

Rental affordability is a national issue that has serious local consequences. Members will know that in July this year I held a housing stress information night in Bankstown to give my local community the chance to have their financial questions, their issues and their concerns addressed by a panel of experts. That night was facilitated and chaired by financial and money expert Paul Clitheroe. The night was a great success; 250 people came along. I think it was such a success—that is, I think that we were able to give the sort of practical advice and the sort of useful information that people need—that I am doing it again. This time I am doing it in Cabramatta, at the other end of my electorate. On Tuesday next week I will be holding a second housing stress information forum, and I will do that at the Cabravale Leisure Centre. This time I am doing it during the day, to encourage young families to come along. I will also provide free child care to make attendance that much easier. Like the session that we held in July, this event will feature a panel of financial experts who will take questions from the audience from the floor. They will include Karen Cox, from the Consumer Credit Legal Centre; Jenny Reid, from Creating Links, a local NGO; David Bell, from Centacare; Ricci Bartels, from the Fairfield Migrant Resource Centre; and John Moratelli, from Legal Aid. The panel discussion will be led by respected financial journalist Karen Tso, previously of the Nine Network and now working as an anchor for CNBC. She is one of Australia’s most respected financial reporters, and she has very generously agreed to participate in this event to assist the people in Cabramatta who are doing it very tough.

As well as talking about mortgage stress, the panel will focus on the difficulties that families in my electorate are facing with renting. I am glad that Brij Datt from the South West Sydney Tenants Advice and Advocacy Service will be on the panel to provide advice to people that are really struggling with rental stress. Can I take this opportunity to place on record my thanks to the local press in my area, both the Fairfield Advance and the Fairfield Champion, for the support they have shown in promoting this event and bringing it to the attention of people that need this support. I also thank the Bankstown-Canterbury Torch newspaper for the support they showed for the forum that I held earlier this year in Bankstown and for the support they are showing for this event in Cabramatta. The front page of the Bankstown-Canterbury Torch newspaper today says ‘Rent spike: forum offers specialist rental stress advice’. You cannot do these things alone. You cannot get the information that is necessary for people to take action to get practical advice without the help of the mass media. My local newspapers have been extremely helpful in that regard, and I thank them most profusely.

When we find ourselves in financial difficulty, it is hard to speak up and it is hard to get help. That is why this event will also include stalls set up in the foyer to allow people one-on-one to get specialist help. There will be about 10 organisations that will hold stalls next week. They include Creating Links, Wesley Mission Credit Line, the Smith Family, Financial Services Union, the Salvation Army, the Office of Fair Trading in New South Wales, Legal Aid, the New South Wales Department of Housing, Centrelink and the South West Sydney Tenants Advice and Advocacy Service.

The theme of the day is ‘Don’t wait until it’s too late to get help’. What I hear all the time when I talk to counsellors and experts in this area is that people wait until it is too late to get help. For those who have a mortgage it might be waiting until the sheriff knocks at the door or the bank forecloses. For those people who rent it might be that they wait until they get the knock at the door asking them to leave immediately. My message today and the message that will be conveyed to all who come along next Tuesday is: don’t wait until it’s too late to get help; there are plenty of people out there who can help to provide you with free and independent advice. Many of those people will be there on the day.

If one local family struggling to pay the rent or the mortgage is put in contact at this event with a person or an organisation who can help them then it will be a success. That is what happened at the last housing stress information night that I held. A woman named Sophia Helene came along. She was just about to start work as a real estate agent. She came along because she wanted to learn a little bit more about the housing market and her potential clients. But, while she listened to the panellists speak that night, she realised that she could do with a little bit of help herself. At the end of the night, she went up to the Smith Family stall in the foyer and she spoke to a bloke named Gary Ingels. That night she signed up for a free budgeting course from the Smith Family.

Sophia and her husband have been working with Gary since then to improve their financial situation and ease the mortgage stress that they are currently under. I ran into Sophia a couple of weeks ago in the street and she gave me a big hug. She said that she had come along to the forum not realising that she could benefit from the information that was being offered that night. But the information she received changed her life and put her financial situation back on track. She was extremely grateful. I said: ‘It wasn’t me that provided that help; it was the experts that were on the stage. The politician just provides the opportunity. By putting someone in need in touch with people who can provide that help, assistance and practical advice, I can do a good thing.’ I recommend it to all members of this House.

Sophia is coming along next Tuesday. I have asked her to come along and she has been very willing to do that. She will speak as well at the forum and tell others to seek help before it is too late, before they get into deeper financial trouble. I hope people take this opportunity to seek help before it is too late. Just as the problem of rental affordability was not created overnight, it will not be solved straightaway. The National Rental Affordability Scheme is a long-term solution that will, in time, address the need for affordable rental accommodation in our community. I hope it makes a difference because no place needs it more than my electorate of Blaxland. I commend the bills to the House.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I want to congratulate the member for Blaxland for a wonderful contribution and for making sense of what is a real issue on the ground for I think all of us here in parliament and something that we ought to all be involved in trying to do something constructive about. That is really the story of what today’s bills, the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 are about. The National Rental Affordability Scheme is about doing something practical on the ground. It is about delivering for people who are in need.

I thought I might start my contribution on this particular matter with my story of how I began in the rental market and then bought a home. I think it would reflect what a lot of young people go through when they first get into the rental market. With most young people, when you get your first job you do not earn a lot of money and it is important to find a place to live that is comfortable and safe and gives you a home base as cheaply as possible. Often what really young people do when they are in that situation is rent or share with their friends or, if they are not in a position to do that, they will try to find something that is really affordable. I was in the same position but I was clear in my mind that, when I first began working and began renting my own place, I would rent with a view to buy. The most important factor was to find somewhere that was cheap to rent—something that I could afford, something that would allow me to put a little bit of money aside not only to have a life but also to save some money to actually buy a home. I think that is the story of how most people buy their first home.

It might be the story of how most young people got to be where they are today but unfortunately that story may no longer be the same for young people, and it is pretty sad. Times have changed. Today the expectation that a young person on their own, beginning work, could even afford to rent somewhere on their own is completely alien as a concept. I do not know that many people in their first job in the first few months away from home would be in that sort of financial position, but there may be some. What that creates is a whole new generation of people that have to find different ways of doing things. They have to rely either on their friends and family or maybe on unusual or uncomfortable living arrangements. Perhaps they turn to government to give them some options as to how they might be assisted in getting not only into their first home but also into renting. That is what is so important about not only the bills we have before us today but also what we have already implemented.

We face very different times today. They are different economic times, different financial times and different times in terms of people’s ability to gain accommodation, whether renting or buying. There is no question at all that we are in a global financial crisis. That has added a layer over the top of an existing problem that has actually been with us for quite some time. It is not a new problem. As the member for Blaxland said, this is a problem that has grown over a long period of time. It is a long-term problem and we will have to find long-term solutions.

What really sticks out and what really is important to note in this is that this problem has built up over the past decade. It built up at a time when there was a very good financial environment for people to be able to go out and buy homes to rent or to do with what they wanted. Wages were high and there was a great sense of affordability about everything. There was one exception: the growing number of people who came under stress—housing stress, rental stress and buyer stress, those people who were in the market. Over the past 10 years we have seen an overheating not just on a global level—and that certainly did take place—but very particularly here in Australia in the housing market. Nowhere was it more overheated than in Sydney. But it was certainly overheated in other markets as well, whether it was in Perth, which was exceptionally overheated in terms of its housing market, or in other places such as Brisbane, my home town, in my state of Queensland.

That did a couple of things. It drove people out of specific areas. It became unaffordable for them to live in areas they needed to live in for either work reasons or family reasons or lifestyle reasons. It drove them into areas further and further out to the west, further outside the bounds of where they would normally live, work and have their friends and family around them. That in itself has created certain problems as well.

It has also created a situation where the overheating of the market caused people to continually buy further and further up and where the only people who were really buying into homes at a particular point were investors. So I suppose we had a conundrum where a number of things were happening all at once. There was a global overheating of the housing market; a massive overheating of the housing market in Australia; a situation where only very serious investors could get into the housing market for rental purposes, driving up rents; and a very strong lack of supply matched by a very strong demand for housing driving all that up.

The point of putting that on the record and describing what has been taking place over the last 10 years is just to make the very simple point that governments are elected to look after the best interests of the community and of the Australian people. For 12 years, but in particular for the last 10 years, during this overheating of the housing market at a global level and in Australia we saw little if any action at all taken by the previous government. I know that some opposition members are going to get all excited about what that means. They will think I am just having a go at them, but that is not the case. The fact is that Labor, in opposition, made repeated calls for the government to do something significant to assist people into the rental market and the housing market. We called on them to do something in a measured way that would have meant something to the people who needed it the most and in a way that would not have distorted the market.

In recent days we have heard criticism of our first home buyers grant scheme. Our scheme doubles the grant from $7,000 to $14,000 for those who want to buy an existing dwelling and triples the grant from $7,000 to $21,000 for those who want to buy a new home. We have done that in a very calculated and strategic way. We have done it at a very specific time and for a limited period—unlike what the previous government did. When the previous government delivered their first home buyer grants of $7,000 and $14,000, it overheated the market. It stimulated the market so much that it was completely distorted. In the end, the people they were trying to help and assist were the people they hurt the most. That is the tragedy of what the previous government did. We are now left with the task of picking up the pieces. We are now left with the task of managing a housing market that has become distorted. Some of the worst distortion has been caused by the global financial crisis that is upon us.

Labor’s scheme is timely and strategic and measured and calculated. It will deliver for the people who need it the most. There are many reasons why the previous government failed to deal with housing affordability, particularly in the area of rentals. You have to understand the philosophy which drove the previous government and which continues to drive the opposition today—that is, they believe this is not their job. In fact, they believe it is not the job of government. They believe in allowing the market to deal with everything. They believe in allowing market forces to deal with it. We now know very clearly what the outcome of doing that is. We now know very clearly the outcome of allowing those policies to prevail and allowing the market to go on its merry way. We have seen it on a global level with the global financial crisis. We have seen it domestically in Australia with the overheating of the housing market. Luckily, in Australia we have had the courage to maintain, over many decades, a strong financial regulatory system which has protected us in the worst of times.

The housing affordability crisis, and the rental affordability situation, is a long-term problem—and we have a long-term solution. The package before us today has already been implemented and is part of a $2.2 billion package. Rhetoric might sound nice but, in the end, you have to deliver for real people. We are talking about the real economy, real people and what they need to maintain not only a decent quality of life but also a decent standard of living. For a lot of people, that has been eroded very quickly by the uncertainty we face in this economic climate.

The first home owner grant is directed at assisting families and young people buying their first home. It will make sure they get the assistance they need. They need it right now. That is why our package is on the table and being delivered right now. It will continue for just one year, ending on 30 June next year, because at that point the market should have stabilised. I think it is important to send a message to the market that this is not something that will go on in perpetuity. This is a measured scheme that will deliver an amount of money to assist a specific group of people at a specific time. It is a carefully thought out measure that will not overheat or distort the market. The Howard government put in place a similar scheme but without careful thought. Also, because we have a lack of housing, our policy is targeted at those who want to buy new homes. That will generate a market for housing construction. That will keep people in jobs and make sure that we keep our economy strong. To make sure people are encouraged into the new housing market, we are delivering $21,000 to them. The key thing about that amount of money is that it will be enough for people to afford a deposit and pay for their legal costs. It will make a substantial difference. It will get them into the market. So we are not only targeting rental affordability—we are doing a range of things there, and I will go to some of that detail in a moment—but we are also trying to get people into ownership of new and existing homes.

Part of our strategy has always been to deal with these matters in a partnership. We believe in partnerships with the states and territories. We believe in partnerships with the community. We believe in partnerships with the industry and the housing sector. We believe in partnerships because, in the end, partnerships deliver the best outcomes and the best results. We are consulting widely. We are ensuring that our policies will actually deliver for the greatest number of people possible. We are doing that in conjunction with our other policies, including delivering on the promised tax cuts, making sure that we maintain a strong economy and making sure that the Rudd government maintains its roles and responsibilities. We are not just delivering in one area and forgoing others but making sure that there is a whole-of-sector approach in the work that we do.

I want to emphasise the point concerning partnership with the states. If there is one thing this country desperately needs, it is strong links and strong partnerships—a new approach to harmonisation across the states. We heard a lot of rhetoric over the past five or six years about the causes of the housing affordability problems—which are also the causes of the rental affordability problems. We heard a lot of blame-shifting about who was responsible. The previous government was more than happy to lay the blame at the feet of developers, to lay the blame at the feet of construction companies, to lay the blame at the feet of the states or the territories. In fact, I recall very well that for the past 10 years they were more than happy to lay the blame of every problem that existed at everyone else’s feet except their own. That distorted their policy reaction and any further action they took.

The reality is that we are all in this together. If you look at all the data, all the information and all the research, you cannot just say it is a case of the fees and charges of local or state governments. There is actually a very good report out from one of the related institutes that has looked at what those fees represent, at the percentage developers get in terms of their margin and at land costs versus construction costs. While there might be flexibility in those percentages and how much each charges, the reality is it is all of them put together that has created this affordability problem. That is the bottom line.

Following the 2007 election campaign, we followed through on our commitments that we would put in place a whole range of policies. We will work with local and state governments to reduce fees and charges, and we have schemes in place to deal with that. Through the tax system, we will provide tax incentives for developers, investors and construction companies to build new stock. If you are ever going to deal with the problem of housing affordability you have to get people into homes. We need more homes. We need to drive down the demand. But you need to be careful when you drive down demand that you do not collapse the sector, that you do not collapse the equity someone has built up in their home or their piece of land. So we are doing it strategically and we are making sure we work with the states and territories.

Through the tax system, we will provide investors and developers with an $8,000 per year rebate, over a 10-year period—$6,000 provided by the federal government and $2,000 to be provided by the states—if they sign up to a very simple scheme. If they build a home, a unit, a townhouse, whatever it might be, for somebody to occupy and they rent it out at 20 per cent below market value, the federal government and the state government, through our scheme, will deliver them a massive tax incentive to do that. That will drive construction. That will return investors to that market. That will provide the houses that are needed to help people into their first home or help people into very decent, good quality, affordable rental accommodation. That is central to what we are doing.

We have heard a lot of opposition criticism on these particular measures that we have put in place—they are either too much or too little or they are either too early or too late. But what the opposition do is very consistent: they are very good at criticising. In fact, it is almost like they have been returned to their natural place now that they are in opposition. They were in government for nearly 12 years but it is like they have just been returned to where they really, truly belong, because they never seem happier than when they are in opposition. They get up on their high horses, they carry on, they love to criticise, they all speak with different voices on different issues and none of them are quite on the same page at the same time, but they seem to be having a really good time. Of course, the sad part is that they are doing that while Rome burns.

We are currently facing some very serious global issues and some very serious domestic issues and it is us in government, Labor, that are prepared to stand up and take those tough decisions. That is what we have done with the National Rental Affordability Scheme and that is what we have done by injecting some life back into the construction sector to make sure that our economy does not slow and falter and to make sure that people are maintained in jobs while at the same time providing the sort of affordability that we need.

In fact, some of the hype and hysteria coming from the opposition has led me to think in recent days that the opposition is really just a circus. This really dawned on me in the last couple of days after their actions and words about the surplus. We have a Leader of the Opposition who thinks he is the Australian version of Harry Houdini. He is going to create the greatest magic trick of all time: he is going to make something disappear not once but twice. That is right. He wants to take the surplus and make it disappear and then he wants to grab it again and make it disappear all over again.

We have people like the member for O’Connor, Wilson Tuckey, who really is the clown of the circus. He gets up in parliament and, sure, he is entertaining, sure, he absolutely entertains me, sure, I get a laugh out of everything he does and, sure, he is funny, but in the end he is a joke. That is the reality. He comes into this place and delivers absolutely nothing at all. Then, of course, we have the great supporting act, which is the frontbench of the opposition. Picture this: they are the Keystone Cops. They are all running in different directions. They have a different view on every policy position, and they are never quite sure who—

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

Order! I think the member for Oxley should return to the subject.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

I am very much on the subject. They are Keystone Cops in their inability to deal with the crisis that is before them—and that is housing affordability, the global financial crisis and every other piece of policy that we have in front of us. That is only the three-ring circus. There is always a supporting act in the three-ring circus called the sideshow, and here that is the backbench—a bunch of galahs. They squawk all over the place but, in the end, the galahs have no bite at all.

It is Labor that is actually delivering the essential bits of policy. It is Labor that is doing the hard yards in making sure we can get people into good, decent, new, affordable homes and making sure that, whether it is in Brisbane, Sydney or even Perth, where the market is overheated, we provide the tools and the regulatory framework, we provide the funding assistance, we work with the states and in partnership with the sector, we maintain growth in the economy and we ensure that people’s jobs are maintained.

I congratulate the minister and the leadership of the Rudd government for this excellent policy and the money they have delivered to ensure that the economy continues to grow. (Time expired)

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in strong support of the government’s National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. The National Rental Affordability Scheme (Consequential Amendments) Bill 2008 will amend the Income Tax Assessment Act to enable eligible entities participating in the scheme to claim a refundable tax offset, to ensure that the contributions from states and territories participating in the scheme are treated as non-assessable and non-exempt income for taxation purposes, and to ensure that there is no capital gains tax consequence as a result of the receipt of the incentives under the scheme. It is important that that happens so that we attract the sector in particular to be involved. I am speaking to the two bills that are being dealt with in the cognate debate, so when I make my contribution I will stray across both of the bills.

These bills are part of a comprehensive policy package in response to housing needs—to housing needs long neglected across the whole of Australian society, including my seat of Page but not just in Page. Housing is something that has been neglected at a national level which has had a great impact at the local level. These bills represent one of the key planks of the Rudd Labor government’s housing policy.

We need public housing. We need public investment in housing. Otherwise, we would just be leaving it to the market, and the market does not take care of all the housing needs of our community. That is what these bills are directed at doing. I was written to recently—I think all members would have got a letter—by Shelter WA, who highlighted again this national issue that has a local impact. They said that, particularly over the last decade, at least $3.5 billion has been taken out of the housing sector. That was money that should have been in there as public investment, but under the previous government there was a disinvestment in the housing sector, and that greatly affected the housing stock.

Housing stress, as we know, has been a big issue and remains one, but it is being addressed. Some of the initiatives through these bills will take some time to kick in at the community level, so the problem will not be fixed overnight and it cannot be fixed in a short period but these measures are a way of attempting to do what is required.

In talking about these bills, it is necessary to talk about the affordable housing package in general but also to look at homelessness, an issue that has impacted my area. It is one of those things that are very difficult to quantify. Some homelessness is where people are out on the street, but some homelessness is where people are living with relatives, have to camp at friends’ places or have to live in cars. Again it comes down to—although not entirely—not having enough housing stock available at affordable prices. That really is unacceptable. It is commendable that our Prime Minister has not only made homelessness a national priority but also has stated that he wants to work towards the target of halving it in 10 years time. That is compelling. It is compelling for a number of reasons but particularly at a humanitarian level.

Homelessness is an issue. My view has always been that one of the things we have to do with people who are homeless is just provide shelter for them, provide homes for them. Every citizen has the right to shelter, and as a decent society we have a responsibility to house our own, no matter what their circumstances. Sometimes people say to me ‘they drink’, ‘they do drugs’, ‘they gamble’ or whatever, and sometimes that is true. But none of us is perfect and we have to look after the afflicted as well as the addicted. We also have to look after people with illnesses, whether psychological or physical. I have seen people who are at less than full capacity trying to organise themselves to keep a roof over their heads. Some people just cannot do it and they need help and support, particularly those who do have a mental illness. They get a place and a number of things may happen: they do not pay the rent when they should or they pay it intermittently; they wander away for a while; or they disturb the neighbours. The latter is always harder; some of the others are easier to fix. They get moved on or they get evicted or they lose their housing and then they are homeless again. And then they get back into the never-ending cycle of homelessness. It is easier just to keep people in their homes.

In Lismore, one of the big centres in my seat of Page, we are looking at building a homeless shelter because we do have a housing problem there. Fortunately, we have a contribution of $200,000 from the federal government. But everybody is kicking in. The whole community is behind it, and it is being driven by local government through Lismore City Council. That is just one response to try to tackle the housing issue at a local level.

When I talk about housing, it is with some background that I have in the area. I was a founding member and president of the North Coast Community Housing Company, which was first set up in about 1983. It still continues today to provide housing at affordable prices, which is what these bills are about, on the North Coast and across the Northern Rivers. It is pleasing for me to see that organisations like that still exist and try to meet that need in the community. These bills will also do that at a very strategic government level and through strategic intervention by government, ensuring that we do have some more affordable housing stock. In discussions so far, I have heard a number of people talk about regulations not being available. My information and advice is that those regulations are available. I want to put that on the record to correct a probable misperception about that particular issue.

Mr Deputy Speaker, you may call me a bleeding heart, but homelessness does cause me pain, to see people who are evicted or put in a homeless situation because they cannot afford a home. It is one of those things that I am sure causes some pain to all members in this House, and we should work towards resolving it.

The scheme encourages, through tax incentives, large-scale investment in affordable rental housing by offering an incentive to those who provide new dwellings on condition—and from what I understand it is clearly non-negotiable, as it should be—that the new dwellings are rented to low- and moderate-income households at 20 per cent below market rates. That will make it affordable. I want to outline what the incentive is. It is both a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution to the value of $2,000 per dwelling per year in the form of direct financial support or in kind contribution. The incentive can also be in the form of a refundable tax offset or payment. The incentive has a 10-year life span. It is payable each year for 10 years to participants who comply with the criteria. As I understand it, it will be indexed in line with the rental component of the CPI.

The bills introduce a key part of the $2.2 billion affordable housing package, and this delivers on the Rudd Labor government’s 2007 election commitment. I also understand that COAG has agreed to implement the scheme as well as be involved in it, and that is good progress and good news. The National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia, an investment of about $622 million over four years. I, like every good local member, will be saying, ‘Of course, I want some of that investment in Page.’ That is what good local members say, but I know there is already an interest in my area, particularly from local governments. It is pleasing that I do have local governments in Page which have already shown a keen interest. They have also taken action to provide housing in the local community.

In closing, I commend these bills. I also commend the Minister for Housing, Tanya Plibersek, for the good work that she does in the area of housing by bringing not only technical policy expertise to the area but also compassion, which is absolutely necessary when we are dealing with the issue of housing.

Jodie Campbell (Bass, Australian Labor Party) Share this | Link to this | Hansard source

The Australian people were told by the previous government that they had never been better off. Well, on this side of the House we know how flagrantly untrue and out of touch that statement, delivered by the former Prime Minister, really was. That is why we made a commitment to the Australian people that we would do what we could as a national government to ease the burden and to relieve some of the pressure, particularly financial, under which so many in our community are suffering. That was a commitment that I made as I travelled around Northern Tasmania and spoke with the electors of Bass. It was a pledge that I made with confidence, and that is why I am proud to add my voice in support of the Rudd government’s National Rental Affordability Scheme.

At no time, I believe it is fair to say, has it been harder for people, particularly those on low and moderate incomes, to find affordable rental accommodation. We hear a lot about the prohibitive cost of housing in and around the major cities like Sydney and Melbourne. I have no doubt that things are difficult. Let me assure everyone that across the towns and communities of Northern Tasmania too families are struggling. The most recent census figures show that 40 per cent of renting households in my electorate of Bass are under rental stress. That is to say that these households, these hard working Australians and families, spend more than 30 per cent of their income just to pay the rent. Forty per cent of renters—I find that an absolutely frightening thought. This equates to 2,676 families who are struggling with their budgets each and every week, and this is in a climate of ever-rising rents. It is a disturbing trend, to say the least. For example, in the last year alone the rent on a two bedroom home in Launceston has risen by 13½ per cent. It is now $210 per week. It is little wonder families are struggling. For a three bedroom home the average rent is $240 per week and for a four bedroom home it is well over $300 per week. Vacancy rates are at critically low levels and rents are increasing faster than other everyday living costs.

It should be remembered and noted that cost-of-living expenses are also rising, adding to the pressure families are feeling. As I mentioned, it is not just Tasmania that is affected by these issues. It is nationwide and therefore demands not only a whole-of-government response but a whole-of-country response. Research by the National Centre for Social and Economic Modelling found that across Australia there were 1.1 million low and moderate income households in housing stress in December 2007. Nearly 700,000 of these families are now spending more than 30 per cent of their limited incomes just to pay the rent. It has a knock on effect also; it means that the great Australian dream of home ownership is moving further and further out of reach of so many. Families and workers who in the past would have rented and used that as a stepping stone to buying their own home are now finding it much tougher to do that. These people are being forced to move house, live in cramped conditions and cut back on essentials just to keep a roof over their heads. This is having an enormous impact on families, workers, young people and pensioners. Rental affordability pressures are driven by a poor supply of affordable rental housing. That is why increasing the supply of affordable rental properties is a major priority for the Rudd government.

The National Rental Affordability Scheme is a $623 million investment by the government to create 50,000 affordable rental properties for low and moderate income earners in its first four years. The scheme delivers on one of the government’s key 2007 election commitments. The scheme provides incentives to participants to build new dwellings for renting to low and moderate income households at 20 per cent below market rents. If market demand stays strong, the government will expand it to 100,000 properties over the following five years. There are two key elements to the scheme. They are: an annual Australia government contribution of $6,000 for each dwelling in the form of a refundable tax offset or payment; and an annual state or territory government contribution of $2,000 or more for each dwelling, which will be provided through cash payments or in-kind financial support.

This represents a substantial investment in affordable housing for low- and moderate-income Australians. It demonstrates the government’s long-term commitment to affordable rental housing and also acknowledges that the issue will not be resolved overnight. The scheme is a new opportunity for all levels of government to work together with business and not-for-profit organisations to increase the supply of affordable rental housing for Australian families. It will facilitate new and creative partnerships between institutional investors, developers and community housing providers.

The importance of the community housing sector to the success of the National Rental Affordability Scheme cannot be overstated. In my home state of Tasmania there are more than 2,700 people currently waiting for public housing. If this scheme relieves some of the pressure on the public housing system then the flow-on effects can only be positive. As a government we believe that the National Rental Affordability Scheme will bring substantial growth to the community housing sector, whether it is tenancy managers or owners and developers in a consortium. The incentives are intended to leverage private sector investment of up to $13 billion over the next four years, with more than 1½ million households anticipated to be eligible to rent the dwelling at, as I mentioned, a 20 per cent discount on market prices. This is perhaps the government’s most ambitious new initiative. It will also form part of the national affordable housing agreement. It will benefit key workers like entry-level police officers and teachers, carers, cleaners, retail and hospitality staff and childcare professionals.

Mr Deputy Speaker, as you can doubtless imagine, the Tasmanian Council of Social Service, or TasCOSS, has welcomed the scheme. It is, according to Tom Muller, the council’s chief executive officer, a step in the right direction, particularly after a decade of funding decreases across public housing. It is estimated that over the last 10 years the amount of funding committed in this area decreased by 30 per cent in real terms.

Whilst I believe there is some way to go and there will always be more work to be done, the Rudd government’s commitment on homelessness is clear. One of the first things Labor did was to appoint a Minister for Housing, something which simply did not exist during the Howard years. I am proud to say that a degree of compassion is being restored in the federal arena, and we are committed to working with the states to find solutions in relation to this. There is a crisis of affordability and now is simply not the time to continue passing the buck between different levels of government.

The National Rental Affordability Scheme is a supply-side measure increasing the supply of affordable rental properties. These incentives, provided by the Australian and state governments, are valued at $8,000 each year. If there continues to be demand, the government will expand the scheme by an additional 50,000 incentives over the following five years—further growing our investment in Australia’s affordable housing stock. This demonstrates the government’s long-term commitment to affordable rental housing and also acknowledges that the issue will not be resolved overnight.

This too has been acknowledged by TasCOSS. It, along with its national body, has six recommendations which it sees as solutions to the public housing shortage and housing affordability. They are:

A Growth Target should be established involving an increase in the stock of public and non-profit housing by 30,000 additional dwellings by 2012.

An Affordable Housing Growth Fund should be established with funding of $7.5 billion over 4 years strictly ear-marked for expanding the stock of public and non-profit housing, contributed on a proportional matching basis by the Commonwealth and the States/Territories.

An Operating Subsidy Program should be established, with funding of $3.5 billion over four years provided by the Commonwealth.

These funding arrangements will require approximately $5 billion above funding currently provided by the Commonwealth and State/Territory Governments through the Commonwealth State Housing Agreement (CSHA).

New stock should meet standards relating to dwelling quality, disability accessibility and energy efficiency.

Commonwealth Rent Assistance (CRA) should be reviewed to ensure that it best meets the needs of all low income renters. As a first step, the maximum rate of CRA should be increased by 30% … for low income households currently receiving the highest rate of CRA at a cost of $500 million per annum.

This list stems from a knowledge and understanding of just how dire the situation is for many in our community. According to TasCOSS:

There are at least 600,000 families and singles in the private rental market in housing stress. This represent 65% of low income private renters.

Approximately 180,000 households are on public rental housing waiting lists. Eligibility is extremely limited, with access restricted to the most severely disadvantaged.

The supply of public housing has declined by approximately 30,000 dwellings between 1996 and 2006 from 372,000 to 341,000 dwellings.

As I mentioned earlier, Commonwealth funding for public and non-profit housing has fallen by around 30 per cent in real terms since 1996. More than 32 per cent of households receiving Commonwealth rent assistance still pay more than 30 per cent of their income on rent. There is a national shortage in the annual supply of new housing per year of more than 30,000 dwellings, and more than 105,000 people experience homelessness on any given night.

I realise, as does the government, that the issues affecting the public and private housing sectors are not identical. However, I believe that if we can address issues of affordability in the private sector through schemes such as the National Rental Affordability Scheme then the potential is there to ease the burden on the public sector. Neither can or should be viewed in isolation. To boost the capacity of the not-for-profit sector to be involved in providing housing as a part of the scheme, the Australian government has set up a capacity-building strategy. This strategy will specifically target the not-for-profit community housing sector. We have committed $1.5 million over two years to the strategy.

While we are working hard to ensure these ambitious housing projects and programs are implemented, picked up and used to their full advantage, I, like the Minister for Housing, will continue listening to the people who take the time to contact me regarding issues surrounding housing. Let me tell you, there are many of those in Northern Tasmania. These are the people who are directly affected by these problems and solutions.

I would like, if I may, to take a moment to speak of the Rudd government’s $10.4 billion Economic Security Strategy and, specifically, the first home buyers scheme boost. This yet again demonstrates this government’s commitment to assisting people to enter the property market. In my home state of Tasmania, if history is any indication, almost 2½ thousand people will be in a position to take advantage of the boosted scheme. That means that for existing properties the grant is now $14,000, while for newly built homes the grant is $21,000. This, like many of the government’s policies, demonstrates that we understand the pressures families and working Australians are under. We appreciate how difficult it is for many people attempting to enter the housing market.

The first home owners scheme boost is a decisive Rudd government initiative to stimulate housing activity and give first home buyers a better chance in the housing market. The Rudd government is making sure our economy emerges in strong shape from these tough international times so that we can provide quality jobs and security for working families into the future. To that end, I commend the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008 to the House, secure in the knowledge that, as a government, we are acting across the board to assist both renters and buyers.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to 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 am particularly pleased to speak to this legislation, because every time the Minister for Housing introduces a bill into this House we are reminded that the opposition cared so little about housing affordability when they were in government that they never even had a housing minister. It also reminds us that the Howard-Costello government ripped millions of dollars out of the Commonwealth-State Housing Agreement, leaving public housing desperately underfunded around the country and thousands of Australians homeless or in housing stress.

Terms like ‘homeless’ or ‘housing stress’ flow easily from the tongue; however, having previously worked on the board of Kyabra Community Association, a community organisation in my electorate that looks after people in stress and provides community housing, I know that they are not just words, that we are talking about real lives, real misery, real limited opportunities. It is easy to condemn it in this House, but the Howard-Costello government needs to be forever condemned for what it did to the marginalised when it came to housing.

I was interested to receive a letter from Shelter Western Australia, a community organisation, with the following comments from Roger Raven, the chairman:

The Australian Government’s subsidies to the states and territories are important for the viability of their public and non-profit housing programs. The Howard Government stripped $3.5 billion from the CSHA.

He then seeks support for a few things. It is interesting to see how the effects flowed through not just to South-East Queensland but all over the country. We can no longer live in denial. Australia is facing a housing affordability crisis and it requires a multipronged response. So I welcome the announcement last week by the Prime Minister and the Treasurer to increase the first home buyers grant to $14,000 for first home buyers of an existing home and to $21,000 for first home buyers constructing a new home. That is incredible news, which was very well received by people at my weekend street stall. At the Rocklea markets I had numerous people come up and congratulate us. A few people said they wished it had happened the week before, just before they signed a contract—but we cannot make everybody happy. This incentive will enable many young people to realise their dream of home ownership. For too long the great Australian dream of owning some bricks and mortar—your own home, although in Queensland it might not be of bricks and mortar but of timber—has slipped towards a nightmare. Now we can turn that dream back into a reality.

But this is just the tip of the iceberg. The Rudd government is also investing $512 million over five years to help cut the planning and infrastructure costs of new housing developments. We have set up first home saver accounts to help young people save for their own home. At the street stall at the weekend, as I just said, and at Sunnybank Hills the month before I had numerous people come up and ask about the first home saver accounts. I had parents coming up with their children, who were in their late teens to early 20s, to ask what it was about, how they could do it and what they needed to do. Over the next five years the Rudd government will spend $150 million to build up to 600 new houses and units for individuals and families who would otherwise be sleeping rough.

And we are implementing the National Rental Affordability Scheme. The scheme provides $623 million to help create 50,000 new affordable rental properties across Australia. Under the scheme, low- and moderate-income families will be able to rent a dwelling at 20 per cent below market rates. To fully appreciate the significance of this measure, it is good to have a clear idea of just how much rents have increased in recent years. Back in September 2003—not that long ago—the median weekly rent for a two-bedroom unit in the city of Brisbane was $270. In September 2008 it was $425, up almost 60 per cent in just five years. That is an extra $155 to be found every week. It is the same story in regional Queensland. Let us take as an example the electorate of my colleague James Bidgood, the member for Dawson. In the city of Mackay, for example, a three-bedroom house will now set you back $380 per week. Back in 2003 its rent was only $170 per week. Why didn’t I buy property in Mackay back in 2003! We are talking about an increase of more than 120 per cent in the cost of renting a three-bedroom home in five years. That is an extra $210 per week.

Is it any wonder that families, pensioners and carers are struggling to meet these costs? Is it any wonder that young people are struggling to save a deposit to buy their own home? That is especially the case with country kids who come to the city looking for opportunity and perhaps cannot stay with their parents, so they are forced to go into the rental market. I do not get to the movies very often in this job but the other day I got to see a movie called Step Brothers, which is about two people staying at home who are in their 40s but act like children. Maybe that is the sort of civilisation we are developing, especially in some of our big cities, where people have to stay at home and their parents cannot get rid of them because they cannot afford to get into the rental market or, heaven forbid, the housing market.

The Rudd government is aware of the pain that these rent hikes are causing many Australians, and the National Rental Affordability Scheme is about providing some relief to and reducing rental costs for low-income families. The scheme encourages investment in affordable rental housing by offering incentives to developers. The Commonwealth will provide $6,000 per year per dwelling and the states and territories will contribute $2,000 per year per dwelling. These incentives will be available for 10 years.

This model has had tremendous success in Queensland on a small scale through the Brisbane Housing Company. The Brisbane Housing Company is a not-for-profit organisation set up by the Queensland Department of Housing, Brisbane City Council, local charities and community groups to provide affordable housing at below market rents to low-income families. Since the company was set up, in 2002, it has built more than 600 dwellings. As I said, charities, community groups, the state government and Brisbane City Council got together to do the right thing by people who are suffering housing stress.

The legislation before the House provides the legislative framework to enable the National Rental Affordability Scheme to be implemented. It amends the Income Tax Assessment Act 1997 to enable those participating in the scheme to claim a refundable tax offset and to ensure that state and territory contributions are excluded as income or capital gains for tax purposes. The legislation also allows for the scheme to be developed by regulations. The draft was released last week.

As we have seen in recent weeks, economic circumstances can change only too quickly. This legislation provides the flexibility to enable the scheme to be amended and adapted as needed, depending on the global and local economic circumstances. Market rent, tenant eligibility criteria, acceptable vacancy periods and reporting requirements will evolve through regulation as required.

Public housing and rent assistance have helped millions of low-income families throughout the country; however, these measures alone can no longer meet the demand for affordable housing. This is a completely new and innovative way of boosting market supply of affordable housing and supporting low-income families. I am fortunate enough to have close connections with a couple of builders, both as friends and people in my electorate, and they are certainly very supportive of this scheme. My office has sent out information about the scheme to them and they have received it very positively. Once again, I thank the housing minister and the Treasurer for introducing this legislation and I commend it to the House.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. These bills seek to address a long-emerging problem in our housing economy whereby people are increasingly stuck at the level of accommodation in which they are residing and are unable to move through the system. By this I mean—as the previous speaker outlined and as I know through direct personal experience—we have the phenomenon of adult children living for extended periods with their families because they cannot access rental accommodation or save a deposit to get into an affordable first home. The old model, of course, was that people lived at home probably until they went on to post-secondary education or a job. At that point they moved to fairly low-rent accommodation for a while—shared accommodation and so forth. They got their first job, were able save a deposit and move into their own first, normally small, home and gradually either extended or upgraded over their lifetime. As a result of that, in this country we have a very high degree of security behind people in their retirement via the fact that they own their own home. We have seen that pattern, which has been a long-established one in our society, vastly disrupted over recent decades. In this package the government has had, I believe, the foresight to identify that there will be far-reaching consequences not only for our society and communities but also for our economy if people are unable to sustain themselves over the longer period and have their own homes by the time they are at retirement age.

The legislation before us first identifies that part of the market—the rental market—where clearly barriers to access are emerging and the trap of rental stress is being created for people. Interaction in that end of the market is particularly important in the issue of homelessness, because service providers trying to move the homeless into low-rent accommodation are increasingly competing with people who are unable to move out of that level of the market. This legislation is important both in providing rent relief in our communities and in being part of the solution to the homelessness issue. I will come back to that very briefly at the end of my comments.

The object of the bills before us is to increase the supply of affordable rental dwellings and thereby to also reduce rental costs for low- and moderate-income earners. Many speakers today have talked about the pressure on those in low-income types of accommodation. Indeed, even moderate-income earners, the people we rely on—policemen, teachers, council workers and all those service providers in our community—particularly if they are living in high-demand areas, are finding their income is increasingly stretched in providing for rental accommodation.

The scheme encourages large-scale investment in affordable rental housing by offering incentives 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. With some of the increases we have seen in the rental rates that will barely get us back to a few years ago but will be a significant improvement for people under stress. The incentives comprise a Commonwealth contribution of $6,000 per dwelling per year and a state or territory contribution in the form of direct financial support or an in-kind contribution to the value of $2,000 per dwelling per year. The incentives can be in the form of a refundable tax offset or payment. The incentives will be provided each year for 10 years to complying participants and will be indexed in line with the rent component of the CPI.

The National Rental Affordability Scheme is a key part of the government’s $2.2 billion affordable housing package. The government’s package will increase the supply of affordable rental homes, help people save for their first home, lower housing infrastructure costs and build new homes in order to provide for the homeless. The associated National Rental Affordability Scheme (Consequential Amendments) Bill 2008 makes amendments to the Income Tax Assessment Act 1997 to provide for the refundable tax offset and to ensure that state and territory contributions to entities participating in the scheme are non-assessable and non-exempt income for tax purposes and also that there are no capital gains tax consequences for receipt of incentives under the scheme.

If market demand remains strong, the Commonwealth will make a further 50,000 incentives available from July 2012. And, with such wonderful policies and programs in place, I am sure we will still be in government in 2012 to see that through to its injection into the system. This will help to build another 50,000 affordable rental dwellings. The establishment of the scheme will offer the flexibility required by changing circumstances and conditions in the rental market, including determining market rent, tenant eligibility criteria and acceptable periods of vacancy. The scheme will be reviewed to test whether it is adequately focused, whether there needs to be simplification of the scheme reducing the administrative burden and whether there are issues of noncompliance that need to be addressed.

I would just like to turn to the situation in my own seat of Cunningham. For those who are not familiar with it, it is basically Wollongong. It is a beautiful part of the world. It is a coastal area on a main railway line. As a result of this, it is a very popular place for people to live. Indeed, it has been under significant housing pressure because people are able to sell up in Sydney and move down to Wollongong and still access employment in Sydney. In my seat, one in four of my working constituents travel to Sydney to work. Twenty-five per cent of the working population leave every day to travel to Sydney. Beyond the broader infrastructure pressures that has provided, it has provided real pressure on housing as well. When that is combined with the fact that we have a world-class, fantastic university attracting students locally but also significantly from regional areas of the state and from overseas, you can imagine the converging pressures that we are experiencing on the regional accommodation market.

In my seat, there are 3,932 rental households in rental stress. The total number of renting households in Cunningham is 9,448. If you do the quick sums—I cheated by doing it on a calculator earlier—that tells you that 41.6 per cent of my renting households are in rental stress. That is as a direct result of the fact that we have had those converging pressures at the same time as it is very difficult to create new housing stock because we are placed right between the sea and the escarpment.

The pressures are very significant in the rental market. Rental stress of course means that people are forced to relocate and find it increasingly difficult to relocate. Often they get into back-payment problems. They are thrown out of a particular accommodation and then they have to try and find alternative accommodation. Or, at that end of the market, an elderly couple might discover the neighbourhood they are in is a university rental area. The lifestyle clashes that occur mean the block of flats or whatever are not appropriate for them and they have to move again. We see a lot of that in our area. Sadly, as that pressure hits home, they start cutting back on the essentials in order to just keep a roof over their heads. That can have quite dire consequences of course in terms of their health and wellbeing as well.

The Illawarra Regional Information Service’s Economic report 2008: issue2 recently pointed out that the Wollongong statistical district is currently going through a unique period characterised by a sudden drop in rental property vacancies. As recently as June 2006 there was an average of 175 houses and 360 units listed for rent in the Saturday edition of the Illawarra Mercury. Just over two years later there has been a large-scale decline in those numbers. In the December quarter of 2007, only 87 houses and 170 units—half the earlier numbers—were available. Median rental prices have also been steadily increasing in the Wollongong, Shellharbour and Kiama local government areas. The IRIS study also points out:

Contrary to conventional wisdom, Wollongong may actually be a more expensive place to rent a property than Sydney and New South Wales when the relative sizes of renter’s incomes are taken into account.

I think that indicates one of the drivers behind 41.6 per cent of renters being in rental stress. The study noted the medium rent of family households in Wollongong is 26.1 per cent of household median income, which is higher than Sydney at 23.5 per cent and New South Wales at 22.7 per cent.

Wollongong and the Illawarra’s population will of course continue to increase. In some ways, I think we have underestimated the growth in population that is taking place and will take place in the future. That will place increasing pressure on the housing and rental market in our region and in my seat in particular. The increases in the first home owners grant to $14,000 and $21,000 are undoubtedly welcome. I am sure my colleague the member for Throsby, Jennie George, will see a lot of activity in her seat because most of the new housing in our region goes up there. I am sure a lot of the renters in my more cramped seat will be looking for those opportunities as well.

In my final few moments, I would like to say that in December last year I talked to several of the homelessness and emergency service providers in my region. They are acutely conscious of this decreasing pool of available affordable rental accommodation. Most services aim to be an intermediary—that is, to take people in in crisis or difficulty and then move them into a more sustainable, long-term situation. That is becoming more difficult for them. I particularly want to thank Southern Youth and Family Services—Narelle Clay and her team. They offer six different services ranging from crisis refuge to medium-term accommodation, to the point where they find independent living and then provide support services. I was horrified to learn that hundreds of young people are turned away every month because they just cannot provide enough accommodation. I also went to see the accommodation St Vincent de Paul provide for homeless men. They said that people come down from Sydney on the train thinking they will go to a nice coastal area where it is more pleasant and friendly, but they find it impossible to get accommodation. I thank both of those organisations for providing me with some fairly sad but important information on the challenges facing our region. This is an important part of an overall package and it is a really innovative approach that finally a federal housing minister has been able to progress. I commend the bills to the House.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I would like to congratulate the member for Cunningham for her very well thought through contribution to today’s debate on the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008. I know she has a very deep understanding of these issues facing her constituents.

The government is delivering much-needed housing reform as a part of our election commitments which we took to the federal election last year. We are establishing a National Rental Affordability Scheme to address a chronic shortage in rental housing, which has the greatest impact of course on those who can least afford it. Last week we observed the Rudd government taking unprecedented action to provide for pensioners, seniors, carers, veterans, students, first home buyers and low-income families by providing a broad range of initiatives to help them with the deep and troubling economic circumstances. It is these members in our community of course that rely most on rental housing. The National Rental Housing Affordability Scheme was announced on Monday, 13 August and this is another election promise that the Labor government is delivering. As part of the government’s $2.2 billion affordable housing package this suite of schemes will increase the supply of affordable rental homes and build new homes for homeless Australians whilst lowering housing infrastructure costs and assisting people in saving for their first homes.

According to the National Centre for Social and Economic Modelling, in December of last year there were 1.1 million Australian households in housing stress. As the nightly news reports on the incredible fluctuations in the Australian and international share markets and while governments around the world are going to great lengths to secure their economies, this figure of 1.1 million Australian households that are currently in housing stress must certainly be increasing. At the moment vacancy rates are at critically low levels and the rental market is being subjected to greater forces in the wider housing market, and with housing affordability being such a critical issue this has the effect of driving rental prices up. Out of the 1.1 million households that are currently subject to housing stress almost 700,000 are spending more than 30 per cent of their limited incomes just paying the rent. It is now harder for low-income and moderate-income earners to find affordable rental housing for themselves and their families.

According to 2006 census data, in my electorate of Corangamite there are 2,494 households where rental stress is significant. There are people in communities around Australia being forced to move from house to house, attempting to find the right house at the right price with of course increased overheads as they do so. The Labor government understands the nature of these concerns and we took significant policies to the federal election last year. With this much-appreciated assistance, the National Affordable Housing Summit Group states that whilst rental housing is becoming increasingly difficult, those that can afford it are finding it more difficult to save for their first homes. We have developed a $2.2 billion affordable housing package and the Rudd government is now delivering on that commitment. This is progressive policy on issues that need to be dealt with now. Rental affordability is affecting so many demographics within our society and this is having a detrimental effect on those groups.

I spoke last week on the Schools Assistance Bill and the fundamental emphasis of that bill on the need to provide quality education to everyone. Most university students are at the mercy of a private rental market where rent rises are outstripping wages growth and inflation and that is putting significant pressure on their ability to complete their university education. The current rental affordability pressures are driven by a poor supply of affordable rental properties and this is having an enormous impact on families, key workers, young people, students and pensioners.

The National Rental Affordability Scheme is totally new in the Australian context. It is an innovative approach to reducing the number of Australians living in rental stress. To give an example of some of the people this scheme will benefit, I would like to draw attention to people who have recently graduated or completed training in key areas such as teaching or nursing and even to entry-level police officers. Upon completion of occupation-specific training, some people choose to move quite a long distance away from where they previously lived and worked. Indeed, some are even assigned placements in areas that require physically moving away from the area in which they initially lived. Often, when they have just begun their careers and are on their initial placements, they are not in the financial position to be able to buy their own place or have flexibility in rental choice due to the costs of training or lower starting salaries. These people play key roles in communities, and finding accommodation in various areas can be very difficult. To combat that difficulty, the National Rental Affordability Scheme will create up to 50,000 new rental properties across Australia, at a cost of $623 million in the first four years. This will be a huge boost to low- and moderate-income households who are suffering housing stress. Subject to market demand, the government will expand that to 100,000 properties over the following five years.

The National Rental Affordability Scheme is designed to encourage investment in affordable housing for the purposes of renting to low- and middle-income households at 20 per cent below market rates. The scheme will achieve this by bringing together a range of participants from various government and nongovernment organisations by providing structured incentives to redress the shortage of rental housing. These structured incentives will take the form of cash and tax incentives to providers of rental accommodation to low- and middle-income households. These incentives are comprised of two main components. The Australian government is making a contribution of $6,000, in the form of a refundable tax offset or payment, for each residence that meets the criteria for the scheme. This will be joined by an annual contribution from the relevant state or territory government of $2,000 or more for each residence, which will be provided through cash payments or in-kind financial support. These two main components will act as the catalyst for a number of outcomes. It will be possible for community housing groups, equity investors, charities, church groups, developers and any other organisation that wishes to provide affordable rental housing or invest in affordable rental properties with a secure stream of funding for a 10-year period.

This scheme will bring substantial growth to the community housing sector. This growth will be in various forms, with the aforementioned organisations able to participate as tenancy managers all the way up to owners and developers in consortiums. The intention of the scheme is to leverage private sector investment of up to $13 billion over the next four years by offering institutional investors and other eligible bodies annual rental incentives for 10 years—provided, of course, the conditions of the scheme continue to be met. From an investor’s point of view this creates a fantastic new dynamic as it opens up a new investment opportunity for investors, creating a new asset class of investment in residential property. The government expects the scheme will facilitate new and creative partnerships between institutional investors, developers and community housing providers. Involvement of both investors and the not-for-profit charitable sector is critical to such a scheme.

Within the National Rental Affordability Scheme Bill we have provided for the act to be taken to have commenced from 1 July this year. By retrospectively including the commencement date we are reaffirming our commitment to providing affordable rental housing for those who need it most. The bill provides for the regulations to prescribe a scheme which deals with the approval of participants and the approval of rental dwellings, and provides incentives to an approved participant if certain conditions are satisfied. Including within the regulations of the bill the rest of the administrative detail of the scheme will provide the government with the necessary flexibility to address changing circumstances. Circumstances that may change include the process for determining market rent and tenant eligibility criteria. Other items that may be subject to reconsideration are acceptable periods of vacancy and reporting requirements of the scheme. The government will review the scheme in the early years of its implementation to ensure that it is adequately focused on those Australians in rental stress, and we may need to make improvements to the scheme before it is expanded.

Within the conditions of the scheme the government has included the ability to apportion, withhold, offset or withdraw the national rental incentive as a security measure in the event that the requirements are not met. To preserve the integrity of the scheme, an incentive may be offset or recouped in the circumstances provided for by the scheme. This bill also provides that the scheme may provide for variations, transfers and revocations of allocations.

In relation to receiving incentives, the bill provides for the secretary to either issue a certificate in relation to a refundable tax offset or make a payment. However, unless a participant is an endorsed charitable institution, the incentive is to be made available in the form of a refundable tax offset. We will also test whether or not there is scope for simplifying the scheme or reducing the administrative burden on providers and whether there are evolving issues of non-compliance that need to be addressed.

Other measures that will maintain the integrity of the scheme include mandatory requirements covering the conditions relating to eligible rental dwellings, eligible tenants and the maximum rent that can be charged, as well as the permitted vacancy rates. We will ensure that we are providing affordable rental housing to those who need it most. This problem will not be solved overnight and the government has shown its long-term commitment to affordable rental housing by providing a scheme which will be sustained over the next 10 years and which has the capacity to be increased if need be.

The National Rental Affordability Scheme will provide incentives to encourage large-scale investment in affordable housing. This will increase the supply of affordable rental dwellings and will reduce rental costs for low- and moderate-income households. The scheme is a new opportunity for all levels of government to work together with business and not-for-profit organisations to increase the supply of affordable rental housing for Australian families. The scheme will increase the supply of rental dwellings and will reduce the costs of renting in the private market for Australians and their families earning low and moderate incomes.

The big winners in this scheme are the renters of Australia. They are working families, students and people who are providing essential services; they are pensioners and people from low socioeconomic backgrounds. I commend the bills to the House. I, too, would like to congratulate the Minister for Housing for the well thought through contribution that she is making to the renters of Australia.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I move:

That further proceedings on these bills be conducted in the House.

Question agreed to.