Senate debates

Tuesday, 9 May 2023


Housing Australia Future Fund Bill 2023, National Housing Supply and Affordability Council Bill 2023, Treasury Laws Amendment (Housing Measures No. 1) Bill 2023; Second Reading

12:52 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | Hansard source

I stand today to make a contribution in relation to the Housing Australia Future Fund Bill, the National Housing Supply and Affordability Council Bill and Treasury Laws Amendment (Housing Measures) No. 1 Bill 2023. At the outset I make it very clear to this chamber that the opposition will be opposing the Housing Australia Future Fund Bill 2023. However, we do intend to support the National Housing Supply and Affordability Council Bill 2023.

The most relevant thing today in the contribution that I'll make on behalf of the opposition is that we will not be supporting the establishment of the Housing Australia Future Fund. It's probably one of the most egregious examples of financial engineering that we've seen from this or any government, for that matter. Concerningly, this is starting to become a bit of a hallmark of this government, trying to facilitate significant government spending in off-budget items through funds like this.

It's clear, like most of their policies so far, that the genesis of the Housing Australia Future Fund has been driven more by the potential headlines it could generate than by achieving the significant and sensible outcomes in housing that they purport to be trying to deliver by this set of legislation. So, despite Labor's promise that they will invest $10 billion in housing, we know that every time someone from the government says that it is simply not true. The commitment is about as tangible as their aspirational targets, and we know that Australians cannot live in aspirational targets.

We know that the Albanese Labor government is not proposing in this bill to invest $10 billion in housing. They are not intending to do that at all. What they are doing is setting up a fund of fully borrowed money, $10 billion worth of Commonwealth borrowings, with the hope that the fund will produce sufficient returns to be able to pass those returns on to housing projects. But we know that, with the 10-year government bond rate at the moment approaching four per cent and rising, this $10 billion of borrowings will cost the Commonwealth approximately $400 million every year in interest. That's $400 million every single year. And it's very relevant to the fact that this bill is before the House this week, because we know right now that Australians are doing it really tough due to serious constraints due to the rising cost-of-living pressures that are being overseen by this government.

Make no mistake: this inflation we are seeing is domestic inflation. It started here in Canberra and can't be blamed elsewhere. But the pressures that this inflation is inflicting are particularly felt by households trying to pay the mortgage as interest rates continue to rise. Australians will be looking very closely at tonight's budget to see how it will help them with their cost-of-living crisis that is putting serious pressure on their budgets. We know that the increased borrowing contained in this legislation will only add to the inflationary impact and pressures that are on our economy at the moment, which will inevitably lead to ever-higher interest rates.

We've seen a very clear message to the government from the Reserve Bank. It is saying to this government that it needs to start doing some of the heavy fiscal lifting to reduce inflation instead of leaving it entirely to the Reserve Bank; otherwise, the job will continue to be left to monetary policy, and, in a minute, monetary policy will run out. We've already seen eight rises under this government. So what is the Albanese government's answer to the pleas from the Reserve Bank to borrow less and to spend less? It's to set up a fund with $10 billion worth of borrowings that we know will likely have $400 million worth of interest costs every year.

There are a number of reasons why the opposition will not be supporting this bill. First and foremost, anything that will increase inflation and, therefore, lead to higher mortgage rates cannot, in good conscience, be supported in this place. Second, there is absolutely no certainty that this fund will result in any funding of any housing projects. The disbursements from the fund will be wholly reliant on the financial performance of the fund's investments in equities and other financial products, and that is a very big 'if'—you don't need to go too far back into history to realise what a big if it really is. For example, if this fund had been established last financial year, the Commonwealth would have lost approximately $370 million in addition to the $400 million in interest. That is a total loss of $770 million. It would mean that not even one dollar would be available for social and affordable housing projects.

This is not a source of stable, recurrent funding for a government program. Instead, it is an absolutely blatant attempt to try to keep a housing measure from impacting Jim Chalmers' budget bottom line. The International Monetary Fund has already clearly warned the government about the proliferation of these sorts of funds. But you don't need to be an economist from the IMF to be concerned about what this government is trying to do here. It is clear that there is every likelihood that, at the end of this term of government, we could find that we have not delivered a single house as promised, at great cost to the budget's bottom line and to Australian households. The bill also lacks any crucial detail. This is something that has become a bit of a hallmark of this government—to just put in the legislation and worry about the detail later.

The government has refused to release the investment mandate and is restricting scrutiny of the key information on the fund's capacity to deliver on its very own commitments by the government. We know that when the government doesn't want us to see something, there is usually a pretty compelling reason why not. This legislation is essentially a shell with all the key aspects of the operations of the fund that are likely to be contained in this investment mandate, which they still haven't made public. That should make every observer of this particular passage of this legislation very, very nervous about this fund.

The investment mandate needs to go through public consultation because the sector is very nervous about the way in which the fund is structured. Indeed, the sector has already outlined a number of failures in this bill. There is a failure to define key terms. What is the definition of 'social housing'? What is the definition of 'affordable housing'? What is the definition of 'acute housing'? These are terms that will dictate what this fund will spend potential future returns on—if there are any returns. Stakeholders have also criticised the limit on annual drawdowns. Again, this highlights the lack of funding certainty with no mechanism and performance criteria against which to assess the effectiveness of the grants. Furthermore, the bill prescribes a five-year review time frame, which is completely inadequate given the uncertainty around the funding model.

This fund is in absolute contrast to the approach of the former government, and we believe we have a very strong record, which is there for all to see, on supporting homeownership and funding social and affordable housing. Firstly, we established the National Housing Finance and Investment Corporation—soon to be renamed Housing Australia—which was a landmark achievement. In establishing this landmark body, the coalition put community housing providers at the centre of what we did. Since its creation, NHFIC has delivered $2.9 billion in low-cost loans to community housing providers to support 15,000 social and affordable dwellings, saving $470 million in interest payments to be reinvested in more affordable housing. It also unlocked 6,900 social, affordable and market dwellings, through the coalition's $1 billion National Housing Infrastructure Facility, to make housing supply more responsive to demand.

Over our last three years in government, the coalition's housing policies also supported more than 300,000 Australians with the purchase of their home. In particular, under the coalition, first home buyers reached their highest level for nearly 15 years. We assisted more than 60,000 people into a home, through our Home Guarantee Scheme, which helped homebuyers get into the market by bringing down the deposit hurdle from 20 per cent to five per cent. Most recently, there was the Family Home Guarantee, which required a deposit of only two per cent for single parents, 85 per cent of which were single mothers. We also delivered 137,000 HomeBuilder projects. Our First Home Super Saver Scheme helped more than 25,000 people fast-track their savings and deposits through concessions within their superannuation.

In summary, we've got a government whose housing policies are in tatters, and first home buyers have dropped month on month under this government, with no action in response. Now they're trying to bring on the Housing Australia Future Fund legislation, which will add to the inflationary pressures already being felt by households around Australia and bring pressure onto the economy, with absolutely no certainty of any returns being generated and being able to be applied to housing. Our message is very clear to the government: a housing fund that will increase inflationary pressure and result in higher interest rates, that has no guarantee of return or the delivery of any housing projects, that's going to cost $400 million a year in interest rates and that's going to move community housing providers to the sidelines is not the way to deliver the positive change that so many Australians are needing right now. We will not be supporting the establishment of this fund.


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