Federal Housing Legislation Needs Amendments

The Albanese Government has made more, positive announcements to reform the housing sector in one year than the previous Government made in 10 years. Taking a few more weeks to negotiate simple, sensible amendments to the draft Housing Australia Future Fund (HAFF) legislation will give the industry the confidence needed to move forward.

As drafted, there is no guarantee that any of the interest earned from the $10 billon HAFF investment will be used to increase the supply of social and affordable housing. The Government must commit to a minimum funding stream, topping up the interest dividend in years that underperform, to ensure at least $500 million is available to boost supply annually.

Similarly, if the investment return is better than expected and generates more than $500 million in any one year, the whole amount should be dedicated to increasing housing supply for the people who are most in need.

The HAFF must also be indexed to keep up with inflation. It’s hard to know if sufficient numbers of owner occupiers and investors will sell out of the market due to the potential for policy changes and cost of living pressures, and how that could affect the rental market. What is certain is that the market is already failing to meet the needs of 640,000 households, migration will make it worse, and the economy and essential services are suffering.

Simple supply and demand economics will not solve the affordability crisis. More homes have been built in the last 10 years than ever before and they have never been less affordable. New supply must be targeted and secured for social and affordable rental.

The Federal Government is to be applauded for designing a suite of housing initiatives and introducing the draft legislation. Negotiations with the cross-bench must continue in good faith.