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Monday, 24 November 2008
Page: 19

Senator STEPHENS (Parliamentary Secretary for Social Inclusion and the Voluntary Sector and Parliamentary Secretary Assisting the Prime Minister for Social Inclusion) (1:53 PM) —In summing up the debate this afternoon, I thank senators for their contributions and for raising what have been some very important issues confronting the government and also thank the senators who were involved in the Senate Standing Committee on Community Affairs inquiry into the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008.

These bills give legislative effect to the Australian government’s $623 million investment in the National Rental Affordability Scheme. The scheme is one element of the $2.2 billion affordable housing package that was announced by the government in the May budget, and its implementation is part of the government’s housing agenda, which is well underway. The first round of expressions of interest for the government’s $512 million Housing Affordability Fund has closed. I can advise the Senate that 91 applications have been received from around Australia. Banks have started to offer new first home saver accounts—a $1.2 billion initiative that will help aspiring home owners to save for their first home.

The government has also made changes to the first home owners grant that will provide a $1.5 billion stimulus to the housing market, helping to shore up confidence at a time of global economic turmoil. This shows that housing is central to the Rudd government’s social and economic policy agenda. Boosting housing supplies is a crucial part of responsible economic management. Access to secure and affordable housing is fundamentally important to the everyday lives of all Australians. Access to secure and affordable housing is a critical feature of our social inclusion agenda and will underpin our initiatives to address the growing homelessness in Australia that Senator Fielding just referred to.

The National Rental Affordability Scheme is the first major housing intervention in over a decade. For the first time in a decade, the Commonwealth is engaged in the housing market. It is quite directly putting forward a solution to the critical undersupply of affordable rental housing for low- and moderate-income Australians and their families. There are now 1.1 million low- and moderate-income households in housing stress, with nearly 700,000 of these households in the private rental market. Rental stress, as we all know, puts enormous financial pressures on families, key workers, young people and, of course, on pensioners. We know, too, that the key reason for the rapid escalation in rents over recent years is a lack of supply of affordable rental properties. The National Rental Affordability Scheme intends to tackle this head-on. The scheme will increase the supply of affordable rental properties by 50,000 over the next four years. If there continues to be demand, the government will expand the scheme by another 50,000 properties over the following five years, further growing Australia’s affordable rental stock. This demonstrates the government’s long-term commitment to affordable rental housing.

The scheme creates a new asset class for institutional investors in affordable residential housing. It will encourage many institutional investors to enter the residential rental market for the first time. The government anticipates that the scheme will leverage private sector investment worth up to $13 billion over the next four years. More than 1.5 million low- and moderate-income households will be eligible to rent these dwellings at a 20 per cent discount to market rate. These households will include key workers such as entry level police officers, teachers, carers, apprentices, cleaners, hospitality staff and childcare workers. Under the scheme, there is a new opportunity for all levels of the government, the business sector, the community housing sector and the not-for-profit organisations to work creatively together to increase the supply of the rental housing stock.

The rental incentive will be paid either as a refundable tax offset or as a direct payment. The direct payment arrangement for the not-for-profit sector reflects the government’s strong support for the work of that sector, whose involvement is important to the successful implementation of the scheme. The participation of both investors and the not-for-profit charitable sector and partnerships between investors and charities are crucial to the scheme’s success. That is why the Australian government will introduce a transitional safety net to cover not-for-profit community housing providers who participate in the scheme.

The supplementary amendments to the National Rental Affordability Scheme—the National Rental Affordability Scheme (Consequential Amendments) Bill 2000—extend the definition of ‘charitable purpose’ to include the provision of rental dwellings under the scheme. The amendments will apply to charities endorsed by the Commissioner of Taxation, who are approved participants of the National Rental Affordability Scheme and who receive incentives under the establishment phase of the scheme for years 2008-09 and 2009-10. The safety net will cover these not-for-profit providers for the 10 years they receive incentives under the scheme. The amendments directly address one of the key issues raised in evidence to the Senate Standing Committee on Community Affairs inquiry into the bill. The scheme itself and the safety net the government has introduced for community housing providers will bring substantial growth to the community housing sector, whether as tenancy managers, owners or developers in a consortium.

The National Rental Affordability Scheme will be given effect through regulations. This arrangement gives the government the flexibility to address changing circumstances and to ensure that the scheme continues to meet its objectives in the most efficient way. A draft of the proposed regulations was released 10 days ago to assist senators to understand the scope and operation of the scheme. The details of the regulations directly address many of the issues raised by the opposition’s amendments. The government acknowledges that others have flagged the possibility of the scheme being used to enhance sustainability outcomes in private rental properties. Reducing greenhouse gas emissions and improving sustainability are also a national priority of the government. So we accept a target to reduce Australia’s greenhouse gas emissions by 60 per cent on 2000 levels by 2050.

Debate interrupted.