In a key pre-budget address to the Australian Housing and Urban Research Institute, Treasurer Scott Morrison reaffirmed the Coalition’s strident opposition to changing negative gearing tax concessions, plus a drive to increase private investment in the supply of housing.
- No disruption to current negative gearing policies (as this would come at a cost to renters)
- More private investment in affordable housing (currently Australia’s public housing stock remains tied up in state territory government balance sheets
- Inclusionary zoning measures which require developers to set aside a portion of new developments for social housing
- Development of a bond aggregator, which would allow Government to loan money to community housing associations at a lower long-term rate.
- Not spending more, but spending better
Housing Industry Association
“Establishing a mechanism that enables institutional capital to fund investment in affordable housing is a good step. In this regard, the ‘bond aggregator’ model which increases the social and community housing sector’s capacity to access capital should enable the industry to provide a larger quantity of affordable housing.
“As the Treasurer rightly pointed out, there is ‘no silver bullet’ to solve Australia’s housing affordability challenges. The long-term objective must be to ensure that there is an appropriate supply of new housing that meets the needs of a growing population. A ‘bond aggregator’ can be part of the solution for the social and community housing sector. However, policy makers must not ignore the existing impediments to housing supply more broadly.
“A well-designed housing infrastructure fund must also be part of the Federal government’s considerations. Additional housing stock cannot be brought to the market efficiently, including for projects funded through the ‘bond aggregator,’ if there is a lack of investment in the critical infrastructure that supports new housing development.
PowerHousing Australia
PowerHousing Australia also welcomed Treasurer Scott Morrison’s commitment to deliver a raft of measures that address housing right across the lifecycle spectrum.
From aiding new supply to creating more social and affordable housing, supporting first home buyers and seniors looking to downsize, this package has been a while coming but signals a step in the right direction for fixing Australia’s housing affordability challenges.
PowerHousing CEO Nicholas Proud said adopting the UK bond aggregator model will open streams of institutional funds to increase the supply of social and affordable housing.
“While public housing has decreased by 24,000 since 2007, community housing in Australia has over the same period grown from 33,526 to 72,410 dwellings as per the recent Productivity Commission Report on Government Services. The community housing sector has largely built scale on the basis of property transfers and the Federal National Rental Affordability Scheme.
“Providing funds through to the community housing sector will deliver more affordable homes more cost-effectively and assist those on low incomes through to first home ownership with more options, new housing and the potential for a suite of wrap around services to aid training, education, health and outcomes.
“We will have to wait until the Budget to know whether the Treasurer will secure the deep funding measures that are required to meet the gap between what those in affordable housing can provide and what it is vital to deliver in terms of dwellings into the long-term future. This is an integral part of the CHP model, and we are hopeful this gap will be addressed in the upcoming federal budget.
THE INDUSTRY
Meanwhile, Ray White chairman Brian White said the announcement by the Treasurer on Monday that negative gearing will continue to be an integrated policy of the Australian Government is good news to all property owners, including all those seeking to achieve self-sufficiency in their financial planning programmes.
“Property has proven to be the solid financial foundation for the majority of Australians who will be greatly relieved by the continuity of the policy.
“Each success story diminishes individual dependence on government coffers,” he said.
