Labor’s $10 billion housing fund on the brink in parliament

The federal government has hit a political roadblock in parliament over its vow to set up a $10 billion fund to invest in new housing projects, with the Coalition warning against the plan while the Greens demand more help for the homeless.

The Liberals and Nationals have stepped up their objections to the Housing Australia Future Fund over the use of $10 billion in Commonwealth bonds to raise the finance at a time when interest rates and loan repayment costs are on the rise.

The federal government has pledged to build 1 million new homes over five years.Credit: Scott McNaughton

With the Coalition party room tipped to reject the housing fund at its meeting on Tuesday morning, Labor will be forced to negotiate with the Greens and independents in the Senate to save the key election pledge from defeat.

The dispute over the housing fund widens the debate on major Labor policies that use debt to establish off-budget funds to finance new policies, with the government also trying to secure a deal with the Greens on the $15 billion National Reconstruction Fund after the Coalition decided to vote against the policy last week.

The Greens will set out their demands for the housing fund on Tuesday, including a minimum of $5 billion to be invested in social and affordable housing every year, far beyond the government plan for the new fund.

The Greens will also demand a $1 billion investment in remote Aboriginal housing, also eclipsing the government policy in the housing package introduced to parliament last week.

Max Chandler-Mather is pushing for more direct spending on housing with his call for a $5 billion investment every year.Credit: James Brickwood

“The Greens have serious concerns about a housing plan that will literally see the housing crisis get worse than it is now, and so will seek to negotiate in good faith with the Labor government,” Greens housing spokesman Max Chandler-Mather said.

“Labor’s centrepiece housing legislation locks in permanent real term cuts to housing funding, does nothing for renters, and will see the shortage of social and affordable housing grow, seeing the housing crisis get worse.”

Other demands from the Greens include a “national plan for renters” including a negotiation over a national freeze on rent increases at national cabinet, expecting Prime Minister Anthony Albanese to raise the issue with state and territory leaders.

“Freezing rent increases and doubling Commonwealth Rent Assistance will ensure we provide immediate relief to the millions of households in serious financial stress as a result of soaring rents,” Chandler-Mather said.

The housing fund is meant to get 30,000 social and affordable homes built over the next five years and will also provide $200 million to repair housing in remote Indigenous communities, $100 million for crisis accommodation for women and children escaping domestic violence and $30 million for housing for veterans.

The $10 billion will be invested to generate a dividend that will be used to pay housing providers a subsidy for social and affordable housing, but experts have warned that it may not earn enough to achieve the 30,000 target.

Chandler-Mather has described the $10 billion investment as a “gamble” on the sharemarket and is pushing instead for more direct spending on housing with his call for a $5 billion investment every year.

A key issue is the scale of the housing challenge, with University of New South Wales professor Hal Pawson estimating the current unmet need for social housing equates to 437,000 households.

Independent senator David Pocock is also seeking changes to the Labor housing plan on the grounds the 30,000 homes will not be enough.

“The 30,000 won’t even come close to meeting demand,” he told this masthead last week.

Housing Minister Julie Collins took aim at the opposition in question time on Monday in the expectation the Coalition party room would decide to vote against the housing fund.

“Most Australians would expect people in this place to support more social and affordable housing,
but, from what we’re hearing, that is not the case,” she said.

“Indeed, we’re hearing that some will be coming in here to vote no to building more homes for women and children fleeing family violence. People will be coming in here and voting no to building more homes for veterans that are homeless.”

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