Labor makes housing concession ahead of Senate fight

At least half a billion dollars will be spent on social and affordable housing each year in a shift the housing minister hopes will secure crossbench support for the federal government’s key housing bills this fortnight after weeks of negotiations and delays threatened the future of a core Labor promise.

The government is trying to get legislation establishing its $10 billion Housing Australia Future Fund passed through the Senate in the next two weeks, and it needs the support of the Greens to do so. Returns from the investment will be used to build a promised 30,000 social and affordable homes over the first five years of the fund.

Housing Minister Julie Collins says the government will amend the housing legislation in a bid to secure support.Credit: Alex Ellinghausen

But the Greens, who have demanded a two-year rent freeze and a direct spend of $2.5 billion a year on housing for the most vulnerable, say the changes offered do not provide a single cent of additional guaranteed funding or extra help for renters.

Ahead of the start of parliament, Julie Collins said she was willing to amend the housing policy to guarantee a $500 million floor for spending on social and affordable housing and to allow that floor to be increased in future years. The original legislation had a $500 million cap on spending from fund returns.

“Given the urgent need, we will be seeking to advance this legislation in the coming sitting period before the Senate rises until August,” Collins said in a letter to the Greens and key Senate crossbenchers on Monday.

“We urge you all to vote in support of the Housing Australia Future Fund and the tens of thousands of rental homes it will help fund.”

In March, Greens housing spokesperson Max Chandler-Mather, independent senators David Pocock and Lidia Thorpe and Tasmanian senators Jacqui Lambie and Tammy Tyrrell signed a joint letter to the minister calling for a suite of changes to the housing legislation in exchange for their support.

Responding to that letter, Collins said the $500 million spending floor was on top of changes those senators had already requested. The government response includes changes such as an amendment to pull forward a review of the housing fund to December 31, 2026, and an agreement to provide $200 million through the housing fund for the repair and maintenance of Indigenous housing.

“To provide additional certainty to the housing sector, the government will remove the cap on disbursements from the Housing Australia Future Fund from 2024-25, replaced by a guaranteed fixed disbursement of $500 million per year, indexed from 2029-30, the year proposed by multiple stakeholders to the Senate inquiry,” Collins said in the letter.

“The government will also amend the legislation to allow for the yearly disbursement amount to be increased in the future by the treasurer and minister for finance through a disallowable legislative instrument.”

But at the weekend she ruled out supporting a rent freeze, a key ask from the Greens, who will meet on Tuesday to discuss their position on the housing bill.

Chandler-Mather said the Greens had bent over backwards to reach a compromise - he revealed last week the party had halved its ask for annual spending on public housing - while Labor had only offered to close a loophole that could have risked all public housing funding.

“The Greens want to negotiate, but Labor is refusing to shift on the two key demands we’ve made clear for the last eight months, more guaranteed money for public housing and a nationally coordinated freeze on rent increases,” he said after receiving the Housing Minister’s letter on Monday.

“The Greens have shifted substantially, we’ve said to the government that we’ll pass their bill in the coming sitting fortnight if they guarantee $2.5 billion right now in social and affordable housing, and commit $1 billion to incentivise states to freeze rent increases at National Cabinet.

He said the current plan would not see one additional social or affordable home built until after the next election, and does nothing to address the rental crisis.

“Right now this country is on the precipice of a major social crisis. It is completely unacceptable that the Labor government is not taking up this opportunity to take real steps to tackle the housing crisis,” Chandler-Mather said.

Collins pointed out that the government has already helped renters, including with a 15 per cent rise in the maximum rate of Commonwealth Rent Assistance.

She said the government has already made $575 million available through the National Housing Infrastructure Facility for social and affordable housing.

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