Labor’s $10b housing fund secure after $1b Greens deal

Labor’s signature $10 billion housing promise is expected to pass parliament this week after the federal government and the Greens agreed to a deal following months of protracted negotiations and delays.

An extra $1 billion for a separate public housing fund ended the fiery tussle between Labor and the Greens to get the government’s Housing Australia Future Fund up and running to deliver more social and affordable housing to the country.

Greens leader Adam Bandt and spokesperson for housing and homelessness Max Chandler-Mather in parliament on Monday.Credit: Alex Ellinghausen

Prime Minister Anthony Albanese said he was pleased Labor’s core election promise to establish the Housing Australia Future Fund now has majority support in the Senate.

“With the Australian Labor Party, the Australian Greens and all the crossbenchers from the Jacqui Lambie party as well as Senator [David] Pocock, [are] all declaring their support … for social and community housing to be built in this country,” he said in question time.

“This is the last of the commitments I made in budget replies to put into legislation.”

Housing Minister Julie Collins said the fund will be established in the next two months, but it will now take longer for it to start delivering returns that can be put towards social and affordable housing.

“We obviously want to get the fund up and running as quickly as we can,” she said. “We know from talking to community housing providers and to states and territories that the delays have cost providers.”

The Greens failed to secure an agreement to limit rent increases, but party leader Adam Bandt said the extra $1 billion for public and community housing on top of the $2 billion social housing accelerator for states and territories announced in June would not have materialised without his party’s negotiations.

“That was never on the table when the negotiations started. That’s $3 billion dollars for public and community housing that the government initially said they couldn’t find,” Bandt said on Monday afternoon.

Anatomy of a deal

The Greens’ initial ask:

• $5 billion a year in direct federal investment in social and community housing, indexed to inflation
• A two-year national freeze on rent increases
• Doubling of the Commonwealth Rent Assistance allowance

Previous additions from Labor:

• A $2 billion Social Housing Accelerator for state and territory work on social and affordable homes
• An additional $3.5 million in incentives for states and territories to build more homes
• Turning the $500 million spend from the fund into a minimum instead of a cap.

What clinched the deal:

• A $1 billion investment in the National Housing Infrastructure Facility to be spent on new social homes in 2023-24

The building sector says approval delays will be the only major roadblock to taking on more social and affordable housing construction as a result of the deal.

Master Builders Australia chief executive Denita Wawn said the housing bills were critically important to addressing the housing crisis.

“They are vital pieces of the puzzle as we look towards building over a million homes over five years to ensure that every Australian could be housed in a house that is fit and proper and in the right place,” she said.

The MBA is forecasting the number of new private home builds set to start this financial year will slump to just over 170,000, well below the rate needed to reach the government’s stretch target of adding 1.2 million new homes over the next five years.

Wawn said the industry was ready to build more social and affordable homes as the number of housing approvals declined due to higher interest rates and increased costs, but building approvals will need to speed up.

The industry peak body’s data shows the time taken to complete homes and apartments has risen, even without taking into account initial development application approval times, rising from 9.7 months for houses in 2008-09 to 10.2 months in 2021-22, while completion times for apartments rose from just over 20 months to nearly 30 months in the same period.

Monday’s housing deal was also welcomed by the community housing sector as well as investor and property peak bodies.

Once the $10 billion housing fund is established, at least $500 million a year in interest earned on the fund will be used to fund social and affordable housing, and the government has repeatedly said in the first five years it will help build 30,000 homes.

Despite agreeing to support the bill, the Greens were unable to get the government to budge on coordinating a national approach to capping or freezing rents, and that will now become the party’s focus.

Chandler-Mather said he was “upset and angry” the government didn’t agree to the rental caps and freezes, but there would be future chances to secure the party was unable to secure in the negotiations.

“They saw the pain that renters are suffering and they decided to do nothing for them,” he said.

“Now if we get to the next election – and maybe this is what it’s going to take – and Labor lose a bunch of new seats to the Greens because they ignore the one-third of this country who rents, then so be it, that may be what needs to happen.”

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