Adam Bandt sharpens demands as Greens hold social housing policy to ransom

The PM is facing renewed pressure to provide greater assistance to renters struggling with the rising cost of living.

Anthony Albanese is under renewed pressure to provide financial relief for struggling renters or face an embarrassing defeat on one of his cornerstone election promises.

Greens leader Adam Bandt will use an address to the National Press Club on Wednesday to put the heat on the government to negotiate on its $10bn social housing fund and back its suite of reforms.

Mr Bandt will say he has no qualms about shooting down the Housing Australia Future Fund should the government refuse to come to the table.

“There is a full-blown nationwide rental crisis and it must be confronted; the Prime Minister’s scorn shows he hasn’t kept up with the sea change in Australia’s housing system,” he will say.

Adam Bandt will sharpen his demands over the housing policy. Picture: NCA NewsWire / Martin Ollman

The minor party holds the future of the HAFF in its hands after the Coalition resolved to oppose the legislation to establish it earlier this year.

It says that in its current form the number of homes it wants to build and HAFF’s maximum spend per year is insufficient.

There are also concerns the Future Fund model could result in no money being available to spend on social and affordable housing in a given year, should the piggy bank make a loss.

“Imagine if the government spent no money on public schools one year because a stock market gamble backfired: that’s what they’re proposing for housing,” the Greens leader will say.

The Prime Minister has previously said the government has a mandate for the HAFF and insists he’s “happy” to take it to the next election, should the Greens hold out.

Sharpening his demands on Wednesday, Mr Bandt will say he wants the government to slash the capital gains tax break and landlords’ interest deductions with reforms which would return $74bn to the budget over the next decade.

Slashing the tax breaks could return billions to the budget.

He will also call for the government to commit to doubling the Commonwealth’s rent assistance, provide an incentive to the states to implement a rent freeze, and build 225,000 publicly owned properties, at an estimated combined expenditure of $69.4bn.

Overall, the reforms are estimated to improve the budget bottom line by $4.7bn over the next decade.

“Labor should stop giving handouts to property moguls with more than one investment property and instead use that money to fund a rent freeze, double rent assistance and build even more government-owned public and affordable housing,” Mr Bandt will say.

However, the estimate raised concerns from the Parliamentary Budget Office about investors and owner-occupiers being pushed into negative enquiry, should the tax breaks be cut without other levers being pulled.

The Parliamentary Budget Office has raised concerns about the policy. Picture: NCA NewsWire / David Crosling

“The extent to which house prices fall and rents rise would also be influenced by how many renters would be able to switch to owning property,” the costing document said, “making it detrimental to sell the property and potentially creating risks for the banking system, possibly leading to more defaults.

“A sudden decline in house prices, and higher rents, may also trigger a significant economic shock and result in negative fiscal consequences, partly or fully offsetting the additional revenue, for example lower than anticipated capital gains and corresponding tax.”

Capital gains tax concessions for the family home were worth more than $48bn in 2022-23 and another $23.7 billion in revenue foregone on CGT discounts for individuals, such as property investors and for trusts.

In 2019-20 taxpayers reported total rental losses of $10.2bn, delivering them a $3.6bn tax benefit.