Labor’s social housing plan looms as ‘disaster’ with $515m cut

New analysis has found the government’s flagship housing policy will see a $515m cut for social and affordable housing.

Housing Minister Julie Collins. Picture: Getty Images

The decision not to index spending on the government’s flagship housing policy would cost $515m in lost investment over a decade, parliamentary analysis has found.

The new figures have sparked warnings from the Greens who say Labor’s $10bn Housing Australia Future Fund is a “disaster” which will see a shortage of housing “get worse”.

Labor is currently locked in negotiations with the minor party over its centrepiece housing policy, with the off-budget fund designed to build 30,000 new social and affordable housing, including 4000 homes for women and children impacted by family and domestic violence.

The Greens are negotiating the balance of power in the upper house after the Coalition formally opposed the fund along with Labor’s $15bn National Reconstruction Fund and safeguard mechanism overhaul.

According to modelling conducted by the Parliamentary Library, the maximum annual funding available will have fallen to $400m by 2032, or a cumulative total of $515m lost over 10 years because the fund is not indexed to inflation.

Greens housing and homelessness spokesman Max Chandler-Mather said Australians would “never accept” real cuts in funding for schools and hospitals and should not accept cuts on housing.

“Labor’s housing Bill locks in half a billion dollars in real term cuts to housing funding over the next decade, does nothing for renters, and will see the shortage of social and affordable housing get worse. That’s not a housing plan, it’s a disaster,” Mr Chandler-Mather said.

“If the government can afford to spend $12bn next year alone on tax concessions for wealthy property investors, then it can afford to invest $5bn building social and affordable housing for those that really need it.”

Housing Minister Julie Collins said the Greens were risking billions of dollars of investment in social and affordable housing by standing in the way of the Bill, which she said marked the “single biggest investment from the federal government” in more than a decade.

“Standing in the way of legislation to create the fund will risk every single dollar of returns from this $10bn investment,” Ms Collin said.

The Greens are threatening to scuttle the housing legislation if the government fails to agree to a raft of demands, which include a minimum of $5bn invested in housing each year, indexed to inflation, and removing a $500m cap on spending.

The minor party has also urged the government to include a national freeze on rent increases, an immediate doubling of commonwealth rent assistance and $1bn reserved for Aboriginal housing over five years.

Mr Chandler-Mather said that Labor’s promise to build 30,000 new houses would not be enough to keep up with rising demand.