Wayne Swan calls on Greens to pass housing fund bill

Proposals for significant investment by the superannuation fund sector in social and affordable housing could be stymied by the Greens in the Senate, Cbus chair Wayne Swan has warned.

Cbus chair Wayne Swan says establishment of a $10bn Housing Affordability Future Fund is ‘the only game in town’. Picture: Sam Ruttyn

Proposals for significant investment by the superannuation fund sector in social and affordable housing could be stymied if the Greens block legislation in the Senate to set up a $10bn Housing Affordability Future Fund, Cbus chair Wayne Swan has warned.

Mr Swan said the investment community, particularly major super funds, was awaiting the passage of the legislation which could make investment in social and affordable housing more financially attractive.

He said the policy was in danger of being blocked in the Senate by the Greens who are calling on the government to end negative gearing and drop the 50 per cent deduction for capital gains for investors, as a condition for giving their support for the Bill.

“The Greens have got the wrecking ball out and they are going to smash up a fund which can do so much (to encourage investment in social and affordable housing),” Mr Swan said on the sidelines of a Sydney conference hosted by the National Housing Finance and Investment Corporation. “It is not going to do everything, but it is a really good start, and they are saying they will knock it off.

“We need a staged, planned approach (to providing incentives for more investment in the sector) which is funded properly and encourages super funds to do more in this area.”

The former federal treasurer said many major superannuation funds, including Cbus, wanted to step up their investments in this sector but were conscious of their duty to make sure any investments were also financially attractive for their members.

Announced last year by the government as part of a broad package to encourage more housing investment, the proposed Housing Australia Future Fund is set to use the income from investing its $10bn fund, to provide financial incentives to increase investment returns for super funds investing in specific low income housing projects.

The fund’s goal is to add 30,000 new social and affordable dwellings in its first five years.

Mr Swan said income from the fund would help to “finance the gap” between the actual return on projects and what was needed by super funds.

Cbus and some other industry super funds, including UniSuper and HESTA, have been investors in bonds issued by NHFIC, which provides financial assistance to not-for-profit community housing providers to build social housing.

However, Mr Swan said that currently most social and affordable housing project would not be able to meet the returns needed by super funds.

“When it comes to social housing there is a gap,” he said. “We can’t afford it financially.”

Mr Swan said the establishment of the fund was currently “the only game in town” which could start to bridge the funding gap and was a central plank of the government’s housing strategy.

“It is really crazy,” he said of the move by the Greens. “It is wrecking ball politics.

“We would be the first to say that there need to be more initiatives (to help provide more social and low-cost housing) over time. But this is the one we have now.

“The investment community is waiting for the outcome and whether or not they are going to block it or not.”

Mr Swan’s comments come amid reports of declining home ownership in Australia, with the increase in migration levels post Covid adding to pressure on the rental market.

Federal Housing Minister Julie Collins told the conference that Australia faced challenges in the provision of private housing to meet the needs of the expected 1.8 million new households expected in Australia by 2033. There were also major challenges in the provision of social housing.

Ms Collins said there had been only 19,200 new social housing dwellings added to the supply in the decade from June 2011, while there were now currently more than 174,000 people in public housing waiting lists.

Originally published as Wayne Swan calls on Greens to pass housing fund bill