Labor has successfully passed the Housing Affordability Future Fund in the upper house, allowing the government to begin housing reform.
The Australian parliament has approved a $10 billion (US$6.43 billion) housing fund legislation, enabling the Labor government to pursue its ambitious housing reform agenda.
After months of negotiations with the Australian Green Party and crossbench senators, the Labor government has secured enough votes to pass the Housing Australia Future Fund bill on Sept. 14.
However, revisions were made to the bill in order to gain the support of the Greens.
A minimum of $500 million from the fund’s returns will be allocated to housing each year as part of a deal with the Greens, an improvement on the previous maximum of $500 million.
The fund will also allocate $200 million to repair, maintain, and improve housing in remote Indigenous communities, $100 million for housing women and children affected by family and domestic violence, and $30 million for constructing housing for homeless veterans.
By committing an additional $1 billion to a housing program, Labor managed to gain the support of minor parties and crossbenchers, in addition to the previously announced $2 billion investment in social and affordable housing supply.
With the newly approved housing fund, the Labor government aims to construct 30,000 social and affordable homes over the next five years.
Prime Minister Anthony Albanese hailed the passing of the bill as a major victory for vulnerable Australians.
“Today is a win for boosting housing supply … for improving housing affordability across the nation,” he said in parliament.
“Today, we have brought together the crossbench to pass the biggest investment in social and affordable housing in more than a decade.”
Concerns About the Legislation
While the Labor government celebrates the passage of the legislation, the Coalition remains skeptical about whether the fund can deliver on its promises.
“It’s not even a drop in the bucket. I mean, this is 6,000 homes a year over five years. At the same time, this government is bringing in 1.5 million new migrants,” said Shadow Housing Minister Michael Sukkar.
“I fear that we won’t see anywhere near these 30,000 homes … and even that is inadequate.”
The Coalition has opposed the legislation, arguing that it will lead to inflation without necessarily directing investments where they are needed.
Peter Tulip, chief economist at the Centre for Independent Studies, agrees with Mr. Sukkar.
Mr. Tulip points out that 30,000 homes only increase the national housing stock by approximately 0.3 percent, which will have minimal impact on the housing market.
“If we assume that the rent on these new dwellings is about a third less expensive than average market rents, then the direct effect of these dwellings is to reduce average rents paid by all renters by 0.1 percent,” he told The Epoch Times.
“In total, the sum of direct and indirect effects is to reduce the average cost of housing by about 0.8 percent. That is tiny, though it’s better than nothing.”
Mr. Tulip believes that relaxing zoning restrictions to allow for more buildings is the best way to increase affordable housing in Australia without costing taxpayers.
“In contrast to today’s announcement, this would improve affordability without costing the taxpayer a cent,” he said.
Meanwhile, Liberal frontbencher Anne Ruston criticizes Labor’s negotiations with the Greens, claiming that they have caused the fund’s cost to exceed