Right now, Labor are trying to force two housing bills through the Senate which will make the housing crisis worse. One of which will push up house prices (Help to Buy) and one which will drive up rents (Build to Rent).
The Greens weren’t elected to wave through Labor’s broken housing policies.
We’re here to fight for the millions of people suffering as the result of Labor’s refusal to take the housing crisis seriously.
At a time when millions of renters and mortgage holders are struggling to keep their heads above water, we’re very frustrated that Labor’s only housing plans will actually make the crisis worse.
From the moment these bills were introduced, we have made it clear that we were willing to pass Labor’s housing plans if they negotiated with us on ending tax concessions for property investors, freezing and capping rent increases, and directly investing in building publicly owned housing.
Last time Labor came to the table and listened to the Greens, we won $3 billion for public and community housing.
But right now Labor is not negotiating, and have said they would prefer their own bills to fail than to work together.
Without making any negotiating offer, Labor have tried to force these bills through the Senate, which would mean their own bills would fail.
We don’t want to lose what might be the Parliament’s last chance to address the housing crisis before the election, and so the Greens have extended the Senate’s time on the bills until 26 November to give more time for Labor to negotiate a plan that tackles the housing crisis.
These bills will now return to the Parliament at the end of the year. Labor should come to the table with the Greens to work on a plan that will actually help the millions of renters, first home buyers and mortgage holders struggling under this housing crisis.
THE GREENS PLAN
Here’s what the Greens have asked for action on:
- Action on freezing and capping rent increases
- Ending the unfair tax handouts for property investors (negative gearing and the capital gains tax discount) that are turbo charging house prices and making it harder than ever for renters to buy their first home
- Establishing a publicly owned property developer, which would build 360,000 good quality homes over the next five years and 710,000 over the decade to be rented and sold for cheap
We don’t expect that we will get everything that we want in a negotiation. But so far Labor have made absolutely no offer to improve and pass these bills.
BILL 1: HELP TO BUY
In short: it's only accessible to 0.2% of renters and will drive up house prices for the other 99.8%.
The proposed scheme would only help 10,000 of Australia’s 5.5 million adult renters per year, which works out to be 0.2% of renters per year. For the other 99.8% of renters, Help to Buy will push up house prices – and that’s according to the Government’s own Productivity Commission.
Schemes like Help to Buy, known as demand-side support, push up house prices because they allow people to pay more for housing than they otherwise would be able to afford. Just like the First Home Buyers Grant and the Coalition’s HomeBuilder program, they lead to more people being priced out of housing, and overall home-ownership rates falling as a result.
During the Senate Inquiry into Help To Buy this year, experts shared our concerns with the scheme:
“...these schemes have been around forever, but the money is eventually capitalised into house prices, so the beneficiaries gain at the expense of everyone else.” – Dr John Quiggin, Professor of Economics at the University of Queensland
“The Help to Buy scheme, like many previous housing affordability schemes from both major parties, is a policy to boost the financial position of a particular group, usually first home buyers. The problem with these kinds of policies is that they simply increase demand for housing, and this increases the price of housing. The result is that it makes housing less affordable.” – Matt Grudnoff, Senior Economist at the Australia Institute
“When you stimulate demand, it puts up prices and makes housing more expensive for everybody else.”... “We have a housing affordability crisis, and this makes that problem worse for the majority of people entering the market.” – Dr Peter Tulip, Centre of Independent Studies
While for those few eligible, Help to Buy could help them afford a home they couldn’t otherwise, every extra dollar a Help to Buy participant can afford to bid drives up the price of housing overall.
So, while the Help to Buy Scheme may help the 0.2% of people lucky to get access to the scheme, for the other 99.8% it will make things worse by driving up house prices even further.
Even though this is a small scheme, anything that pushes house prices up in the middle of a housing affordability crisis is a step in the wrong direction. This is a decision the Greens are not willing to make.
If the Labor Government really cared about helping first home buyers into the market, they could scrap tax concessions like the capital gains tax discount and negative gearing, which fuel property speculation and help investors outbid first home buyers, and instead invest in a public developer to build hundreds of thousands good-quality homes that could be sold and rented at below-market rates.
BILL 2: BUILD TO RENT
In short: It will drive up rents by creating new tax handouts to property developers for luxury apartments and Labor have no modelling that it will guarantee a single affordable home for renters.
Labor’s other bill, known as ‘Build to Rent’, will create new tax handouts to property developers to build luxury apartments. The recent Senate inquiry heard evidence from experts that the plan will create a powerful class of corporate landlords who will jack up rents, engage in rent maximisation strategies and exploit tenant data, all while collecting tax handouts from the government.
None of the homes built are likely to be affordable for low income families – and in fact even according to the property industry itself, as it stands the Build to Rent plan may not lead to a single new home being built, luxury or affordable.
FAQ
- Are the Greens blocking housing?
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No. The Greens have not voted down either of Labor’s housing bills.
The Greens have secured more time for Labor to come to the table and negotiate with us on outcomes that will actually help the millions of renters and communities locked out of home ownership before coming on for a vote in November.
Right now, there is zero certainty that either of Labor’s two bills will build a single affordable home. In their current forms, one will drive up house prices. The other will drive up rents.
We will not let Labor sabotage the only opportunity for action on the renting and housing crisis this Parliament.
We know we won’t get everything we want. That’s how negotiations work. Last time Labor negotiated with us, the Greens won $3 billion for public and community housing.
Labor should come to the table and work with the Greens to scrap the unfair tax handouts for wealthy property developers, freeze and cap rent increases, and build more public housing like we used to do in Australia.
- Why are the Greens and Liberals voting together?
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The Greens and the Liberals oppose these bills for very different reasons. The Greens want to negotiate on a plan that actually tackles the housing crisis, and have made that clear to the Government. The Liberals just want to block the government’s agenda.
Labor does not have a majority in the Senate. They need to negotiate with other parties in the Senate if they want to pass legislation – that’s how Parliament works.
Through negotiations on the Housing Australia Future Fund (HAFF) in 2023, the Greens were able to secure an additional $3 billion in direct funding for public and community housing, and a guarantee that $500 million will be spent through the HAFF each year.
We’re glad we did. Labor’s HAFF has not yet built a single home, but the direct funding secured by the Greens has.
- But won’t Labor's bills encourage new housing supply?
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Labor’s Help to Buy scheme allows people to purchase existing homes so it won’t necessarily add to housing supply.
Economists and the government’s own Productivity Commission agree that this type of assistance has the effect of pushing up house prices for everyone and as a result lowering home ownership overall.
And Labor’s Build to Rent scheme gives handouts to property developers to build luxury apartments, with no modelling from the Government to suggest it will build a single affordable rental.
- Won’t Help to Buy help some low-income first-home buyers afford a home?
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Help to Buy only has 10,000 places a year, meaning it could at best help just 0.2% of Australia's 5.5 million eligible renters per year. For the other 99.8% of renters, Help to Buy will push up house prices.
What’s worse, it may not even help those 0.2%. A very similar scheme in NSW has failed spectacularly, with only 503 places out of 6,000 taken up in its first two years, as restrictive income and house price limits meant that it was nearly impossible for prospective buyers to find a home that qualified, or be able to borrow enough to pay for it.
In fact, analysis shows that even with the government owning 30-40% of the home, it would be almost impossible for people earning less than the income limits to be able to secure a loan to cover the rest. And on top of that, if your income ever rises above $90,000 you’d face huge repayments to the government.