At the National Press Club today, Greens Leader Adam Bandt will accuse Labor of making the country’s rental crisis worse, saying the upcoming Budget must include more for renters and that the Greens were willing to hold out on passage of the government’s housing bill until Labor addresses the rental crisis.
Currently, Labor’s biggest Budget expenditure on housing is set to be on negative gearing and capital gains tax breaks, which will push up rents and make the housing crisis worse. Mr Bandt will present the Greens’ PBO-costed proposal to scrap tax handouts for landlords and wealthy property investors with more than one home, to fund an incentive for states to implement a two year rent freeze, build publicly-owned housing and double rent assistance for 1.4 million students, single parents, pensioners, people with disabilities, families and those looking for work. Mr Bandt will say that Labor should include these measures in the upcoming Budget to ensure its housing bill gets passed.
The Prime Minister has previously said he has no power to act on the rental crisis, dismissing such claims as ‘pixie-dust’, but Mr Bandt will use the suite of measures to demonstrate that the federal government has the power to act to solve the rental crisis, and there are urgent and available interventions that the government could implement that would pass the Senate in the next three months.
With the Greens’ support, the following measures would pass the Parliament before July and renters would receive immediate support, while also building out a pipeline of publicly-owned rental stock.
The Greens have identified significant concerns with the government’s Housing Australia Future Fund Bill, which includes nothing for renters and has no guaranteed minimum spend for social housing in the event that the fund doesn’t generate a return. Mr Bandt will confirm that if the government doesn’t come to the table on tackling the rental and housing crisis, the HAFF Bill will not pass the Senate in its current form.
Ending tax handouts for property investors with more than one investment property, while grandfathering tax arrangements for one investment property, and abolishing the capital gains tax discount would save the budget $74.1 billion over the decade.
The expenditure measures including a rent freeze incentive, doubling rent assistance and building public housing would total $69.4 billion over the decade.
The Greens proposed housing package would:
- Establish a Rent Freeze Housing Fund for State Governments by doubling the $1.6 billion in annual funding provided under the existing National Housing and Homelessness Agreement to increase stock, for example by immediately starting to purchase existing properties for affordable housing, on condition that the jurisdiction freezes rents for two years and limits increases thereafter
- Double the rate of Commonwealth Rent Assistance if government continues to refuse to lift income support payment rates above the poverty line
- Directly build 225,000 publicly-owned properties over the decade which will generate rental income, instead of gambling money on the stock market via the neoliberal housing fund
- Immediately abolish the 50% capital gains discount for individuals for assets held for more than 12 months
- Phase out the deductibility for all investment property interest expenses against personal income for individuals with more than one investment property purchased before 1 July 2023 over a 5-year period
Housing Policy Measures - Fiscal Balance
End tax breaks for property investors
Double Rent Assistance
Rent Freeze Housing Fund
Government-Owned Affordable Housing Build
Total budget improvement
Distributional analysis of CGT and NG handouts
According to the Treasury's Tax Expenditure and Incomes Statement, in 2019-20 over half a million people benefited from the capital gains discount for individuals and trusts. Nearly 91% of the total benefit was received by tax filers with above median taxable income, and 75% by the top 10% of tax filers, 61% were men and most of the benefit went to people aged over 50.
In 2019–20, 79% of the rental tax reduction went to people with above median income, and 35% of the reduction went to people in the top taxable income decile. Rental deductions are most commonly claimed by those with higher taxable incomes, particularly those in the seventh or higher taxable income decile.
Around 1.2 million men claim rental deductions and derive a larger tax reduction than women from these deductions by $2,180 on average. Men received around 59% of the tax reduction whereas women received 41% of the tax reduction.
Excerpts from Greens Leader Adam Bandt MP’s address to the National Press Club
Above all, right now, we’re in a housing and rental crisis.
Rents have skyrocketed. There are not enough affordable homes. Millions are stressed just trying to keep a roof over their heads.
More and more people are sleeping in their cars with their kids, others are lying awake at night wondering whether there’ll be a letter from the real estate agent telling them the rent has gone up again by hundreds of dollars a week, or worse, they simply have to leave.
More and more people are spending hours in line to simply view a rental property. Some people have not been able to get back into a permanent home after years of floods and fires.
Right now, there’s a shortage of 640,000 public, community and affordable homes, and it’s increasing every year.
Rents are rising six times faster than wages. People are being encouraged to bid higher than the advertised rates, forcing rents higher and higher. According to Homelessness Australia, an average student will be left with $13 dollars a day after they pay their rent. Many essential workers, like nurses and aged care workers, would have to spend two thirds of their income on rent to afford a place in our capital cities.
It does not have to be this way. Labor can freeze rent increases and build more public and affordable homes.
The Prime Minister says ‘bad luck’ to renters by mocking these suggestions, calling them “pixie dust” when I asked him about it in Question Time, or according to Labor backbencher Julian Hill, “simply impossible”.
But it is possible.
A rent freeze is both legally and politically possible.
During the pandemic, National Cabinet decided to collectively act to protect the interests of renters with a moratorium on evictions. The then PM Scott Morrison reportedly put federal government financial assistance on the table, including through taxation arrangements, as part of a package to provide rent relief.
If Scott Morrison can act, Anthony Albanese should as well.
The Ministerial Council Meeting of Housing Ministers is about to meet and it should be on their agenda. They could seek a submission from the ACT, where Labor, in government with the Greens, put caps on rental prices.
Scotland - again with the Greens in shared government - has just implemented rent controls and it can be done here too.
The Victorian, South Australian, Tasmanian and the ACT governments all froze rent increases during the pandemic.
Many state governments already limit rent rises to once a year, and if they simply extended that to two years, there would be a two year rent freeze.
It is unacceptable and irresponsible for the Prime Minister to throw his hands up and put the Greens’ rent freeze proposal in the too hard basket when Labor holds almost every seat around the National Cabinet table.
With wall to wall Labor State governments on the mainland, Labor can’t pass the buck on the rental crisis anymore.
We know Federal Labor can get State governments to act on issues where they share responsibility.
Labor acted on energy prices at the end of last year, organising for Parliaments across the country to be recalled and complementary state and federal legislation passed, with Greens support after the government agreed to put household electrification measures in the Budget.
The Prime Minister must treat rising rents with the same urgency he brought to rising power bills.
And as Labor has no ideas of its own to tackle the rental crisis, here’s another proposal. The Federal government uses the power of its purse strings all the time to drive change, and they can do it with the housing crisis too. It’s not ‘pixie dust’, it’s what the Federal government already does.
So the Greens’ proposal, which I am announcing today, is to establish a Rent Freeze Housing Fund, with an annual $1.6 billion of extra funding for states and territories under the National Housing and Homelessness Agreement, effectively a doubling of their NAHA funding. States and territories could access this fund if they impose a 2 year freeze on rent increases and cap rental increases after that. States could put that money towards expanding their own stock by building more public housing, or by buying up existing empty homes or NRAS properties to deal with the crisis immediately.
This is a real and concrete pathway for the Federal Government to introduce a freeze on rent increases. We have put to the Government that we are ready and willing to pass a housing plan that includes a commitment to coordinate a freeze on rent increases, $5b a year invested in public and affordable housing, owned by the government, which people could rent for 25-30% of their income, along with an immediate doubling of rent assistance for the struggling students, single parents, pensioners, people with disabilities, families and those looking for work as a downpayment on raising all income support payments above the poverty line.
So there’s the pathway for the federal government to deal with the rental crisis, Mr Albanese.
The Government’s own National Housing Finance Investment corporation has said we need $15 billion a year invested in public and affordable housing for the next 20 years. The Greens, in the spirit of compromise, have suggested that the Federal Government should contribute a third of that.
Is Labor really saying that they are willing to spend over half a trillion dollars on Stage 3 tax cuts for the wealthy and on nuclear powered submarines, but can’t find $5 billion a year for public housing and $1.6 billion a year for a rent freeze, in the middle of a housing crisis? Any moderately progressive government would scrap the Stage 3 tax cuts and submarines, but even if Labor remains resolutely committed to handing over $9000 a year to Clive Palmer, there’s another way to fund a proposed solution to the housing crisis.
Right now, Labor is giving billions in handouts to investors and landlords through negative gearing and capital gains tax handouts. This is driving up prices and rents, and locking young people out.
Labor’s biggest Budget expenditure on housing is for tax breaks for wealthy property investors.
Labor is making the rental crisis worse.
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.
This isn’t about someone who owns one extra house or flat as an investment in addition to their main residence. They’re not affected by the Greens’ proposal. We’re calling for an end to tax breaks the government is currently giving to people who own three, four, twelve or twenty-five properties.
It is about the 20,000 wealthy moguls who own more than six properties each and claim these handouts for the 151,000 houses they own between them.
Half of all the billions in negative gearing tax concessions goes to the top 20% of households.
All up, the Greens’ proposal would raise $74.1b over the decade and cost $69.4b.
Tackling the rental crisis actually saves the government money.
Instead, Labor wants to gamble $10 billion in the Future Fund and if it makes a profit, build social and ‘affordable’ homes, with no minimum spend and spending capped at $500 million a year. And if the fund makes a loss, like last year, nothing is spent. 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.
Labor says it will build 30,000 homes in five years, across the country, then nothing, and at the end the waiting lists will be longer than they are now.
Even if Labor’s bill passed tomorrow, by the next election, there won’t be a single home built.
We don’t need billions gambled on a fund for the future - we need direct investment now.
$5 billion a year would see 225,000 homes built.
The Greens want to see the government do what governments have done in the past. Spend public money on public investments. Government should just build the damn homes itself, not gamble money on the stock market.
Labor is currently pressuring the Greens to pass their weak housing bill that sees the crisis get worse.
But if Labor wants our support on its housing bill, it needs to come to the table on the rental crisis and on building more public and affordable housing.
With all his Question Time contempt about a rent freeze being ‘pixie dust’ and his reported delight about campaigning at the next election on his housing bill failing in the Senate, the Prime Minister needs to understand this isn’t an inner Sydney council meeting and a chance to get even with the Greens.
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.
There’s now a third of the country who rent.
As a group, renters have been ignored by the old parties.
The Greens campaigned strongly on renters’ rights at the Federal election and our vote went up.
After investing for many years in our grassroots organising model, another key to our success in the last election, the Greens now have the means to communicate directly with many of these renters, most of whom don’t spend their time listening to the Prime Minister’s question time threats.
We have already been going to the queues at rental property inspections in Melbourne and handing out rent freeze materials, as well as door knocking in Labor electorates around the country about our stance on Labor’s housing bill, and we are receiving great support.
People know that as things stand, Labor is actively choosing to make the housing and rental crisis worse.
Labor is the party of property moguls.
The Greens are fighting for renters and affordable homes for all.
If Labor wants our support on their housing bill, they need a package that meets the scale of the crisis. A package like the one I have just outlined can be legislated and in place before July.
Labor negotiated on the Safeguard Bill, they recalled Parliament to deal with power bills, and they should show the same urgency on housing and rents so that everyone has an affordable place to live.