The Federal Government’s centerpiece legislation to address housing supply and affordability in Australia faces significant hurdles, with the Opposition opposing the reforms and the Greens and crossbench senators demanding substantial changes.

The Senate Economics Legislation Committee has released its report following its review into the Housing Australia Future Fund Bill 2023 and related bills.

Whilst government senators support the bill, Coalition senators have recommended that the legislation be dumped whilst the Greens and independent senators David Pocock and Lidia Thorpe have called for fourteen, twelve and eighteen amendments respectively.

This means the government – which is keen to secure passage of the bills before Parliament rises next week – may need to make changes to secure the legislation’s passage.

Forming the centerpiece of the Commonwealth Government’s strategy to work with states to deliver one million new homes over the five years from 2024, the Housing Australia Future Fund package of bills were introduced into Parliament last month.

At its core, the package will:

  • establish a new $10 billion Housing Australia Future Fund (HAFF) to fund ongoing investment in social and affordable housing;
  • establish a new body known as the National Housing Supply and Affordability Council to provide independent statutory advice to government on improving housing supply and affordability across the housing spectrum; and
  • rename the National Housing Finance and Investment Corporation to ‘Housing Australia’.

Central to the package is the new $10 billion Housing Australia Future Fund.

This will provide a dedicated investment vehicle that will invest in financial assets and use the returns to deliver social and affordable housing.

According to Government estimates, returns from the fund are expected to deliver around $500 million to be invested in social and affordable housing each year.

Over the first five years, this will be sufficient to:

  • fund construction of 30,000 social and affordable homes; and
  • provide $330 million for other critical housing needs.

Of the 30,000 social and affordable homes, 20,000 will be social homes. Of these, at least 4,000 will be earmarked for elderly women and women/children fleeing family violence.

The other 10,000 homes will be affordable homes which are allocated to frontline workers such as police, nurses and cleaners.

Meanwhile, the $330 million to go toward other housing needs will be allocated to matters such as repair and maintenance of housing in remote indigenous communities, crisis and transitional housing options for elderly women facing homelessness and women and children who are experiencing family violence, and housing and specialist services for veterans who are experiencing homelessness or are at risk of homelessness.

In its majority report, government senators said the bill would deliver a scalable and affordable solution to address housing needs that reflects targets which are realistic and achievable.

However, opposition and crossbench senators have savaged the proposed changes.

In their dissenting report, Coalition senators recommended the package of reforms should be dumped.

In rejecting the bill, Coalition senators argued that:

  • money spent via the new fund would further fuel inflation and place more pressure on interest rates;
  • no investment mandate for the proposed fund has been released;
  • instead of providing taxpayer funded incentives for super funds to invest in housing, the government should enable superannuation fund members to use their super to buy a home;
  • instead of splurging on the new fund, the Commonwealth should provide incentives for state and local governments to undertake planning and other reforms to reduce the regulatory burden on new housing delivery.

By contrast, the Greens and crossbench senators David Pocock and Lidia Thorpe want the fund to have greater ambition.

Rather than an estimated $500 million being invested each year, the Greens and Thorpe want this increased to a minimum of $5 billion in annual investment and for this to be indexed to inflation.

Pocock, meanwhile wants the overall size of the fund increased from $10 billion to $20 billion.

Meanwhile, the Greens have called for immediate action to address the rental affordability crisis (including rent controls, a doubling of the rate of Commonwealth Rent Assistance), a minimum of $1 billion over five years to be spent on indigenous housing as part of the package and a limit on fund recipients to ensure that private developers are not able to profit from public housing funding.

With the Coalition opposing the reforms, the Government will need support from the Greens (11 seats) and at least two independent senators to pass the package of legislation through the Senate.

With Jackie Lambie and her offsider JLN senator Tammy Tyrell indicating their potential support, the legislation’s fate may rest with the Greens.

Building industry lobby groups urged all parties to pass the reform.

Maxwell Shifman, national president of the Urban Development Institute of Australia, said the package was the right way to address the gap in affordable housing, boost housing supply and accelerate affordable housing delivery.

“This is a crucial milestone that will involve the entire market working together – Governments, CHPs and private housing providers – in a shared objective to combat the chronic shortage of affordable and social housing,” Shifman said.

“If we don’t act now, we will soon see an irrevocable change to the demographics of our towns and cities, forcing young families to live further away from their support networks, skewing workforce participation and hobbling productivity.”