The $10 billion housing fund established by the federal government will be destroyed, according to Greens leader Adam Bandt, unless it is dramatically improved. If this happens, it will be the administration’s first serious parliamentary setback.
The administration still needs to get enough support in the Senate for its housing measure, which would use fund returns to finance 30,000 social and cheap homes over the following ten years.
The Housing Australia Future Fund bill, according to the Greens, does not provide any assistance for renters and does not have a set minimum amount that must be spent even if the fund does not make a profit.
The Coalition has stated it will reject the bill, thus the government needs their backing to pass it.
However, Mr. Bandt informed the National Press Club that his party would reject the bill as-is following weeks of unsuccessful negotiations.
“Labor needs to come to the table on the rental crisis and on building more public and affordable housing,” Mr. Bandt said. “If Labor wants our support on the housing bill, it needs to do that.”
Is Labor genuinely stating that they are willing to spend over $500 billion on nuclear-powered submarines and stage 3 tax cuts for the wealthiest but are unable to find $5 billion annually for public housing and $1.6 billion to implement a rent freeze in the midst of a housing crisis?
The Greens have proposed a fund to support a two-year freeze on rental prices, the direct construction of 225,000 publicly owned dwellings over a ten-year period, and a doubling of Commonwealth Rent Assistance, unless income assistance programs like JobSeeker and Youth Allowance are increased.
The Green Party estimates that their ideas will cost the government little under $70 billion over the next ten years. They suggest that this cost might be offset by gradually eliminating negative gearing for those who own two or more investment properties and eliminating capital gains tax breaks on assets held for longer than a year.
Property tax breaks costing billions of dollars
As interest rates rise, the cost of negative gearing is likely to more than triple, and within a decade, the capital gains tax discount is projected to cost the federal government more than $20 billion annually.
The “negative gearing” tax system, which currently permits investors to write off net rental losses against their income taxes, would be phased away under the Greens’ proposal over the course of five years, and instead, investors would be forced to pick only one property to which they could apply the discount.
According to Treasury tax declarations for 2019–2020, the top 10% of earnings claimed 75% of the tax deductions made possible by negative gearing.
“This is not about someone who, in addition to their primary dwelling, owns one additional house or apartment as an investment. The Greens’ idea has no impact on them, according to Mr. Bandt.
“We’re asking the government to stop providing tax incentives to people who own three, four, twelve, or twenty-five homes. It concerns the 20,000 powerful businesspeople who each own more than six properties.
Similar reforms to negative gearing were proposed by Labor before the 2019 election, but they were rejected.
The Greens’ stance, according to Prime Minister Anthony Albanese, is “completely illogical”.
They want to invest more in social and inexpensive housing, and Mr. Albanese claimed that their plan is to prohibit $10 billion from being used to establish a fund for such investments.
“The Greens would be opposing a $10 billion investment in social and affordable housing if they voted against the Australia Future Fund for housing.
If they vote against this money, “they will be held accountable for it, and any rhetoric they use about housing issues will be regarded as just farcical.”
The agreement with the states and territories to build 1 million new houses over five years, together with an additional $350 million over that time, was one of the housing assistance the government has already provided, according to Mr. Albanese.
