TOPICS: Housing Accord, Albanese Government’s ambitious housing reform agenda, Small business.
ANDY PARK, HOST: Well, Julie Collins is the Federal Housing Minister. Welcome to RN Drive. The one million new homes figure, look, it is roughly in line with the number built around the country in the past five years, pre-pandemic. In his speech, the Treasurer called this plan aspirational. So what does that actually mean?
JULIE COLLINS, MINISTER FOR HOUSING AND MINISTER FOR HOMELESSNESS: It is an aspirational target, Andy, and good evening to all your listeners out there. This is about the Federal Government stepping up to the plate. It's about getting all three tiers of government to work together with the sector, with industry, with providers, to actually deliver more affordable homes on the ground right across the country. What the commentators are talking about, and some of them are talking about here, is a really serious investment from the federal government. Our Housing Accord also is in addition to our election commitments and to the other things that we've talked about that are in the budget last night. We're talking about the Housing Australia Future Fund, we're talking about a Supply and Affordability Council, we're talking about a National Housing and Homelessness Plan, we're talking about creating Housing Australia, and we're talking about programmes to get more Australians into their own homes sooner. It's all about actually having the architecture and having a system and a once in a generational opportunity here to change housing in Australia. That's what we're talking about here.
PARK: You say once in a generation, the Treasurer says aspirational, but wouldn't that entail building more houses than we have in the past?
COLLINS: What we know in terms of the residential construction sector is that some previous government programmes have brought forward construction, and construction was expected to drop off dramatically in the second half of next year and in the years following that. What the sector are telling us is that it will drop off dramatically and that there will be significant issues and that effort is not able to be maintained over time. So this is an opportunity for governments across Australia, state and federal, to step up and to fill that gap and to get more affordable homes into the market. It's also about trying to attract more private capital investment into the system, including superannuation funds.
PARK: The new Accord was a dominant part of the budget last night, yet the only new funding committed on your part is, well, under that budget is $350 million for 10,000 new affordable homes. Do you concede that the focus on the million figure is misleading and, therefore, where is it coming from?
COLLINS: Well, we're talking about a broad architecture here. We're talking about a Housing Accord, working with people to deliver more social and affordable homes. We're talking about being able to facilitate more private capital investment into the market for more affordable homes.
PARK: Yes, but it's not a million Minister, is it?
COLLINS: We said we'll set the ball rolling with our investment of $350 million for the ten affordable homes, the 10,000 affordable homes, and that this will be matched by states and territories. So that's 20,000. That's the two tiers of government making effort and stepping up and trying to support the system and trying to support the construction sector to build more affordable homes. And it's about leveraging that capital investment so that we can get more homes on the ground. The entire package, if you look at it, and you look at even our recent announcement out of the Jobs and Skills Summit, it's about, in the short term, expanding the remit of the National Housing Infrastructure Facility up to $575 million, made available very quickly indeed to get more social and affordable homes on the ground early. And then we're talking about the Housing Australia Future Fund, $10 billion there in perpetuity. With the returns of that fund being invested each and every year into more social and affordable homes across the country. We expect that fund will deliver 30,000 social and affordable homes in the first five years of the fund. And we're talking about the returns from that fund starting to come through towards the second half of next year. And then we're talking about the Housing Accord, which is long term, and we're talking about an affordability and supply council that will provide advice on the aspiration and the numbers, and will provide advice to state and federal governments about what other levers we should pull or have available to us to increase the supply. This is about looking at what are the barriers to getting more social and affordable homes on the ground and how do we remove those barriers and getting all three tiers of government to work together, because no tier of government is going to be able to solve this alone. This is a very significant investment from the federal government, and it's the first very significant investment from the Federal Government in a very long time.
PARK: So, Minister, are you able to tell me what proportion of the one million new homes the Commonwealth government will deliver?
COLLINS: We're talking about initially the 10,000 and then matched by the state and territories. And we're talking about obviously 30,000 from the Housing Australia Future Fund in the first five years of that fund, we're talking about about five and a half thousand from the Housing Infrastructure Facility. So that is a very significant number when you put that together. This is about -
PARK: Have the states and territories committed to that extra delivery? I mean, have you?
COLLINS: We have had discussions with states and territories, and states and territories are lifting their effort. In the next two years, they expect to be able to build around 15 and a half thousand new social and affordable homes. So all of this adds together and starts to fill the gaps as the private sector pulls out of the market. And it's also about getting the super funds into the market. What we need to do here is try and remove barriers to get more investment in homes and get more supply of homes on the ground.
PARK: In the budget, there was no immediate relief for the somewhat 950,000 households who are experiencing housing stress as we speak. The reason for that is largely due to inflationary stress. What is your message to those living in cars as we speak? Will there be additional assistance in the short term in the May budget for them?
COLLINS: Well, obviously we also provide further assistance through the National Housing and Homelessness Agreement, which is $1.6 billion each year provided to states and territories to provide services. We obviously also had as an election commitment and in the budget, $100 million for safer places, for transitional funding for women and children fleeing family violence. Of the 30,000 social and affordable homes, 4,000 of those we want to be for women and children fleeing family violence, but also old women at risk of homelessness. So we are looking at right across the spectrum, the short term, the medium term and the long term. And in the meantime, we're working on a National Housing and Homelessness Plan through the Accord process that will have short, medium and long term goals to try and improve housing supply in Australia. We're talking about a really broad architecture here to try and change housing affordability in Australia. It's a very significant announcement and a very significant investment.
PARK: If you just tuned in, Federal Housing Minister Julie Collins is here. We're talking about the budget measures to address the burgeoning shortfall in social and affordable housing, here on RN Drive. Let me ask you, Minister, is the $350 million for availability payments to encourage private investment or is that cost in addition?
COLLINS: What that is about is facility payments are often made. No social or affordable homes are built without some form of subsidy. This is the type of system that operates in terms of super funds investing overseas. We have super funds come to us to say they want to invest here in Australia, but there are barriers to that. What we want to do is remove some of the barriers and try and get some of the superannuation capital to invest here in Australia so that their members can enjoy some of the benefits of their investments.
PARK: Have the super funds signed up to this Accord?
COLLINS: Some of them have and we've been talking to them, and certainly the Treasurer has got the investors roundtable to do more work to get some of that super fund investment into the sector. As we know, super funds in Australia have got some trillions of dollars ready to invest. We know also that many of them cover key workers who currently in some places can't afford to live close to their work. We want more workers to be able to live near where they work and we want to try and remove some of the barriers. As I said, that will also be the role of the Affordability and Supply Council, talking to all tiers of government about what are the levers we have available, what more barriers do we need to pull, what do we need to do to get more supply of social and affordable homes on the ground.
PARK: On the question of participation of the super funds, HESTA says it hopes investment collaboration opportunities will emerge from this Accord. They're tending to use language more like looking forward to and aim to and seeking to, which suggests to me that the industry requires more convincing.
COLLINS: Well, certainly they've been very positive in the discussions that we've been having with them. We know that some super funds have already made some initial investments in Australia. What we need to do is work with them and to remove the barriers and that's what the availability payments in the $350 million is about. It's about working with them, removing the barriers so that they can invest here in Australia and not just invest overseas. As I said, the super funds are keen to try and support their members who are workers here in Australia.
PARK: The budget has also been criticised for lack of assistance for renters. They're set to face considerable rent increases in the coming two years according to the budget. That's after going up about 10 per cent in the year to September. Peak bodies are lobbying for an increase to rental assistance. Will rent form part of the focus for the May budget?
COLLINS: Obviously what we're trying to do in terms of increasing the number of affordable homes and social homes is have more places to be able to be rented below the market rate. That is the point of affordable and social homes. So what we actually want to do is increase supply of those to try and take some pressure off the rentals. And obviously what we've done more broadly in the budget is try and invest in a way that does not increase inflation because you played the grab earlier from the Treasurer about inflation and the impacts it can have, particularly on vulnerable people. So we've done our best to try and avoid that in the budget and what we're trying to do is invest in things like affordable housing, like cheaper childcare, cheaper medicines, expanding paid parental leave and trying to get people's wages moving.
PARK: You're also the Small Business Minister. Small business has expressed some disappointment that the budget, they've been dealing with things like staff shortages for two and a half years and housing is sort of a connected and related thing to that. They, as with the rest of us, are also facing a 56 per cent increase in electricity bills in the coming months. What support is there in the budget to ensure that they don't have to close their doors?
COLLINS: Well, obviously we've been talking and working with small businesses closely. We have been delivering on our election commitments around supporting small businesses. There are some energy efficient grants available for small businesses in terms of trying to improve their energy efficiency. But it's important here to remember that of course we're now dealing with increased electricity and energy prices because we've had a decade of denial and delay from the former government. We're now having to deal with the consequences of that. We also know, of course, that the former government knew energy prices were going to increase before the election. They opted not to tell the Australian public, including small businesses, that this was going to be the case. We of course have since then have got the Ukraine war that's impacting and we know of course that energy prices are impacting inflation. So we are looking at what else does need to be be done in terms of energy prices. But we need to be really careful about what is that and what does that look like and we need to try and keep pressure down on inflation.
PARK: Minister, I appreciate your time tonight. Thanks for joining me.
COLLINS: Thanks very much Andy.
PARK: That's Julie Collins. She's the Minister for Housing and Homelessness and Small Business.