PATRICIA KARVELAS:
Decent, secure housing and more Australians owning their own home. That was the promise of last week’s Federal Budget. The government’s centrepiece National Housing Accord pledges 1 million new homes by the end of the decade. But there are fears that supply chain delays and labour shortages will make that goal unachievable. Julie Collins is the Minister for Housing and Homelessness and the Minister for Small Business, and our guest. Welcome.
JULIE COLLINS:
Good morning, Patricia, and to your listeners today.
KARVELAS:
When will we get more detail around the delivery of this policy? There are so many – I’ve got more questions than I think answers have been provided about how it works.
COLLINS:
Well, we’ve been doing a lot of work on trying to change the architecture of housing. It’s a once‑in‑a‑generation reform here. We’re talking about creating Housing Australia. We’re talking about creating a Housing Australia Future Fund, with $10 billion in it and returns each year going to social and affordable housing. We’re talking about a Supply and Affordability Council, to provide advice to the federal and state governments on how we can reform and what we need to reform in terms of trying to get more homes on the ground more quickly. We’re talking about, of course, a new national accord – a million homes over five years from 2024 with 10,000 affordable homes from the federal government. We’ve got the states agreed to match that. And that accord, of course, is with the sector, with the industry, with superannuation funds. Everybody is on board in terms of trying to get more affordable homes on the ground more quickly. And then, of course, we’re going to work on a national housing and homelessness plan. We want to have a short, medium and long-term plan for housing in Australia, so that more Australians have a safe and affordable place to call home.
KARVELAS:
The building and construction sector have been warning for months that supply chains are locked up and tradies are in short supply. How are you going to meet that promise?
COLLINS:
Yes, well, we’ve obviously been talking to the sector and the industry. We do know that supply chains are impacted. They are starting to ease a little bit, and, of course, we know that workforce shortages are significant, which is, of course, why we’ve got our fee‑free TAFE places and university places in the Budget in terms of trying to train more Australians. And in the short term, of course, we are importing some more skilled labour.
We know we’ve got a lot of work to do on this. It is an ambition, an aspiration, if you like, for the million homes. We do know it’s going to be difficult to meet. But what we need to do is try and keep up supply and as, of course, the private demand comes out of the market, we want to lift that with further investment from government.
KARVELAS:
Okay.
COLLINS:
So we want to bring in superannuation funds as part of that.
KARVELAS:
Yeah, and that’s the issue I want to really delve into here. You say aspiration and it will be difficult to meet.
COLLINS:
Yes.
KARVELAS:
So you know you can’t meet it realistically?
COLLINS:
We’re absolutely going to do everything we can to try and meet it –
KARVELAS:
But you’re not bound at all, are you? It’s just an aspiration? It’s the vibe, right? Like, you’re not sort of – it’s not a firm target that you’re going to get to.
COLLINS:
We certainly want to get there Patricia. We know that housing affordability is a really serious challenge right across the country. But we’re also, of course, as I said, going to implement and establish the Supply and Affordability Council to provide advice to governments, to the different tiers of governments, about what needs to be done. And we’ve got local, state and federal governments signed up to this accord. It’s a really significant change here.
KARVELAS:
Builders are struggling to source everything from, you know, things for kitchen fittings, plumbing supplies. Some but not all are coming from China or via Chinese factories, and China is committed to COVID‑zero, which is causing lots of these delays. How can you be confident this problem isn’t going to derail the deadline given there doesn’t look like there’s going to be a shift on that policy?
COLLINS:
Well, we’re obviously continuing to talk to the sector and to industry. We’re also – I know the Industry Minister is doing some work on supply chains. And, of course, we’ve started investment in our National Reconstruction Fund, which is to actually do more here in Australia with our raw products, which will also assist. And some of that work has already begun. We do think that the target is achievable, but it is an aspiration, it will be difficult. But we do think we can get there. But, importantly, Patricia, we need to get there for Australians. We know that at the moment far too many Australians are saying they can’t afford high rents, they can’t afford to purchase their own homes still.
KARVELAS:
The Master Builders Association says the cost of building supplies is a major problem. Last week’s inflation figures had housing materials up 16 per cent over the year to September. Is there a risk this plan could increase those costs?
COLLINS:
What we also know is that in the last few years, COVID and, of course, the bringing forward of residential building by some other government programs have increased prices. Indeed, the average cost of building a residential home in Australia has gone up around 46 per cent in the last decade, of which half of that has been over the three years. So we do know that it’s a really serious issue. And that’s why we’re staging this.
What we will do immediately is unlock up to $575 million from the national housing infrastructure facility. Then, of course, in the first half of next year we’ll invest in our Housing Australia Future Fund. In the second half of next year we’ll start to get returns from that fund, and then from 2024 the accord kicks in. So what we’re trying to do is stage this to fulfil the supply demand without overheating the market. This has been very well thought through. We’ve gone through it carefully with industry and with the sector, and we absolutely think it’s achievable. We know it will be difficult to meet, but we think we can get there.
KARVELAS:
Okay. You think you can get there. So the Commonwealth money that you have promised in the Budget that was outlined last week, the Treasurer said that it’s about basically affordable rents, right? Making these houses affordable.
COLLINS:
Yes.
KARVELAS:
So this is for rental stock. How does the Commonwealth money get used to make rents cheaper?
COLLINS:
So obviously all social and affordable housing by its very nature has some sort of subsidy, usually a taxpayer‑funded subsidy, to make it affordable. So what we’re talking about here is the facilities payments. So it would be an annual payment to either superannuation funds or community housing, social housing providers to try and meet that gap of what is a normal affordable market rent versus what they will be renting it out to people on lower incomes who are eligible to go into that type of housing.
So it’s about actually supporting the market. It’s about trying to get some of this superannuation investment. This is the type of thing that superannuation investments are investing in overseas, and we want to see more of it in Australia. We need to start to remove some of those hurdles. Some of the superannuation funds have already started to do a little bit in Australia in terms of social housing. This is about trying to get everybody on board and trying to get more capital into the market to get more affordable homes on the ground.
KARVELAS:
I want to move to the issue of industrial relations. It’s looking – and you are Small Business Minister, so this very much affects small business too. It’s looking unlikely that bill will become law by the end of the year. We heard from David Pocock, who’s a senator, who says he needs more time to consult on elements of the bill. Here’s what he told me.
DAVID POCOCK:
There are elements of this bill that should absolutely pass, and I think are fairly non‑controversial. On the bigger things that we haven’t had time to look at the detail and looking at the bill, we’ve already found, you know, a few drafting errors. So I think it really does warrant more scrutiny.
KARVELAS:
He’s suggesting a carve‑out of some of the less contentious parts so they can be passed and then a longer period into February next year for the others. Is that reasonable?
COLLINS:
Well, obviously Minister Tony Burke will be talking to other members of parliament around getting this bill through. I think the important thing here to remember is the former government said it was a deliberate design of their government to keep wages low. What we have said in the lead‑up to the election and since is we want to get wages moving. We can’t get wages moving unless we make some changes to the law. This is about getting some changes to the law and trying to get them done in a reasonable time frame. We are allowing three weeks. I think it is for people to have a proper look at the legislation –
KARVELAS:
Okay, but three weeks – with respect, Minister, three weeks is a very short amount of time for a proper scrutiny of a very complex bill. There could be unintended consequences. Do you accept that three weeks is just not long enough for proper scrutiny?
COLLINS:
Well, I think the issue here is, Patricia, as we’ve heard, inflation is increasing. We need to get people’s wages moving. Every time we delay some piece of legislation like this what it means is it’s more time before we can get wages moving at a reasonable pace to try and keep up with inflation for Australians. We obviously want to be reasonable about this. We want to negotiate. We want to get this through because it’s critical for Australians, particularly women in feminized workforces, that we get this bill through the parliament. This is about getting low‑paid workers, many of them women, a pay rise, a decent pay rise, (a) to keep them working in the sectors such as child care and aged care, but (b) to make sure that we can get wages moving given inflation is continuing to rise.
KARVELAS:
I know that you want to get wages moving. That’s central, and you’ve made that case. But best law is always made when there is proper scrutiny, when there is massive amounts of sunshine on the legislation. Do you accept that you need that extra time so that a proper consideration of all of the elements of the bill, including the contentious elements, are able to be looked at?
COLLINS:
I’ll leave it to Minister Burke to brief crossbenchers, to have a discussion with all members of parliament, to liaise with various bodies that are interested in this legislation. This will be careful and considered. We want to get some legislation through the parliament before the end of the year to get people’s wages moving. That is the critical point here. That is what we are trying to achieve. People have known that we would have legislation coming. We’re obviously happy to be as open and transparent about that as we possibly can be. What you’ve seen from our government since we’ve come into office, of course, is openness and transparency, and we’re being grown‑ups about this. We will obviously carefully consider any recommendations or any concerns people have about timing, but we really need to get something through the parliament.
KARVELAS:
Will the government do deals with the crossbench to get this bill through? I know David Pocock has been pushing to have the ACT’s public housing debt eliminated. Is that on the table?
COLLINS:
Look, what we want to do is we want to try and get wages moving. We want to work with everybody in the parliament to be able to do that. You know, I don’t think that it’s appropriate for people to, you know, be making deals about pieces of legislation on the floor of parliament. I think that each piece of legislation should be judged on its merits for what it is. That’s what I would hope that people are doing as they’re taking this piece of legislation, as Senator Pocock has indicated that’s what he’s doing. And I’m sure that other members of parliament will be doing the same.
I mean, when it comes, for instance, to the housing package that we just talked about, Patricia, we had a position from Peter Dutton on Thursday night last week saying that we were being too ambitious and then a day later we had the opposition spokesperson coming out saying we weren’t ambitious enough. You know, like, we need to try and get some stuff through the parliament. We’re going to have to legislate our industrial relations reform. We’re also going to have to legislate our major housing reform. And what we want is people to consider a piece of legislation on its merits.
KARVELAS:
Thank you so much for joining us this morning, Minister.
COLLINS:
Thank you, Patricia.