Bill Shorten and Labor’s policies will drive up rents for the increasing number of Australians that new Census data reveals are renting, have increasing rental costs or are paying over 30 per cent of their income on rent.
Labor reckless decision to abolish negative gearing will not only bring on a hard landing for Australia's housing market, threatening jobs and economic growth, but will put even more stress on Australia's renters as mum and dad investors, who provide around a quarter of the country's rental stock, are forced to walk away.
The effects will be even more acute for renters in markets like Perth, Darwin, Hobart and Adelaide, where new investment in rental stock is needed, but will be even less able to compete with the big metro areas in Sydney and Melbourne.
The Turnbull Government’s comprehensive housing package outlined in the 2017 Budget recognised the growing problem of rental affordability and is acting to put downward pressure on rents. This follows years of talk and ineffective policies from the former Labor government.
As part of our comprehensive new housing package, we are getting on with the job of encouraging investment in affordable rental accommodation and getting more affordable housing construction underway.
Labor are determined to drive up rents by abolishing negative gearing. This will only push more households into rental stress and drive Australians further away from home ownership. This is not a policy to boost housing affordability, it just a policy to put up taxes.
You can't make it easier for someone to save to buy a house by putting up their rent. Under our plan, we are giving renters who are saving for their first home a tax cut on their home deposit savings, through our Super Saver Scheme. The scheme will accelerate the savings of Australians looking to buy their first home by more than 30 per cent.
BIS Shrapnel modelling of proposals adopted by Labor revealed they would hit Australian rental households hard:
- Rents would increase by 10 per cent ($2,600) per annum
- 70,000 extra households would be pushed into housing rental stress
- 4 per cent fewer new homes would be built
Labor simply fails to grasp that 27 per cent of Australia's housing stock is owned by investors, with 2 million taxpayers in Australia having an interest in a residential investment property.
Labor’s proposal to cut mum and dad investors out of the private rental market would mean less rental properties available for Australians, leading to higher rents, crowding out of those on lower incomes as well as even greater pressure on overstressed community and social housing providers.
The Census data reinforces the reasons why the Turnbull Government’s comprehensive housing affordability package outlined in the Budget is so necessary.
We are now working with State and Territory governments to introduce a new National Housing and Homelessness Agreement, with the requirement for concrete outcomes, which will increase the supply of new housing for all Australians, including renters, particularly those most in need.
We are establishing a $1 billion National Housing Infrastructure Facility to work with States and Territories to fund deals with local governments to remove infrastructure impediments to developing new homes and apartments on selected sites.
We will be encouraging private and foreign investment in affordable rental accommodation for low to moderate income households through a range of new tax incentives.
Private investors will be encouraged to invest in new and existing affordable housing. From 1 January investors, in qualifying for affordable housing, will be entitled to a 60 per cent discount on capital gains if they hold the investment for a minimum of three years in aggregate.
A new National Housing Finance and Investment Corporation (NHFIC) will be established by 1 July next year to provide long term, low cost finance to community housing providers for affordable housing projects. This will also assist in attracting large scale investors, including superannuation funds, into the affordable rental sector.
And the Government will enable direct deduction of rent from welfare payments of tenants in public and community housing providers, giving greater income certainty for investors in this type of rental accommodation.
Labor’s determination to end negative gearing and force a hard landing for the housing market is a recipe for disaster for Australian renters and our economy alike.
Australians who rent would be the collateral damage from a classic Labor revenue grab.