- Federal Government urged to double housing incentives for states and territories.
- Four key proposals, including affordable housing initiatives and improving decarbonisation efforts.
- Enhancing construction workforce, incentivising affordable rentals, and streamlining foreign investment processes.
Property Council of Australia (PCA) has called upon the Federal Government to double the $3.5 billion performance-based funding awarded to states and territories surpassing their housing targets.
Doubling the incentives to meet an ‘impossible’ Accord target
Right before the May 2024 Budget, PCA submitted to the government that the scale of the housing crisis necessitates larger incentives for state governments, which can better weather the ebbs and flows of political cycles.
Hence, it suggested that the Government deploy the commodities surplus to bolster the $3 billion competitively funded New Home Bonus and $500 million Housing Support Program.
PCA chief executive, Mike Zorbas noted that the while the predominant sentiment was that the national target of building 1.2 million homes over the coming five years was beyond reach, PCA was committed to helping the governments achieve their targets.
“Australians, especially young people, simply can’t afford a swing and a miss on the national housing target.”
Mike Zorbas, PCA
“We need to supply more quality homes around job, educational, and social opportunities and as close to public transport as we can get
“The vast majority of people see the greatest opportunity in our capital and regional cities. Most of us have wised up to the importance of housing supply and choice where we want to grow up and where we want to grow old.
“Right now, Labor is in power in every state government bar Tasmania, but the time will come when that changes, and we need to keep our eyes on the national housing prize.
“History tells us housing supply repeatedly gets shoved in the too-hard basket when politics intervenes. We need to break that cycle by offering the states a carrot no Premier from any party can ignore.
“Over the forward estimates where trillions are divvied up across the economy, a pool of $3.5 billion between eight states and territories to boost housing supply won’t survive changes in state politics.”
The clock is ticking on housing targets
Titled Not a minute to waste, the pre-budget submission laid out four key Federal Budget proposals. Namely, housing for all Australians, turning Australia into a competitive hub for international investment, improving the capacity of the nation’s construction workforce, and clarifying the roadmap to decarbonisation.
Additionally, the submission also recommended targets for alternative forms of housing, like purpose-built student accommodation and retirement living communities, for inclusion in the National Housing Accord.
“The reality is, if we expand higher density housing supply at either end of the age spectrum, where government and community services are most efficiently delivered, then everyone benefits.”
“With younger people utilising bespoke student housing to meet their unique needs, and older Australians moving into communities that are proven to keep them healthier and happier for longer and save taxpayers $1 billion a year by delaying their entry into aged care, then we open up the middle market for more Australian families,” he continued.
Building the capacity of Australia’s construction workforce
Furthermore, the submission proposed reducing skilled migration while placing greater emphasis on construction trade. New construction typically comprises a meagre 1.8% of skilled migrants. Thus, the intake of qualified high, medium, and low-skilled construction workers should at least double.
“We have an ambitious national housing target, big state projects built on foot, and growing green energy infrastructure needs that terrific training and TAFE initiatives cannot hope to meet,” Zorbas said.
“We must stop the housing dog chasing its tail. While intelligently managing down the overall intake of migrants, we urgently need a higher proportion of the people we bring to Australia qualified in construction to build the housing all Australians need.”
Reducing the red tape on commercial investments
PCA also recommended the Government lower the managed investment trust (MIT) withholding tax rate from 15% to 10% when Built-to-Rent (BTR) projects incorporate an affordable housing component, encouraging more investment into affordable rentals without burdening the Government’s budget.
Finally, it called for the government to better resource the Foreign Investment Review Board (FIRB), remove unnecessary application fees, and exclude non-controversial commercial property investments from screening.
The submission was released before Zorbas’ 6 March 2023 appearance at the National Press Club, where he participated in a discussion on solutions to the housing crisis.
