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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

Renting or buying a home is not getting any easier in Australia, and the future could get even worse if we don’t do something.

With the population growing, homes are going to be in short supply, particularly affordable homes.

The federal government wants to build new houses with an investment fund, the Greens want a rent freeze and more guaranteed funding for affordable homes, and negotiations are becoming the latest flashpoint in a bitter dispute between the two parties.

Today, chief political correspondent for The Saturday Paper, Karen Middleton, on the political games that could decide the future of Australian housing.

It’s Wednesday, April 5.

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RUBY:

So Karen, one of the key challenges that the Albanese Government is facing right now is how they address housing affordability in Australia. And they have a plan, but at the moment they're struggling to get support for it within Parliament. Can you tell me a bit about the position that they've found themselves in?

KAREN:

Yes, so they would like majority support to give it through the Senate. That can either come from the Coalition, as a bloc, or if the coalition won't support a bill, which it won't in this case, from the Greens plus two independents. And the government is currently trying to negotiate a pathway with that combination, and not getting very far just at the moment.

You know, housing is a huge issue. This legislation is about social and affordable housing. It would be setting up what would be known as the Housing Australia Future Fund to provide ongoing dividend to plough into social and affordable housing. And the urgency of this kind of fund, along with other measures that the government is taking on, housing is sort of underlined by some of some of the recent figures we've seen from the National Housing Finance and Investment Corporation that's suggesting that there's going to be a shortfall by 2027 of about 100,000 homes in terms of supply. So we will not have enough homes to meet the demand and that will put pressure on the housing market. So there is an urgent need to do something in general for housing supply, and particularly something at the lower end.

RUBY:

Okay. Well let's talk a bit more then about what Labor is trying to do here. It wasn't that long ago, Karen, that Anthony Albanese got up and gave his victory speech where he talked about growing up in public housing. So I imagine that there is a lot personally at stake here for him. How is Albanese, and how are Labor saying that this particular bill is going to address the crisis?

KAREN:

Yes, both Anthony Albanese, and in fact the Housing Minister, Julie Collins, lived in public housing when they were growing up. So both of them have a personal stake in this to a degree.

Archival tape – Anthony Albanese:

“My Mum lived in the one council house and it became housing department for the whole of her 65 years. And she drummed into me growing up, you know, when you get the opportunity, buy your own home."

KAREN:

The Government is emphasising that this is only one of the measures that it has in place for housing. Whenever Anthony Albanese gets asked about this he rattles off a whole lot of other things.

Archival tape – Anthony Albanese:

“If you look at all our plans we have the most comprehensive housing policy of any federal government in decades.”

KAREN:

You know, the half a billion dollars immediately for those on lowest incomes through the National Housing Infrastructure Facility. And then another, I think it's 1.6 billion, in the agreement that they have forged with the states and territories to deliver housing. So there are more immediate measures that are being taken.

But this one is a longer term measure and it's designed to be a more permanent arrangement.

Archival tape – Anthony Albanese:

“I'm proud to say that Labor in government will create a $10 billion Housing Australia Future Fund, with the annual investment return to build social and affordable housing, and create thousands of jobs.”

KAREN:

The way it's going to work is that the government would borrow $10 billion and set this up as an investment fund. So it's an off budget measure, meaning they don't have to find the revenue within the budget for it. They're just going to borrow the money. That makes it a bit controversial. That's part of the reason why the Coalition doesn't want to negotiate to endorse this, because it doesn't like the idea of an off budget fund. And there have been some warnings from the likes of the International Monetary Fund, that setting up off-budget funds based on borrowings could be inflationary. So there's a concern that it might have that impact on the economy.

So $10 billion in this fund, and that would be invested to bring a dividend to make money, and from those investments, and then to dedicate $500 million to building social and affordable housing for people on low incomes. Now they'd be 20,000 dwellings being built as part of that, and they'll also be money set aside for the improvement of housing in indigenous communities, and for crisis and transitional housing options for vulnerable women and children.

So the question is, will the money always be there if you’re subject to the vagaries of the stock market? And certainly what the Greens — and some on the crossbench — are saying is this just isn't enough. So we are now seeing a kind of a stalemate in negotiations.

RUBY:

Because Labor needs the Greens and crossbench to be able to pass this bill. Can you tell me a bit more about what the Greens are saying about why this won't address the housing crisis in its current form? Because they're being pretty strident at the moment, aren't they Karen? So run me through what the main criticisms are.

KAREN:

Yeah, it's an interesting dynamic, Ruby. Because what we're seeing at the moment are negotiations that have been conducted at the Minister to spokesperson level. So that's Minister, Julie Collins, mostly negotiating with the Greens spokesperson on housing, and that's Max Chandler-Mather.

Archival tape – Reporter:

“It is the shock election result that was hiding in plain sight. The Greens swooping in to key inner city electorates in Queensland.”

Archival tape – Sky News:

“The Greens saw a massive 13% swing in their favour. With the Labor preferences, the Greens candidate Max Chandler-Mather is looking victorious.”

KAREN:

Now he's a new MP. He won one of those Queensland seats that the Greens won — in a bit of a surprise — at the federal election.

And he's pretty strident. He's from the sort of activist camp of the Greens, I guess, and he's been successful at the election through his grassroots campaign strategy.

Archival tape – Max Chandler-Mather:

“This wasn't just a campaign that was fought over the last six weeks. This is a campaign recognising that people are fed up with politics.”

KAREN:

So he believes that he's in touch with public sentiment on housing. He thinks that people want him and the Greens to hold out. So he is digging in very much and saying “We are not going to accept what's on offer in this bill.”

Archival tape – Max Chandler-Mather:

“What sort of country is it where the government is willing to spend $12 billion a year on tax concessions for property investors, in the form of negative gearing and capital gains tax, but not a single extra cent on housing?

Archival tape – Crowd:

“Shame!”

KAREN:

Max Chandler-Mather is saying, it doesn't do enough for people who rent. Social and affordable housing is really about people who rent, but they say that the rent relief is not enough.

Archival tape – Max Chandler-Mather:

“We have said to the government it is not good enough to wash your hands of renters. It is not good enough for you to say 'if you rent, we don't care about you.' It is not good enough to say that 'if you're copping $150 rent increase next week, there's nothing we can do.'”

KAREN:

And he says it's too subject to the ups and downs of the stock market, and it isn't going to be substantive enough, or permanent enough, or fast enough, to do anything.

Archival tape – Max Chandler-Mather:

“I mean, imagine if we funded schools and hospitals like that? Imagine if the Minister had to go to a school and say 'Sorry, you don't get that much money this year because our gamble in the stock market didn't work.'”

KAREN:

So the government is fielding a number of fairly strident demands. And at the moment certainly, although the Greens and the government are negotiating, neither seems to be budging on their position.

RUBY:

Yeah, and we saw the Greens very recently cut a deal with Labor over the safeguard mechanism. So how does this dynamic that we're seeing now between the Greens MP, he's handling this, Max Chandler-Mather, and the Prime Minister, Anthony Albanese, how does this dynamic compare to what we have just seen in climate negotiations?

KAREN:

Well, it's quite interesting. You know, some people are making the observation that Max Chandler-Mather is a little bit like the young Albanese was when he came into Parliament. Fired up, and outspoken, and a bit of a firebrand, and a bit sort of to the barricades, and that certainly was the way Anthony Albanese was when he entered Parliament back in 1996, a long time ago now.

He's now Prime Minister. He takes a different approach these days to the way he practises his politics, but he's up against this young guy who's negotiating on the Greens behalf. So that's one aspect of all of that. Both of them believe that they can speak to a public constituency that will take their side. So Anthony Albanese has said, well almost, “I dare you to vote against this and then have to go out and argue in public that you didn't support taking steps to create more social and affordable housing in the economic climate we're in.”

So we're in a kind of a staring contest here, about, you know, which side is going to blink first. And what is also part of the mix, as you say, is that the Greens have just done a deal with the government on the climate change legislation, the national safeguards mechanism that involves emissions reduction through the mechanism that was already there, but really wasn't doing anything.

So the Greens, having done a deal, are mindful of their own constituency, some of whom didn't want a deal and wanted them to hold out for a guarantee from the government that there'd be no new coal or gas facilities built, and the government wouldn't do that.

But the compromise they reached will certainly make it harder, for particularly, new gas projects.

So they found a compromise on one bill. They're now digging in on the second one. What we don't know yet is how far they're prepared to go. Are they really prepared to vote no, or is this part of a negotiating tactic to go right to the wire, and then find some kind of fallback position? And they're keeping their cards very close at this point.

RUBY:

We’ll be back in a moment.

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RUBY:

Karen, could we at this point take a step back and talk a little bit more about how the housing affordability fund would actually work? So, the plan is for the government to borrow money, put it into the stock market, and then use returns that they might get from that on affordable housing. Do the Greens have a point here, that relying on the stock market might not be the most stable way for us to fund affordable housing?

KAREN:

Well, certainly the stock market goes up and down and in any given year it can do well or it can do badly. And that will depend on the nature of the investments, and the economic climate that we're in. There is a board that will be appointed that will oversee the investments at arm's length from the government. They will make those investment decisions. And then if and when it does make a return, the government will take advice from another body that it's setting up, on where it should target those houses to be provided. So which parts of the country, you know, which parts of cities or regional areas, who should get those houses. So that will be a separate part of the decision making process. But some of the critics — including the Greens — are arguing that if, for example, this fund had been set up last year, looking at the way the overall Future Fund that already exists has been operating, it probably would have made a loss. And they say “don't forget, you also have to pay for the interest on the borrowings.” So the $10 billion that is the seed funding for these investments, would be borrowed money and you pay interest on that. And we know that interest rates are going up, and have been going up. So there's the interest on that, and then there's whatever return you get after that's paid. Is that going to be enough? And they are all arguing, the critics are arguing, that this is not a secure enough form of funding going forward. And Labor, in response to that, is arguing that this is a permanent investment. Anthony Albanese is confident that there will be returns, and he is starting to suggest that the Government would be providing that money regardless now. They haven't said that outright. It's been sort of part of the negotiations between the Minister and the various parties. But they’re certainly starting to suggest that the money would be there. But people shouldn't be concerned that the investment, you know, wouldn't be made in social and affordable housing.

RUBY:

And the bill, as we've said, it's currently stalled in the Senate. So could we talk a bit further about Labor and Anthony Albanese’s competing interests here? Between wanting to get what is a key policy over the line, versus, I suppose, a reluctance to compromise with the Greens on this, which instinct is likely to win out?

KAREN:

Well Ruby, I think it's interesting. If you look back over the climate bill and comparing that to this. The government absolutely needed to get a deal on that bill. It needed the bill in and functioning. It needed the law operating. And that piece of law will be operating from the middle of the year. So it didn't have a lot of time to muck around. And we're on a timetable for 2030, and for 2050.

This is in a slightly different category. I think Anthony Albanese calculates, based on what he's been saying publicly, that he can make some political hay with this one. He can have a crack at the opposition, the Coalition, and at the Greens for refusing to cooperate, and he can say they aren't wanting to do anything about public housing, about social and affordable housing, they're not serious. So he sees himself as having a bit more time up his sleeve to make that argument. And he calculates that that's an argument that would go in his favour and not in the Greens favour, and they are calculating the reverse. So it's very interesting to see who's reading the electorate better, and who's prepared to blink when it comes to the crunch.

RUBY:

Yeah. I mean, it's obviously an interesting position for the Greens as well, because they are once again finding themselves having to decide whether they will negotiate a few concessions or whether they should actually vote down government legislation? What do we know about how that debate is playing out within the party, and whether there is any appetite for them to oppose some of the government's plans?

KAREN:

So I think there's a general view that they should hold out at this point for a better deal. What we saw with the climate bill, though, was there was quite a lot of pressure from outside the parliamentary party, and in the wider Greens movement, from high profile figures — like Bob Brown and Christine Milne — for them not to do a deal. So there is a divided constituency within the Greens, and there will be some debate, and probably disagreement, over when is the time to hold and when is the time to fold.

We've now got a month or so with no Parliament. Throughout April the Parliament won't sit. And it returns in budget week, in the end of the first week of May. So the bill will be back in the Parliament then. And so I think the closer we get to crunch time, when the government starts to really put the pressure on, we'll have a better understanding of what the internals are looking like in the Greens, and whether they are going to hold out and are really prepared to vote no. Or whether they're really just using this as a negotiating tactic to try and find a third way, as it were, in the same manner that they did with climate change.

RUBY:

Okay. So it sounds like things will become more clear in a month or so. What is the sense in Canberra of who might give ground first?

KAREN:

Well, I think it's very hard to know, because both sides indicate that they're willing to wait, that they're not in a hurry. The Greens have said via Max Chandler-Mather that they are happy to go back to the electorate and start running around talking about how the Government won't do a deal, and is being unreasonable, and hasn't gone far enough. In fact, inside the government they believe that Max Chandler-Mather wants to use this as a sort of recruiting tool in his electorate, and they think that he's only thinking about the politics and not the bigger picture. He thinks the government is not taking them seriously enough, and not treating the issue seriously enough, and that he thinks the public will agree with him. So it's very hard to see who's going to win out. The government thinks he's politically naive. He thinks he's got their measure. It's the young Turk versus the older Turk, and ultimately, when it comes to the crunch, it may well end up at the level of leader to lead in negotiations, with Adam Bandt and Anthony Albanese. Eventually it will get back to them if they can't find a resolution, sort of, lower down the chain, and then we will really see who's prepared to dig in and hold out and who thinks they've got politics on their side.

RUBY:

Yeah, and holding out is one thing, but housing is only becoming a bigger and bigger issue with voters as the cost of living goes up. So you would think that this will only become increasingly important for the government to get right.

KAREN:

And if it drags on and on and on, and there's a general message that Parliament can't get something sorted on housing, if that's a message that goes out there, then we may well find voters saying, “look, a pox on all your houses. We voted for this government to get stuff done and nobody seems to be able to cooperate”, and that might not go well for any of them. So they'll be mindful that they do need to get on and get something done.

RUBY:

Karen, thank you so much for your time.

KAREN:

Thanks, Ruby.

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RUBY:

Also in the news today…

Interest rates are holding steady, making it the first time in 11 months the board of the the Reserve Bank hasn’t lifted rates at its monthly meeting.

Yesterday’s decision means the cash rate will remain at 3.6 per cent, which is still the highest level since May 2012.

However, Governor Philip Lowe signalled there could still be rate rises down the track, saying they could be needed to tame inflation.

And,

TikTok will no longer be allowed on government phones, following a ban announced by the Attorney General on Tuesday.

The Chinese-owned app is facing a raft of bans in western nations due to fears that the Chinese government could be accessing some user data.

The CEO of TikTok, Shou Zi Chew, recently told a US congressional hearing, that the Chinese government has never asked TikTok for its data.

I’m Ruby Jones. This is 7am, see you tomorrow

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