Minister Collins interview on 7.30 with Sarah Ferguson
E&OE Transcript
SARAH FERGUSON, HOST: Julie Collins. Welcome to 7.30.
JULIE COLLINS, MINISTER FOR HOUSING AND MINISTER FOR HOMELESSNESS: Thank you, Sarah.
FERGUSON: Now, the target of the Housing Australia Future Fund is to build 30,000 social and affordable homes over five years. The research suggests that the actual need is much bigger than that. How did you come up with that figure?
COLLINS: We obviously took to the election a $10 billion Housing Australia Future Fund with an ambition to build 30,000 social and affordable homes in the first five years of the fund. The idea, of course, is that returns from the fund are there in perpetuity, adding to social and affordable housing each and every year. The Housing Australia Future Fund is a critical but one part of the government’s broad, ambitious housing agenda. We’re obviously doing a lot more than just the Housing Australia Future Fund. But the Future Fund is critical in terms of leveraging investments from other tiers of government and, of course, institutional investment and building the capacity of community housing providers right across the country.
FERGUSON: Let me just ask you this. If you’re going to invest $500 million a year to build 30,000 homes over five years, that means you’re planning to spend $83,000 per home. Can you build a home in Australia for $83,000?
COLLINS: Well, that’s obviously the Commonwealth’s contribution. As I said, it’s about leveraging other investments from other tiers of government, it’s about leveraging investments from community housing providers and it’s about leveraging institutional investment into social and affordable housing. What we want to do is create social and affordable housing as investment asset classes in Australia. What we want to do is get more homes on the ground more quickly. And the whole point of the fund, and the way we’ve designed it this way, is so that it’s there in perpetuity with returns each and every year providing long term investments and long term certainty for investors and indeed for community housing providers.
FERGUSON: When will the first home be built?
COLLINS: Well, that will depend on how fast we get the fund through the Parliament. We, of course, already have homes on the ground, going on the ground today from the $575 million that we unlocked last year out of the Jobs and Skills Summit. And, of course, we’ve got our National Housing Accord, which starts on 1 July 2024.
FERGUSON: I beg your pardon, in relation to this particular fund. Assuming that you do get it through, when would the first home be built?
COLLINS: Well, it’ll take a little while for those returns to come through. So, the sooner we can get the fund through, the sooner we can get homes on the ground. These types of plans and projects take quite a while to get off the ground, so as soon as the bill is passed we need Housing Australia to be going out there, working with all of the providers, working with the sector so that we have concrete plans, so as soon as the money is able to flow we have houses going under construction straight away.
FERGUSON: And just briefly how long do you think that will take?
COLLINS: Well, it will take a few months to get the returns from the fund. We anticipate probably in the first twelve months we’d get a return. But as I said, it’s just part of our broader housing policy and we already have homes going on the ground today because we unlocked that $575 million immediately late last year.
FERGUSON: Now you need the support of the Greens to pass the bill. They made a concession last week. How close are you to a deal?
COLLINS: We’re of course talking to parliamentarians right across the Parliament. When we got the bill through the House of Representatives, we got support of the majority of the crossbench – indeed, all of the crossbench except the Greens – and we even had one Liberal member cross the floor and support the bill. I think people know that we need to get homes on the ground. We have a serious supply issue in Australia today. We need to get more homes on the ground more quickly, but we need to do it in a responsible way, working with the construction sector and working with community housing providers, and that’s what we want to do. And we’re busy talking to people right across the Parliament. We got a letter with eight concerns by the crossbench in the Senate. We have addressed all of those eight concerns, and we’re continuing to have discussions in good faith across the Parliament.
FERGUSON: Now, Labor’s signature housing policy is, as you describe it, an aspirational target of a million affordable rental homes over five years. What’s the difference between an aspirational target and a real target?
COLLINS: Well, what we’re talking about there is from the 1 July 2024 under the National Housing Accord, which was part of our first budget – the October budget last year – is working with particularly local government and states and territories about what reforms can we do on the ground, working with them. Because they obviously have a lot of the levers, particularly when it comes to planning reforms, to be able to make sure that we have more steady construction in Australia. What we need is less stop start construction across, particularly for residential homes. What we need is consistent supply being added to each yea,r and what we want to do is work with the sector and with the industry. What we don’t want to see is what we’ve got in the construction sector today Sarah, where we’ve got a lot of companies in the construction sector struggling and where we’ve had capacity for the last few years. We know that dwelling approvals are off. We know that capacity will start to increase, and we’ll be able to get more construction underway in the second half of this year. What we want to do is work with the sector to make sure that we get the timing right. What we want to see is steady growth over time of the construction sector.
FERGUSON: But just to come back to that notion of an aspirational target. Aren’t people entitled to know what you can actually achieve in concrete terms, rather than an aspiration?
COLLINS: Well, that’s why, of course, we’ve got the Supply and Affordability Council. We’ve set up an interim council. What the Supply and Affordability Council will do is look at that and work out with us, and with the reforms that the states and territories and local governments will do, about what is achievable. We need to have some ambition. What we’ve heard from experts is that our policy is ambitious, but it’s absolutely deliverable if we all work hard and we all work together. No tier of government is going to solve this alone. What we’ve got here is we’re trying to turn around a ship that’s been heading in the wrong direction for more than a decade. It’s not going to happen overnight, but we’re determined to make it happen. What we want to do is to make sure that we have a steady flow of housing across Australia and we increase supply.
FERGUSON: Just to go into the details of this, you’re talking about an aspirational policy to build a very large number of homes – a million affordable rental homes over five years. The government’s committed to 10,000, the states will build 10,000. That means that 980,000 are going to be coming from private investment or superannuation funds. Is this a target that is grounded in reality?
COLLINS: We’re really serious about making sure that we can achieve this target. We want to make sure that we have a steady supply of homes across Australia. We have seen Australia build 200,000 dwellings in a year. What we’re talking about is dwellings in total. We’re talking about right across the spectrum. We’re talking about social housing, affordable housing and private housing.
FERGUSON: But let’s just talk about this, because for this plan to succeed you need to build 200,000 homes a year. And the housing industry is clearly warning that both higher interest rates and rising costs have crushed the pipeline for new homes. So, the question is, what is the government’s contingency plan if the industry can’t deliver the numbers that you want?
COLLINS: Well, we’re obviously working with them to deliver this. What we want to see is this turned around. As I said, no tier of government is going to be able to do this alone. We’re working with other tiers of government. We’re working with sector-
FERGUSON: I’m sorry to interrupt, but I think you just said that. I want you to bring you to this question. What is your contingency plan? Because the industry is saying that they cannot deliver 200,000 homes a year, but you maintain the aspirational target is meaningful. How are you going to build the number of homes you need to meet that target?
COLLINS: Well, what we’re going to do is we’re going to work to change some of the planning reforms around the country. We’re bringing together planning ministers in the second half of this year. What we’re going to do is work with them, and work with the states and territories and with local government, to get more homes on the ground as quickly as we can.
FERGUSON: But just to go back to what the industry is saying, because they’ve delivered this advice to you, that the pipeline for new houses is crushed, that they cannot deliver 200,000 houses a year. So, I just want to come back to the question about what your contingency plan is when the industry says they don’t have the supplies or the workforce to do it.
COLLINS: Well, we’ve got a range of measures right across government, Sarah too. I mean, we’ve got fee free TAFE to get more staff skilled up. We’re dealing with skilled migration to get more staff, skilled staff. We’re dealing with supply chain issues. We’ve also got our National Reconstruction Fund to deal with some of the supply chain issues. We’re working right across government, right across the board. What we want to do is we want to meet what is an ambitious target. We’re working with the sector and we want to get as close to that target as we possibly can.
FERGUSON: But you accept that you may not meet that target, but you want to get as close to it as you can.
COLLINS: That’s why we’ve referred it to the Supply and Affordability Council about what changes can we make, what things can we do on the ground really quickly that will make a change to where we are today.
FERGUSON: Julie Collins thank you very much indeed for joining us.
COLLINS: Thank you, Sarah.