Address to Northern Territory Property Council and Residential Development Council

Check on delivery

Good afternoon everyone.

I would like to begin by acknowledging the traditional owners of this land, the Larrakia people, and pay my respects to their Elders, both past and present.

At this time of the year it is a particular pleasure to escape Canberra’s winter chill and visit the Top End.

Many Australian cities are defined by a single event which remains stamped into all our memories.

For Sydney, it was the completion of the Harbour Bridge; for Brisbane the great flood of 1974.

But no city except Darwin can lay claim to two such momentous events, both of which devastated buildings and housing alike.

Darwin’s story is a tale of three cities.

First, there was Darwin before its 1942 bombing. It is a city most of us now know well thanks to Nicole Kidman in Baz Lurhmann’s latest film Australia.

Darwin Mark Two, after the War, was mostly a Government town.

The other Canberra they used to call it.

Cyclone Tracy brought that to an end, and ushered in Darwin Mark Three.

Two disasters have defined Darwin and what is significant for a Minister with my portfolio is the constant focus on housing.

In his autobiography, Sitdown Up North, former NT Administrator, Ted Egan recalls his introduction to Darwin housing in 1949 as a group of overcrowded ex-military huts still bordered with a huge barbed wire fence. ¹

St Mary’s cathedral now stands on the site.

As late as 1957 the Darwin Housewives Association was lobbying Canberra about the plight of families living in camps, in the Wet, without a proper roof over their heads. ²

Shortage of housing was the same after Cyclone Tracy, of course.

But the situation was addressed more quickly with Government and the private sector working together.

I hope we can harness that collaborative spirit again, as we deal with the global financial crisis that has impacted on us all and as  the Northern Territory once more faces a housing shortage.

The housing shortage is serious, both in remote communities with an unacceptable level of overcrowding, and here in Darwin and Palmerston as developments like Inpex put greater pressure on local housing.

My challenge today is to convince you to usher in Darwin Mark 4 – – by taking up the opportunities offered by the Rudd Government’s housing initiatives.  

Global Financial Crisis

There is no doubting times are tough.

We are currently facing the greatest global downturn in most of our life times.

The Australian Government has acted firmly and decisively, with measures that have far reaching impacts on your industries.

Our $42 billion Nation Building Economic Stimulus Plan is a strategy to support jobs now by building the social and economic infrastructure Australia needs for tomorrow.

Housing and construction accounts for almost 9 per cent of employment in Australia.

That’s why housing has featured so strongly in our response to the economic crisis.

First Home Owners Boost

The Rudd Government’s First Home Owners Boost is already injecting funds and life into local construction and trades industries.

The take up of this incentive has been overwhelming.

As at May this year, 809 households had taken advantage of the Boost in the Territory.

This is a fantastic result, enabling a new group of young Territorians to buy their first home and achieve the Australian dream.

In February we announced that $6.4 billion will be spent to build 20,000 new social housing dwellings nationally and repair up to 60,000 existing homes.

This is the single largest investment by an Australian government towards social housing and will support an estimated 15,000 jobs.

For the Northern Territory, it means an investment of over $65 million, including $7.1 million over 15 months to build 22 new homes³ under Stage One of the construction program.

More than $4 million is dedicated for repairs and maintenance to 136 social housing dwellings

And more than $54 million for a Stage Two construction program.

We need your help to build and repair these houses, and reach these goals

To date there are many signs that we are on the right track.

Including here in the Territory.

In its Northern Territory State Outlook for March, the Housing Industry Association forecast housing starts to grow by 16 per cent – to 1,215 –  in 2008-09 and by a further 7 per cent in the coming twelve months.

Nationally, the number of home loans for owner-occupiers rose by 2.2 per cent between April and May this year and by 23.5 per cent compared with the same period last year. ⁴

Most importantly construction industry jobs increased by 10,000 in the three months to May this year – that is 10,000 more jobs resulting from decisive government action and our resolve to get on top of the global downturn.

Also in June, the International Monetary Fund upgraded its economic growth forecasts for Australia, noting the downturn has been milder here than in most other countries, due especially to our timely and significant fiscal policy response.

And the latest OECD Economic Outlook showed Australia has the strongest performing economy of all major advanced nations with lower borrowings and lower deficits.

Housing Affordability

Of course even before the global financial crisis Australia had a problem with housing affordability.

The cost of new homes has risen relative to median incomes, partly due to the cost of providing infrastructure up front and inefficiencies in the housing system.

One initiative to tackle this situation is our Housing Affordability Fund.

Some half a million dollars from this Fund has gone into enhancing your Department of Planning and Infrastructure end-to-end Electronic Development Assessment via the Integrated Land Information System.

This is one of the most advanced systems in Australia.

Take a bow Darwin.

And the NT has recently been successful in securing $3.6 million through HAF to construct sewerage infrastructure for Johnson.

This will allow savings of $5,000 to be passed on to each of Johnson’s 800 new homeowners.

Rental Affordability and Social Housing

Right across Australia – and especially in growing regions like the Top End – we are not building enough houses.

One result of this of course is a huge pressure on rents.

The Government’s approach to housing policy is to provide builders and the industry with the tools to improve housing affordability.

In addition to our stimulus efforts the Federal Government was already providing additional capital funding for new social housing.

I have just signed an approval to put $2 million of this funding towards the Northern Territory Government’s Bellamack Seniors Village in Palmerston, matching the equivalent amount we allocated last year.

This is a great local project.

Forty four independent living units will provide homes for seniors waiting for this kind of accommodation.

It will free up underutilised homes for families on current public housing waiting lists as well as giving much need shelter and security to older Territorians

The Bellamack development is likely to repeat the success of the seniors’ villages at Fannie Bay and Coconut Grove.

National Rental Affordability Scheme

One of the new ideas we have brought to the housing sector is the National Rental Affordability Scheme.

This Scheme will see the Federal and Territory governments working hand-in-hand to help you provide affordable rental housing.

The Australian Government, in partnership with the Northern Territory Government, will provide over $8,000 in incentives each year for 10 years to build a new rental property, and lease it at 20%  below market rates to a low income household.

Importantly NRAS properties are open to key workers – such as new apprentices and people working in retail or hospitality – who often have trouble finding affordable accommodation close to work.

Nationally, this will create 50,000 brand new homes for Australians on low to moderate incomes.

Over the next four years the Government is investing $1 billion in the Scheme.

We need your help to get this Scheme to build affordable rental properties in the Northern Territory underway.

We have had incredibly strong interest in Round Two of NRAS – with applications for 28,000 incentives nationally.

I understand that we have received our first applications from the Territory.

I will be announcing the outcomes of the funding round in the coming months.

So watch this space.

The Government hopes that builders and developers will make use of the NRAS as they plan developments.

Down south, builders are forming partnerships with community organisations to manage properties and using NRAS as a form of presales over a proportion of new developments.

Given the current difficulties with getting finance, this a big opportunity for developers.

Conclusion

So, the Scheme is an excellent opportunity for your industry to work with the Federal and Territory Government to boost building activity in the Territory.

I encourage all of you here today to get involved in this Scheme and help the Territory build new affordable rental housing.

If I can leave you with a snapshot of the housing situation, you can see why housing is such an important part of the Government’s Nation Building Stimulus Plan.

The Government is well aware of the critical undersupply of housing, hence we are actively funding initiatives that will improve our housing stock, create more homes and stimulate the economy.

In the Territory, there is an estimated undersupply of more than 1100 dwellings.⁵

With the help of the National Rental Affordability Scheme, the Housing Affordability Fund and the Government’s commitment to repairing existing social housing stock, we are addressing this undersupply.

Housing affordability is an issue.

The median price for homes has increased in most areas in the Territory.

The median house price increased by more than five per cent in the first quarter of 2009 compared to the last quarter of 2008.

On the rental front, affordability in the Territory has decreased.

The proportion of family income needed to meet rent payments is 29 per cent compared to the national average of 25 per cent.

At $530 a week Darwin has the highest median rent for a three-bedroom home in the country.

The vacancy rate for rental properties in Darwin was only 1.8 per cent in the recent March quarter, only Sydney and Melbourne are worse.

This indicates a strong demand for rental properties.

This is why the Government is creating the opportunities for private investors and construction companies to start building rental properties in the Territory.

I strongly encourage you all to become involved in the Government’s housing investments and work together to create a growing and secure community housing sector.

Thank you for the opportunity to address you today and thank you for listening to how the Australian Government is committed to maintaining a strong industry and a strong economy.

I will welcome hearing your opinions and ideas so Top Enders can reap the benefits of increased community housing, new homes and rental homes as part of this endeavour.

Darwin has always emerged stronger from each crisis.

I have every faith that, with our support, you will do it again this time.

1. Egan, Ted,  Sitdown Up North, Kerr Publishing, Marrickville NSW, 1997.
2. Dewar, Dr Mickey, Darwin – No Place Like Home, Public Lecture, NAA, 2008.
3. Electorate of Lingiari will receive 5 dwellings (at a cost of $2.2 million) and Solomon will receive 17 (at a cost of nearly $5million)
4. ABS, Housing Finance, Australia, May 2009 (cat. no. 5609.0)
5. HIA forecast – 1200 new dwellings completed with underlying requirement of 2300