Housing support to help first home buyers to purchase a property will be sent to a vote this week without a deal, meaning it will be shot down unless the Greens or Coalition change their stance.
The latest offer by the Greens to strike a deal has been rejected, though the government had consulted to see whether it could be agreed to as time runs out for legislation to be passed.
The federal government will now call the bluff of the parties, who if they reject the bill will face campaigning at the federal election that they refused housing support.
As the final sitting week of the year closes in — potentially the last before the election — the government is applying pressure to clear its backlog.
“It’s time for this silly charade to end. Australians are in real housing distress here, and the Greens need to stop working with Peter Dutton to delay action,” Housing Minister Clare O’Neil told the ABC.
“The Greens have been playing politics on this for two years now, almost everything the Labor government has tried to do on housing the Greens have either blocked or delayed, or played politics with. The time for that is over.
“You get the distinct impression the Greens want Australians to continue to be in housing distress, so Adam Bandt can try to harvest those grievances into votes. It’s the crassest form of politics there is, straight out of the Peter Dutton playbook.
“I hope that they change their behaviour this week.”
Clare O’Neil accused Max Chandler-Mather and Adam Bandt of playing politics on housing. (ABC News: Chris Gillette)
There are two bills before the Senate intended to add more supports for homebuyers and renters: the Help to Buy program, where the government would cover up to 40 per cent of a home’s purchase price and take equity in the property that could be bought out later; and Build to Rent, which provides tax incentives for developers to build and maintain apartments with units that are rented out below market rate.
The government says Help to Buy would support 40,000 first home buyers and Build to Rent would encourage the development of tens of thousands of new rental homes, releasing pressure in the tight rental market.
Both have been stuck without enough support to pass, and the government’s Help to Buy legislation has already been effectively rejected by the Senate once — and while the Coalition has flatly rejected the proposals, the Greens say they would like a deal.
Greens offer rejected over cost, legality concerns
Last week, Greens housing spokesman Max Chandler-Mather wrote to Housing Minister Clare O’Neil and offered to sit down over the impasse.
The Greens proposed funding the immediate construction of 25,000 “shovel-ready” homes that had not successfully won funding in the first round of the Housing Australia Future Fund (HAFF), and lifting the proportion of affordable units in Build to Rent properties from 10 per cent in each development to 30 per cent, with stricter rent caps.
They also proposed removing requirements for people purchasing through Help to Buy to buy out the government’s share of a home, if after purchasing their income rose above the threshold that makes them eligible for the scheme.
The compromise offer was a significant step down from their initial demands, which included imposing rent caps, building more public housing and winding back negative gearing tax breaks for property investors.
Behind the scenes, some in the sector were hopeful it could break the stalemate, as the government appeared to consider it carefully.
But that offer has been rejected, after advice from Treasury and Housing Australia to government suggested some of the changes could be unlawful, or would in some instances end in funding being committed to homes that were already being built.
The Housing Australia Act prevents the minister from directing loans or grants, meaning an order to immediately fund the construction of 25,000 additional homes through the HAFF could contravene that act.
Treasury and Housing Australia analysis also found it could cost at least $20 billion more over 25 years to directly fund the unsuccessful pitches.
A separate analysis by consultancy firm EY, commissioned by the Property Council, determined tripling the percentage of affordable rentals in each Build to Rent complex would break the business model for developers and result in few properties being built using the scheme.
“These demands were unlawful, unworkable and just another political distraction from the Greens,” Ms O’Neil said.
Parties point fingers at who is holding up housing support
The government has argued that the Greens took a substantially similar idea as Help to Buy to the 2022 election, and so is playing politics on housing.
In the wake of the Queensland election, crossbench senators David Pocock and Jacqui Lambie, as well as several “teal” independent MPs, called on the Greens to support the housing bills and bring some support for Australians.
The Greens have argued their tough negotiating on the Housing Australia Future Fund resulted in an extra $3 billion in funding for affordable housing and they are willing to negotiate on Help to Buy and Build to Rent.
“Labor has a choice this week: hand more power to Dutton by doing deals with the Liberals, or work with the Greens to start tackling this massive housing crisis,” Max Chandler-Mather said.
The government has previously sought to meet with the Coalition to discuss a path forward on its housing legislation, but did not receive a response.
