The Greens will go to the next election promising to scrap tax handouts and invest billions of dollars for a public property developer to build homes to plug critical housing gaps for renters and first-home buyers.
Against a backdrop of a housing battle with Labor over the government’s shared equity scheme, and a looming supply shortfall, the party’s housing spokesman Max Chandler-Mather will use a National Press Club address on Wednesday to announce a plan for the next government to build homes and sell and rent them for below-market prices to help renters and first-home buyers.
Mr Chandler-Mather will say the Australian government cannot, and should not, continue to rely on private developers to tackle the housing crisis.
Under the plan, a public property developer, which would sit under a revived federal department of housing, would build 360,000 “good quality” homes over the next five years and sell and rent them for a big discount.
Based on costings by the Parliamentary Budget Office, the average renter using the program would save $5200 a year on rent, and the average first-home buyer purchasing one of the homes would save $260,000 compared with average market prices.
Under the plan, the developer would sell the homes at just more than the cost of construction to any first-home buyer, while rents would be capped at 25 per cent of household income.
Thirty per cent of the homes would be available to purchase and the other 70 per cent would be dedicated rentals, under the Greens’ plan, with 20 per cent of the rental stock dedicated for the bottom 20 per cent of owners.
Properties purchased by first-home buyers could only be sold back to the government at cost price plus CPI.
Mr Chandler-Mather will say the plan was a return to the way governments used to build homes for people.
“Relying on private developers to tackle the housing crisis is like relying on Coles and Woolworths not to rip you off. They helped create the crisis in the first place and have no interest in fixing it,” he will say.
“For decades now the government has left the supply of housing to private developers, and they have catastrophically failed, making massive profits while driving up the cost of housing by deliberately restricting supply, sitting on vacant homes and blocks of land approved for development.
“Normally, a private developer pockets a big profit, but the public developer would put that profit back in the pockets of renters and first-home buyers in the form of lower house prices and rents.”
According to costings, the underlying cost to the budget over the decade would be $27.9bn.
Comparatively, the federal government spent $27bn in rental deductions for property investors this year alone.
Already, the Greens have the balance of power in the Senate, and after picking up two more seats in the House of Representatives in the 2022 election, they believe they have a chance of pushing Labor into minority government in the next election – due by May 2025.
The announcement comes as the Greens and Labor remain deadlocked in a war over the government’s Help to Buy scheme, which would give 40,000 first-home buyers over four years the ability to co-purchase a home with the government.
The Greens say the scheme is an unfair “lottery” that will drive up house prices – a point countered by economists and the government – and want the government to instead wind back negative gearing and scrap capital gains tax concessions.
Prime Minister Anthony Albanese has indicated the government won’t be held to ransom over its last major piece of housing policy before the next election
In his address on Wednesday, Mr Chandler-Mather will chastise Mr Albanese and his government for planning to tackle the housing crisis solely by relying on “profit hungry developers to build expensive homes no one can afford”.
“Labor’s plan … is to give billions of dollars in tax handouts to property investors, which deny millions of renters the chance to buy a home,” he will say.
“This plan would transform the lives of millions of people, whether it’s the single mum who is sleeping in her car or the young couple who have given up on the dream of ever owning a home.”
