The path to real, affordable housing
CHECK AGAINST DELIVERY
I acknowledge the Traditional Owners of the land on which we meet today and pay my respects to their Elders, past and present.
We are finally here, and thanks everyone for their patience.
AHURI is gaining a bit of reputation in these traps as a harbinger of doom.
The 2011 Brisbane Conference was delayed because of the floods—and we’ve now been delayed because of a cyclone.
I can assure you today that my message isn’t about doom, it’s all about hope.
There is a path to a more secure housing future for all Queenslanders—it will take work but we will get there.
I want to start off though by paying tribute to the thousands of Queenslanders affected by Tropical Cyclone Debbie and her aftermath.
There is a lot said and a lot written about the resilience of people up here, and about the community spirit that we share.
After visiting some of the worst impacted communities—places like Proserpine, Cannonvale and Airlie Beach—I can assure you that isn’t just some cliché.
The way that communities have come together, have looked out for each other and had each other’s backs is inspiring.
Like the man I met who run an excavator company in Airlie and his daughter, who, without prompting or expectation of anything in return, got straight to work on cleaning up the cove to help make it ready for tourists.
They hadn’t emerged unscathed—they and their families were crowded together, eight of them, on a single floor after their home had been rendered unliveable.
They felt they couldn’t sit around and wait—they’d rather be out helping the community to get back on its feet.
And the people in places like Midge Point that were cut off from power, water and sometimes road for days. People like Elona and Kerry.
When I caught up with Kerry, she’d just had her clothing washed for the first time in days thanks to a visit from Orange Sky Laundry.
She said that having clothes on which didn’t smell was such a boost—she felt so much better and more able to keep going with recovery efforts.
But still, Kerry wasn’t concerned about herself, despite her home having been without power and water.
She said, “I’m someone who will speak up, you know? So I’m not worried about me. I’m worried about the people who don’t feel like they can speak up, so I want to make sure they’re all right.”
And I must pay tribute to the work of all of those who swung into action—our emergency services workers, our power crews and my department’s housing and building and asset services crews.
Our housing staff checked in on our high risk and vulnerable tenants—our seniors and people with a disability—both before and after the cyclone, evacuating people where necessary and ensuring people had what they needed.
And our building staff worked diligently to ensure safety and get important public infrastructure back up and running—including making sure every school was open after the holidays.
This included helicoptering in contractors and materials in some of the worst hit areas.
It’s testament to what we can achieve when we work together.
While I was inspecting the damage I was also reminded—once again—that housing is more than just shelter.
A home is so much more than a roof over someone’s head.
This was demonstrated by people in places like Cannonvale, hit hard by Debbie, refusing to move into emergency accommodation.
Refusing to leave their homes unsecured for fear they may lose their possessions, the things they hold dear to them.
Let’s never be fooled into believing that housing policy is simple—it’s not.
And to the untrained eye it’s complex and it’s messy.
Those of us in this room know that’s not necessarily true.
Sure housing is multilayered, it touches and is touched by almost every other policy area government deals with.
It’s a human need, a human service and involves a whole range of human emotions.
It’s vast and it’s interconnected—but its problems are easy to understand if you look hard enough.
The rubber hit the road at the last election when Federal Labor did what was once unthinkable and took on negative gearing and capital gains tax.
In early 2015 John Daley and Danielle Wood from the Grattan Institute wrote in Fairfax that negative gearing “is an untouchable tax policy.”
“Moving to limit negative gearing concessions will not be popular. More than a million taxpayers have structured their affairs to benefit from these concessions.”
And concluded by saying:
“Negative gearing is a sacred cow that should be ritually slaughtered sooner rather than later.”
While not committing to wholesale ritualistic slaughter, Bill Shorten did pick up and run with a well thought out series of reforms around negative gearing and CGT.
And it turned out not to be the act of electoral suicide that pundits predicted.
And the success of Labor’s policy has now dragged the Commonwealth Government to the point where they need to acknowledge the problem of housing affordability.
And this fundamentally puts them in a difficult position.
Real action on housing affordability requires them to turn against their personal and ideological view that housing is primarily about the creation and accumulation of wealth.
The choices we are called to make as policy makers always fall upon two paths.
There’s those that encourage safe, secure and affordable housing for people.
And those that support housing primarily as an investment vehicle.
When he spoke in Melbourne the week before last the Treasurer said he won’t foreshadow what’s in the Federal budget—which is true to form.
His strategy seems to be to throw up a balloon and see which way the wind—and the polls—blows.
It doesn’t inspire confidence that they have any meaningful strategy.
To appropriate Scott Morrison’s language they are taking neither a scalpel nor a sledge hammer to housing affordability.
They seem to be approaching the issue with something more akin to a spatula. Sure we will see some activity, and a few flips along the way, but it’s unlikely to lead to any meaningful change.
Today I will foreshadow the key directions of our strategy that will be released following our budget—and following the federal Budget on May 9.
But before I get to the Queensland approach, it’s important that we work through what we have heard from the Commonwealth.
In his speech Mr Morrison proposed the same old tired prescription for housing affordability.
The same wrong choice that we have been making for generations—unlock new supply, open up more land.
The Commonwealth wants us to double down on a strategy of sprawl that over the last forty years has worked to clog the arteries of our cities.
Trying to combat our housing problems by continuously pushing back the limits of our cities is a path to more social dislocation.
We are reaching the outer limits of growth, and further greenfields development increases resource constraints.
Take the Yarrabilba development in Logan that will be home to another 50,000 people and 20,000 homes.
It’s ten kilometres from the nearest collection of manufacturing and service jobs in Logan Village. There won’t be enough jobs in the immediate area initially to cope with the demand.
So people will commute, and commuting comes with costs in terms of both money and time. And, crucially, productivity.
You cannot build affordable housing on the fringes of our cities. It may offer a cheaper sticker price—though the property pages beg to differ—but the overall costs catch up with you.
Ventures into Greenfield expansion that don’t take into account the costs of increased emissions to our society are also foolhardy.
Sprawl neglects the productivity gains that are to be made by embracing a new 21st century urbanism.
Increasing the supply of new land can’t do it on its own. We don’t have boundless plains any more.
Morrison is on a well-worn path—highlight an issue controlled by states and councils in order to tap-dance around negative gearing and capital gains tax discounts.
It’s a misdirection and it lacks internal logic.
Morrison is at pains to point out that negative gearing is a tool used by professionals like teachers and nurses.
At the same time he has accepted that these same key workers are finding it more difficult to afford to live in the communities in which they serve.
And it’s no surprise we know that only 12 per cent of nurses and 14 per cent of teachers negatively gear. We know that the proportion of people using negative gearing increases as income increases.
In selling his negative gearing message the Treasurer completely leaves out the entry level enrolled nurse who earns $55,000 a year and whose first hour of work each day goes to pay for parking.
By focussing policy on housing primarily as a wealth creation vehicle and maintaining the current distortions through negative gearing and CGT—at a cost of five billion to the budget each year—you embed an unfair advantage for those who already have wealth.
It’s playing out at auctions across the country—first homeowners beaten out by investors buying there third or fourth or eighth property, boosted by favourable tax treatment.
Property sites like Domain now report on Sydney and Melbourne auctions like football matches with headlines such as:
“Seasoned investor with nine other properties beats out families in Leichardt.”
A particular favourite of mine from this genre is a quote from a young couple beaten by an investor in Sydney at an auction in February this year. The report says:
“Thanks Sydney, for destroying our dream of owning a home,” Mr Allison said half-jokingly.
“We’re all part of the puppetry of the overinflated prices in Sydney.”
Last week Bill Shorten released Labor’s housing policy, which addresses some of these distortions head on.
Cracking down on the explosion of residential investment through self-managed super is smart, solid policy.
The use of leveraged SMSF strategies has grown by 850% since 2012.
Once again, this sees those without an asset base crowded out by those with ready access to capital.
This type of speculation has also given the greenlight to boiler-room style wealth creation schemes—feasting off the life savings of unsuspecting mums and dads.
As Building Minister I have seen the results of these dodgy operations much too often.
Unfinished houses. Illegal phoenixing. Fly-by night operations.
People are struggling to pick up the pieces, left without their lifesavings and little more than a dodgy, unfinished home never likely to realise its potential.
If you create a giant honey-pot of easy money you attract the worst types of flies.
In attempting to pull-off his tap-dance routine Morrison has also raised the idea of allowing young people to access their super to fund a deposit on their first home.
The stupidity of this should not be understated.
It’s moving young people to place all of their eggs in the property basket—funnelling them into a forty or fifty year bet on the capital growth of property rather than the compound growth of diversified investment.
And it’s impractical in the first instance.
Association of Super Funds of Australia figures released in 2015 show the median super balance of a 25–30 year old is $10,000, and $9,000 for woman in that cohort.
30–35 year olds don’t place much better, with the median for men at $25,000, and women—as the gender pay gap kicks in—reporting $18,000.
This proposal asks young people to bet the house on their entire savings and then some.
Thankfully, as Morrison attempts his tap-dance Matthias Cormann is acting as the Rogers to his Astaire, pulling off an undoubtedly complicated reversal of his boss’s thought-bubble.
It’s an idea that deserved to be terminated—and I am pleased to see that it has.
The fact that such a proposal was even considered at the highest level of government shows just how out of touch they have become.
What’s more Treasurer talks about slow wage growth as our major economic challenge while at the same time the Government is gleefully allowing a cut to the real wages of millions of Australians.
I don’t think Australians are fooled by this double speak—and I don’t think it’s fooling anyone in this room.
It’s cynical and it’s cruel to cut wages, to cut welfare and to cut health and education funding, to refuse to provide security of funding for housing and homelessness and remote housing and, in the same drawn out breath, cut taxes for the wealthiest businesses in the country.
Its goes beyond cynical, it’s hypocrisy at its most craven.
It’s a well-worn political playbook, and it’s exactly what we have seen from the Treasurer so far.
I have been open about my concerns with funding agreements like NAHA but I reject outright the idea that it has been used like a “one way ATM” in Queensland.
Queensland starts behind the eight-ball in terms of housing, with historically low public housing investment and the added complexity of a decentralised stated and our role in supporting some of the most remote communities.
Yet we consistently punch above our weight, as outlined in the recent National Report on Government Services.
We unashamedly take a hands on approach to housing. We face up to our challenges.
It’s an approach which is paying dividends which will be put at risk if NAHA is to be scrapped or cut.
And while I believe deeply in the need for funding reform across housing—including for remote housing and homelessness—Mr Morrison’s attacks on the states are well wide of the mark.
Its classic blame shifting in order to duck responsibility.
The Treasurer likes to reel off NAHA benchmarks to highlight poor performance—implying that social and public housing exists in its own universe, separated from the challenges inherent in the rest of the market.
Building new social and affordable housing cannot solve housing affordability if significant distortions—such as negative gearing and capital gains discounts—are driving housing stress across the continuum.
What happens at the top and in the middle matters to what happens down the bottom.
The subsidies that we provide to those at the top directly impact homelessness, and rental stress and the inability for working people to own their own home.
Even with its flaws, NAHA keeps over 70,000 households in secure accommodation in this state.
It supports the integrated services that prevent homelessness and help to sustain tenancies.
And it backs our rollling capital program, which at this very moment is worth a modest $130 million across the state.
At the point the Federal Treasurer is floating cuts to NAHA in order to fund a new bond aggregator, there is reasonable justification for people in this room to be concerned.
New financial instruments are fantastic and I fully support new ways of leveraging investment—but they aren’t equivalent to funding housing services.
You cannot approach reform by proposing a complete tear down.
No one here believes you solve the housing crisis by making people homeless.
And homelessness support itself is still facing long term uncertainty over funding for NPAH.
Imagine the outcry if every year our hospitals faced a funding cliff—where surgeries couldn’t be planned outside of the current financial year.
I fail to understand why homelessness is given this treatment.
The problem isn’t going away.
The women and men on the frontlines working with the homeless, the people who go into parks and alleyways, who take the calls in the early hours, need certainty and they need to be able to plan.
The Palaszczuk Government unashamedly takes the position that housing is a human service and that we are a human services provider.
And being a human services provider is about obtaining better outcomes for people.
Taking someone off the streets and housing them. Connecting people with other services to better their welfare.
Effective human service delivery, service delivery done well, is an important economic driver.
Good human services policy is the foundation of a just society and a catalyst for an efficient, inclusive economy.
Medicare gives people access to affordable healthcare, and affordable healthcare gives people the ability to participate in the workforce.
Compulsory superannuation has given people increased retirement security through savings, and those savings are also unleashing investment in infrastructure, renewables and, if I have anything to do with it, affordable housing.
Our task in addressing housing isn’t just about making it easier for people to buy or rent, or getting people off the street or providing homes for the vulnerable—as important as each of these things are.
By getting housing right we supercharge the productivity of our cities. We expand people’s opportunity to take part in the economy, and share in its benefits.
We limit inequality.
Of course the inverse is also true—if we continue to stuff it up we widen the gaps and entrench inequality.
There’s an easy cognitive trap people fall into in assuming that much of housing is outside of our control—that it is somehow governed by mysterious forces.
As I mentioned earlier people’s housing outcomes are always a result of the decisions made by people, be it the Board of the Reserve Bank, Scott Morrison, a local council or policy makers like me.
Our decisions have a real world impact.
And there is scope for real leadership. And while we must manage competing interests that doesn’t discount us from adopting multiple approaches to fill the gap.
The Property Council plan released this week suggests removing the unnecessary costs of building, and there is a lot of scope for leadership from local government on this.
I’ve started some of this work through our Queensland Building Plan consultation, and last year our Government passed the most comprehensive planning reform in a generation.
Safe, secure affordable housing has the ability to lift people up from despair, give them a base to achieve, a chance to participate and belong.
Our strategy is about reforming service delivery so that it is truly person-centred.
It’s also about significantly reforming capital delivery, building the right types of housing, in the right places and at the right scale.
And this requires a significant internal reform program for my Department.
It’s not going to be easy—but we all need to do things differently.
Last week I met with Aboriginal and Torres Strait Islander Mayors, where we set a goal of slashing sixteen weeks out of remote housing delivery timeframes.
This is a significant challenge but it’s a necessary one.
Likewise, Better Neighbourhoods Logan, which I will talk more about in a moment, is a significant shift away from the Department’s traditional capital model.
And these shifts have framed the thinking that I am taking into our state budget preparations and outline what I see as the key framework for real reform.
Last year in Adelaide I spoke about how our system was broken—whether you’re a small homelessness provider or the largest CHP, our current system is not working.
I spoke about how social housing has become the ultimate safety net, one that is too hard for people to climb out of.
I reached a diagnosis that most of you have already reached long ago.
I think we all understand the scale, and significance of what’s ahead of us.
I want to concentrate on the path forward.
The collective challenge that we all face, at every level of government, as civil society and as community organisations, is to unblock the arteries of our housing system.
Our attention must be focused on clearing pathways for people, on creating a genuine opportunity for people to be able to progress through the housing continuum.
It will require significant construction of new housing—but our solutions go beyond bricks and mortar.
The state infrastructure plan sets a target of 10,000 new affordable dwellings needed over the next 15 years.
The work that we are doing with Better Neighbourhoods Logan is working towards that target.
We also need to change how we provide our services and innovate in delivery.
It’s become increasingly clear to me that this work must start by ending the expectation that public housing is a home for life.
There has been a perception that being accepted into public housing is like winning the lottery—that you’re set for life.
I’ve said many times that public housing has transformed into the ultimate safety net—and it’s a net that is either too hard for people to climb out of or that’s comfortable enough for people to choose to stay in.
In any case, by not providing proper avenues to move through the system we are continuing to trap people.
That trap will continue to exist unless we take meaningful action to recreate affordable housing for working people.
We shouldn’t forget that public housing didn’t start off as a safety net—it’s a relatively new role that has developed.
In Queensland we started providing support for working people to buy their own homes back in 1910.
As the depression hit, and working people struggled to manage their repayments to the state, we shifted to providing affordable rental accommodation for working people. It’s this model that we largely still operate today, catering to a much narrower constituency of vulnerable people.
Soldiers returning from war, the resulting population boom and increasing immigration all conspired to significantly increase demand for housing.
Between 1947 and 1971 the nation’s population doubled.
From the mid-thirties there had been a significant contraction in housing construction, exacerbated by the War.
With an exploding population, and a flat-footed construction sector, we took war-time like action to provide housing for working people.
We catered to post war aspiration—it was government playing an active role in securing a better future for working families, playing a role in building better lives.
The problems we face today are of a similar scale to what we faced in the post war years.
Very few of us deliver housing for the working poor anymore at all. Our housing doesn’t facilitate getting ahead—it provides somewhere to languish.
Queensland has both the most targeted social housing system and the highest satisfaction ratings across the country.
This is admirable, it’s something that successive governments and our service delivery staff should feel proud of—we have changed and saved lives.
But our ability to be a safety net is hampered by our own success. There is no way out of our nation leading system.
We are creating a disincentive to achievement and trapping people in our homes.
Consider a single mum, on a parenting payment, living in one of our properties in Coorparoo or Mount Gravatt.
Now what we want this person to do is get a secure job and move into the private rental market—move along the housing continuum.
To rent an apartment in the private market where she lives and not be in housing stress that single parent will have to earn $73,000 a year.
I think we would all agree that it’s implausible to expect someone on $18,000 a year to make a leap to $73,000.
But that’s the expectation inherent in our system.
It’s why the glib “get a better job” line we have heard too often out of Canberra just doesn’t cut it.
People remain stuck in the net because it’s not worth even trying to climb out.
There are around 142,300 low income renters currently experiencing housing stress in Queensland.
We must be honest that there is no genuinely affordable housing product, operating at scale in this country.
NRAS is a short term market discount product, not a product that guarantees actually, genuinely affordable living for working people.
Key to building smart cities is ensuring a diversity in the economy.
We can’t settle for a situation where our key service workers are warehoused in outer suburbs, subjected to the costs of long commutes.
Discounted market rent in West End or Bowen Hills, or Nundah or Mount Gravatt is still unaffordable for most people.
We can’t continue to pretend to talk about housing affordability without having a real definition of what that means.
We can’t continue to settle for “affordable” being confined to the latest development to open on our suburban fringe.
On Wednesday I asked my Ministerial Housing Council to join me in delivering a new definition of affordability, something that is based on people’s real income and real housing costs, rather than a simple discount to the market.
This process needs to look at new eligibility limits, based on incomes that are coupled with a new package of subsidies for affordable housing.
Only with a robust definition of affordable can we have real a framework that creates real commercial viability for non-profits to grow affordable housing.
And the need to tackle affordability takes on more seriousness, with 700,000 Australians set for a pay cut on 1 July.
While we haven’t seen affordable housing at any real scale, there are promising signs.
BHC have had success with some of their offerings, these offerings haven’t yet been scaled. As a shareholding Minister I am very keen to see this potential fully realised.
It’s time to return our focus to supply affordable housing, not simply providing a safety net.
And in my view, community housing providers are best placed to drive this development, but it can only work if subsidised and financed in the right way.
We cannot unblock the system if we continue—as government and the community housing sector—to focus on the same clientele.
There are limits to simply replicating safety net housing for vulnerable people.
You have told me that you can’t make it stack up on a 25% of income model, targeted at the lowest earners.
Providers that I talk to accept that availability of credit isn’t the only barrier.
Security is needed around rent revenues, security that doesn’t exist with community housing simply duplicating the role of a safety net housing provider.
That’s why today I am pleased to announce new funding of $1.8 million for Q-Shelter to work in partnership with my Department to develop a workable model for growing affordable housing across the sector.
And I want this new model to provide a framework for the long-term sustainability of the sector—including the ownership of title of this new affordable housing.
I’m not going to re-prosecute the failure of title transfer to deliver growth across the sector.
Except to highlight this quote in AHURI’s Ready for Growth Report from a finance partner:
“When we [the finance industry] think about the capacity of the sector it’s very much constrained by the cash flow characteristics …
The bottom line is that you can only lend against what the known cash flow is, therefore, that is the constraint…”
For the sector to have notionally grown by $3.2 billion in five years, without significant improvement in balance sheets or cash flows to allow that growth to be leveraged into more housing is a collective failure of policy makers.
I understand that the post 2013 world has sparked a minor existential crisis for the sector.
I want to make sure that the next major investment in affordable housing is predicated on policy settings that don’t lead to further crisis.
That path requires clear roles, clear definitions, a thorough understanding of what the capacity of the sector is and how it can be leveraged and meaningful, achievable and measurable long-term targets.
And the commitment that I give to you today is that if you embark on this change with us, I will work with the sector to leverage our combined growth wherever possible.
As I mentioned before we are changing the way that we deliver new housing through Better Neighbourhoods Logan.
We are also assuming a role as a catalytic investor, creating partnership opportunities and creating a base for those partners to leverage off our investment.
At its core, Better Neighbourhoods Logan is about interacting with people, our tenants and the market differently.
We’ve listened to feedback from the market and designed a streamlined, multilayered process that slashes time and expense from the traditional procurement model.
We have a laser like focus on making sure that what we spend is demonstrating the appropriate yield.
Better Neighbourhood’s Logan accepts that we don’t have all the answers, while positioning the department as a serious economic and commercial actor, working with industry and the sector for a specific purpose.
We aren’t taking the easy option of privatisation and transfer, getting properties off our books and devolving the responsibility we have to provide homes and housing services.
Neither are we taking the old school approach of throwing up some estates, with the best of intentions but without much thought of future needs of the city.
And while we are changing the way we interact with the market, this is coupled with changing the way we interact with people.
In partnership with BHC and Churches of Christ we have run a research project with our tenants in Logan about housing options.
As a long standing area of public housing we have a significant number of seniors living in homes that, looking at the data we wouldn’t consider suitable for their needs.
Across the city there are approximately 650 seniors that under the definitions would be considered as ‘under-occupying” homes, and through the research we know that around 240 of those seniors would consider transitioning to housing that better meets their needs.
We know this, because we’ve asked people.
One of my predecessors in the previous Government approached tenant engagement by writing a form letter to elderly tenants suggesting that they may need to move or share their homes with others.
It’s telling that this approach was still being talked about during the research, with one elderly tenant saying:
“I was terrified of being forced out when the Housing Minister announce a few years ago tenants would be moved out if the home was ‘not suitable for their needs’.”
It’s an important reminder that a house is different from a home—and everything that we do needs to take into account the connection that people have with their home, and the connection they have in their community.
So, as we embark on our $1 billion, twenty year pipeline of development in Logan I am determined to ensure that we never forget that we are working for real people, who deserve dignity and deserve respect.
It’s a dual pronged program of change—changing the way we deliver homes and making sure that everything we do is focussed on people.
So the Queensland approach, which will be announced following our budget, will be comprehensive.
It will be ambitious and targeted.
And as I said at the start of the consultation, it will provide a pathway for safe, secure and affordable housing for every Queenslander.
And for me that starts with young people.
We have significant power to transform the lives of young people for the better, and I want to play a video that demonstrates this power.
In each of these three cases its secure housing that has been a catalyst for achievement.
That’s why today I am pleased to announce we will be building three new youth shelters, based off this model.
This type of supported accommodation provides young people, people between 16 and 25 years old, a pathway to security and independence.
It’s a pathway to jobs and training.
And for many young people, particularly those who are leaving the foster care system, this tailored support will be the first time they have been given the tools to tread their own path.
And scaffolding this economic independence and participation will be a key theme of the strategy we release.
It will focus on building connections in our community, ensuring that the most vulnerable community members are supported.
I am also determined to ensure that we build a responsive housing system that is fair, a system that we can all have confidence in.
And of course we need to grow the number of affordable homes available to Queenslanders, a shared responsibility that I am determined to see through.
A lot of hard work has led us to this point—and Queensland is now weeks away from having the most comprehensive ten year housing plan in the country.
Your contributions to this plan have been invaluable.
What I have found over the last twelve months is a broad understanding that things need to change—that allowing the status quo to continue will only widen the housing gap in Queensland.
If we embrace change together—focus on the things that matter, the housing needs of all Queenslanders—I have no doubt that our state will lead the nation in housing outcomes.
I look forward to embarking on this journey with you, together.
Keynote address given by Hon Mick de Brenni MP at the Australian Housing and Urban Research Institute Housing and Homelessness Solutions Conference, 28 April 2017