The Greens have split a Government bill to ensure greater scrutiny of Labor's plan for Build to Rent tax breaks and regulation of Buy Now, Pay Later schemes.
A Greens motion in the Senate today means the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 will be divided into two separate bills which will both be considered by the Economics Committee.
There is little evidence that Build to Rent will do anything to increase rental affordability. This is because property developers aim to maximise profits and in Build to Rent properties that means ensuring rents continue to rise. Mirvac has boasted about charging rents 15 -20% above market rent on their build to rent projects. This form of gentrification drives up rents for everyone in the area. In Melbourne, a Build to Rent development saw tenants evicted and then the apartments relisted with a rent hike of $185 per week.
The current 'build to rent' plan will see developers able to access tax concessions from the government if they build private rental apartments where 90% can be completely unaffordable, while the other 10% have to meet a weak definition of affordability. The bill stipulates that the lease period for the private rentals must be 3 years, but includes no provisions to cap rent increases or provide protections against unfair evictions.
The bill currently stipulates only 50 of the apartments must be available to rent, which means a developer could sit on hundreds of vacant apartments while collecting the government tax handouts.
The legislation currently has a requirement that 10% of the apartments are "affordable". However, "affordable" is defined in the legislation as 74.9% of market rent, with income thresholds to follow in regulation. With the price of rents so high, for many even the 10% of "affordable" apartments will be unaffordable.
Noting these concerns and the Senate inquiry process underway, the Greens have split the Bill and will seek to negotiate with the government in return for support in the Senate. With the Greens key negotiating asks to be announced in due course.
As stated by Greens Economic Justice Spokesperson Senator Nick McKim:
"By splitting the bill, we can give each part the attention it needs, especially the controversial Build to Rent tax breaks."
"It will also mean we can make sure the regulation of BNPL is as robust as it needs to be."
As stated by Greens Housing Spokesperson Max Chandler-Mather MP:
"The Greens will be announcing our demands on this bill in due course, but right now Labor's plan boils down to giving tax handouts to property developers to build apartments almost no one will be able to afford, with no protections against unlimited rent increases.
"What this bill proves is if Labor wanted it could impose rent caps on any developer receiving the tax handouts, but instead has chosen to allow developers to jack up the rent by as much as they want.
"Once again Labor is tinkering around the edges and announcing a policy that makes it look like they are doing something for renters, when in reality it is just a plan to give property developers more tax handouts.
"Under this plan a developer could pocket government tax handouts, then jack up the rent by hundreds of dollars, evict tenants, and sit on hundreds of vacant apartments in an effort to further drive up market rent.
"Tax handouts for property investors and developers helped create the housing crisis in the first place, so it is genuinely extraordinary that Labor is now proposing to give more tax handouts to property developers.
"If Labor wanted to help renters they would coordinate a nationwide freeze and cap on rent increases, phase out the tax handouts for property investors denying millions of renters the chance to buy a home, and have the government start building rent capped apartments available to any renter that needs one.
"The Greens have a fully costed policy for a public property developer that would build 610,000 good quality homes for rent and purchase at prices people can actually afford. This would be a far better use of public money than more tax handouts for private property developers."
