The Housing Minister believes Labor can deliver the 30-thousand new homes as part of Labor's housing bill which looks set to pass parliament. But the construction sector is facing worker shortages and supply chain constraints which could make the target difficult to reach.
Category
📺
TVTranscript
00:00 Look, there's no doubt that the construction industry is facing a number of challenges
00:05 on a few different fronts now to get more housing built.
00:09 I suppose the key thing with the HAF is that what it does is create a sustainable funding
00:13 stream for community housing providers so that then they can provide the subsidised
00:17 housing with certainty going forward, knowing that that subsidy is going to be funded in
00:22 perpetuity.
00:23 So, in that way, that's how it supports the construction of 30,000 homes.
00:27 I think it's important also to consider the broader context here, which is that 30,000
00:31 is essentially wrapped up in the bigger national cabinet target of 1.2 million well-located
00:36 homes over five years.
00:38 So, the construction industry has a much bigger task ahead of it than just the 30,000 dwellings
00:44 supported by the Housing Australia Future Front.
00:47 The number of challenges, the supply chain constraints are real.
00:51 They peaked during COVID and they're working their way through now and there's not a whole
00:54 lot that can be done about that in the short term.
00:57 There's also maybe some financing issues for some developers with the RBA raising interest
01:02 rates that increases the cost of capital for the development sector.
01:06 Now, there's not a whole lot you can do about that either because the RBA is raising rates
01:10 to try to tackle inflation.
01:11 So, it doesn't make a whole lot of sense to ask the RBA to hit pause so that developers
01:16 can get cheaper financing.
01:19 One thing that can be done there is that state governments can use their own state development
01:23 programs in a sort of counter-cyclical way to help balance out the construction cycle.
01:29 Probably the most interesting or the most relevant one is on the labour shortages front.
01:35 There's a big battle for skilled workers in the construction industry at the moment.
01:38 It's not just housing, it also is in infrastructure.
01:42 We've had a lot of—there's a lot in the infrastructure pipeline.
01:44 We've actually seen some state governments put pause on some major infrastructure projects,
01:50 probably in no small part because they're going to find it hard to get the workers.
01:54 Brisbane's building a lot of infrastructure for the Olympics.
01:57 There's also a lot of construction going on in the renewable energy sector as well.
02:03 One thing to note is that we are talking a longer-term target here.
02:07 So, if there's demand for the labour in these sectors, wages will rise and that should hopefully
02:12 attract more people to these jobs over time.
02:16 One thing that can be done in the shorter term is that we have a part of our migration
02:20 system notionally there to plug temporary skill shortages, temporary skilled visas.
02:26 Like we did in the mining boom, mining companies needed a lot of workers really quick to build
02:30 mines.
02:31 We brought in a lot of skilled construction workers on temporary visas.
02:35 That's one avenue that can be pursued in the construction sector as well.
02:39 And could some of this new housing for some of the most vulnerable Australians come in
02:44 the form of acquisitions of existing apartments to speed this process up?
02:50 Yeah, that's definitely right.
02:52 And that's something that Graham has written about before.
02:57 Every new house that adds to supply ultimately increases affordability for everyone because
03:02 the more houses there are, the less scarce that housing is, then the lower rents and
03:07 prices would be than would otherwise be the case.
03:10 But one thing we can do, particularly given we've got such a smaller and scarletic stock
03:15 of social housing, there's not a flow of houses for people who are vulnerable and at risk
03:19 of homelessness to move into.
03:21 One thing that state governments can do immediately is buy up existing stock and then just turn
03:26 that into public housing.
03:28 And that can be done really quickly.
03:30 And that is a really quick and easy way to boost the social housing stock.
03:34 But is there existing stock available?
03:36 Well, volumes are low at the moment because prices have been as interest rates have gone
03:42 up, prices have flatlined or trended down in some areas.
03:46 And typically volume in the housing market dries up when prices when there's uncertainty
03:51 about prices.
03:53 But there's still a healthy amount of houses being traded.
03:56 And state governments have deep pockets.
03:59 So there's nothing stopping them on the existing volume being traded in the market right now,
04:03 stepping in and making bids for properties.
04:05 Yeah.
04:06 And so what do you think of the policy overall?
04:09 I think the Housing Australia Future Fund is a really good policy.
04:12 Now, probably one of the main criticisms was that, you know, the way that the Greens were
04:17 negotiating in the Senate was this doesn't solve our broader housing problems.
04:21 Now, that's a fair criticism.
04:23 What I might say in return is that it's not designed to solve all our housing problems.
04:27 It's designed to be a piece of the puzzle in what is actually a complicated and multifaceted
04:32 problem.
04:33 It's the biggest investment in social housing that we've had in about 15 years since the
04:37 GFC stimulus under the Rudd government.
04:40 So in that sense, it's quite a substantial investment in social housing.
04:44 And I think the key thing about it is that by setting it up as a fund and then promising
04:51 the returns of those funds as a funding stream to community housing providers over the next
04:55 15 years, it gives certainty that the funding is going to be there.
04:59 A lot of community housing providers will point to the difficulty in getting new projects
05:04 off the ground, not knowing if the funding is going to dry up in one, two, three, four,
05:08 five years time.
05:09 So by providing that certainty, I think it gives community housing providers the confidence
05:13 they need to go ahead and build the new social housing stock.
05:16 [BLANK_AUDIO]