LOOK AT HOMELINK, MR HOWARD

Queensland Housing Minister Robert Schwarten today welcomed Prime Minister John Howard’s indications that he is examining ways of helping renters in the private market.

“It’s great to see John Howard expressing some interest in the woes of the private rental market,” Mr Schwarten said.

“But he needs to be careful that he does not repeat his failed policies of the past.”

Mr Schwarten said any plan to introduce rent relief subsidies would not address the underlying problems and would instead line the pockets of landlords.

“The Howard Government currently spends around $500 million a year in Queensland on rental assistance but it is clear that this investment is not addressing Australia’s housing crisis,” Mr Schwarten said.

“The private rental market, which the Federal Government has relied upon in the belief that it would solve everyone’s housing needs, is now in a state of collapse.

“Rents have skyrocketed, tenants are bidding for properties and even those people on a good wage are struggling to afford the price being asked for rental accommodation.

“Consider how difficult it is for low income earners. And even if they are fortunate enough to qualify for $70 maximum rent assistance from the Federal Government, they have to first find a place to rent, and then scrape together the extra $200 every week to keep a roof over their heads.

Mr Schwarten said figures released by the Residential Tenancies Authority showed that rent in Queensland had increased by almost 50% on average in the past five years.

“Throwing more money at the situation, by way of a rent subsidy, is not going to help the situation; it will instead result in pushing the rents being asked even higher,” he said.

“I agree with the biggest apartment owner in Australia, developer Harry Triguboff who said in The Australian newspaper (22/02) that rent relief would just mean higher rents as the subsidy would be absorbed by landlords.

Mr Schwarten said the money would be better spent building more affordable accommodation.

He again urged the Federal Government to consider his bold new proposal – Homelink – to boost the supply of affordable housing in Australia by linking government housing assistance and private property investors.

“I developed Homelink in March last year and initially got a positive response from the Federal Government but since then have heard little” he said.

“Under Homelink, 1000 private rental units would be provided for $31 million compared to the $370 million capital investment if government was to provide it alone.”

The Homelink model is based on the following principals:

• The Federal Government pays 10 years rent assistance up front to the investor and this upfront payment is not subject in income tax;
• State Government provide a grant of $6,000 tax free to the investor as well as free tenancy management services;
• Local Governments provide a 25% discount on general rates
• Tenants living in a Homelink property will not receive rent assistance as it will be paid directly to the investor.

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