Thu, 15th May 2008

Rental affordability scheme is typical Labor - long on spin, short on detail

Michael Keenan MP
Shadow Assistant Treasurer, Superannuation and Corporate Governance

At a time when housing affordability has put many Australian families in crisis, the Government’s scheme is an administrative nightmare.

Shadow Assistant Treasurer, Michael Keenan MP, is today calling on the Labor Government to revise its National Rental Affordability Scheme, which he said in its current form is “a complicated mess that could drive up rents for Australian families”.

Mr Keenan said Labor’s rental affordability scheme will be unworkable and will not succeed.

The rent must be 20 per cent less than the market rate throughout a minimum 10 year period that the dwelling is rented out.

And note that the concessions offered are available only for new dwellings.

“This is a valuers’ dream. It won’t help Australians struggling to find affordable rental accommodation, it will only serve to line the pockets of developers,” Mr Keenan said.

“I would very seriously question this scheme’s viability. While the Commonwealth has overall management responsibility for the scheme and the national legislative design, the states will determine the process for setting the rent and refer possible tenants to the scheme.”

He added: “The scheme, as it is now, will be an administrative nightmare – it simply won’t work.”

Mr Keenan added that the proposed initiatives to lift the number of low-rent housing over the short and medium term must be accompanied by major long-term reforms that addressed the key underlying causes of house price inflation.

“The Government needs to get this right in order to help people struggling in the rental market and create a true incentive for investors. However, once again, we have a lot of Labor spin and a poorly designed program that will do nothing for Australian families.”