Troubleshoot a notification in The Australian Financial Reviewthe treasurer said he and the fund managers agreed there was a role for the federal government.
“I’ve had nothing but encouragement from the pension sector when it comes to our efforts to get them interested in solving our housing stock in this country,” he said in Parliament House.
Hampered by tax institutions
“We want to be part of the solution when it comes to pension investment in our national priorities in a way that delivers strong returns for their members.”
Speakers at Monday’s Property Summit said ‘build-to-rent’ – which has grown to half the private rental housing stock in some US cities over the past 30 years – has been hampered by tax authorities in Australia.
Stockland chief executive Tarun Gupta told the Sydney event that build-to-rent to operate commercially and at scale required high rents. Affordable housing required additional government support for the sector.
An industry goal is to reduce the 30 percent withholding tax on the profits of foreign investors in managed mutual funds that own build-to-rent assets. The rate is double the 15 percent imposed on investments in other commercial housing assets such as student housing and hotels.
While the higher interest rate doesn’t directly affect local institutions, it keeps foreign funds out, making the market shallower.
Last month, Dr. Chalmers entered the pension sector to direct some of his massive capital into housing and clean energy investments for nation building.
Speaking with Treasury Secretary Katy Gallagher on Tuesday, he said there was a “huge opportunity” to provide Australians with good, strong returns and retirement income, while also helping big national priorities such as housing and energy transition.
“I have now met a number of funds who are encouraged, if not excited, by the prospect of the Commonwealth government looking to play a role here, within the confines of our budgetary pressures and position,” he said.
“We will work with state governments, local governments, industry and pension funds to address this issue.
“Our economy creates jobs for people, but we don’t create the homes where people can live near where they can work. It’s a big challenge.”
Of Labour’s 20,000 planned social housing units, 4,000 will be allocated to women and children experiencing domestic violence, as well as to older, low-income women at risk of becoming homeless.
An additional 10,000 affordable housing will be allocated to essential workers, including police, nurses and cleaners, to allow them to live closer to their workplace.
A new $10 billion Housing Australia Future Fund is also planned.
dr. Chalmers said he and Housing Minister Julie Collins were encouraged by private sector support for Labor’s plans.
Prime Minister Anthony Albanese used Labor’s Jobs and Skills Summit to unveil plans to use $575 million from the National Housing Infrastructure Facility to improve the risk-reward ratio in affordable housing projects.