Give states $16bn in return for nationwide rent freeze, says Adam Bandt

Greens leader Adam Bandt is urging the Albanese government to allocate an additional $16 billion to the states for affordable housing, contingent on a promise to freeze all residential rents for a two-year period. Bandt's proposal aims to save $4.7 billion over ten years by ending tax breaks for property investors and reinvesting the funds into affordable housing while also doubling rent assistance.

Amid a 10% increase in rents over the past year, tenants have experienced an average additional expense of $52 per week, amounting to $2,727 per year, due to a shortage of rental properties. The Greens' plan, as cost by the Parliamentary Budget Office, outlines $69.4 billion in spending over ten years. This includes doubling rent assistance ($43.6 billion), establishing a fund to incentivize states to freeze rents ($16 billion), and constructing 225,000 publicly-owned rental properties ($9.8 billion).

The proposed rent freeze fund would increase the annual $1.6 billion given to states under the national housing affordability agreement, subject to the condition that rents remain frozen for two years and are limited in their increases thereafter.

The Parliamentary Budget Office estimates that immediate abolition of the 50% capital gains discount for individuals on assets held for over 12 months and a phased-out removal of negative gearing for individuals with more than one investment property bought before 1 July 2023 over five years could save $74.1 billion over a decade.

The Greens also advocate amending the housing Australia future fund bill to ensure $5 billion of spending on social and affordable housing, a significant increase from the current limit of $500 million.

Notably, the Labor party has not proposed any changes to capital gains tax and negative gearing since its defeat in the 2019 election, during which it pledged to reduce tax concessions.

The economic inclusion advisory committee has also recommended an enhancement to rent assistance, which is currently under consideration for the upcoming May budget.