Event: Denita Wawn interview with Hamish Macdonald, RN Breakfast
Date: Monday, 19 June 2023, 8.08 am AEST
Speakers: Hamish Macdonald, host RN Breakfast; Denita Wawn, CEO Master Builders Australia
Topics: Social Housing Accelerator; Housing Accord
Hamish Macdonald, host RN Breakfast: The Albanese Government has announced a one-off $2 billion investment to deliver thousands of new social homes across Australia. The Social Housing Accelerator payment as it’s called will be given to state and territory governments within the next two weeks. But the building and construction industry is already, as we know it, facing significant challenges including rising costs of materials, regulatory hurdles, labour shortages, all the rest of it. So, where does that leave that funding? Joining us now from parliament house in Canberra is Denita Wawn the CEO of Master Builders Australia. Good morning to you.
Denita Wawn, chief executive Master Builders of Australia: Good morning, Hamish.
Hamish: $2 billion. What does this buy us? What do you get?
Denita: It buys us a lot of social housing that we desperately need around the country. It’s incredibly important that we resolve the social housing crisis which is a part of the puzzle of the bigger housing crisis around this country. It also gives some opportunity for our industry to have some forward sales. Sales are dwindling madly because of those inflationary pressures, because of rate rises, and we were looking for government to step up and assist in trying to smooth out some of the bumps that are along the way for our industry. So, for us, it’s a win-win situation. Particularly for those that are looking at homelessness at the moment.
Hamish: When we say a lot social housing. What are we talking? What sort of numbers?
Denita: Well, it’s going to depend a little bit on the type of housing that the state and territory governments look at and certainly looking at ensuring that we get best bang for our taxpayers’ buck and also making sure that we maximise the opportunities to house as many people as possible. So, wouldn’t hazard a guess at this stage but we know that $2 billion can go a long way if it is utilised well. And I think that the interesting thing is then how do we then also bring in the institutional investors to assist as partners in this process as well so we can ensure that there is more money into the sector.
Hamish: But, I mean, this is $2 billion of taxpayers’ funding for everyone listening at home this morning. Isn’t that sort of response, if that’s what it is, a little vague?
Denita: Not really. We’ve known and there’s a group called the National Affordable Housing Alliance that we needed a minimum $20 billion put into social and community housing in this country to simply meet the here and now needs of our community. There has been a significant underspend in social and affordable housing over the last 10, if not 20, years. And as such, there was a desperate need for governments at all levels to step up. This is just one piece of that puzzle to ensure that we meet those desperately needed social houses to ensure that we are looking after our community.
Hamish: Given all the pressures on the building sector generally like supply chain issues, like labour shortages, the cost even of what supplies are available, how confident are you that builders can meet the sorts of targets that might be laid out with projects like this?
Denita: Hamish, if you would have asked me that question six, eight months ago, I would have said that it would have been difficult. But things have changed dramatically within that period. We had a massive demand during COVID as people didn’t go overseas, they were not spending money elsewhere, so we had a huge surge in demand for housing. That is falling off significantly to the extent that we look as though we’re going to, we’re forecasting building numbers of about half in the next 12 months than what we’ve done in the last 12 months. So, we will well and truly have capacity by the time this money looks at shovel-ready projects. And as such, we’re not so concerned about capacity. Nevertheless, it is a medium-to-longer-term issue as we address population increases and the housing shortage generally. The industry and governments have got an 18-month window really from our perspective of looking at our capacity, reducing inflation, reducing those interest rates to get private investment back into the housing market, and also to ensure that we have as many skilled people as possible. Because we know there is a big gap in the housing forecast for the next 12 months but it will rise again.
Hamish: A lot of threads to pull together there in what you’re talking about. But when you hear governments across the board acknowledging, talking about the housing supply shortage and the need to address housing affordability whether it’s buying or renting, do you think that rhetoric matches the decisions being taken by government to increase immigration given how many people will be arriving in the country?
Denita: Well Hamish, we know and our industry is but one of many industries around the country desperately needing skilled workers. So, we’re in a catch-22 situation that we need more people, particularly skilled workers, in this country to meet the shortages we have as an economy. But equally, we need to work out the housing crisis so we can house not only Australians but new Australians as well. Master Builders have said for now 10-odd years that the housing crisis has been as a consequence predominantly of supply constraints which are the purview of the state and territory governments. And that’s why we commend the Albanese Government with the Housing Accord that is focused on those supply constraints to look at greater land access for development, to look at reducing developer charges, and most importantly, to look at flexibility in zoning and planning around our country. And I think importantly…
Hamish: Slow down, respectfully, slow down if you could. The stuff that you’re listing off there can lead to bad outcomes can’t it, in terms of development?
Denita: It can, Hamish, and that’s why I think it’s really important that the government brought together the state and territory governments as well as local government through the Housing Accord to try and resolve these things sensibly in a proper, orderly process. And we know things are happening behind the scenes at the moment to ensure that exists. That is something we have been calling out for the last five years, that there is a collaborative approach between all levels of government with industry to resolve some of these impediments to ensure that we don’t have situations where there is development that is not sustainable. We need sustainable, resilient housing in our country throughout both the cities and the regions and it’s got to be done in a constructive way and politics put aside.
Hamish: When you list off all of those things that you want changes on or want movement on, is the single biggest one land release? Is that the key detail here if Australia is to address the affordability of housing?
Denita: Hamish, we’re really looking at how. We’re looking at planning impediments and planning impediments from a broad perspective is zoning. It’s about what we can build and where. It’s about greenfields as well as brownfields developments. And it’s also about costs of development. We know that there is massive demand for housing. We also know that there is private investment both institutions as well as individuals wanting to build but simply the numbers at the moment don’t stack up in terms to implement those opportunities. So, you know, for example, the NSW Government the other day announced a change in planning where by in a medium, high rise density building you can get an additional four levels if it’s for community housing as a mixed development. We applaud those types of initiatives as a way to resolve some of the issues that we’re facing at the moment.
Hamish: Denita Wawn, thank you very much.
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