Treasury modelling that predicts rents would rise by just $2 a week under Labor’s housing plans has come under fire as renters across Australia report increases of up to $100.
Fiery Debate Over Housing Policy
Housing Minister Clare O’Neil defended the government’s controversial budget measures during a heated debate with Nationals Senator Bridget McKenzie on Wednesday morning. O’Neil insisted the changes would have “almost no impact on rents” despite mounting backlash from renters.
Sunrise viewers flooded the text line with stories of soaring rental costs, with some claiming their weekly rent had jumped by as much as $100 since the federal budget announcement.
Minister Acknowledges Broken System
“We’ve got a housing system in this country which is broken and it’s really hurting millions of people around our country,” O’Neil said. “I can be really honest with you and say that governments of all political stripes, Labor and Liberal, have not done enough about this problem over decades and that has changed since our government came to power.”
The government’s housing changes mean that from July next year, new property investors will only be able to access negative gearing concessions on newly built homes, while existing investment properties will retain current arrangements.
“If you have an investment property right now, your negative gearing arrangements remain in place. We are not changing those arrangements,” O’Neil said. “When it comes to the changes that are in the federal budget, there are two things we are doing: we are levelling the playing field for first home buyers and we are building more homes for the country.”
Modelling Under Scrutiny
O’Neil repeatedly pointed to Treasury, Commonwealth Bank and Grattan Institute modelling suggesting rents would rise by only about $2 a week under the reforms. “Overall, the pressure on rents will actually be downwards, that’s because we are building more homes and rental prices are set based on how many rental properties we have and how many people are in the market,” she said.
Despite viewers sharing stories of dramatic rent increases, O’Neil remained adamant the changes would not significantly impact renters. “We’ll see 75,000 rental households today turn into first home owning households because of the changes that we’ve made,” she said.
Opposition Criticises Government
But McKenzie accused the government of ignoring the real-world impact already being felt by renters and warned the modelling would become “another broken promise”. “If you are flooding the market with two million more people wanting a rental property to live in at the lower end of the market, you are putting pressure on the system,” McKenzie said. “Because Labor isn’t taking the tough decisions to slash spending and put downward pressure on inflation like everywhere else in the world, we are going to continue to see these horrific price rises going forward.”
She challenged the government’s reliance on Treasury projections and demanded it release the government modelling. “Experts are also saying, Clare, that rents aren’t going to go up by $2 a week under your government’s plans. They’re going to go up between 3 per cent and 10 per cent,” McKenzie said.
O’Neil stood firm, arguing the government’s broader housing strategy would eventually ease rental pressure by increasing supply and helping more Australians transition from renting into home ownership. “We are the first Australian government in 70 years in this country to have a big comprehensive plan for how we’re dealing with housing,” she said.
