Call for superannuation funds to invest in affordable housing
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Call for superannuation funds to invest in affordable housing

The trillions of dollars tucked away in superannuation funds should be invested in affordable housing in Australia, a Canberra-based advocacy group says.

ACT Shelter executive officer Travis Gilbert said he was disappointed the Barr government's recent budget did not address the systemic problems driving homelessness in Canberra.

A homeless person sleeps rough outside the ACT Legislative Assembly.

A homeless person sleeps rough outside the ACT Legislative Assembly.Credit:Karleen Minney

The budget allocated an extra $1.23 million this year for frontline homelessness services, $200,000 for supported accommodation for people with mental illness and $250,000 to design a second Common Ground in Dickson.

However Mr Gilbert said there was little in the budget to provide permanent housing for people, and expressed concern the government's new housing strategy has not been released.

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The strategy was due to be released first in December, then April. Now it will be released later this year.

Mr Gilbert said it was also concerning the ACT had not yet signed up for the the National Housing and Homelessness Agreement, with funding to expire at the end of the month.

"We actually think housing is the solution to homelessness. It takes a permanent home to end homelessness, people need somewhere with a permanent tenure," Mr Gilbert said.

"It's concerning when you look at the cost of private rentals here in Canberra at the moment. Pensioners are paying 71 per cent of their income on rent, including rent assistance. That leaves $82 a week for everything else, which is not a lot."

The government did offer a reprieve to first home buyers in the budget, with stamp duty to be waived for those with a combined household income of less than $160,000 from July 1, 2019.

In his budget speech, Chief Minister Andrew Barr also called for the federal government to raise Newstart, although did not specify a dollar amount.

But Mr Gilbert said there were levers the ACT government could pull to entice investors to let their properties out at below-market rent.

"If the ACT government offered concessions like land tax relief, stamp duty relief, or some relief for residential rates for community housing providers and also investors willing to let properties below market rate it could help," Mr Gilbert said.

Mr Gilbert said these incentives could lure superannuation funds to invest in affordable housing in Australia, rather than in the United States and the United Kingdom as they did currently.

"In my conversations with them they say the policy settings in Australia are not right to invest in housing," Mr Gilbert said.

"If they invest in mining or blue chip stocks and shares they might have a return rate of 7 or 8 per cent while the return rate for housing is 4 to 5 per cent.

"They say it's not worth it to invest in affordable housing, but the government could step in to fill the gap. They could do that by not charging land tax or stamp duty."

Mr Gilbert acknowledged as the Commonwealth collected the bulk of the tax, it had a bigger sway in providing more affordable housing.

However he said the ACT government could not abdicate responsibility for problems with housing affordability.

"If a couple working full time on the minimum wage has very little capacity to save for a home deposit, that should be a big concern to government," Mr Gilbert said.

"While the ACT government's shared equity scheme is available for tightly targeted groups, now upwards of one-third of the workforce are not in a position to buy.

"It was always the case that some people couldn't get a loan but we're talking about quite a large number of working people who can't, which I don't think has been the case in previous generations."

Katie Burgess is a reporter for the Canberra Times, covering ACT politics.

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