00:00 Look, there's no doubt that the construction industry is facing a number of challenges
00:05 on a few different fronts now to get more housing built.
00:09 I suppose the key thing with the HAF is that what it does is create a sustainable funding
00:13 stream for community housing providers so that then they can provide the subsidised
00:17 housing with certainty going forward, knowing that that subsidy is going to be funded in
00:22 perpetuity.
00:23 So, in that way, that's how it supports the construction of 30,000 homes.
00:27 I think it's important also to consider the broader context here, which is that 30,000
00:31 is essentially wrapped up in the bigger national cabinet target of 1.2 million well-located
00:36 homes over five years.
00:38 So, the construction industry has a much bigger task ahead of it than just the 30,000 dwellings
00:44 supported by the Housing Australia Future Front.
00:47 The number of challenges, the supply chain constraints are real.
00:51 They peaked during COVID and they're working their way through now and there's not a whole
00:54 lot that can be done about that in the short term.
00:57 There's also maybe some financing issues for some developers with the RBA raising interest
01:02 rates that increases the cost of capital for the development sector.
01:06 Now, there's not a whole lot you can do about that either because the RBA is raising rates
01:10 to try to tackle inflation.
01:11 So, it doesn't make a whole lot of sense to ask the RBA to hit pause so that developers
01:16 can get cheaper financing.
01:19 One thing that can be done there is that state governments can use their own state development
01:23 programs in a sort of counter-cyclical way to help balance out the construction cycle.
01:29 Probably the most interesting or the most relevant one is on the labour shortages front.
01:35 There's a big battle for skilled workers in the construction industry at the moment.
01:38 It's not just housing, it also is in infrastructure.
01:42 We've had a lot of—there's a lot in the infrastructure pipeline.
01:44 We've actually seen some state governments put pause on some major infrastructure projects,
01:50 probably in no small part because they're going to find it hard to get the workers.
01:54 Brisbane's building a lot of infrastructure for the Olympics.
01:57 There's also a lot of construction going on in the renewable energy sector as well.
02:03 One thing to note is that we are talking a longer-term target here.
02:07 So, if there's demand for the labour in these sectors, wages will rise and that should hopefully
02:12 attract more people to these jobs over time.
02:16 One thing that can be done in the shorter term is that we have a part of our migration
02:20 system notionally there to plug temporary skill shortages, temporary skilled visas.
02:26 Like we did in the mining boom, mining companies needed a lot of workers really quick to build
02:30 mines.
02:31 We brought in a lot of skilled construction workers on temporary visas.
02:35 That's one avenue that can be pursued in the construction sector as well.
02:39 And could some of this new housing for some of the most vulnerable Australians come in
02:44 the form of acquisitions of existing apartments to speed this process up?
02:50 Yeah, that's definitely right.
02:52 And that's something that Graham has written about before.
02:57 Every new house that adds to supply ultimately increases affordability for everyone because
03:02 the more houses there are, the less scarce that housing is, then the lower rents and
03:07 prices would be than would otherwise be the case.
03:10 But one thing we can do, particularly given we've got such a smaller and scarletic stock
03:15 of social housing, there's not a flow of houses for people who are vulnerable and at risk
03:19 of homelessness to move into.
03:21 One thing that state governments can do immediately is buy up existing stock and then just turn
03:26 that into public housing.
03:28 And that can be done really quickly.
03:30 And that is a really quick and easy way to boost the social housing stock.
03:34 But is there existing stock available?
03:36 Well, volumes are low at the moment because prices have been as interest rates have gone
03:42 up, prices have flatlined or trended down in some areas.
03:46 And typically volume in the housing market dries up when prices when there's uncertainty
03:51 about prices.
03:53 But there's still a healthy amount of houses being traded.
03:56 And state governments have deep pockets.
03:59 So there's nothing stopping them on the existing volume being traded in the market right now,
04:03 stepping in and making bids for properties.
04:05 Yeah.
04:06 And so what do you think of the policy overall?
04:09 I think the Housing Australia Future Fund is a really good policy.
04:12 Now, probably one of the main criticisms was that, you know, the way that the Greens were
04:17 negotiating in the Senate was this doesn't solve our broader housing problems.
04:21 Now, that's a fair criticism.
04:23 What I might say in return is that it's not designed to solve all our housing problems.
04:27 It's designed to be a piece of the puzzle in what is actually a complicated and multifaceted
04:32 problem.
04:33 It's the biggest investment in social housing that we've had in about 15 years since the
04:37 GFC stimulus under the Rudd government.
04:40 So in that sense, it's quite a substantial investment in social housing.
04:44 And I think the key thing about it is that by setting it up as a fund and then promising
04:51 the returns of those funds as a funding stream to community housing providers over the next
04:55 15 years, it gives certainty that the funding is going to be there.
04:59 A lot of community housing providers will point to the difficulty in getting new projects
05:04 off the ground, not knowing if the funding is going to dry up in one, two, three, four,
05:08 five years time.
05:09 So by providing that certainty, I think it gives community housing providers the confidence
05:13 they need to go ahead and build the new social housing stock.
05:16 [BLANK_AUDIO]
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