Social housing tax plan axed

SOUTH BARWON MP Darren Cheeseman has accused opponents of his government’s recently ditched plan to introduce a social housing tax of spreading lies about the reform.

The Andrews Government announced in mid-February it would introduce a 1.75 per cent levy on new builds in greater Geelong in order to raise funds for social housing, but received concerted pushback from the property sector, councils and state opposition.

“This is a nasty, unfair tax … it needs to go,” Shadow Treasurer David Davis said in response to the announcement.

By March 1 the government had ditched the plan, saying it was off the table for good.

The Social and Affordable Housing Contribution (SAHC) was expected to annually raise around $800 million that would in turn fund an average 1,700 new social and affordable homes a year.

The Property Council claims the levy would have seen median house price rises of $11,725 in Armstrong Creek and $9,362 in Wyndham in Melbourne’s west.

“This package would have delivered massive benefits for the development sector while ensuring a modest and reasonable contribution was returned to social and affordable housing for Victorians,” Mr Cheeseman said.

“Unfortunately, certain people sought to mislead the community and spread lies about this reform.

“We won’t create super profits for a sector that will not share a portion of the profits with Victorians.”

The Andrews government claims to have been working closely with the property development sector for some time on a package of reforms that were intended to slash approval times for projects.

In exchange the government sought to impose a levy that it said would ensure some of the extra profit that would be made as a result of the reforms would be returned to the community through affordable and low-cost housing.

The reforms would also have exempted social housing properties from paying council rates from mid next year, a move that “concerned and disappointed” City of Greater Geelong deputy mayor Trent Sullivan.

“The council has recognised the need for an increase in social and affordable housing in Greater Geelong, and has just started public feedback on a proposal to turn over three parcels of council-owned land – worth a combined $3.6 million – for this purpose,” he said.

“The government, through its legislation, is effectively transferring its responsibility for funding a state initiative onto some (but not all) Victorian ratepayers.”

“We firmly believe this initiative should be funded from Victorian Government revenue.”

Both the City of Greater Geelong (COGG) and the state government recognise that there is a vast and growing shortage of social housing in the region and state.

“We’ll focus on delivering our unprecedented $5.3 billion Big Housing Build – delivering 12,000 social homes to Victorians in need,” Mr Cheeseman said, although it’s not entirely clear how a decision to axe a key fundraising levy will impact on this plan.

COGG’s Social Housing Plan similarly contains an aim to increase affordable housing in the region by 12,000 properties over the next 20 years, yet it is similarly opaque on exactly how it expects to achieve this goal given it’s four times the current amount of stock in the region and 10,000 households are already in need.