Labor’s rank and file demand housing towers remain in public hands

3 months ago 23

The Victorian Labor Party membership has issued an edict to the Allan government against selling any public land as it knocks down and rebuilds Melbourne’s mid-century housing commission towers.

Debate over how to best to redevelop the high-rise sites will shift from the weekend’s Labor state conference to federal Treasurer Jim Chalmers’ Economic Reform Roundtable in two weeks’ time, where housing advocates will push for tax changes to stimulate government investment in public housing.

The state conference on Sunday passed a resolution calling on the Victorian government to retain public ownership of all land across the housing commission tower sites and lobby Canberra to create a GST exemption for materials and services used to build and maintain public housing.

Resident Awatif Taha outside one of the Racecourse Road, Flemington, towers.

The proposed tax reform, which would also extend Commonwealth Rent Assistance to public housing tenants, is intended to arrest a 30-year-slide in the supply of public housing stock, which is being replaced by community housing where not-for-profit landlords can charge higher rents.

Labor for Housing advocacy group co-convenor Julijana Todorovic said state governments, including in Victoria, needed to build more public housing alongside community housing, and were pressing for the tax changes to remove what she described as a “public housing penalty”.

“The reality is because of federal government taxation settings, it is far more economical for state governments to build community housing than it is public housing,” she told the conference.

“The federal government is penalising public housing tenants and their provider, the state, purely for being public. We say this is wrong.”

Victorian Minister for Housing and Building Harriet Shing, speaking to this masthead on the sidelines of the conference, confirmed that tax arrangements for both forms of social housing were part of ongoing discussions with Canberra.

“We are continuously talking to the feds about what the taxation settings are,” Shing said.

“The motion that was put up today was about doing everything we possibly can to make sure that as the tower sites are developed, we are taking care of the needs of people who are most vulnerable and increasing stock and the numbers of homes to the best extent possible.

Protesters rallying outside Parliament House on Saturday oppose demolition of Melbourne’s public housing towers.

“We need both public and community housing within the system of social housing in order to address that unmet need.”

The Victorian government’s plan to demolish and redevelop Melbourne’s 44 housing commission towers by 2051, announced by former premier Daniel Andrews in his final days in the job, has led to emotive debate between the Labor Party, the Greens and social housing advocates.

At two Carlton sites where demolition has already begun, red brick towers will be replaced entirely by public housing, with 16 per cent more dwellings. At the next two sites slated for demolition in North Melbourne and Flemington, land will be leased for 40 years to private, not-for-profit consortia to develop and manage community housing projects.

The shift from public to community housing will lead to a more than doubling of the number of dwellings available but has been condemned by some public housing advocates. The Greens oppose the change in social housing model and question the need to demolish rather than retrofit existing towers.

Yarra City Council Mayor Stephen Jolly, in inflammatory remarks last month to a parliamentary inquiry into the housing tower plan, likened the scheme to ethnic cleansing.

Todorovic, a Slater and Gordon lawyer and former Young Labor president, said debate needed to move past a “false dichotomy” of public versus community housing and that tax reform was essential to encourage state governments to invest in both.

Labor for Housing has argued for changes to the GST and abolition of the capital gains exemption for property investments in a submission to the Chalmers roundtable.

Under current GST arrangements, materials and services used for community housing are exempt because of the charitable status of not-for-profit providers. This makes community housing, on average, 10 per cent cheaper to build and maintain than public housing.

While rent for public housing tenants is set at 25 per cent of their income, they don’t quality for Commonwealth Rent Assistance. Community housing tenants are usually charged between 25 and 30 per cent of their income and can receive rent assistance.

Shing said she remained convinced that demolition and redevelopment would deliver the best outcome for people who rely on social housing.

“It is very easy to cling to the model that was delivered between 50 and 70 years ago, but that does a disservice to the importance of having a home that is beautiful and secure and energy efficient,” she said.

The resolution passed by the state conference commended the government for keeping the Carlton, North Melbourne and Flemington sites in public ownership and expressed concerns that it had not provided an assurance about the remaining 40 sites.

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