Wednesday, 15 May 2024

Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023

Second reading

Debate resumed on motion of Aiv Puglielli:

That the bill be now read a second time.

Samantha RATNAM (Northern Metropolitan) (14:36): I am pleased to continue my contribution some months after we began debate on this important bill and to add to what I have remarked on previously. The reason we must talk about how we can better support renters is because the housing crisis in Victoria and indeed right across Australia just continues to worsen, and parliaments like these and governments like the one in Victoria are just not doing enough to support the thousands, if not millions, of people who are struggling to keep a roof over their heads.

Since we began debate on this bill some months ago, rents have continued to skyrocket. In the past year there has been an average rental increase of almost 14 per cent across Victoria, and that is on top of the increase of over 11 per cent from the year before that. The areas that have been hit the hardest are those with a higher proportion of low-income earners, which means the most vulnerable are hurting the most. For renters there is no end or relief in sight. The rental vacancy rate remains at around 1 per cent in Victoria, and as our housing stock grows at a snail’s pace, driving up rent prices even further, more and more people are being priced out of even the private rental market. Lease renewals bring huge anxiety for renters. For many it is not a question of if there will be a rent increase but of how much. Will it be so much that they have to cut back on other essentials, or will it be so much that they have to move to another place altogether? Moving comes with its own sets of challenges. A tight rental market means few options to choose from and severe competition with everyone else who is looking, not to mention the hundreds – sometimes thousands – of dollars it costs to move house.

Renters are struggling in ways we have not seen in our lifetime. We are hearing about people skipping meals so that they can keep a roof over their heads, about food banks being attended by people who have never sought this kind of help before and about families with small children being expelled from their homes by colossal rent increases and having to live in tents or in cars. The public housing waitlist is already at over 120,000 people and growing, and these people have no hope of finding somewhere to stay as we move into a cold winter. Under these conditions it is unconscionable to leave the rental market to regulate itself. The rent freeze should have happened a long time ago, before things started to deteriorate and hurt so many people. Research by Better Renting tells us that if a rent freeze had been implemented in March of last year, a household in Melbourne would have saved well over $2537 by now. If this policy was implemented across the country, the savings to renters would be $5.3 billion over the next year. These figures are the difference between food on the table and going hungry for some families. For others it is the difference between a roof over their heads and sleeping rough.

We are urging the government to freeze rents without delay. This is a measure that will provide relief for renters – not at some distant point in the future, but right now when it is needed most. Rent controls are not a new idea; they have been adopted by many governments across the world, including Scotland, Germany, Denmark and China. Even the ACT right here in Australia has rent caps that are linked to inflation. Contrary to the current economic orthodoxy on rent controls, these jurisdictions have not had a sudden drop in rental property supply, nor have their property markets collapsed. The research which espouses these fearmongering views about rent controls is brought to you by the property lobby, the development industry and conservative media. The government needs to stop ignoring the evidence that is before us and ignoring the struggle of renters. We cannot keep treating property as primarily a financial asset and housing as an afterthought. Labor’s current housing policy fails to recognise the urgent need to shift the balance of power between landlords, real estate agents and tenants. This is why we have proposed this bill and we have also been fighting for other reforms like a 90-day cap on short-stay accommodation such as Airbnb so that more homes can be made available to those in need at prices they can afford.

We are putting forward real solutions to this rental crisis. We are putting these ideas on the table. Ignoring the crisis or tinkering around the edges will not make it go away. The government has several tools at its disposal to make things better for renters right now and protect those most at risk of homelessness. Labor cannot wait any longer. We need a rent freeze now.

Sheena WATT (Northern Metropolitan) (14:41): I rise to speak on the bill before us, the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023, brought to us by Mr Puglielli, a member for North-Eastern Metropolitan. I am keen to get up here and make a contribution on this. Mr Puglielli in his second-reading speech, which I think I was here for some of and some of which I watched in the office, I recall, made assurances that the proposal around rent freezes and caps is not a Greens thought bubble. Look, I have got to say as someone who has lived much of my life renting, I get it – frankly I just get it. Ask any group of people my age or younger, and they will fill your ears with horror stories about the lines at housing inspections, the torturous application forms, the seemingly unjustifiable rent hikes, the black mould. I understand it, and I have seen it all. I understand the struggle to meet rent, the fights with managing agents to secure the most minor of repairs, the fights over the bond – oh, gosh, I could tell you some stories about that. The list just goes on. Even worse, I have got to say and renters would say, it is understanding your rights and securing clear and timely relief from authorities such as Consumer Affairs Victoria and VCAT. I get it.

But a bill to freeze rent and clumsily put caps on rent increases is not the answer. I would say and agree with that member for North-Eastern Metro that it is not even a thought bubble. In fact I was thinking about academics and researchers and what they are saying. Yes, I am very familiar with the work of Better Renting, but I went to associate professor at Deakin Business School Ameeta Jain. She had a piece recently in the Conversation,in June, where she talked about rental caps. She said:

While freezing rents would appear to be a simple method to increase rental housing affordability, the unintended consequences of any such move will have a long-term negative impact on the total availability of rental housing stock, reducing the quality of housing and increasing a black market in rental housing.

Global experience suggests that improving supply, by easing building restrictions and scrapping red tape for new developments, is likely to be a more effective policy tool in Australia. Local councils and state governments need to simplify and expedite the process for approving new developments at the same time as reducing taxes on rental properties, both during construction and later.

It is clear that Victoria deserves a much more comprehensive approach to rental affordability, renters rights and security for all Victorians, and to that end, instead of proposing a rent-and-cap scheme that has been proved time and time again not to work, the Allan government is focused on increasing housing supply and strengthening our tenant protections. We believe that everyone deserves access to a safe, secure and affordable home, whether they own it or not.

Victoria already boasts the strongest rental protections in the country, yet this government acknowledges that there is more to be done to ensure fair treatment for renters today. I am going to go over the 130 reforms – not all of the 130, but the ones that I hear time and time again are so strongly supported by tenants in our state. Of course they were added to by the housing statement that came through in, I believe, September last year. We are advancing protections for renters by restricting rent increases between successive fixed-term rental agreements, banning rental bidding and safeguarding renters’ personal information. I have got to tell you, the amount of information that some of these real estate agents want about you is obscene, so I am very happy to see that safeguarding of renters’ personal information; I can only imagine what happens if that all gets out. We are extending notice periods for rent increases and vacating to 90 days. There is enforced mandatory training and licensing for industry professionals, like agents and property managers, alongside the introduction of stricter penalties for law-breaking agents and sellers. Let me tell you, members of our LGBTI community are not happy about having to hide who they are just to get a rental, so I think some stricter penalties out there for law-breaking agents and sellers is a really good thing. I was most pleased to hear about Rental Dispute Resolution Victoria and that that is being established. But the one that filled me up, I have got to say, is the portable rental bond scheme. That I know will be enormously popular. I have already heard a few folks talk about that with great enthusiasm.

We have delivered on our commitment to a rental stress support package, increasing our initial $2 million commitment to $7.8 million. The package addresses the rising demand for rental assistance across Victoria, complementing our efforts to boost social, affordable and market housing supply. Of course we have got the $5.3 billion Big Housing Build, which is aimed at constructing 800,000 new homes statewide over the next decade, and we firmly believe that the increased supply of homes will drive affordability. It is only a Labor government that would display the courage to build, build and build the homes Victorians will need over the coming decades, and only Labor governments can be relied upon to refine and deliver the protection that tenants want and need.

I have been in this space for a little while now, and I have got to say that this bill before us will do more harm than good. The government will be opposing it, which will be no surprise, I assume, to those behind me. Our government has championed renters’ rights through the introduction of these 130 reforms, allowing more flexibility for renters to modify their homes, eliminating no-cause evictions and removing barriers to pet ownership. We have also introduced minimum standards to ensure safer, more energy-efficient rental properties, and Consumer Affairs Victoria actively investigates landlords who breach these standards, with stringent penalties for egregious or systemic violations. I think it is important to note that there are some bad players out there, and they are being investigated by Consumer Affairs Victoria. We have bolstered the enforcement, and it is required. We have established a new renting taskforce within CAV tasked with cracking down on misconduct by rental providers and agents, including offences like false advertising and failure to maintain minimum housing standards.

The Allan Labor government is prioritising fair and secure housing for all Victorians, and to achieve that we understand that we need to implement some ongoing training and some licensing requirements for real estate industry professionals to foster some ethical practices and ensure renters’ peace of mind. Under the housing statement we are also imposing tougher penalties for misconduct, including the removal of commissions for underquoting – how good is that? We believe promoting better skills and conduct within the real estate industry will benefit renters and property owners alike.

Rental controls have been spoken about in this bill before us, and I have got to say the Allan Labor government’s housing statement does not propose rent controls. It recognises the adverse long-term effects observed in other cities worldwide. Evidence from places like San Francisco and Stockholm suggest that rental controls reduce housing supply and exacerbate rent inflation, disproportionately affecting vulnerable renters – and that is before I get into the black market rentals that are over there. By way of contrast, can I just say when rental controls in towns such as the Boston metropolitan area were repealed, studies from there showed that the outcome was an increase in rental supply and housing maintenance, importantly. Given Melbourne’s historically low rental vacancy rates and high demand, there is no doubting implementing rent caps without a national framework risks deterring investment in rental housing. Our focus remains on increasing housing supply to alleviate these pressures on renters.

Of course I am also thinking about our regional friends, and the fact is that in regional Victoria, with the housing supply issue, it is pretty tough out there. That is why the announcement of $1 billion in the Regional Housing Fund, delivering 1300 social and affordable housing homes across regional Victoria, is so welcomed. It includes some fast-tracking of projects in flood-affected areas and provides immediate support for people experiencing homelessness. There are of course our collaboration efforts with the federal government, and I was happy to see the federal budget handed down last night, which included some more money for housing. What we are seeing there through collaboration with the Commonwealth is that we are set to deliver 769 homes over five years under the social housing accelerator program, which aims to expand social housing and provide really modern and energy-efficient homes for vulnerable Victorians. I know there in Carlton that the red-brick towers are going to get replaced by something that I am sure is going to be much loved by the community.

The Allan government has a commitment to breaking the cycle of homelessness, because let us also remember that a whole bunch of folks are homeless in Victoria on any given night. I know that we must do more for those communities. We must invest in homelessness prevention support services and specialised housing programs. That is why this year’s budget delivered $196.9 million over five years to break the cycle of homelessness in partnership with the homelessness sector, so I thank them for all their efforts in supporting our community. There is as part of that $196.9 million the establishment of a four-year competitive grants program for homelessness services, funding for Journey to Social Inclusion over four years to address rough sleeping in our community and some very welcomed and dedicated funding to addressing homelessness for First Peoples through self-determining approaches with Aboriginal Housing Victoria in the Victorian Aboriginal Housing and Homelessness Framework. I also know that the homelessness after-hours statewide service will get some funding to help provide access to homelessness services and crisis responses outside of business hours. There is also some targeted support to address young people and women experiencing homelessness. There is Better Health and Housing to support those folks with some really complex housing needs. I have the good fortune of supporting a number of those folks through my electorate office work, particularly those that access our world-class medical services through the inner north and the Parkville precinct.

One thing that I know is particularly needed is the continuation of Pride in Place, a specialised support for LGBTIQA+ Victorians experiencing or at risk of homelessness. There are youth activities, engagements and safe spaces through the Richmond youth hub right there as well in Northern Metro. So this is a pretty significant investment in addition to the existing $300 million to specialist homelessness services, which benefits 100,000 vulnerable Victorians who are at risk of or experiencing homelessness.

There are some things that I want to go over with respect to some of the action or inaction by the local councils in my area when it comes to blocking housing. I know that the City of Darebin in 2017 spearheaded the vote against the construction of new social housing units in Preston, and the Preston renewal project was pretty strongly opposed by some folks at the City of Darebin. Closer to home in my part of the world, the Greens of Merri-bek voted against the redevelopment of the former Gronn Place. I know that the member for Pascoe Vale has visited that development a number of times. It is a fantastic investment, and I am really happy to see that when –

Samantha Ratnam: On a point of order, Acting President, I seek your guidance on the accuracy of the member’s contribution. The member has made an assertion which is factually incorrect, and I ask her to withdraw that comment.

The ACTING PRESIDENT (John Berger): There is no point of order. Ms Watt to continue.

Sheena WATT: I am happy to continue, and I can talk a little bit about Yarra City Council and a rejection there by the Greens party when it came to the social and affordable housing project in Collingwood that would have introduced hundreds of additional homes to the local housing market. I know that the community there were very much calling for it. The benefit for renters and prospective homebuyers in that area certainly is not lost on those of us from that part of the world. There is more to be said and there are more contributions happening, and I cannot say strongly enough that this bill will not address the critical issues affecting our housing and rental markets here in Victoria and indeed in my part of the world in the inner north. That is why I and the government will not be supporting this bill before us today.

Richard WELCH (North-Eastern Metropolitan) (14:55): I am pleased to rise to speak on the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023. At the risk of starting with a cliché, Churchill said that if you are not a socialist at 21 you have no heart and if you are not a conservative by 30 you have no brain. I think that is a fairly accurate way to describe this bill, because its heart is absolutely in the right place. I have absolutely no doubt about the pain our community is feeling at the acute shortage of rental properties, and I fully endorse the desire to do something about it. We in this place are privileged to have a place of leadership in this society, and we are obligated to do something about it when we see suffering, when we see unfairness, when we see the social contract not being fulfilled the way it should be. Most of my life I was a renter as well. I am glad I own a home now, but I was a renter for a very long time of all sorts of different qualities of rental, some of them pretty gross. In my bohemian days I revelled in that – the mattress on the floor and a glass of red wine by the bed.

But there is always a balance between the renters’ rights and the rental providers’ rights. It is a very delicate balance that needs to be maintained, because human nature being what it is, inevitably, if the power balance skews any which way, people take advantage of it, and we know that. We know that rental providers take advantage of their tenants terribly, in some cases in appalling ways, but we also know that tenants do the same, which is just to say human nature will prevail. Our job as lawmakers and regulation and rule setters is to make sure that that balance is fair and equitable to all, and I think that is why probably this bill is right in heart but wrong in practice. Usually in your youth, when you start as a socialist, you start as a good Russian socialist, then you move to the Yugoslavian mixed-market model and then you eventually realise it is all garbage.

Members interjecting.

Richard WELCH: Sorry, what was the interjection? I will take the interjection.

Members interjecting.

Richard WELCH: I do not know what that means. The balance must be right. The problem in this of course is it does not address the problem at heart, because there are simply practical issues with the bill in the capping of rents at 2 per cent. I know there are other provisions, but let us just take the simplest example, capping rent at 2 per cent. Of course the fundamental flaw of that is it assumes all other costs also remain within that 2 per cent, so any other costs of being a rental provider above 2 per cent mean you are actually paying to provide the rental stock.

Obviously we have had numerous examples around the world where a rental cap simply destroys supply. It means either those who are already providing rental assets exit the market, as we are seeing in Melbourne quite overtly right now, or it deters new entrants from coming in and adding new rental stock. Again, we have the lowest levels of new stock being added. It also destroys the incentive of the rental provider to maintain the property, because they are dealing within narrowed margins. They have to then be very judicious in how they maintain those properties, because again they will fall into loss. Of course it destroys the incentive for capital improvement, because if you put your capital into this asset class you are going to get a lower return than putting your capital into another asset class. What that means is people will shift that capital to less productive purposes for the benefit of society and they will move it to productive purposes that are of benefit for themselves. So they will go into other asset classes, and that is writ large with what we are seeing in Melbourne right now. I wish it was otherwise.

I think the other fundamental flaw that we have got in this is the bureaucracy itself to administer it. The proposition to administer it is truly Russian-esque, in that the scale of administration you would need to vet and review every single new lease agreement so that it met and complied with these provisions would put an incredible amount of cost into the system. That cost has got to be passed on somewhere. It would put in an incredible amount of delay, which would exacerbate the time, effort and cost for the rental provider and for the person trying to rent. In that sense it fails in a practical sense as well. When you consider that additional impost in addition to all the other controls and restrictions and taxes that go in conjunction with being a rental provider, it makes, I think, the proposition quite untenable for people wanting to go into that market, wanting to be rental providers. You would have to wonder what the cost of that administration would be and what the extent of delays would be. That can have all sorts of flow-on effects that radiate out from that as well, in a practical sense.

The other question of course is: why do we stop at rent? There are other essentials of life that we should also consider capping the prices of. Should we have not capped energy prices two years ago? We put a hard cap on that as well – and so on and so on. We could cap all the prices in the supermarket – and we are back at being 17 doing HSC and thinking Yugoslavia is a good idea.

It does not fail at heart; I think the desire to address this is right. On the solution, I have different antidotes to the problem. For me the biggest antidote of course is to acknowledge the areas that are priming demand in the first place. We have a high level of immigration. We have a high level of foreign students, who are all welcome, but they do prime it. We have a constricted supply, because we are, again, too interfering in a lot of planning policies. We are not letting people get on with building. We could be building in the regions. We could be making good use of mixed usage and higher densities in a number of suburbs without destroying the amenity of those suburbs. We could be reducing the burden on investment into residential property so that more capital moves that way.

To me a rental cap is a sugar hit. Basic structural economics, as demonstrated time and time again, will provide the supply we need to meet the demand. When that supply comes back into balance and there are more properties for rent than there are renters, then the balance of power between renter and rental provider will come back to a more sane position. In the meantime we have a mess. I agree it is a mess. I agree we need to change it. I agree we need to do something about it. I just do not agree that this is the way to do it. I will conclude my contribution there.

Rachel PAYNE (South-Eastern Metropolitan) (15:04): I rise to make a contribution on the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023 on behalf of Legalise Cannabis Victoria. This bill provides for a freeze of rents at the rate they were on 1 January this year or, if not previously leased, at no more than 10 per cent above the local median rate for a two-year period. With respect to rent caps, this bill caps rent increases at 2 per cent every two years and links rent to the property instead of the tenancy. Importantly, this bill also ends no-grounds evictions at the end of a fixed-term lease and provides powers for tenants wishing to challenge a rate increase.

It is no secret that we are in the middle of a housing crisis. This government’s own housing statement notes that, disturbingly:

… in the last five years, typical rents have gone up by 21 per cent in Melbourne and 40 per cent in regional Victoria.

We also know that there are more renters now than ever before in Australian history. People are being forced to stay in the rental market for longer, with the time it takes a Victorian household to save a deposit almost doubling in the last two decades to 6.2 years. Many face an impossible choice, sacrificing more, often essentials, to keep a roof over their heads. Eventually many become homeless. I know in my region many local government areas have experienced a rapid and sustained increase in homelessness. In Monash we saw that between 2016 and 2021 there was a 101.4 per cent increase in the homelessness rate. In more recent years, data from the Council to Homeless Persons shows that Casey recorded the highest demand for services for those experiencing or at risk of homelessness, and 40 per cent of people considered to be homeless are under 24 years of age. These stats are damning.

As a member of the Legal and Social Issues Committee, the topic of rental affordability is one that I am acutely aware of. The final report for the inquiry into the rental and housing affordability crisis in Victoria acknowledged that numerous organisations and renters supported some type of rental control. The report also highlighted a few concerns about rent controls that I would like to address – namely that there would be a reduced rental supply because it would disincentivise new construction and rental providers would sell rental stock. The elephant in the room of course is that if people sell their investment properties, who buys them? According to the evidence in the report, owner-occupiers. So rental controls lead to increased housing supply for owner-occupiers, allowing renters to potentially buy their first home – how terrible. Appalling!

The position of this government is that a rent cap would take rental properties off the market, discouraging investment in housing stock and transferring property to owner-occupiers. What we saw from their housing statement was a privatisation of public housing and a reliance on industry to drive the creation of more social and affordable housing. This critique relies on the assumption that housing must be an investment – that we must rely on the private market to give people a roof over their heads. Housing should not be treated as a commodity, it should be treated as a human right. We cannot continue to rely solely on a supply-and-demand argument. We have never had more homes per head of population in Australia than we do right now. One million homes in Australia sit empty every night. This is not simply a supply issue, it is an issue that speaks to the very nature of what we allow as a society. The business of housing, the business of a roof over your head, the business of your right to a safe and secure home – that is the road we are going down in Victoria. I do not know about you, but to me that is terrifying. This crisis is urgent. Housing is a major driver of inequality, and the current policy framework is a bandaid to wider issues. We have an opportunity here in Victoria to stand up and say that everyone deserves a home. Let us take this opportunity and get serious about tackling the rental crisis.

Michael GALEA (South-Eastern Metropolitan) (15:09): I also rise to speak on the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023. Across Australia we are experiencing a housing crisis. A lack of supply, interest rate increases and many other factors are putting additional and huge cost-of-living pressures across all Victorians, across all Australians and across people in my community of the south-east. Instances of rental stress and mortgage stress have risen. It has become a lot harder for all people to enter the housing market, and I know that has been the case for far too many of my constituents. We do have some severe issues in our housing market, and as a member of the Legal and Social Issues Committee I too have had the opportunity to dive into this issue quite a bit deeper in recent times. There are a lot of things I could say about this bill, but I think, to cut to the chase, the main thing I would say is: if I thought that this bill would achieve what it sets out to do, if I thought that this bill would have a positive impact on the housing crisis that we are seeing, I would support it. But it does not, so I do not.

Despite the best efforts of my Greens colleagues on that inquiry to paint a picture that rent caps were the way forward, the evidence that we saw in that inquiry was actually quite to the contrary, and I will dive into some examples briefly if I have the time. We also saw of course in that inquiry some green shoots – one of those green shoots being that Victoria is actually the national leader by quite some margin in fact when it comes to the build-to-rent sector. That is a sector that will continue to be supported by this government as part of Minister Kilkenny’s housing statement, which has recently also been announced. It is one of the many things that we will need to rely on under this extremely ambitious and, dare I say, unprecedented plan to fix the housing crisis in Victoria, to home as many people as we can and to do so in a way that is sustainable.

Referring to the documents motion I spoke on this morning, to do so in a way that is sustainable means putting more development in a sensible fashion in inner- and middle-ring suburbs without leaving the outer suburban areas such as mine to take the full brunt of our population growth. We have many exciting things going on in the south-east, as we do of course in all our growing suburbs across this state, but for too long there has been too much pressure on those growth areas to absorb the population growth for Victoria. Indeed that is the story that has been replicated across the country. My relatives in Perth recently told me, about the suburban growth out there, that their outer suburbs extend to the north and to the south just as far as ours do out to the south-east, and in a city with a population less than half of Melbourne’s, that is quite staggering. Nevertheless that does not take away from the fact that we still have a significant challenge here to address, and I acknowledge the work that Minister Kilkenny has already done and continues to do in this space.

I would also like to take a moment to just touch briefly on the quite significant rental reforms that have also been implemented by the Andrews and Allan Labor governments. There are far too many for me to go into detail, but to put it quickly: restricting rent increases between successive first-term rental agreements; removing incentives for agents to evict tenants to facilitate further rent increases; banning all types of rental bidding; protecting renters’ personal information and standardising the application process for rentals; extending notice of rent increases and notice-to-vacate periods to 90 days; of course a big announcement in establishing Rental Dispute Resolution Victoria, which will enable parties to resolve disputes without having to go through the time-consuming and currently quite delayed VCAT process; and also holding property managers and agents accountable by introducing mandatory training and licensing for industry professionals. There are in fact so many I could continue going on and listing the 130 reforms that this government has made in this space – everything from sensible modifications to rentals right through to allowing renters to keep pets, which is obviously a very commonsense reform that of course our not-so-commonsense friends in the Liberal Party opposed when that came into this place as well.

I will quickly highlight three case examples – where rental caps have been implemented, where they have been tried, they have failed. They failed in San Francisco, where the landlords of rent-controlled properties started selling to owner-occupiers or moving their investments to other types of real estate like condominiums or newer buildings which were not subject to the rent caps. We saw property development shift towards higher-income, harder-to-obtain homes, and rent control raised rents in San Francisco by 5.1 per cent. In New York City we saw a similar thing. Indeed we also saw, in another American jurisdiction in Massachusetts, that when rent caps were repealed in the suburbs of Boston there was an exponential growth in rental supply, once rent control was abolished, and also in housing maintenance as well. We know how important it is – at least those of us on this side of the chamber – that housing should be not just available but habitable, and we have had many other debates on related issues. Unlike others, including the Greens party, we do not think that people should be required to live in substandard living arrangements, even if they are in public or social housing – unlike they do appear to advocate for.

There are a number of reasons to oppose this bill, and I do not have all of the time today to go into them. But this is a government that is getting on with addressing both the direct nitty-gritty issues that are affecting renters in this state but also more substantially addressing those issues, as I say, through the housing statement, and I am very much looking forward to seeing that work continue as well. I do not commend this bill the house.

Trung LUU (Western Metropolitan) (15:15): I rise today to contribute on the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023, also known as the rent freeze and caps bill 2023, which the Greens have proposed. The coalition does not support this bill. We believe that governments should not control rental prices for everyone. This approach does not solve the rental crisis, it makes it worse. Instead we should focus on reducing bureaucracy and delays in land development. By doing this we should increase the number of homes available to support Victorian families, whether they choose to live in an apartment or a house. It is important to make the approvals process faster to expedite the process. We all can agree that rent is reaching a very high level, especially when it is reaching 20 to 30 per cent of people’s income.

It is not just rent. Inflation has been high for the last several years, and everything is more expensive than it was before. People are suffering, especially those on low incomes who are just trying to make ends meet and cannot afford to pay any more than they have to. An increase in rent in some circumstances can cause a real crisis in these people’s lives and for their families. Too often some might have to move out and look for places to live. Some might not find another place to live, whether they have a family or not. We hear of situations where people cannot find a location – a home or just a place to rest their head. Some have stayed in cars, some have stayed in tents and, worse, some have stayed on the street.

Many families are facing significant challenges due to rapid population growth. I will give you an example. In my electorate alone in 2023 over 43,000 new arrivals moved into Rockbank, Mount Cottrell, Fraser Rise and Plumpton, nearly matching the population of Werribee itself. So it is crucial to highlight that the Housing Industry Association has forecast a shortfall of 200,000 homes by 2028. Additional research from the Institute of Public Affairs indicates an even larger shortage with 250,000 homes needed in the coming years. To tackle this issue we need to have an aggressive construction strategy to meet the housing needs for the population growth and to prevent further rent increases. In the 2023–24 financial year alone 49,000 homes were built in Victoria. However, the population in our state is more than three times that level.

When we speak about experiences of rental hardship, I just want to express that I spent my childhood growing up in a rented two-bedroom home at a period when there were nine people – three families – under one roof. I understand the struggle renters go through, and the discussion has given me flashbacks to those times in my childhood – of every sacrifice my parents had to make and things that I missed out on that other kids had. Many of my constituents in Western Metro Region are now facing very similar circumstances, having arrived in this country. So the housing rental crisis is a serious concern not just to us in this chamber but to the whole state and the country. People have the right to live somewhere that is clean and comfortable and feel safe – yes, we agree on that, and we advocate for that. We can turn a house into a home – a place that enables them to live and flourish in life, get to work, raise a family and offer hospitality to their friends.

We know we need to do these things to stop rent going up. However, a different approach is this. When my family was going through this, instead of demanding the government take control, my family focused on trying to get work and trying to own a home. That was our approach. I remember a time we had to travel three states in one year to actually land a job. If that is the approach we want so we earn enough money, we understand the hardship, but you need to own a home. So this bill before us now is trying to fix a problem – which I can reflect on with very similar circumstances that I have gone through – and that is high rents, by going through two things. First, you want to freeze rent for two years at the price that was paid on 1 January 2023. Second, you want to cap increases of rent at 2 per cent every two years. Controlling rental prices in this way is just a temporary fix with short-term benefits, but the problem with this is that it will have negative consequences over the long term for renters. So I will be opposing this bill, and I will explain the negative consequences in relation to the proposal.

In a situation like this, it is a temporary fix. If this bill passes, a fixed price will make it cheaper, which is a temptation for any government during this crisis, but why has the government not avoided temptation? We learned the lesson from history. Price control has been tried many times in many different markets, many different countries and many different situations. While it seems good at first sight, it is usually followed by negative consequences, and I will give you the example of Europe, where rent control had been implemented in various cities. It consistently showed the same result: that rent control does not work. The two main consequences for controlling rent are, first, that it reduces supply and availability of rental houses. As a property owner in this space in our state, average Victorian mums and dads make up 80 per cent, so whoever invests in this dream will exit the market, and it will gradually exceed incomes on a rental income. Secondly, it will lead to a decline in quality of the available homes. Before any investment property is taken off to sell, they will try to compensate and keep up the maintenance repayment. Unfortunately, the result is a decline in quality control and the property you live in will suffer. As a result, those renting will suffer in return. Both of these are bad for renters and landowners.

The first and most negative consequence to rent control is that it will reduce supply, which exactly opposes what we want to do. The price in a free market is determined by the interaction of supply and demand; demand is not something the state can control. It is up to the federal government to determine the level of immigration and population growth, but supply is something the state can help influence: how many houses we can build and how fast we can build them. Supply is determined by property development and a house building prediction in response to effective demand from buyers. All this interacts with incentives set by the state government. When the incentive mix is right, supply is strong relative to demand and rent prices will slowly go down. These are the only effective long-term solutions and strategies that can achieve rental affordability that we want to see, but this bill before us will produce the opposite.

There are many places in Australia to invest. People can invest in public stock, in government bonds and private equity. They can also invest in property. By purchasing a house and letting it out, you are making an investment for yourself and supplying something the market and others want – namely, a home to rent. Property investment is not something that the ultrarich do; mums and dads are the Victorians who invest most in rentals. For many mum-and-dad investors, the majority are not wealthy and have just one or two properties. They make up the majority of investors. For investment to work, we must be able to charge a price to cover the cost to repay the bank and the cost for maintenance. But if capped prices are imposed, the cost will go up, because unaffordability causes the person to sell the goods. Right now housing ownership costs are going up. Interest rates and mortgage payments are going up, council rates are going up, everything is going up with the cost of living we are going through at the moment. Victoria has the highest property tax in Australia, and for that you can always ask those across the chamber why.

If we impose a rent freeze and rent caps while the cost of owning a house goes up, this will leave landlords out of pocket, a point which is a strong incentive for them to sell and offer short-stay accommodation instead. This means a house will go off the market, reducing rental availability. There are those who say, ‘Who will buy them – renters will buy them.’ Well, they may not be in a position to buy. It may cover part of the market, but it does not cover all of the market. Those who suffer the most are those who cannot afford to buy; that is why they rent in the first place.

The long-term consequence is that if this bill passes, the prices are fixed artificially low. Investors will simply stop buying homes to rent, and they will invest in capital elsewhere. When investors stop buying developments and stop buying homes for rent, we know what will happen. A good example of this is from Stanford University. In 2019 in San Francisco the housing market found there was a 15 per cent drop in housing supply after rent controls were introduced. The reduced supply of rental houses was exactly the opposite of what they wanted to achieve overseas.

The second negative consequence of rental controls is the effective ability of the landlord to carry out rental repairs. As I mentioned before, if you reduce the payment, then the landlord cannot cover their maintenance costs. If the Greens’ answer to that is, ‘Well, we will force the landlord to do expensive maintenance,’ then many landlords will respond by taking their homes off the market and selling. Again, this is not what we want to see.

In closing, this is a complex area of policy. Many different participants have many different needs which interact in a complicated way. Trying to intervene in the market with a blunt instrument is behaviour that will not solve this type of housing need. It is misguided and ultimately self-defeating. The fundamental solution for stress in all housing markets is to increase supply, not government control. Only a collection of measures acting together across the housing ecosystem will boost supply and in the long run improve the housing market at all. But a rent freeze and caps will not boost our housing supply, which is why I stand here opposed to this bill.

Katherine COPSEY (Southern Metropolitan) (15:27): I rise today to make a contribution to what has been a really wideranging and illuminating debate on the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023. I am speaking in support of course of this Greens bill to cap and freeze rents while we are all here in the midst of a housing and a rental crisis and a cost-of-living crisis that is biting for so many people across the state. So it is timely that the Council is spending time going into debate on this bill, which puts forward a sensible partial solution to the housing crisis that we all face. In addition to the valuable contributions that have come from across the chamber, my colleagues Dr Ratnam, Mr Puglielli and Dr Mansfield have each spoken to this bill, so it is my pleasure today to also provide some comments in support of the bill and summarise the Greens position on why action to freeze rents and then to cap them is essential as we see the dual cost-of-living crisis and housing crisis crippling so many people across our state.

In short, the function of this bill is that it implements a rent freeze for two years if passed, and it would also ensure that tenants cannot be subjected to unlimited rent rises, which are currently permitted under Victorian Labor – unlimited rent rises that we are experiencing during a housing crisis and a cost-of-living crisis. We are in a time when rents are rising faster than inflation and certainly much faster than wages. We are seeing historically high rates of rent, and that is being compounded by other factors in the economy that mean that household budgets truly are stretched. Unlimited rent increases – we have all heard the stories. We have heard the stories from people in our electorates contacting us in absolute distress about the pressures that unlimited rent increases are putting onto households and individuals. These of course may mean a tenant is unable to actually afford their home, the roof over their head, and they may actually be in direct housing stress and even at risk of homelessness. We have heard contributions – it is horrifying to think that here in Victoria in this day and age we have families living in caravan parks and we have families living out of cars. We must act and explore all the solutions to bring about an end to this situation.

Access to safe and secure housing is one of the most basic human rights. The reality for us in this state is that about a third of our population, a third of Victorians, are renting. For many of these households, far too many, the choice – if there is a choice, if you are able to sustain your housing – that you are facing can literally be between paying your rent and buying food or paying your rent and going to see the doctor to get that visit that you have been putting off, often with the ever-present fear that you are inching closer and closer to homelessness. I have been contacted personally by tenants who are in fear that for reporting just everyday maintenance requests they may face the threat of eviction or homelessness.

The bill seeks to end those notices to vacate that can be issued without cause. This is a situation that exists in Victoria, but it is uncommon actually when we compare ourselves to some other countries in the OECD. The bill seeks to end notices to vacate issued without cause solely for the fact that a fixed-term residential agreement is coming to an end, and we commonly see some landlords issuing that notice to vacate in order to increase the rental asking price once relisting the property. Too many tenants have already suffered under this legislative loophole. Too many people have seen their housing taken away only to see the listing pop up at an inflated price weeks later. The bill seeks to end that loophole. It also seeks then to implement a two-year rent freeze and thereafter limit rental increases to 2 per cent every two years.

Together with ending no-cause notices to vacate, these are actually sensible measures. They do not stop people charging a reasonable rent, but they do put in place some guardrails that will mean that someone’s home is not just thought of purely as someone else’s investment asset. It is timely to note that evicting a tenant for no reason, even at the end of the lease, is already prohibited in many comparable OECD countries. We have heard a lot of contributions from the chamber that this is some wild and crazy idea. These measures work in other jurisdictions, and the inability of this chamber to contemplate a sensible measure put forward in good faith that would alleviate the stress and distress that many tenants across Victoria are facing at the moment is telling. It is telling about the blinkered approach that we are taking to the housing crisis.

The bill also allows for exceptions for certain circumstances, such as for capital improvements. This does mean that works to improve a premises above its existing state, works such as renovations – but not everyday repairs, everyday maintenance or work done to meet minimum standards – would be an allowable reason for a notice to vacate. We have had some contributions saying that this measure would be in effect bringing down the quality or standards of properties for offer for rent in this state. It is simply untrue. The measures for exceptions to allow capital improvements do mean that improvement to stock is possible. We have seen examples in comparable contexts including in France, Germany and parts of the US where rent controls can and do exist with healthy housing markets which work more fairly and in line with the public interest. We see that those are especially functional where they are in combination with strong protections for tenants. We know that we have a lot of catching up to do in this state, especially considering the large proportion of people who are now facing renting as a long-term or indeed lifelong situation.

I do acknowledge the steps that have been taken by the government. We heard Mr Galea outline a number of those in his recent contribution. It is a great start, and it is really good to see the government acknowledge the need that tenants are facing. What I would say while we are in discussion on this bill is we are not done; there is so much more to do. Contemplate this – it is a measure that is working in other nations and in other jurisdictions, and it certainly should not be beyond the ken of our Parliament.

We have seen some new research published recently that puts a figure on how much this sort of rent freeze would have meant to households in Victoria, in Melbourne specifically. The most recent figures established that if we had seen a rent freeze implemented, households could have saved over $2500, which would go a very long way for some household budgets as we are facing this cost-of-living crisis in alleviating some of the pressures that they are dealing with every day.

It is disappointing but not surprising that we have met such resistance when we have a really practical measure that is available to this Parliament. One of the frustrating things is that we are met with derision, with shouting down of the idea and with a blanket refusal to engage with the idea, but we will not be discouraged. We will keep advocating for those residents who are stuck renting or who are in long-term rental accommodation that is their home, and we will try and try until we get through to this government to help them understand that this is within their power. We have a bill before the Parliament that would allow it to proceed, and it would have a real impact now on the day-to-day lives of Victorians – more than many of the other solutions that are important and are being canvassed but, let us be frank, are far in the future. This is something that could make a difference now.

I will turn to some of the contributions that have been made and reflect on some of the ideas that have been put before the chamber throughout this debate. Dr Mansfield told the house that Denmark introduced a new 4 per cent inflation-linked cap after they saw that rents were rising too fast, and here in Australia the ACT links rent caps to inflation and the sky has not fallen in there. Investors continue to enter the market, and even the Real Estate Institute of the Australian Capital Territory has said that rent caps there are functioning fine; it is additional protection in the market for people who rely on rentals to make their home. We actually also have a very recent relevant example here in Victoria. During the pandemic of course, we will recall, the national cabinet coordinated with the full participation of the current government here in Victoria a comprehensive freeze on rents nationwide as a proportionate response to the crisis that faced all Australians at that time. What I would put to you is that the housing crisis is no less severe. The current housing crisis is in many cases more evident than we saw during the pandemic during 2020–21. We acknowledge some of the steps that have been taken, but we would encourage the government to seriously consider and put their minds to, rather than shout down, this idea that has been put before them for a cap and a freeze on rents.

I have had conversations with some in my community, and I have heard some contributions that accuse this of being a political stunt and appealing to a particular demographic. Of course this idea is popular amongst those who rent. Of course people who are renting want to see those unreasonable unlimited rent rises stopped. But I have also had conversations with people who are investors and who are landlords who are supportive of the idea of guardrails and having a reasonable cap and guidance as to what an appropriate rental increase might be in the years to come. I have had those conversations with people out in the community, particularly in my electorate of Southern Metro, and I have spoken to people in Albert Park who can see the value of this. They say that as people who take seriously the responsibility of providing a home to someone and would like to see an end to some of the unreasonable unlimited rent increases that were opportunistically imposed on tenants as we came out of the pandemic. They do not agree with that behaviour and are supportive of this idea as well. Dr Ratnam also made the key point that the Labor government has refused to acknowledge all the evidence available to us and has instead developed a housing policy that really fails to disrupt the fundamental driver of the housing crisis. One of the biggest elephants in the room here is the commodification of housing. When we are treating housing as a commodity and not recognising that it is in fact a fundamental human right, we do end up in this situation where we have unlimited rent increases – unlimited rent increases allowed by the Labor government – putting tenants at the mercy of people who are unscrupulous.

I will take the time I have to address an inaccuracy that was put to the chamber in Ms Watt’s speech. It has been a bit of a common tactic unfortunately from this Labor government to try and pass the buck and when it comes to the housing crisis to point the finger at local government. Well, we know, and we have seen reporting that reveals, the inaccuracy of this comment. In fact local governments are largely supportive of the provision of an adequate and diverse housing supply and are approving permits. In relation to the particular example that I understand Ms Watt put in her contribution, of Gronn Place, it is really important to acknowledge that the Victorian government, the Labor government, has taken away community and local government rights in relation to some of the redevelopments, and it is beyond the pale to be pointing the finger at local council whilst at the same time embarking on the wholesale demolition of Victoria’s public housing towers and the privatisation of that incredibly valuable public land.

One of the points Mr Puglielli made, and I will reinforce this, is that the cost-of-living situation has become even more urgent than last year, and we need urgent action here in Victoria. Here is a bill that gives you a mechanism to take action now that will provide immediate relief. It is totally within the power of this Parliament to examine this issue, to give it the meritorious examination that it requires, to freeze rents, to cap rents and to provide relief for Victorians.

Aiv PUGLIELLI (North-Eastern Metropolitan) (15:43): Thank you, everyone in the chamber today, for your contributions on the continuation of this bill debate. As I think has been noted both today and in previous debate iterations, I think we can all accept that we have a very big problem here. There have been a range of different views that have been presented to this house with regard to how to address that problem. Well, generally speaking I think most speakers have sought to do so, to put those solutions forward, so I will just seek briefly to go through some of what we have heard thus far in consideration of the bill that is before us.

For context, we are talking about a bill that effectively freezes the rate of rent from 1 January 2023, at that rate, for two years and then that is capped at a 2 per cent increase for each two years that follow. The premise behind this, which I am sure we may go into shortly in committee, is to allow wages to catch up with the astronomically high rates of rent that Victorians are currently having to pay and that are putting financial pressure, significant pressure, on so many people – people having to choose between whether or not they are going to eat that day or whether they are going to be able to pay for their rent. In the contributions that have been put before us, as I said, we have accepted that we have a problem, but really the question for this house now is: are we going to use the powers that we have as parliamentarians, perhaps with this bill before us, to fix this, to really take this head-on?

What has been put forward by some in this debate process has been the idea of investor flight, and we heard about this during the committee inquiry into housing affordability – this idea that under a proposal of rent freezes or rent caps homes would seem to vanish from the market or supply would be ‘destroyed’. I think that was the word that was used in today’s debate contributions from the Liberal Party. This is quite a dramatic way of talking about, really, someone selling their property. As was put by, I believe, Ms Payne in her contribution today: what is the outcome when someone sells their property? It is that it is bought by another person. And that person could be another investor or, heaven forbid, that person could be an owner-occupier buying their home, possibly their first home. I think that across all political lines here in this place we can accept that that would be a good outcome – someone being able to buy their first home and have that security of having a roof over their head and not being subjected to astronomical increases in rent year after year. So I would put to this house that this idea of investor flight is not as scary as it is made out to be. Potentially it is a rebalancing of a very, very unfair market that has disproportionately impacted so many people who rent – people who should not be treated as second-class citizens purely due to the fact that that is the way that they are able to put a roof over their head. We need to address that inequality that exists currently in the Victorian community, and that is one of the core aspects that is inherent to this bill and its intentions.

We have heard a lot of contributions from across all sides, I believe, talking about the idea of supply. Again, this came up at length during the committee’s deliberations on this issue or on housing affordability more broadly. Supply absolutely is a part of the conversation, and it is important that we have homes to meet the demand for homes that exists across Victoria and, I would say, also across our nation. That is going to be something we continually have to deal with as legislators in this place. However, painting supply – a very sort of blunt term – as a panacea to this issue I think is quite naive and really does not acknowledge the imbalances and the inequalities that currently exist in the system as we have it. The market, so to speak, has not resolved this issue, so that begs the question of this chamber: what do we then do as legislators, as people with the power to make change and to address systemic issues like those which I am describing? Surely we should take it on ourselves to do what we can to make that system better. And if we put the right measures in place, sure, the market may then figure itself out, but as of right now that has not occurred.

So on behalf of so many Victorians who rent, so many people who are doing it tough right now, people who are struggling with the rate of their rent increases, who are feeling as though they are being treated as second-class citizens in Victoria, we have to do what we can to fix that problem. So many people here across all sides have acknowledged that problem exists, and I am relieved that we are acknowledging that across party divides. This is a significant issue here, and wishing away the problem does nothing. We have to do something to address this significant concern that is held by so many in the community and, as has been acknowledged, people who are dealing with the rates of their mortgages as well. The housing system as we currently know it is broken. We need to do what we can to address it.

To continue on supply, it is important to acknowledge what type of supply we are actually referring to. In some contributions I believe – even possibly today – we have heard a bit of this. Supply on its own with no qualification is risky. If you were to increase supply of penthouse apartments by huge amounts, for example, I do not think that necessarily addresses the concern for someone who is on a low wage, someone who is perhaps on income support who needs a roof over their head, because they cannot afford that. Sure, there is a broader market-wide conversation here, but what we need to see is that the supply that is being added into the market is accessible to people who need a home right now, and we know that that is so often people who are struggling to pay their bills, struggling to pay their rents and struggling to deal with the cost-of-living crisis that is gripping our state right now.

That is why in other contributions that I, my colleagues and others have made to this chamber we acknowledge the other parts of the conversation – like public housing, for example – and acknowledge that when we have a system that cares for everyone by having the provision of social and public homes where they are needed for the people who need them, that then has a flow-on effect on the experience of renters across the community that are coming to each of us, as members of Parliament, telling us how they are doing it so tough right now.

Factoring in this idea of supply, if it was put to me and put to this chamber purely at face value that we should increase supply – supply, supply, supply – if we are talking building public homes, if we are talking a massive ramp-up of social housing across Victoria and that is what we mean when we are talking supply, then that is a fantastic idea. I would love to see everyone in this place get behind that. But too often I think, with this flag of the idea of supply being waved in this debate, we are actually talking about profiteering corporations and property developers effectively looking to make a profit, as is their business model, and to build whatever they like wherever they like, and I do not accept that as a panacea for fixing this issue. If it were the case, I do not think we would find ourselves with the problem we are beset with right now, so I will put that to this idea of supply that has come up in each iteration of this debate coming to this house.

We also heard somewhat of a commentary with regard to international jurisdictions and conflicting views really in terms of whether or not those jurisdictions have succeeded in having those measures put forward, whether or not it has worked out for those communities. We specifically I believe heard reference to New York, for example; we heard about San Francisco. I think there is a valuable conversation about looking at each jurisdiction, each model that has been put forward, and examining in significant detail what has actually occurred in each place, because no two places are identical, as I think this chamber will agree. However, before even getting to that point I do think it is worth this house acknowledging the idea that if those measures were not put in place in places like New York, in places like San Francisco, without rent controls, just imagine how much worse those housing markets would be, how much worse the inequality of access to housing would be in those places, how much more unaffordable it would be for renters in those places. I do think again that that sometimes is lost in this conversation of comparison to international jurisdictions. But as I have said, I think looking at those in great detail perhaps could happen in a future debate slot on this bill. That would be something well worth doing. But I do think too often we get the headline approach to comparison of jurisdictions and not the detail that is so desperately needed to really do justice to this issue and examine it at length.

We have heard expression to the effect that we cannot be frantic in our approach to dealing with this issue, that we cannot rush in with a policy. It has been put forward that this policy is not well thought through et cetera, that we cannot take steps that have, as has been put by some, backfired in other places. As I have just indicated, for some of those locations I do think we have to go into more detail about what actually took place. What were the other factors? What is our definition of success? Is it, as I would put, someone having access to a home, a roof over their head – someone who is not in such a dire situation that we are seeing right now, where people are having to choose between paying for their food, paying for their medication, paying their medical bills, paying for their kids’ school costs and weighing that up with their ability to pay their rent on any given week? That is not a living condition that I think we should accept here in Victoria or elsewhere in our nation.

As I think I indicated just before, there is an idea that has been floated in this debate either today or on other occasions that rent freezes force supply to dry up. As I indicated earlier, I do not think that is based on evidence. I think that is based on theory, and too often, as is the nature of things in politics, I think, ‘Where are some of these perspectives coming from?’ I do think there are probably concerns from people with a financial interest in this sector perhaps weighing in on the political debate and getting in the ears of our politicians. I do not think this idea of drying up supply, as I talked about earlier, is well founded. A result of bringing a balance back to the housing market, as we currently see it, where people can perhaps enter that market for the first time and buy their first home I think is a wonderful thing to aspire to. So I do not quite buy into this theorised drama that is put into this conversation. I think we have to be quite serious – this is a serious issue – and rational in how we are actually approaching this issue. I do welcome, nonetheless, feedback from others across this place on ways of moving forward to address the concerns that have been raised by so many with the MPs in this chamber.

I will also remind the chamber – it was several months ago, to be fair, but I am unaware if I previously referred to it – of the pandemic rent freeze, the moratorium that took place in Victoria before I was elected to this chamber. In the reporting from the Legal and Social Issues Committee’s inquiry into the issue of housing affordability, it was what was deemed an emergency measure to deal with the state of crisis that was before us with the flow-on effect of people’s ability to pay rent during those times, acknowledging that that was a crisis situation and that steps needed to be taken by the state Parliament, by members of this place, to address what was a looming threat to people’s ability to keep a roof over their head. What I will also put to this chamber, as I have done already, is that we are in a crisis. So acknowledging an emergency measure that was taken during the time of COVID I do think is well worth us considering again, because if you are hearing from renters right now from anywhere across our state, they will tell you that they are in crisis. They want us to do what we can to address their concerns to make sure that they can afford to keep a roof over their head and to make sure that they are not treated as second-class citizens in the state of Victoria.

Again, this bill before us allows us to consider a solution to what is a crisis that is being accepted by people across the political divides of this chamber. We have a crisis before us. The question for us is: how are we going to deal with it? I would put to this place that this bill is a solution that we should be absolutely considering. Something that I will perhaps leave my contribution on, just looking at the time, is it is also worth weighing up that this is one bill before us – this is the idea of rent freezes and caps. This is one part of the broader housing conversation, as the minister has often put. There is a broad continuum of housing pressures and parts of the housing conversation, and rent is one part of that. It is one cohort: people who rent as their means of keeping a roof of their head. We can do both. These issues are not mutually exclusive. It is on us to do what we can to address what is a housing crisis. I commend the bill to the house.

Motion agreed to.

Read second time.

Committed.

Committee

Clause 1 (15:59)

Thank you, Mr Puglielli, for your contributions, which have responded to a number of other contributions around the chamber on this particular bill. I would like to start with a bit of context, if I may, in terms of the quantum of stock and the volume of funding that may flow from the application of this bill and the circumstances that you have talked about, where it is indeed something that does propose to become law. How many private rental properties do we have in Victoria at the moment by way of split between metropolitan and regional Victoria?

That is a really good question. I want to make sure I give you exactly the right answer. I will just seek further detail.

Harriet SHING: I am happy for you to provide that to me, if you can, on your feet now.

Aiv PUGLIELLI: To the Minister for Housing, I am happy to provide that detail.

Harriet SHING: Mr Puglielli, it is your bill, so it is important that, for the record, we have a good understanding of what is driving the rationale for your bill.

The DEPUTY PRESIDENT: Minister, sorry; please go through the Chair. Mr Puglielli actually has the call.

Aiv PUGLIELLI: Thank you, Minister, for your question. I just wanted to make sure I could get the detail that was immediately available to me. Some of the specific breakdowns I might provide to you on notice because I do not want to take more of the chamber’s time; we have got other business to get through today. Nonetheless, from what I could find we have got 624,000 rental homes across Victoria, approximately 27.5 per cent of Victorians rent, and my understanding is across our nation 82 per cent of renters are in rental stress.

So is that 624,000 figure the private rental figure for properties in 2021, in which case it is 624,671?

I am just happy to confirm that for you in a moment, housing minister.

I am happy to clarify. I appreciate the follow-up, Minister. So as of the 2021 census it was 624,671 rental homes across Victoria.

Mr Puglielli, that is private rental properties across Victoria in 2021. What is the current data on the number of private rental properties across Victoria, and can we have an understanding of how that has been factored into the development of this bill, for the purposes of understanding impact?

My understanding is we are forced to rely on census data, but I am happy to seek some further detail for you now.

Thank you, Minister, for your follow-up question. Given the time by which this bill was put to this house last year, if my memory serves me correctly, the bill was utilising the 2021 data. If you are referring to data from this year – obviously this bill was put before this place prior to this year – I would say there is going to be a non-perfect alignment of numbers that we are talking about. However, as I have indicated, in the formulation of this bill we are looking at the 2021 census data of 624,671 rental homes being in place across Victoria. You are talking to the current context. As I have indicated, we are looking at 82 per cent of people who rent across Australia being in rental stress.

Thanks, Mr Puglielli. So you are missing two years of accuracy in relation to the number of rental properties to which this bill would apply, noting that we can take it through to 2023, which is the date which appears at the top of the bill itself.

You have also referred to rental properties. I assume by that you mean, based on the census data of 2021, private rental properties. Can I ask you to provide the total number of rental properties covered by the Residential Tenancies Act 1997 which would be covered by the scope and contemplation of this bill?

I am just going to seek further detail in respect to your question asked in good faith.

Harriet SHING: Perhaps, Mr Puglielli, on the foundation nature of these questions, if you just want to continue to seek the detail around them. I might take a seat, Deputy President, given the time, and Mr Mulholland might also have a simultaneous question while your five colleagues continue to work through the data.

Aiv PUGLIELLI: I am happy to make an attempt.

The DEPUTY PRESIDENT: Yes, okay.

Aiv PUGLIELLI: I am happy to provide further detail on notice, as we have indicated. Nonetheless, in consideration of this bill before us, as we have indicated in contributions to this place, and also as I have indicated just in my previous response to you, we have used the 2021 census data. Using census data is often common practice in deliberation on issues like that which we are dealing with in this bill today. As I have indicated, there are 624,671 rental homes in place across Victoria. As housing minister, I imagine you quite possibly in the immediacy of what is going on right now have more access to data than I do. Nonetheless, I think in consideration of this issue, as I appreciate you are putting to this house, there are foundational aspects to the question which you are asking in good faith, so I am happy to provide those on notice. Nonetheless, what we are dealing with is a bill that applies to rental properties across the state. We are dealing with what has been put in contributions from all parties in this chamber: a crisis situation facing renters in which people are having to choose between food, grocery bills and medical bills and being able to keep a roof over their head. Dealing with the urgency of this issue, again I am happy to go and find the detail that is available to me as a non housing minister to provide assistance in deliberation on what is before us.

Harriet SHING: It is private, though. I do not do private housing. That is why I am asking you.

Aiv PUGLIELLI: Sure. Just on the interjection, yes, I appreciate fully that the current way that we talk about the housing continuum that we look at in Victoria, the current mode of operating for this government, is that there are several different ministers that deal with different parts of that continuum, so oversight of private rental properties for example is perhaps something that is not in your purview. I do appreciate that, and so in good faith I am happy to provide further detail on notice to assist.

Mr Puglielli, does your bill freeze rents in real terms or nominal terms?

I thank the member for his question. I will just seek some further detail.

The advice I have received is that the rental freeze is nominal.

Thank you, Mr Puglielli. Given it is in nominal terms, do you accept that your rent cap bill would mandate a rent decrease in real terms, rather than simply being a cap?

I thank the member for asking his question. It is a very, very interesting idea, the idea of rents going down, but I will just seek some further detail.

Thank you to the chamber for offering me the capacity to seek further detail to questions which are being asked in good faith. The short answer is yes, because effectively what we are seeing right now is a housing market that is so broken and so pressurised that rents are going up and up and up. People are unable to afford them, and it is literally putting people into homelessness because they are unable to have access to a rental that they can afford. Answering in good faith, with the proposal that is put before us, realistically for many renters to fall back below that line of experiencing rental stress and paying less than 30 per cent of what they earn on their rental costs we are looking at a process of years. Literally it will take years for many renters to come properly down below that line as we wait for wages to catch up. As I have indicated in my contributions to this place, as have others, this is a big systemic issue that we are dealing with, so attempts to depressurise this market I think are noble given the severity of the crisis we are experiencing.

I move:

That the Deputy President report progress and ask leave to sit again.

Motion agreed to.

Progress reported.

Ordered to be further considered in committee of the whole on next day of meeting.