The National Rental Affordability Scheme was established to help low-income or disadvantaged people who were being financially crippled by high rents. It was, and still is, a worthy objective, though it is regrettable that Australia’s rapid population growth has pushed up housing prices, damaging housing affordability and having knock on consequences for rents, helping create the problem in the first place.
The scheme provides incentives of $10,000 a year to unit developers who agree to charge rent at 20% below market rates. Some 20,000 units have been built under the scheme, but it turns out that 40% of them have gone to students, in many cases from overseas. One in two student units constructed under the scheme has been let to foreign students. In Victoria the picture is even more dramatic, with seven out of ten units being let to foreign students.
The theory behind bringing in and educating overseas students is that it brings in revenue, a kind of export income. In practice, as we see here, taxpayers are subsidising it in a major way – the total cost of the scheme is $4.5 billion – and poor Australians struggling to pay the rent miss out.
This is unfortunately all too typical of the impact of population growth on infrastructure provision, particularly in our cities. Money which should be solving infrastructure problems gets diverted into capacity expansion, so our housing, transport, schools and health services never seem to be able to keep up.