Labor's $10 billion housing bill set to become law after deal struck with the Greens

Labor's signature housing bill is set to pass parliament this week after the federal government agreed to an additional $1 billion towards public and community housing.

Labor has struck a deal with the Greens to pass its signature housing policy. Source: AAP / Lukas Coch

KEY POINTS

• The Greens will back the Housing Australia Future Fund after drawn-out negotiations.
• The development means the bill - a key election commitment - will become law.
• The deal includes an additional $1 billion for public and community housing.

Labor's signature housing bill will become law after it struck a deal with the Greens which doesn't include the freezes on rent increases the minor party had been demanding.

But months of negotiations over the Housing Australia Future Fund (HAFF) have concluded with Labor agreeing to an additional $1 billion towards public and community housing this year.

The Greens had refused to back the $10 billion HAFF — which Labor says will build 30,000 social homes over five years — arguing it did nothing for renters, and would not go far enough to ease Australia's housing shortage.

But the party confirmed it had accepted Labor's latest offer on Monday, ending an at-times vitriolic political stand-off.

The deal ends a tense stand-off between the Greens and Labor. Source: AAP / Lukas Coch

The deal does not include freezes or caps on rent increases, and Greens housing spokesman Max Chandler-Mather conceded the HAFF alone would not fix Australia's housing crisis.

Chandler-Mather claimed Labor had refused to coordinate a freeze on rent increases at national cabinet - Labor argues it does not have the authority to do that - and said the Greens "haven't stopped" in its pursuit of that goal.

"We will not stop fighting, we will not rest until there is a cap and freeze on rent increases," he said.

"Labor needs to realise if they keep ignoring renters, they will learn a harsh lesson at the next election."

What will the Housing Australia Future Fund do?

The HAFF will see $10 billion placed in an investment fund, with the proceeds to be pumped into social and affordable housing. It initially estimated that could amount to around $500 million annually.

But the Greens equated the plan to gambling the future of Australian housing on the stock market, warning there was no guarantee it would produce returns. Labor responded by pledging at least $500 million would be spent each year, regardless of the fund's performance.

The $3 billion in additional funding announced since June will not be sourced from the HAFF.

Housing Minister Julie Collins described Monday as an important day for thousands of Australians seeking housing security, and hoped to have the fund functional within “a couple of months”.

“We'll move as quickly as we can to get the fund up and established and get returns,” she said.

“But obviously this will take some time, which is why we're putting some funding straight into more social and affordable housing.”

Collins said delays to the HAFF passing came with costs but did not answer directly when asked why Labor had not offered the deal sooner.

Monday's development means the bill - a key election commitment - will pass both houses, with Labor already having sewn up enough support from other crossbenchers.

Speaking in Question Time on Monday, Prime Minister Anthony Albanese said he was "very pleased" with the development.

Prime Minister Anthony Albanese and Housing Minister Julie Collins have both welcomed the deal. Source: AAP / Lukas Coch

"This is the last of the commitments I made in budget replies to put into legislation. We spent our time in opposition developing good policy that will become good programs in government ... And I thank the leader of the Greens for the constructive discussions that we have had," he said.

In June, Labor announced the one-off housing accelerator, immediately releasing $2 billion for social and affordable homes, though denied that was linked to the HAFF negotiations.

But Greens leader Adam Bandt credited the party's trenchant stance with forcing the government to go further, saying it had now secured $3 billion more than was initially on the table.

"[That] people can't afford to put a roof over their head in a wealthy country like Australia, that is criminal," he said.

"One thing is very clear now ... pressure works."

Sector welcomes deal, no double dissolution trigger for Albanese

National Shelter chief executive Emma Greenhalgh said the crossbench had strengthened the government's housing plans at a time of crisis.

"We must now turn our attention to the development of a coordinated National Housing and Homelessness Plan to provide a clear blueprint for solving the housing crisis," she said.

Homelessness Australia chief executive Kate Colvin said the additional homes would make "an enormous difference".

"It’s welcome to see that increased resources have been added to the amount of social and affordable homes to be built, as the number of people in desperate need of affordable housing continues to increase," she said.

The imminent passage of the bill also removes the potential for a double dissolution election over housing.

To call a double dissolution election - vacating all seats in the House of Representatives and Senate - the government must have one of its bills rejected by the upper house twice, at least three months apart.

Albanese argued the Greens delaying a vote on the HAFF in June amounted to a first rejection, meaning a second rejection in October would have handed him a double dissolution trigger.