Government Plans to Boost Rental Fund

source: news.com.au
A BIG increase in funding to encourage the construction of affordable housing could form part of the stimulus package being considered by the Government as the economic crisis worsens.

Federal officials asked state housing agencies and community housing groups last week how many new dwellings were approved and ready to begin construction in the next 12 months, gauging the potential immediate impact of increasing the $620 million scheme, which offers incentives to encourage private investment in cheap rental housing.

The Australian reported a rapid expansion of the national rental affordability scheme and of government-funded public housing could support the construction industry and ease the financial pressure on working families struggling to pay high rents in a tight rental market.
As senior ministers met to hammer out a possible relief package, Kevin Rudd discussed the global economic crisis in his first conversation with US President Barack Obama yesterday morning, and continued meetings to co-ordinate commonwealth spending plans with the state premiers.

Treasurer Wayne Swan said yesterday: "Supporting the construction industry, boosting it and boosting demand generally, of which construction is a significant part", was a "very high priority" for the Government.
And Malcolm Turnbull released a policy to accelerate depreciation allowances for capital spending on making buildings more environmentally friendly, which the Opposition Leader said would reduce greenhouse emission and support employment in the construction industry.
More than 25,000 dwellings were approved but not yet commenced late last year, according to the Australian Bureau of Statistics, with the biggest backlog in units and townhouses, and by far the sharpest slowdown in commencements of approved buildings in Western Australia.
Government sources said the boost to spending on rental housing was one of a number of options being weighed for inclusion in either a stimulus package or the May 12 budget, with extra capital spending on hospitals and other infrastructure, extra money for job services and training, and personal and business tax relief also on the table.

The rental affordability scheme offers an annual $6000 tax credit or grant from Canberra and another $2000 from state governments to build properties to be rented at 80 per cent of market rents -- incentives that appear more attractive in the current depressed economic climate than when the scheme was announced, and which could be broadened in a revamped scheme.
Rents in most capital cities are predicted to continue to increase this year as the shortage of rental accommodation continues.
Read the full story in The Australian.