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Big banks the big winners in Labor's housing policy

Media Release
Bob Brown 13 Aug 2007

Opposition Leader Kevin Rudd's announcement of a $6,000 subsidy to institutional investors who build houses will deliver more money to the big investors than it will to the low income renters, Greens Leader, Senator Bob Brown said today.
 
"What we have here is the Labor party spending $6,000 to deliver rental savings of less than half that amount," Senator Brown said.
 
"In exchange for receiving $6,000 per year from the Federal Government, institutional investors need only promise to reduce rents by 20 per cent below the market rate. This means a family paying $300 per week would only save around $3,000 per year."
 
"The goal here is to make housing more affordable, not line the pockets of developers. Why should taxpayers pay merchant banks $6,000 to reduce rents by a portion of that? The big winner here is the middle man," Senator Brown said.
 
"Another major problem with this scheme is that investors are set to receive $6,000 per year in government assistance regardless of whether they build a 3 bedroom house or a one bedroom flat. There is no incentive in this policy to build family homes."
 
"Under Rudd's plan, investors would receive $6000 per year no matter how small and inefficient the homes they build. And a family would need to be paying more than $30,000 per year before the benefit they received from a 20 per cent rental reduction would be greater the $6,000 given to the big banks," concluded Senator Brown.

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