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Wednesday, 22 October 2008
Page: 10045


Mr RIPOLL (4:18 PM) —I want to congratulate the member for Blaxland for a wonderful contribution and for making sense of what is a real issue on the ground for I think all of us here in parliament and something that we ought to all be involved in trying to do something constructive about. That is really the story of what today’s bills, the National Rental Affordability Scheme Bill 2008 and the National Rental Affordability Scheme (Consequential Amendments) Bill 2008, are about. The National Rental Affordability Scheme is about doing something practical on the ground. It is about delivering for people who are in need.

I thought I might start my contribution on this particular matter with my story of how I began in the rental market and then bought a home. I think it would reflect what a lot of young people go through when they first get into the rental market. With most young people, when you get your first job you do not earn a lot of money and it is important to find a place to live that is comfortable and safe and gives you a home base as cheaply as possible. Often what really young people do when they are in that situation is rent or share with their friends or, if they are not in a position to do that, they will try to find something that is really affordable. I was in the same position, but I was clear in my mind that, when I first began working and began renting my own place, I would rent with a view to buy. The most important factor was to find somewhere that was cheap to rent—something that I could afford, something that would allow me to put a little bit of money aside not only to have a life but also to save some money to actually buy a home. I think that is the story of how most people buy their first home.

It might be the story of how most young people got to be where they are today, but unfortunately that story may no longer be the same for young people, and it is pretty sad. Times have changed. Today the expectation that a young person on their own, beginning work, could even afford to rent somewhere on their own is completely alien as a concept. I do not know that many people in their first job in the first few months away from home would be in that sort of financial position, but there may be some. What that creates is a whole new generation of people that have to find different ways of doing things. They have to rely either on their friends and family or maybe on unusual or uncomfortable living arrangements. Perhaps they turn to government to give them some options as to how they might be assisted in getting not only into their first home but also into renting. That is what is so important about not only the bills we have before us today but also what we have already implemented.

We face very different times today. They are different economic times, different financial times and different times in terms of people’s ability to gain accommodation, whether renting or buying. There is no question at all that we are in a global financial crisis. That has added a layer over the top of an existing problem that has actually been with us for quite some time. It is not a new problem. As the member for Blaxland said, this is a problem that has grown over a long period of time. It is a long-term problem and we will have to find long-term solutions.

What really sticks out and what really is important to note in this is that this problem has built up over the past decade. It built up at a time when there was a very good financial environment for people to be able to go out and buy homes to rent or to do with what they wanted. Wages were high and there was a great sense of affordability about everything. There was one exception: the growing number of people who came under stress—housing stress, rental stress and buyer stress; those people who were in the market. Over the past 10 years we have seen an overheating not just on a global level—and that certainly did take place—but very particularly here in Australia in the housing market. Nowhere was it more overheated than in Sydney. But it was certainly overheated in other markets as well, whether it was in Perth, which was exceptionally overheated in terms of its housing market, or in other places such as Brisbane, my home town, in my state of Queensland.

That did a couple of things. It drove people out of specific areas. It became unaffordable for them to live in areas they needed to live in for work reasons or family reasons or lifestyle reasons. It drove them into areas further and further out to the west, further outside the bounds of where they would normally live, work and have their friends and family around them. That in itself has created certain problems as well.

It has also created a situation where the overheating of the market caused people to continually buy further and further up and where the only people who were really buying into homes at a particular point were investors. So I suppose we had a conundrum where a number of things were happening all at once. There was a global overheating of the housing market; a massive overheating of the housing market in Australia; a situation where only very serious investors could get into the housing market for rental purposes, driving up rents; and a very strong lack of supply matched by a very strong demand for housing driving all that up.

The point of putting that on the record and describing what has been taking place over the last 10 years is just to make the very simple point that governments are elected to look after the best interests of the community and of the Australian people. For 12 years, but in particular for the last 10 years, during this overheating of the housing market at a global level and in Australia we saw little if any action at all taken by the previous government. I know that some opposition members are going to get all excited about what that means. They will think I am just having a go at them, but that is not the case. The fact is that Labor, in opposition, made repeated calls for the government to do something significant to assist people into the rental market and the housing market. We called on them to do something in a measured way that would have meant something to the people who needed it the most and in a way that would not have distorted the market.

In recent days we have heard criticism of our first home buyers grant scheme. Our scheme doubles the grant from $7,000 to $14,000 for those who want to buy an existing dwelling and triples the grant from $7,000 to $21,000 for those who want to buy a new home. We have done that in a very calculated and strategic way. We have done it at a very specific time and for a limited period—unlike what the previous government did. When the previous government delivered their first home buyer grants of $7,000 and $14,000, it overheated the market. It stimulated the market so much that it was completely distorted. In the end, the people they were trying to help and assist were the people they hurt the most. That is the tragedy of what the previous government did. We are now left with the task of picking up the pieces. We are now left with the task of managing a housing market that has become distorted. Some of the worst distortion has been caused by the global financial crisis that is upon us.

Labor’s scheme is timely and strategic and measured and calculated. It will deliver for the people who need it the most. There are many reasons why the previous government failed to deal with housing affordability, particularly in the area of rentals. You have to understand the philosophy which drove the previous government and which continues to drive the opposition today—that is, they believe this is not their job. In fact, they believe it is not the job of government. They believe in allowing the market to deal with everything. They believe in allowing market forces to deal with it. We now know very clearly what the outcome of doing that is. We now know very clearly the outcome of allowing those policies to prevail and allowing the market to go on its merry way. We have seen it on a global level with the global financial crisis. We have seen it domestically in Australia with the overheating of the housing market. Luckily, in Australia we have had the courage to maintain, over many decades, a strong financial regulatory system which has protected us in the worst of times.

The housing affordability crisis, and the rental affordability situation, is a long-term problem—and we have a long-term solution. The package before us today has already been implemented and is part of a $2.2 billion package. Rhetoric might sound nice but, in the end, you have to deliver for real people. We are talking about the real economy, real people and what they need to maintain not only a decent quality of life but also a decent standard of living. For a lot of people, that has been eroded very quickly by the uncertainty we face in this economic climate.

The First Home Owner Grant is directed at assisting families and young people buying their first home. It will make sure they get the assistance they need. They need it right now. That is why our package is on the table and being delivered right now. It will continue for just one year, ending on 30 June next year, because at that point the market should have stabilised. I think it is important to send a message to the market that this is not something that will go on in perpetuity. This is a measured scheme that will deliver an amount of money to assist a specific group of people at a specific time. It is a carefully thought out measure that will not overheat or distort the market. The Howard government put in place a similar scheme but without careful thought. Also, because we have a lack of housing, our policy is targeted at those who want to buy new homes. That will generate a market for housing construction. That will keep people in jobs and make sure that we keep our economy strong. To make sure people are encouraged into the new housing market, we are delivering $21,000 to them. The key thing about that amount of money is that it will be enough for people to afford a deposit and pay for their legal costs. It will make a substantial difference. It will get them into the market. So we are not only targeting rental affordability—we are doing a range of things there, and I will go to some of that detail in a moment—but we are also trying to get people into ownership of new and existing homes.

Part of our strategy has always been to deal with these matters in a partnership. We believe in partnerships with the states and territories. We believe in partnerships with the community. We believe in partnerships with the industry and the housing sector. We believe in partnerships because, in the end, partnerships deliver the best outcomes and the best results. We are consulting widely. We are ensuring that our policies will actually deliver for the greatest number of people possible. We are doing that in conjunction with our other policies, including delivering on the promised tax cuts, making sure that we maintain a strong economy and making sure that we in the Rudd government maintain our roles and responsibilities. We are not just delivering in one area and forgoing others but making sure that there is a whole-of-sector approach in the work that we do.

I want to emphasise the point concerning partnership with the states. If there is one thing this country desperately needs, it is strong links and strong partnerships—a new approach to harmonisation across the states. We heard a lot of rhetoric over the past five or six years about the causes of the housing affordability problems—which are also the causes of the rental affordability problems. We heard a lot of blame-shifting about who was responsible. The previous government was more than happy to lay the blame at the feet of developers, to lay the blame at the feet of construction companies, to lay the blame at the feet of the states or the territories. In fact, I recall very well that for the past 10 years they were more than happy to lay the blame for every problem that existed at everyone else’s feet except their own. That distorted their policy reaction and any further action they took.

The reality is that we are all in this together. If you look at all the data, all the information and all the research, you cannot just say it is a case of the fees and charges of local or state governments. There is actually a very good report out from one of the related institutes that has looked at what those fees represent, at the percentage developers get in terms of their margin and at land costs versus construction costs. While there might be flexibility in those percentages and how much each charges, the reality is that it is all of them put together that have created this affordability problem. That is the bottom line.

Following the 2007 election campaign, we followed through on our commitments that we would put in place a whole range of policies. We will work with local and state governments to reduce fees and charges, and we have schemes in place to deal with that. Through the tax system, we will provide tax incentives for developers, investors and construction companies to build new stock. If you are ever going to deal with the problem of housing affordability you have to get people into homes. We need more homes. We need to drive down the demand. But you need to be careful when you drive down demand that you do not collapse the sector, that you do not collapse the equity someone has built up in their home or their piece of land. So we are doing it strategically and we are making sure we work with the states and territories.

Through the tax system, we will provide investors and developers with an $8,000 per year rebate, over a 10-year period—$6,000 provided by the federal government and $2,000 to be provided by the states—if they sign up to a very simple scheme. If they build a home, a unit, a townhouse, whatever it might be, for somebody to occupy and they rent it out at 20 per cent below market value, the federal government and the state government, through our scheme, will deliver them a massive tax incentive to do that. That will drive construction. That will return investors to that market. That will provide the houses that are needed to help people into their first home or help people into very decent, good quality, affordable rental accommodation. That is central to what we are doing.

We have heard a lot of opposition criticism on these particular measures that we have put in place—they are either too much or too little or they are either too early or too late. But what the opposition do is very consistent: they are very good at criticising. In fact, it is almost like they have been returned to their natural place now that they are in opposition. They were in government for nearly 12 years, but it is like they have just been returned to where they really, truly belong, because they never seem happier than when they are in opposition. They get up on their high horses, they carry on, they love to criticise, they all speak with different voices on different issues and none of them are quite on the same page at the same time, but they seem to be having a really good time. Of course, the sad part is that they are doing that while Rome burns.

We are currently facing some very serious global issues and some very serious domestic issues and it is us in government, Labor, that are prepared to stand up and take those tough decisions. That is what we have done with the National Rental Affordability Scheme and that is what we have done by injecting some life back into the construction sector to make sure that our economy does not slow and falter and to make sure that people are maintained in jobs while at the same time providing the sort of affordability that we need.

In fact, some of the hype and hysteria coming from the opposition has led me to think in recent days that the opposition are really just a circus. This really dawned on me in the last couple of days after their actions and words about the surplus. We have a Leader of the Opposition who thinks he is the Australian version of Harry Houdini. He is going to create the greatest magic trick of all time: he is going to make something disappear not once but twice. That is right. He wants to take the surplus and make it disappear and then he wants to grab it again and make it disappear all over again.

We have people like the member for O’Connor, Wilson Tuckey, who really is the clown of the circus. He gets up in parliament and, sure, he is entertaining, sure, he absolutely entertains me, sure, I get a laugh out of everything he does and, sure, he is funny, but in the end he is a joke. That is the reality. He comes into this place and delivers absolutely nothing at all. Then, of course, we have the great supporting act, which is the frontbench of the opposition. Picture this: they are the Keystone Cops. They are all running in different directions. They have a different view on every policy position, and they are never quite sure who—


The DEPUTY SPEAKER (Mr PD Secker)—Order! I think the member for Oxley should return to the subject.


Mr RIPOLL —I am very much on the subject. They are Keystone Cops in their inability to deal with the crisis that is before them—and that is housing affordability, the global financial crisis and every other piece of policy that we have in front of us. That is only the three-ring circus. There is always a supporting act in the three-ring circus called the sideshow, and here that is the backbench—a bunch of galahs. They squawk all over the place but, in the end, the galahs have no bite at all.

It is Labor that are actually delivering the essential bits of policy. It is Labor that are doing the hard yards in making sure we can get people into good, decent, new, affordable homes and making sure that, whether it is in Brisbane, Sydney or even Perth, where the market is overheated, we provide the tools and the regulatory framework, we provide the funding assistance, we work with the states and in partnership with the sector, we maintain growth in the economy and we ensure that people’s jobs are maintained. I congratulate the minister and the leadership of the Rudd government for this excellent policy and the money they have delivered to ensure that the economy continues to grow. (Time expired)