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Wednesday, 8 February 2017
Page: 385

Mr BANDT (Melbourne) (10:30): Young people are getting screwed and the government does not seem to care. That is especially the case when you look at one of the most basic of human rights, the right to have shelter and a roof over your head. We now have the situation where many young people cannot even afford to rent a place near where they work or study let alone to buy one. When so many people are being locked out of the housing market because of tax rules that privilege the people who are buying their second, third or fourth home and who get a government handout, while people buying their first get nothing except a kick in the teeth and higher prices, and with so many young people across the country screaming and their parents looking at them and thinking, 'It was not like that when I bought my first house,' you would think they might do something about it. The government conducted an inquiry and said, 'Let's hear from the best and brightest about a number of matters facing the economy; let's have people come up to us and tell us about Australia's economic situation and what the problems are, and what we might need to do to fix things.' The government says, 'There is nothing that needs to be done'—no recommendations, not one recommendation to fix the problem.

It is not just anecdotal or that people are feeling something is different. If you look at the numbers, something is actually happening. Back in 1990, an average house was six times a young person's income. By 2013, it had risen to 12 times their annual income. Something is going on in Australia. In 1994, young households had nearly 10 per cent of the country's wealth. By 2014, this had halved, to just over five per cent. Young people are getting screwed. They have less of a share of the national pie, and house prices are further and further out of reach.

Why is this? Well, we have this incredible lurk in Australia—that pretty much exists nowhere else around the world—that means that, if you are a young person going to an auction, trying to buy a house, someone else can come along who has already broken into the property market, or has a bit more money than you, and they can bid the price up and up and up and up, knowing that if they buy that house for more than it might be worth, they can rent it out and write it off as tax loss. So they do not even want to live in the house; they just want to write it off as a tax loss.

Then the sting in the tail comes because, in a few years, they can flip that house and sell it, and get a tax break on that as well. In other words, if you are one of the lucky few in this country who already has wealth and you hold it in the form of assets—as opposed to the rest of us who earn money from working, wage earners—if you hold it in shares or property, when you sell it, you get 50 per cent of your tax back; you get a 50 per cent tax break. For someone who works just as pay-as-you-go income, you get tax taken out; you have no say in it. You have to pay your tax. But if you are at the top and you have a pile of shares or houses and you sell those, you get a tax break from the government. What does that do? It does a couple of things. One is it makes it nigh on impossible for young people, who have done the right thing, finished their degrees or gone to TAFE—who end up with a mountain of debt to show for it—but they do that. They go and look for jobs, many of which just are not there in the way that they used to be. They get a job and they might only be on a short-term contract. We now have the ridiculous situation where people who graduate as teachers get put on one-year contracts, as if we were potentially going to sell off the school tomorrow and there might be a downturn in business. What rubbish! So you have people who have done the right thing and are graduating or leaving school and now finding themselves faced with insecure work, jobs that are not there and then massively high housing prices that are out of reach and, in Australian terms, well out of whack.

It is not just impacting on young people and making their lives incredibly difficult in a way that we have not seen before in this country. We are not just at a tipping point where those people who are in power and those who have wealth are about to leave a world that is worse off for the young people who come after them than the one that they inherited; this is a broader problem as well that threatens the economy.

It is astounding that this report, apart from our standing report that we put in, turns a blind eye to some pretty fundamental facts. Back in 1997 household liability—that is, the debt that households have—in Australia was about the same as their disposable income. Fast forward to 2015 and household debt was about twice a household's disposable income. The government talks about getting rid of debt. You can talk all you like about government debt, but what about the debt that individuals and households have? It is now twice as big as it was in 1996. That is what is happening under this government. We can talk about getting rid of the debt burden, but it is being shoved onto families and young people.

Now, if you as a young person are lucky enough to outbid one of those investors at an auction and get a house, you will end up with a mortgage that is so many times bigger than it would have been 20 or 30 years ago and you will find yourself struggling under a mountain of debt. You can add to that the debt you might have because you have graduated from university or TAFE or done a training course. Perhaps you have been unlucky enough to be suckered into one of those training courses from a private provider that cost you money but which you do not get any qualifications out of. Whatever the situation, people are now finding themselves facing an economic reality they never had to face before in this society. People are increasingly at breaking point. People are at breaking point and saying, 'What is the point? I've done the right thing and now I cannot find a place to rent near where I work or study, and home ownership is something that I think is never even going to happen for me.'

You would think, faced with this, the government might want to take it seriously. You would think that this mountain of household debt that is now much, much bigger in Australia than disposable income would be cause for concern. You would think that the committee that is charged with inquiring into the economy and looking at the banks might have something to say about it. But what we have learnt is that the banks are enjoying record-high profits in this country and, in part, it is because mortgages are getting bigger and bigger. So the banks make a massive amount of money out of the fact that housing is unaffordable for people. Everyone from the government to the banks to the people who already have a lot of money seem to benefit out of this, but the people who lose out are predominantly young people or people who might not have ongoing work but are forced to go from a month contract to a year contract. They are the ones who front up to a bank manager and say, 'I'd like to buy a house,' and the bank manager says to them, 'I'm sorry, but it says here that you have been on a series of short-term contracts for the last few years. I don't think that is secure enough. I'm not going to write you a loan.' That is who is losing out. We have a choice here.

A division having been called in the House of Representatives—

Sitting suspended from 10:39 to 10:5 4

Mr BANDT: There is an answer to this, which is to get rid of the tax breaks that cost the budget money, money that could otherwise go into schools, hospitals and building renewable energy. Get rid of those tax breaks that at the moment are going overwhelmingly to people who already have houses and who already have a lot of money and a lot of wealth. Get rid of those, and you do two things. You increase the amount of money that is available for government to spend on the services that people expect, so it means you do not have to try to cut people's paid parental leave to try to balance the budget; instead, you are taking it from the top end of town. Of course, they are the Liberal Party's base. They are the ones who donate to the Liberal Party's campaigns, so the government do not want to do it. But sometimes in government you have to have the guts to stand up and say, 'These tax breaks—we cannot afford them anymore.'

The second thing it would do is help put housing back within the reach of young people because, instead of the government spending money to help people buy their second, third or fourth home, you would have money available to help people buy their first home.

I was very proud to be part of the committee and issue a dissenting report that called out this report for the charade that it is—an attempt to cover up and ignore one of the biggest problems in Australian society. It is staring everyone in the face. If the government want to know why they are in trouble, perhaps they should look at young people being locked out of the housing market.