Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 23 February 1987
Page: 507


Mr BEALE(3.03) —In each of the last five sitting days the Prime Minister (Mr Hawke) has completely failed to answer questions put to him about Australia's housing crisis.

Last Tuesday, in response to a question on why new dwelling commencements had fallen from 153,000 two years ago to the current level of 118,000, he talked about company bankrupt- cies in Queensland. On Wednesday, when asked why home loan repayments as a percentage of median family income had increased by 45 per cent in the past two years, he responded by talking about the Opposition's economic policies.

I welcome the Minister for Housing and Construction (Mr West) to this matter of public importance. On Thursday, when the Prime Minister was asked whether he intended to continue the savings banks $145m subsidy for home loans he resorted to personal abuse. On Friday, in responding to a question from the Leader of the Opposition (Mr Howard) about housing prospects he claimed that he had already answered the question. Today we had it twice more. When asked a question about the Real Estate Institute of Australia figures on home loan affordability he admitted that high interest rates were hurting the housing industry. He then went on to more personal abuse. When asked about interest rates he tried to give us a history lesson.

This utter failure by the Prime Minister to respond to questions in the Parliament brings me to ask him the same question as I will be asking the Minister for Housing and Construction-who is now sitting at the table-a number of times throughout this matter of public importance. I say to the Prime Minister in regard to his failure to answer questions on Australia's housing crisis: `What is your excuse for that?'.

This matter of public importance is about the failure of the Hawke-Keating Government to address the critical housing situation facing millions of Australian families because of its high interest rate policy and its high taxation policies. All I need do is draw the attention of the House to the Housing Industry Association Press release of 19 February, which starts off:

With mounting problems in the housing sector . . .

The situation in housing throughout this country has again reached a crisis. Following the introduction of the so-called housing package on 2 April 1986, the Prime Minister, the Treasurer (Mr Keating) and the Minister for Housing and Construction promised there would be 135,000 housing starts in the 1986-87 financial year. The Indicative Planning Council, the Government's own advisory body on housing, has repeatedly downgraded that number-first to 130,000, then to 125,000, and currently to 122,500. I use the word `currently' because the leaked report of the Indicative Planning Council Advisory Committee in New South Wales last week forecast an even greater drop, not only for the current year but for next year as well. Industry sources say there will be only 118,000 starts this year compared with the Minister's forecast of 135,000 starts. I say to the Minister for Housing and Construction, who is at the table: `What is your excuse for that?'.

No doubt the Minister, in his response to this matter of public importance on the Government's deliberate high interest rate and high taxation policies, will refer to the low level of starts in 1981-82 under the previous coalition Government. I remind the Minister that that level of housing starts occurred in the trough of the worst world-wide recession since the Great Depression and in the middle of one of the worst droughts Australia has ever faced. I further remind the Minister that the current level of housing starts, when adjusted for population and demand growth, is not much different from the level in 1981-82. I say to the Minister: `What is your excuse for that?'.

Bank lending for housing remains at relatively low levels and increasingly this lending is for larger homes for more affluent buyers trading up into more expensive, existing housing. Over the last six months funds for new dwellings have declined from 26 per cent of total housing lending to 21 per cent of total housing lending, reflecting the fact that more people are using their money for existing homes and alterations and additions. If the Minister's objective is to house Australians, how can he explain away this increasing diversion of funds from new dwellings into existing houses, and I say to the Minister: `What is your excuse for that?'.

It is the Government's deliberate high interest rate policy that is murdering the housing industry in Australia. I remind the Minister of what Mr Walker, the Labor Minister for Housing in the New South Wales Parliament and a factional colleague of the Minister at the table, said last week. He said that 1986 was a bad year for housing, primarily because of high interest rates and problems with Federal taxation policies. I ask the Minister: `What is your excuse for that?'. Furthermore, this leaked report says that the Committee believed that housing starts in 1987-88 could be 5 to 10 per cent lower than originally forecast. I ask the Minister: `What is your excuse for that?'.

Over the past two years new home loan interests rates have risen from 11 1/2 per cent to 15 1/2 per cent. Banking sources now say-despite what the Prime Minister told us at Question Time today-that this general level of 15 1/2 per cent is more likely to rise than to fall over the next few months. In fact, in one case, that of the National Australia Bank Ltd, 17 1/2 per cent is already being charged for certain housing loans, as my colleague the honourable member for Macquarie (Mr Webster) pointed out today. Thus, housing interest rates have risen from 11.5 per cent to 17.5 per cent, a massive 52 per cent increase. I say to the Minister, a Minister who has repeatedly promised that interest rates would come down; `What is your excuse for that?'. It is now clear that housing package mark I has failed. The $145m bribe given by the Government out of taxpayers' funds to the savings banks has not worked. I challenge the Minister to tell the House again that he believes that the housing package has been successful when it has demonstrably failed, and I say to him: `What is your excuse for that?'.

In March 1986, 21 per cent of median family income was spent on home loan repayments. In the figures released yesterday, as my colleague the honourable member for Fisher (Mr Slipper) has pointed out, one sees that that figure has jumped from 21.3 per cent to a massive 26.7 per cent. This is a massive 51 per cent increase in the amount that families are spending on home loan repayments around Australia, and again I ask the Minister: `What is your excuse for that?' This 51 per cent increase is a shocking condemnation of the Government's housing policies and is testament to the fact that this Government has deserted its constituency. The Government's deliberate and continuing high interest rate policies are hitting at the heart of every Australian family, and more particularly at those lower income earners who simply cannot afford home loan repayments at their current levels. The Housing Loans Insurance Corporation, the Government's own home mortgage insurance company, in its recently released annual report has confirmed a sharply increasing level of defaulting home owners and a sharply increased provision of funds for their customers in arrears. The Minister at the table is the Minister responsible for the Housing Loans Insurance Corporation, and in view of that Corporation's poor performance last year and of its increased provision for home loan defaulters, I ask the Minister: `What is your excuse for that?'

No doubt in his response to this matter of public importance dealing with the failure of the Hawke-Keating Government's housing policies, the Minister will have some words to say about the first home owners scheme. Let me remind the Minister that because of its stringent eligibility criteria, the current first home owners scheme is now lending at significantly lower rates not only than last year but lower than forecast in the current Budget, and I say to the Minister: `What is your excuse for that?'

Every week the newspapers are ablaze with stories about the crisis in the private rental market. In the last two years during this Minister's tenure vacancy rates have trended downwards and rents have been increasing by amounts higher than inflation, and I ask the Minister: `What is your excuse for that?' Furthermore, investors in rental housing have declined from 25 per cent to 9 per cent of the market over the life of the Hawke-Keating Government reflecting the Government's taxation policies. The Hawke-Keating Government's capital gains tax and its policies on negative gearing have struck at the heart of the private rental market. There can be no sustained recovery in housing, and no relief for housing renters, until the Government's deliberate high interest rate policy has changed and until it repeals the capital gains tax.

So that the Minister and the housing industry have the message firmly in their minds, let me say without qualification that the coalition in government will repeal the capital gains tax. Because new dwelling commencements are running well below the underlying demand and because of rental market difficulties, public housing waiting lists have increased from 100,000 when the Hawke Government was first elected to 160,000 now, and I say to the Minister: `What is your excuse for that?'. The Minister will no doubt tell us, in his reply to this matter of public importance on the Government's failed policies on housing, about all the taxpayers' money he is giving to the States for public housing. Why, then, are public housing waiting lists increasing? Why, then, are an additional 60,000 people seeking home purchase assistance? How can the Minister justify this increased spending on public housing if it is not having the desired effect of putting Australians in houses and bringing the waiting lists down? I ask the Minister: What is your excuse for that? Furthermore, in a report commissioned for the Minister's Department, it was documented that 40,000 in our community sleep outdoors every night and another 60,000 sleep outdoors intermittently. I ask the Minister: `What is your excuse for that?'

This matter of public importance reflects the failure of the Hawke-Keating Government's housing policies because of its high interest rate and high taxation policies. The Minister at the table has been asked to give us his excuses for the low level of housing commencements, which are down by 20 per cent since he took over the Department; for the subdued level of bank lending for housing; for the fact that more of those funds are being channelled into existing dwellings than into new dwellings compared with six months ago; for the fact that new home interest rates have gone up from 11 1/2 per cent to as much as 17 1/2 per cent; for the rundown in the first home owners scheme; for the crisis in the private rental market that has arisen because of the Government's capital gains and negative gearing policies; for the increase in public housing waiting lists, from about 100,000 when the Hawke-Keating Government took office to the current level of 160,000; for the 400,000 Australians who live in caravans, in most cases not because they want to but because they have to as they cannot afford housing; and for the 100,000 Australians who from time to time sleep outdoors.

The Minister in his reply will no doubt talk about housing starts during the worst recession year since the Great Depression, about the disappearing first home owners scheme and about increased funds being given to the States for public housing. He will do this Parliament and the people of Australia a favour if he gives us his excuses for his appallingly bad performance, rather than concentrate on the mess to which I have just referred. If he does not give us his excuses, I will return to the question I asked the Prime Minister earlier, and which we are entitled to ask the Prime Minister about his Minister for Housing and Construction: `What is your excuse for that?'