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Wednesday, 1 April 1987
Page: 1918

Mr DOBIE(7.24) —I rise tonight on a matter of importance to millions of Australians-to anyone who is buying or hopes to buy a home; to anyone trying to find rental accommodation; to anyone seeking to invest in the property market; and to those thousands who rely on the real estate and housing construction industries for their livelihood. It is, of course, the state of the housing and construction and real estate sectors, and the Hawke socialist Government's significant role in the calamitous downturn in these areas.

Appropriation (Parliamentary Departments) Bill

Recently, one of my real estate agent constituents yet again pointed out the disastrous effects of this Government's policies on the real estate market. I say `yet again' because, in the past year, I have had many similar representations from people in the real estate and housing industries, and from ordinary people trying to buy or rent homes. Their message is the same and their condemnation of this Government damning. The real estate industry in New South Wales is now gearing up for a major campaign to highlight the Hawke Government's disastrous policies and how they have affected the industry. Central to this campaign is the condemnation of the capital gains tax and the abolition of negative gearing. These two anti-investment policy decisions have had a major effect on the real estate and housing industries although we cannot, of course, overlook the marked effect resulting from the Hawke socialist Government's high interest rate policy.

My constituent gave me a copy of a position paper by the Real Estate Institute of New South Wales, entitled `Federal Government Discrimination against property owners-The Impact of Capital Gains Tax and the Abolition of Negative Gearing on Property Investment'. I would suggest that all members obtain a copy of this paper because it makes very interesting reading. The paper contains a survey conducted among real estate agents in some 30 local government areas across New South Wales with the highest tenancy concentrations. The survey found that in the period from September 1985 to January 1987, the total number of properties managed by the participating agents fell by an overall 8 per cent.

The Real Estate Institute points out that with normal market conditions, agents would expect to increase their listings by 10 per cent to 15 per cent annually. When asked to nominate why this decrease in listings had occurred, 63 per cent of the respondents blamed the capital gains tax and the abolition of negative gearing, either on their own or in combination; 70 per cent of the agents said that there were fewer inquiries from investors now than pre-September 1985, and here, 76 per cent blamed this fall-off in inquiries on the combination of the capital gains tax and the abolition of negative gearing; and 16 per cent blamed high interest rates for the fall-off.

The survey found that agents were quite evenly split over predictions as to how the market would be holding up in 12 months. One-third thought it would be better, one-third though it would be worse and one-third thought it would be the same. The Real Estate Institute received a wide range of responses when it asked the participating agents to nominate the single major factor which would determine the future of the property market. Interestingly, most of the agents referred to the important role the Federal Government played, either through policy decisions or a direct change in government. Only 20 per cent saw market related factors as being a major influence and 26 per cent of the respondents said a change of Federal Government was the single major factor determining the future of the market and that such a change in Canberra would result in an improvement in the market. The REI reached the following conclusion, and I quote:

This survey has indicated very clearly that Government policies are perceived by those in the property industry as being a critical influence on the health of the industry.

Great discontent with the current Federal Government's policies was strongly expressed. The introduction of a CGT, the abolition of Negative Gearing and the high interest rates were cited by nearly all participants as having a detrimental and direct impact on the property industry. The message was clearly portrayed that either those policies must change, or the Government must change-before the market will improve.

Is it any wonder that the Real Estate Institute is mounting this campaign? I could go on and on and state what happened in 1986, but time has beaten me. The fact is that this Government, through its policies, has killed investment, killed jobs and for many young Australians killed the dream of owning their own homes.