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Thursday, 1 March 2018
Page: 2563


Mr SUKKAR (DeakinAssistant Minister to the Treasurer) (11:28): It was interesting listening to that last contribution from a member who is going to vote to support the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018, this 'stupid', 'silly' bill. He's going to vote to support it, and we welcome his support. I'll very happily see him raising his hand in the chamber supporting this bill. For those reading the Hansard, you might not have picked that up from his contribution, but he will vote for the bill. He supports this bill because it is a great piece of legislation.

As we've said since last year's budget, the government recognise the importance of additional investment to meet Australia's needs for more affordable housing as well as making it easier for all other Australians to get into the housing market. Housing, as we all know, is important to the wellbeing of Australians, and access to secure and affordable housing can improve social and economic participation, education and health outcomes.

This bill represents an important step in ensuring that Australians have access to secure and more affordable housing, while continuing to strengthen the integrity of Australia's tax system. It follows the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, which have already been introduced into parliament to give effect to a number of measures that will support housing affordability for all Australians and were announced in last year's budget.

Specifically, this bill implements measures to improve housing affordability, encourage investment in affordable rental housing and, at the same time, as I said, improve the integrity of the tax system. In particular, schedule 1 to this bill delivers on the government's commitment to implement tighter rules for foreign residents owning Australian property, schedule 2 contains a technical amendment to support changes to streamline the foreign investment framework and schedule 3 delivers on the government's commitment to introduce tax incentives to boost investment in affordable housing, importantly, to create the right incentives and, ultimately, to improve outcomes for those in need.

The schedule 1 reforms, announced as part of the 2017-18 budget, to improve tax integrity and reduce pressure on housing affordability do so by strengthening the capital gains tax rules on foreign tax residents, in particular, by denying foreign residents access to the main residence capital gains tax exemption and addressing an integrity issue with the capital gains tax rules for indirect interests in Australian real property by modifying the principal asset test. These two reforms were announced alongside an expansion of the foreign resident capital gains tax withholding regime, which has already been legislated and came into effect last year, on 1 July 2017. Schedule 2 to this bill contains technical amendments that introduce a reconciliation fee on developers for dwellings sold to foreign persons under a near-new-dwelling exemption certificate. The near-new-dwelling exemption certificate was introduced through regulatory amendments that took effect from 24 June last year. Schedule 3 to this bill allows resident investors in qualifying affordable rental housing to obtain a capital gains tax discount of up to 60 per cent for those investments. The changes will provide this additional 10 per cent capital gains tax discount for investments in affordable rental housing and will increase the available capital gains tax discount from 50 per cent at present to 60 per cent for those investing in qualifying affordable housing investments, ultimately with the intention of encouraging more investment into affordable rental housing, which the sector has really been calling for.

I thank, in particular, all of the stakeholder groups, the community housing providers, other peak bodies and interested parties that contributed to the consultation on the draft legislation for these measures. Full details of the measures can obviously been found in the explanatory memorandum. I commend this bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.