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Thursday, 16 February 2017
Page: 1197

Senator SMITH (Western AustraliaDeputy Government Whip in the Senate) (15:19): Let me start with some congratulations to opposition senators, because in this take note session they have at least focused on an issue that is very important to Australian families and to young Australians who are aspirational and want to buy and own their own homes. Of course, the Turnbull government also recognises that this is an important priority, because we in Australia know that home ownership supports stronger communities and social cohesion in our communities, which in turn provide employment opportunities and positive educational and health outcomes.

But a proper and real understanding of the core underlying issues that affect housing affordability in our country is absent. You have been good at identifying the problem but very poor at understanding the underlying issues driving poor housing affordability in some parts of our country. The first point is that there is no single housing market in our country. When you come here and talk about housing affordability, it is important to be clear and distinct as to what part of the country you are talking about. I give full credit to Senator McAllister because she did identify the very real issues in Sydney. We know that housing prices are increasing in Sydney and Melbourne, but we also know that they are falling in places like Perth and Darwin.

Why are they changing? Why are they rising in some places and falling in others? It is because there are some underlying economic issues, and I suspect, Senator Ketter, you know this. I suspect you know that population growth is an important element of housing affordability. I am sure you know that interstate migration is an important element of housing affordability, and I know that as a member of the Senate Committee on Economics you will be well aware that the low interest rate environment is also an important factor. Let me supply some facts around those underlying themes that Labor senators have been quick to ignore. The first fact is that Australia's population growth has averaged 1.6 per cent between 2005 and 2014, almost the highest in the OECD. That clearly affects demand. In addition, there has been a reversal of interstate migration from mining states, including in my home state of Western Australia, back to Sydney and Melbourne, where there are stronger labour markets—again, a key driver of demand. Let me add to that that, while lower interest rates have made things easier for current home owners with mortgages, they have made it harder for first homebuyers to enter the market by increasing demand for housing and making it harder to save for a deposit. We are agreed: there is a priority; there is an issue around housing affordability. But what you fail to do is to be accurate about the underlying influences and provide a policy response to those drivers of demand.

But it is also about land release. You do not have to be Einstein to know that matters around land release do not fall within the domain of the federal government. They are responsibilities that, properly, are held by state and local governments. So it is important to work with state, territory and local governments to facilitate, more readily, land access.

Of course, this brings me back to the alternative policy position of Labor. Rather than having a constructive debate about population growth, interstate migration and a low-interest-rate environment, you would like to bring a sledgehammer to property prices with ill thought out changes to negative gearing that actually will not solve the underlying issues of housing affordability. Instead, they could crash the housing market. Again, we are agreed: we know this is an issue. We know it is more important in some parts of our country than in other parts of the country. But Labor's approach does not provide a solution. It does not provide a long-term plan to improve housing affordability for Australian families. We are agreed: it is a priority, it is important, but you do not have a clear policy response.

So the question is one of what the Commonwealth can do, with state, territory and local governments, to improve issues around demand. What can we be doing to improve issues around land release and land supply. It was interesting that you did not— (Time expired)