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Transcript of doorstop: Ingleburn Gardens Estate, Ingleburn, Sydney: 16 October 2007: Labor's National Housing Affordability Scheme; Labor's National Rental Affordability Scheme; tax; Work Choices; debates; Dick Pratt.



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FEDERAL LABOR LEADER KEVIN RUDD MP

TRANSCRIPT OF DOORSTOP, INGLEBURN GARDENS ESTATE, INGLEBURN, SYDNEY, 16 OCTOBER 2007

E & O E - PROOF ONLY

Subjects: Labor’s National Housing Affordability Scheme; Labor’s National Rental Affordability Scheme; Tax; Work Choices; Debates; Dick Pratt

RUDD: It’s good to be here with Nick Bleasdale, our candidate for Macarthur, we’ve got Chris Hayes, the Member for Werriwa, Wayne Swan, the Shadow Treasurer, Ron Silberberg from the Housing Industry Association, Tanya Plibersek, Shadow Minister for Housing, and various journalists at the back here as well.

Housing affordability. Mr Howard tells working families that they’ve never been better off and Mr Costello says that there is no housing affordability crisis. Well the problem is they’re wrong. When you look at the figures on housing

affordability there’s a real challenge out there for working families.

Now, back in 1996 new house average for your first home buyer was about four times the average annual wage. Ten years later, 11 years later, it’s seven times the average annual wage. Go back to 1996, your mortgage repayments to the bank represented about 17.9 per cent of household disposable income. Now it’s 30.8 per cent of household disposable income. And today we have more than half a million Australians who are living in rental stress, that is paying more than 30 per cent of their income on rent, getting caught in the rent trap and not able to save properly for the future.

For all these reasons, much earlier this year we convened a housing affordability summit in Canberra. I’d like to thank the Housing Industry Association for their participation in it. We brought together the best brains in the country on housing, from government, from the industry, from developers, from finance, to look at how we can make this situation better for working families and first home buyers as well.

And since then we’ve been focussing very much on Labor’s National Housing Affordability Strategy. Part of this problem, and a big part of it is what you do on the supply side. On the supply side, we’ve already come up with two concrete sets of policies.

Firstly, a half a billion National Housing Affordability Fund to partner with local authorities in particular to bring down infrastructure charges and we’ve been talking about that here today at this development at Ingleburn and the centre at Edmonston. That is an important step.

The second is, and I refer before to those suffering problems with rental accommodation, we have a $600 million federal tax credits proposal to assist developers in building new stock and new supply of affordable rental accommodation which is of good quality. We’re talking about funding to provide

50,000 additional units of that accommodation nationwide. Again, a practical supply side measure.

The third I announced today, and that is Labor’s plan for the release of Commonwealth land for the purposes of housing and community development across our nation. You know right now, Mr Howard’s Government is sitting on $6 billion worth of Commonwealth land, $6 billion. Now, the question is - Mr Howard has said working families have never been better off, Mr Costello says there’s no housing affordability crisis. Yet, in July this year despite all that he said he’d have an audit of Commonwealth land and we still haven’t seen the results of that audit.

What we’re proposing today is the fundamental revamp of the Commonwealth property development policy, the Commonwealth property disposals policy, and what this is about is making sure that when you have Government departments with surplus land that priority is given to the needs of housing and community development. Right now there is no such priority attached to the requirements and the priorities of individual Government departments. And so what we would require is each year every Commonwealth Government department to come back to the Minister for Housing and say here is the surplus land we have and to show cause why it should not be released for housing development and wider community infrastructure development. That’s the first thing.

Secondly, the Minister would then provide that information to Labor’s already proposed body, the National Housing Research Supply Council. And, it in turn would then coordinate the targeted release of that land nationwide.

Right here at the Ingleburn army camp we’ve got a practical case in point. Prospectively, the army camp which is adjacent to this development, represents about 40 per cent of the size of what can become a community of about 22,000 people. The negotiations have been rolling on for about three years now and with no practical outcome. It’s time we cut through the red tape on proposals such as this. So we want a new Commonwealth housing policy, a new Commonwealth land release policy and one which will unlock this $6 billion worth of land targeted in particular on housing and associated community infrastructure.

The last thing I’ll say is this. It’s that when it comes to policies like this, the National Housing Supply Research Council will have three overarching priorities in assessing the targeted release of land. Firstly, that it will not have an adverse impact on property prices in surrounding areas. Secondly, that it will contribute directly to the amenity of local communities. And thirdly, it generates jobs.

Now, we therefore believe that Labor’s National Housing Affordability Plan, with these three sets of supply side measures, is a practical step forward for helping working families. Having said all that I think, Tanya, do you want to add something, as the Shadow Minister? And then we’ll go straight to questions.

PLIBERSEK: Thank you very much, Kevin. Look, as Kevin has said, over the last ten years the housing affordability crisis has deepened. In 1996, the average family home cost four years’ worth of the average family wage. Today that’s over seven times the average annual wage. It means that the ordinary family home has become increasingly out of reach for the ordinary Australian family.

Now, the Federal Government’s only response to this so far is to blame the States, to say that the reason is a lack of land release. Peter Costello on the 9th of July and the Government announced that they would be doing an audit of all Commonwealth land. Well, we’ve heard nothing concrete from that audit. The results of that audit have not been released and we know that the Commonwealth has been sitting on this land, $6 billion worth of land, for years now.

The State Governments around the country have written to the Commonwealth and asked for particular pieces of land to be sold to State Governments, mind you - not given to those State Governments - to be released for housing and other infrastructure. In this case, we’re talking also about a railway line, shops, schools, aged care centres, places for people to live and places for people to work.

Despite the requests of the State Governments, here in New South Wales and around the country, Commonwealth land has not been released. In many cases, the Commonwealth hasn’t even bothered to reply to letters written by State Ministers. That means that all of Peter Costello’s rhetoric about land release is empty rhetoric.

It is only Labor that is proposing to release, as a priority, tracts of land like this, for productive development - for new housing, for schools, for child care centres, aged care facilities, town centres, railway lines and all of the infrastructure that’s needed to sustain a community. This comes on top of two significant proposals that we’ve already made - our Housing Affordability Fund worth a half a billion that will pay for some of the essential infrastructure that is missing from new

developments like this because the Federal Government has consistently refused to invest in infrastructure, leaving it to local government and the States.

The second policy, as Kevin has already said, is our National Rental Affordability Scheme, which is a $603 million investment that would draw $2.5 billion worth of private investment into low-cost rental accommodation. Our National Housing Supply Research Council will govern the sensible timing of releases of land, like this new release that we’re proposing here, and we have committed to a National Affordable Housing Strategy led by a National Housing Minister that will work closely with Treasury to ensure that we have the, we allow people into the housing market.

JOURNALIST: Mr Rudd, how many blocks of land will this actually release?

RUDD: Well, I’m advised by the local community here, it’s about 40 per cent of the total proposed development of the new Edmonston Park Estate. That’s a large slab of a potential development. The overall size of the community proposed is about 22,000.

JOURNALIST: Nationally, how much extra land will be released as a result of this plan?

RUDD: Well, the process is this. We know from the Government’s own statistics there’s $6 billion worth of land, point one. Point two: every Government department will have to tell us, at the end of each year, why their surplus land shouldn’t be released - show cause - that doesn’t occur at present. Three: land then submitted to the National Housing Supply Research Council and four: a targeted staged release of land nationwide. That’s the process that we propose; we think it’s the right way forward because very locality’s requirements is going to be different.

JOURNALIST: (inaudible)

RUDD: Actually, right here isn’t hypothetical, it’s very real, because it’s 40 per cent.

JOURNALIST: (inaudible)

RUDD: No, it’s not, it’s $6 billion worth of land nationwide. Mr Howard is constantly saying that when it comes to the housing affordability problem - he doesn’t call it a crisis - it relies purely on one thing - the States releasing more land. Any rational analysis will tell you there are a number of supply side measures necessary. We’ve gone through a couple of them and on land release, it’s both Commonwealth and States which need to coordinate their actions further. Then you can assist on the demand side as well.

JOURNALIST: The (inaudible) that sits on billions of dollars worth of prime beach front land in Perth, will that fall under this plan, would you throw them out of there?

RUDD: No, the process we outline is that each year Government departments submit their surplus land and show cause as to why it shouldn’t be released and then secondly it goes to a proper planning process for release.

You see here we are in 2007, in the middle of a national housing affordability crisis, and what’s Mr Howard’s response been? Mr Costello says in July this year, ‘oh, we’ll have a bit of an audit.’ Well that’s it. We think it’s time this was fast-tracked, that we cut through the red tape to release land wherever we can.

JOURNALIST: Are you able to say roughly, how much of that $6 billion would be released (inaudible).

RUDD: No, what we are outlining here is a clear cut process for land release. There hasn’t been one effectively with a priority on housing needs for the duration of the Howard Government. After 11 years there is no priority attached to releasing Commonwealth Government surplus land for housing and community purposes. That’s the core problem here. We’re putting a sword to that and saying let’s get on with the business of helping working families get access to what are proposed here to be first class housing developments.

JOURNALIST: But this in itself doesn’t guarantee a single extra block of land, does it?

RUDD: Well in the case of this particular development at Ingleburn, as I said it’s 40 per cent of a development which will hold 22,000 and we can see no earthly reason why there is any impediment to the release of that 40 per cent of this development

JOURNALIST: On the question of tax, given that Wayne Swan has said many times, and I think you have too, that you’ve got no objection to tax cuts that contribute to job participation and jobs growth. Having said that, can’t we assume that you will be supporting if not Mr Howard’s actual tax package, something quite similar to it?

RUDD: Well Matthew, I’ve always seen myself as an economic conservative and that means when it comes to questions of public finance you’ve got to be cautious in the way in which you look at these things. Yesterday we had released a 273 page document, the mid-year fiscal and economic outlook. We’re working out way through that. The Government, 30 seconds after putting it out, released their approach to tax.

JOURNALIST: But I’m talking about…

RUDD: Hang on, hang on.

And that’s what they did yesterday. We’re working out way through that.

What are our criteria for tax reform? One: incentive, critical. Two: participation. Three: international tax competitiveness. Four: fairness and five: simplicity. On the fairness argument, and you look at working families under financial pressure, it’s huge out there. And what Mr Costello and Mr Howard have done all year is deny that there is a housing affordability crisis, say there isn’t pressure on families through groceries and petrol prices, ignore the fact that we’ve had a 12 per cent increase each year in child care costs, and then on top of it add Work Choices, stripping away penalty rates and overtime. And now, after 11 years and a day into the election campaign, they’ve produced this particular approach.

JOURNALIST: The Howard plan is going to be hard to beat isn’t it?

RUDD: We are more than relaxed at putting forward our own approach to tax in our own time. And we’ll be reading carefully the document which has been put forward.

JOURNALIST: Mr Rudd, Australian voters are looking for your comeback on tax. Can you give them some idea as to when they are likely to see something? Is it going to be a couple of days like in the Budget reply speech, you were able to match those tax cuts, worth $31 billion, is it going to be a couple of days, is it going to be a couple of weeks?

RUDD: Well we’ve got to work our way carefully through the document released yesterday. That’s the cautious and sober approach. We’ve already done lots of modelling in recent months on a whole range of options. And together with Wayne and others we are working through those as we speak. All I can say is, we will release it in due season and don’t feel slightly that we need to put anything out by tomorrow lunchtime. Mr Costello will say: the skies will fall in if Labor doesn’t produce a tax policy by 11 o’clock tomorrow morning. Well, Mr Costello can say that as much as he likes.

JOURNALIST: Do you think it weights the tax cuts too heavily towards the top end of the income spectrum?

RUDD: We’re still working our way through it. As I said, two of our overarching criteria here are fairness: fairness for working families who have all these pressures on them at the moment, and on top of that, incentive. You know something, we need a tax system which gets the balance right just like we need to get an industrial relations system that gets the balance right between fairness and flexibility.

JOURNALIST: Mr Rudd, Mr Howard could not name the official interest rate - the Reserve Bank interest rate - last night, what significance to you draw from that?

RUDD: Well it’s not so much that Mr Howard couldn’t remember a particular number on the day, it’s the fact that neither he nor Mr Costello understand that working families are under real financial pressure. Mr Howard has said that working families have never been better off and Mr Costello said that there is no housing affordability crisis. That’s the concern with this Government.

JOURNALIST: Are you saying that the SAS would have to justify its existence on that (inaudible) land annually, under your plan?

RUDD: They would have to - in terms of surplus land requirement - they would have to provide through their Government department a justification as to why surplus land should not be released for housing and community purposes. And that would apply - not just to Defence land - we’re talking about all Government departments across the country.

JOURNALIST: Mr Howard campaigned on interest rates last election, what does it say that should be not now be able to at least name the interest rate, this time around?

RUDD: Well, can I say that it’s not so much that Mr Howard can’t remember the number, it is that Mr Howard said that working families have never been better off. That is the problem because it reflects a government out of touch.

JOURNALIST: Mr Rudd, The Macarthur Chronicle has been told that the cost of our housing in Ingleburn district is between $500-$600,000. Do you consider that affordable housing and what would you consider affordable housing in the region like (inaudible) or Macarthur?

RUDD: You know something, the definition of affordable housing varies across the country and it varies with income distribution. I’m not aware of the report in the Macarthur Chronicle that you refer to, but can I say this: we have said all year that there is a housing affordability crisis. We convened - because the Government refused to - a national housing affordability summit. We brought all the best brains together in the country to look at all the supply side measures, the various financial measures and some of the demand side measures which together add up to a national solution. You know what the nation wants? For everyone to stop bickering and for someone to put their hand up and say: “let’s have a national housing affordability strategy”. We’ve got three planks of that out there. And here we are, a few days into an election campaign, 11 years into a Government, and nothing from Mr Howard and Mr Costello.

JOURNALIST: Just on that Mr Rudd, you said before that one of the principles about which would guide whether you release land is whether it would affect the surrounding land values. How can you seriously argue that it is not…

that you can release land in large amounts thereby increasing the supply - without affecting the price?

RUDD: What we’ve said that the three criteria which will be forming the judgments of the National Housing Supply Research Council, are One: impact on surrounding property prices, Two: impact on community amenity and Three: the ability to generate jobs. Now, obviously, each of those decisions on land release right across the country will be targeted on the impact it has on surrounding property prices. But let me tell you, that if you are making sensible planning judgments into the future, and this goes to land release judgments in general, you can get that right. The problem right now is there is no strategy. By the way - why did we propose at our housing affordability summit to create a National Affordability Research Council? Because the industry, almost to a person said to us: “for God’s sake, will you please establish a national body, which can, as one of its core functions, look at the overall pattern of land supply nationwide?” It is not happening at present.

JOURNALIST: Mr Rudd, on the tax issue, are you concerned that the Government’s announcement on tax policy will put upward pressure on interest rates in the future?

RUDD: We’re still working our way through the numbers on that, and we’re looking at obviously the distributional impact of the proposed tax measures from the Government and also what effect it would have in terms of our inflationary environment. Can I say this, that Mr Howard at the last election said that he would keep interest rates at record lows - and since then - they have gone up five times. Mr Howard now says he is going to have a particular promise to the community on unemployment. I’d ask people to bear very closely in mind how much Mr Howard’s promise was worth at the last election - five interest rate rises. And let me tell you, the people who are on mortgages, if you are a first home buyer on a mortgage $240,000 or so, the average. Mr Howard’s broken promise on interest rates at the last election has cost you something in the order of $2,500 for the year.

JOURNALIST: But will the tax cuts increase the risk of interest rate rises in the future?

RUDD: We’re working out way through the inflationary impact of what has been proposed by the Government and to add to an earlier answer, it’s one of the reasons why it is important to be sober, cautious and considered in looking at the finalisation of our own approach to tax. And we will make that plain in due season.

JOURNALIST: One of the local MPs, Pat Farmer from Macarthur, said that he has only received three complaints in relation to AWAs and workplace changes. He says local businesses and employees are happy with the changes. What do you say about that?

RUDD: I think the local member has plainly lost touch with his community, because what we hear right across the country is people are concerned, particularly about their kids, having penalty rates and overtime stripped away from them under Mr Howard’s unfair AWAs. That’s what we hear right across the country. And here is a figure for you. The figures produced by a recent study by the University of Sydney compared people on AWAs and people

on enterprise agreements and found - in a very large survey - that those on AWAs were being paid $106 less. I ask that people to look very carefully at those survey findings, and I suggest that the member for Macarthur have a long, long further consultation with his community.

JOURNALIST: Was the Government not sober when they put together this tax cut plan - you said you’re going to look at the detail - were they over the top?

RUDD: What’s interesting about this is Mr Costello, I understand, in an interview yesterday said that he has been working on this for some months. Secondly, I notice that the Budget surplus has changed dramatically since the May Budget papers and those contained in the May info document, so the Government has been working for some months on this, obviously with some knowledge of the unfolding, changed budget circumstances. This document - 273 pages - was released yesterday afternoon and here we are the following morning - that’s why I think we should take due caution, due season, and work our way through this. And I am absolutely confident that our response will be right.

JOURNALIST: Mr Rudd, have you begun prepping for the election debate? You can’t seriously think that we believe you’re going to knock him back?

RUDD: Well, what is it about this debate, I think it’s arrogant of Mr Howard to say that there’ll be one debate, and he just expects people to roll up with his rules, on pay television - not the networks - and that’s it. All over red rover. I think that’s the height of Prime Ministerial arrogance. I think it’s far more decent if we have, as I’ve already proposed, something run by the national press gallery, three debates, across the election season, and I’d hope that Mr Howard would agree to that. And why punish the worm? Everyone in Australia likes the worm. I’m a - I wouldn’t say a big fan of the worm - sometimes the worm goes against you. But, you know, let’s be friends of the worm - OK?

JOURNALIST: Are you prepared to have no debates rather than the one that Mr Howard has proposed?

RUDD: I am prepared to have three debates.

JOURNALIST: Mr Rudd, on Work Choices, the Prime Minister essentially called you a liar yesterday evening by suggesting that he had further plans for more workplace reform - how do you respond to that?

RUDD: Well, Mr Howard is not being fair dinkum with the Australian people when the Finance Minister says that we are going to have another batch of workplace changes after the election. And the Treasurer says the only thing worth preserving in the industrial relations system is the minimum wage. Mr Howard should talk to Senator Minchin and Mr Costello about what their plans are for the future of industrial relations.

JOURNALIST: But they’ve both drawn a line under it.

RUDD: Oh you listen very carefully to what Mr Costello had to say yesterday. Quote - something like this: I don’t believe any further changes are necessary. And, I support the current policy. Well, a few of us have been around politics long enough to know what all that means. Here is the challenge to Mr Costello: when Mr Costello becomes Prime Minister if the Liberals win the next election, will he rule out making any future changes to Work Choices at all? We know that from the last election, when the Howard Government said nothing about Work Choices - they got control of the Senate and we ended up with the most radical set of industrial relations changes this country has ever seen. And now, we’re supposed to take Mr Howard with hand on heart saying trust me on Work Choices. I think the Australian people have woken up to that.

JOURNALIST: Under a Rudd Government national literacy program, would it be your dream that an Opposition leader would be able to read a 275 page document within 24 hours?

RUDD: What I would like to see for the nation is for us to have the best education system in the world. That’s my vision for the nation. And what it comes to tax policy - Ms Crabb - I think it’s very important that the nation expects their leaders to take a sober, considered, conservative approach - and I’m proud of being an economic conservative when it comes to monetary policy and fiscal policy.

JOURNALIST: Dick Pratt is being sentenced today. Should the Government - and Labor - hand back donations from his company?

RUDD: Can I just wait and see what happens in the courts on that? And I’ll make some further comment on it. I will come back on it - I’m just saying I will come back on it.

JOURNALIST: In relation to your land policy, were you largely talking about land lots on the outskirts of major cities? And are you planning any further announcements such as an (inaudible) of the first home buyers bonus?

RUDD: Firstly, in terms of the land release strategy for Commonwealth owned land, this $6 billion that Mr Howard has been sitting on the for the last 11 years, it is all over the country. Some in outer suburban areas, some elsewhere. We need a proper, rational plan to allocate this land across the nation to help first home buyers in particular. And, in terms of first home buyers, one of the measures we have already put forward, in terms of the relief of infrastructure charging in new developments, is to take off a fair slice of the new infrastructure charges which float in new developments, and let’s face it, many first home buyers go to new developments to purchase their land. Last question.

JOURNALIST: (Inaudible)

RUDD: The only thing wearing me down in a six week campaign so far, Joe Hildebrand, is your camera. Staring right up my nostril. I’m looking forward to the next six weeks. I think it’s going to be great talking to people right across the county. Engaging in the big policy debates of the nation. And - if you get lucky - maybe even having three debates with the Prime Minister.

ends.