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Shadow Treasurer discusses housing affordability; and Badgerys Creek airport decision.

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E & OE

Subjects: Housing affordability crisis, Badgerys Creek decision

LAWS: Good to talk to you. Is there really an answer to housing affordability for young people, how do they start?

LATHAM: Well it’s very tough, particularly in the Sydney market. These new figures are showing the typical first home mortgage in Sydney is now $2,500 repayment a month. How do people cope? Well basically, you can’t get into the Sydney market unless you’re inheriting a home or you come from a very high income. So we’re losing a large part of the great Australian dream, which is something that all Australians should be worried about, particularly for our children and our grandchildren.

LAWS: Maybe we’re losing part of the great Australian dream in the area that we’d like to be dreaming? Maybe it means relocation?

LATHAM: Well for some people this is what’s happening, but I think it’s a real community problem, particularly in Sydney. It’s said that in the metropolitan area someone on a nurse’s wage can’t afford to buy a three-bedroom home. And when it gets to the point when nurses, firemen, policemen - the people who service our community - can’t afford to live in the community, then we’re all diminished by that. We’re sort of getting an imbalance in housing affordability such that people that we need to have safe neighbourhoods and lead a decent life, if they can’t move into the city in good numbers then the whole of the city becomes diminished by that process. So it

just affirms the point that we urgently need new home affordability measures by the Federal Government to give young Australians, to give people on a moderate income, a chance to get into this very tough housing market.

LAWS: Well it is very tough. And when they say that housing affordability has dropped to an all time low since 1990, it’s not just to do with house prices, it’s only got to do with affordability. So how do we turn that around? I mean, you could afford to buy a home in 1990 and now you can’t.

LATHAM: It’s particularly tough for the first homebuyers in Australia. Under normal conditions of all the people buying a home 25% have been first home buyers, but that’s fallen to less than 15% for the first time ever. So for the first homebuyer, that great Australian dream of owning a home is getting further and further away. What is the solution? I don’t think there’s an overnight solution, let’s be realistic about this, there’s no magic wand that can be waved. What we actually need out of Canberra is some incentives where people can put some money aside over a period of time and accumulate a home deposit, accumulate a savings record and hopefully then get a mortgage. I talk to people in my electorate who say, `we want to save, we want to put some money aside for our kids, we want to put some money aside for a home deposit, but we don’t get any encouragement, we don’t get any tax incentives out of Canberra to do that’. So I think that’s the thing we need to address is that people want to help themselves, it’s time for the Government to give them a helping hand.

LAWS: I agree with that, when [inaudible]

LATHAM: Oh absolutely there’s no doubt about that.

LAWS: And even when you give stamp duty concessions, they still have to bid more at auctions don’t they? So that’s not going to make any difference.

LATHAM: Well there’s huge prices in Sydney but it’s not just a Sydney thing. It’s Melbourne, Brisbane. I was in Tasmania recently and they were talking about the boom in home prices for the first time in a generation. So

it’s right around the country. And I think if you talk to parents and grandparents their number one concern is that their kids won’t be able to access what so many Australians have been able to enjoy and that is home ownership. The security of having a roof over your head that is your own. And it is a national crisis, an affordability crisis when less than 15% of the home buyers are doing it for the first time.

LAWS: In a lot of European countries, people rent all their lives. Is this something that we maybe should be getting used to?

LATHAM: No, that’s not the Australian way.

LAWS: I agree it’s not.

LATHAM: I grew up in public housing, I know the insecurity and concerns that renting can bring. You haven’t got a secure outlook for the future and ultimately you have the arguments about money and where the family’s headed and rent. It’s not the aspiration that most Australians have had particularly for their children. People want that asset, the security of owning your own home and with security comes a better chance in life.

LAWS: Just quickly to Anthony Albanese is he making a nuisance of himself?

LATHAM: Well he’s standing up for what he thinks is right but I pointed out yesterday, the Badgerys Creek decision is first and foremost a decision for western Sydney. I think there’s a good rule in politics when you get these land use controversies: you listen to the locals. Listen to the locals and

respect the opinion. In this case the opinion is from western Sydney. The second airport we’re talking about is not going to be built within cooee of the inner Sydney, so this is a matter for western Sydney MPs. We’ve got a unanimous recommendation that Simon Crean has adopted not to proceed with Badgerys Creek and that’s where the matter should end.

LAWS: Do you think Albanese would have been well advised to just sit on it?

LATHAM: Well I think he’s got some legitimate concerns, primarily about the Howard Government, because they had a promise in 1996 to build a second airport and if John Howard had kept his promise we wouldn’t be having this debate now, we wouldn’t have had all the uncertainty about

aircraft noise …

LAWS: No but we might have had it at Badgerys Creek.

LATHAM: … well we would have if the Government had kept its promise. So to some extent the Labor Party debate is a consequence of a broken promise by the Howard Government. I think the thing in the inner city is to look at ways the arrangements there can be improved. I know they have planes that break the curfew and all these concerns come out. So there are some management things that can be done in Sydney airport to improve the circumstances. But I can tell you John, in Sydney’s west its time to end the uncertainty. Labor’s made the right decision for our region, which is not to proceed with Badgerys Creek, and we’re going to stick to that 100 per cent.

LAWS: Well everybody knew it was all over anyway. The Government wasn’t going to talk about it until 2005 or something if they were still there.

LATHAM: Well there’s figures in today’s paper which say that it wouldn’t be built for another twenty years so all that was happening with the Badgerys

Creek site was they were playing politics, election by election, and it was causing a lot of uncertainty. My great frustration was that every time we went to talk to a Federal or state minister about a major project for western

Sydney they had the alibi, `oh we can’t do that because of the uncertainty about whether there’ll ever be Badgerys Creek’. So, that uncertainty [inaudible] to some extent has paralysed a lot of major projects and you just

can’t go on like that.

LAWS: No you can’t. Good to talk to you, Mark, and thanks for your time.