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Monday, 19 October 2015
Page: 11666


Mr ALEXANDER (Bennelong) (10:46): Housing its people is a fundamental responsibility for government. The current instability in Australia's housing market is disturbing, and the time has come for change. It is our duty as policymakers to ensure the Sydney and Melbourne bubble does not burst the foundations of our nation's economy. A median price of close to $1 million for a house in our nation's biggest city is unsustainable and, while some people benefit personally from the surge in property prices, this is not good news for the broader community and the next generation of prospective home buyers. The Reserve Bank's charter contains a duty to ensure its policy is exercised in such a manner as 'will best contribute to … the economic prosperity and welfare of the people of Australia'. This duty is exercised with success through adjusting the prime interest rate to control inflation within a prescribed range. Unfortunately, this is done regardless of the social impact on housing affordability or the capacity for a low-income family to make their mortgage repayments. As Australians overwhelmingly express their wealth through property ownership, it is my contention that it is the RBA's duty to maintain housing inflation within a prescribed level.

Earlier this year, as Chair of the House Standing Committee on Economics, I commenced an inquiry into home ownership. This inquiry has performed incisive research into the demand and supply drivers in the housing market and the impact of the current tax policies at all levels. Receiving submissions from our nation's leading academic and industry experts, the inquiry has identified a range of opportunities for reforming the current system. It is my personal belief that this reform needs to occur now. To do this, everything must be on the table and must be considered without fear or favour. A lever on negative gearing to make fine adjustments can be viewed as a dynamic tool. Superannuation could be harnessed to assist homebuyers to cross that threshold making ownership more affordable than renting. Deductibility for the owner-occupier and the creation of a home hedge fund could offer opportunities to protect our economic prosperity. We will not achieve the best results for our nation if the response to these opportunities is an ideological one. All the facts and all the options must be comprehensively assessed in order for an informed course of action to be taken. Only then can the RBA fulfil its charter responsibility to 'best contribute to … the economic prosperity and welfare of the people of Australia', by effecting a counterbalance to establish stability in the housing market.