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Thursday, 1 March 2018
Page: 2559

Mr HILL (Bruce) (11:13): It's a pleasure to follow the previous speaker on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018. I think where he finished is where I would start. This is a crisis in this nation that affects people, and in this place we can often get lost in the numbers. The numbers are profound. We are now right at the top—it's not a competition we want to win, but we're right at the top—in the world as one of the most expensive places to buy a house or rent a house. That's not where we want to be. That's not what good policy should be seeking to achieve.

We've seen change in just a generation. It used to take about four or five times an average weekly wage to get an average kind of home—that's been fairly steady, with a few ups and downs, for many decades. That's grown out of control in the last couple of decades. In Melbourne and Sydney, for example, you need between 10 and 12 times an average weekly wage just to have a crack at getting an average foothold in the housing market. It's not a situation which we should be relaxed and comfortable about, to borrow John Howard's ridiculous phrase. His aspiration for the nation was to be relaxed and comfortable—what a silly aspiration for a nation! The current Prime Minister's aspiration for the nation seems to be an Australia where he's the Prime Minister forever and his rich mates pay a bit less tax. That's pretty much the extent of it.

The other aspects of the numbers are instructive. We have 195,000 people right now across Australia on social housing waiting lists. None of the bills that the government's putting forward do anything about that. We had 288,000 people in 2017 presented to homelessness services. That is 288,000 Australians seeking help in one year. They're people, not numbers.

In response to this crisis, we were told in the lead-up to the budget—remember the headlines?—we were going to have housing as a centrepiece of the budget. It was going to be fantastic. We were finally going to confront this crisis. That lasted for about two weeks and then kind of fizzed away. I think Paul Keating's comment on the Prime Minister is apt: he's a fizzer—big red firecracker, light it up, off it goes and then nothing.

In response to that, we have no minister, no plan and a series of teeny-tiny bills scattered around the Notice Paper. If you brought them forward together, maybe it would look a little bit more like a package then, but instead I think the political strategy is to have a whole bunch of do-not-much and do-nothing bills scattered around with 'housing' in the title, creating the illusion of activity, because, if you say 'housing' in the title of a bill, maybe someone will think you're taking the crisis seriously and doing something.

The other aspect of the strategy, as we hear from government speakers on these teeny-tiny bills every now and again when they pop up, is to blame the states. It's all the states' fault, you see, because they haven't put enough money in here or it's a supply problem. We haven't got enough land supply; that's the problem one week. But that is a nonsense. As we know, housing is a market. There is a housing market. There's clearly a role for government, particularly at the crisis end, for people who are desperately poor and need a house to live in. Shelter over their heads is kind of important in the scheme of things.

But there's also supply and demand in a market. Yes, there should be a focus on supply. Most of that—not all of it—is largely within the province of the states making sure there are enough new development sites on the edges of cities and in established areas to build houses on. That's fine. But there's also demand and, whichever way you look at it, the big levers of demand are in the Commonwealth's control. They just point-blank refuse to own up to that or do anything about it. I say to the government: every time you bring forward one of your silly little do-nothing bills that don't really address the problem with housing in the title, we will stand up, we will speak up and we will call you out for the lack of action.

Some measures in the government's little do-nothing bills are actually harmful—for example, the 'raid your own superannuation' one. Apart from the fact that it distorts the purpose of superannuation in this country, which is to provide for a decent retirement, not to get you a house to live in when you're young, all economists—but they're just economists who study these things; the government are a bunch of geniuses, of course, who know best on most matters, particularly when they don't like looking at expert evidence—say that's kind of a dumb thing to do if housing's unaffordable, because you just put more fuel on the fire. You push up prices by adding to demand and bringing more cash in.

From our point of view, most of the government's budget measures do very little. That one, as we've spoken about, is downright harmful but comes on the top of the quite offensive set of statements that we've heard from the government like 'Get rich parents.' Particularly in the major capital cities, as I've said, if housing now is 10 to 11 times average weekly earnings just to have a crack, you probably do need rich parents to get your $100,000 or $200,000 for a deposit so you can have a crack at borrowing the rest. That's if you're not in the casualised workforce which the government is hell-bent on accelerating in its own workforce of the Public Service, as we're now learning, but also more broadly. You can't get a loan. Funnily enough, if you're a casual worker for 13 years, you can't actually get a bank loan to have a crack at buying a house even if you've got rich parents to give you the deposit. Or everyone could get a $200,000 job. You could get a much better paying job and then you could have a house. We heard in the last few weeks the third leg of the three-legged stool—remember we had trilemmas and three-legged stools last year for a little while on energy policy. The third leg of the housing policy is, 'Get rich mates.' If you haven't got rich mates or you can't get a great big pay rise, that is another option. You could get a rich mate to just give you a house.

I want to make a couple of remarks on negative gearing and capital gains tax. Again, we've said we'll stand up, we'll speak up, we'll call this out every time they bring forward a nothing bill. The fact is that the current combination of negative gearing and capital gains tax exemptions fuel demand for housing. I don't think that's a controversial statement. But that's for a few reasons. Partly it's a terrible, ridiculous and unproductive use of capital. If you're a high-income earner in this country, the most rational thing to do on a Saturday is wander down the street, find an auction and bid up the cost of an existing house. You can outbid a first home buyer because you get a great big tax kick from the Australian government. The people who need it least, as usual with this government, get the most.

We hear a lot about investment at the moment. I would think that it's not a difficult thing to see that that is an unproductive use of capital. Bidding up the cost of an existing house is not actually where we want spare capital from high-income earners or those with cash in their pockets to be putting it. I'm old fashioned on this. Housing is for people to live in. Housing isn't supposed to be the preferred investment vehicle or a class of investment in the country. It's completely unproductive. I'd rather see a tax system that encourages people with a bit of spare money to invest in the share market or invest in businesses or invest in something that might grow the economy and grow jobs. Who knew? It's a very pro-business statement, I know.

But as we've also heard, the current tax concessions are enormously regressive. Overwhelmingly, the benefit goes to those who have most, the top 20 per cent of income earners, people already with capital and wealth. As usual with this government, they get the big kick along and the benefit. Every few weeks when this comes up in question time, we hear about the nurse and how somehow apparently we on this side hate nurses because we want to refocus the nurse investor. Again, it's a smokescreen and a distraction.

An honourable member interjecting

Mr HILL: My mum was a nurse. I have a lot of time for nurses. I love nurses. And good on anyone who wants to have a crack at getting into the market. But the data is clear that the overwhelming benefit goes to those who have most. Strip it back, that is the entire point of the Liberal Party. We know this. They're the party of wealth and capital. Own it, be up-front about it, as you are with multinational tax cuts.

The other thing you have to call out about the negative gearing and capital gains tax cuts is they're expensive. We've heard a lot about debt and deficit, structural budget repair and the budget emergency. Apparently the budget emergency doesn't apply if you want to give yourselves a tax cut. Everyone earning over $180,000 in the country got a tax cut last time—no budget emergency there! There were $65.4 billion of big business tax cuts—no budget emergency there! It is entirely unclear how that will be paid for because all the pain appears in the out years. It is in years 7, 8, 9 and 10 that it really ramps up. It's only an emergency for those on welfare and for the most vulnerable people in the country so the budget emergency doesn't apply to everybody.

It is a good thing to do from a structural budget repair point of view to refocus the tax concessions. They're enormously expensive. We hear a lot about how Labor wants to abolish negative gearing and capital gains tax. That is not true. That is not our policy. Our policy is to refocus those concessions and put them to work so that you can still negatively gear and you can still have that big capital gains tax deduction on new housing. What that would do is put negative gearing to work and back to the original point of it, which was to help encourage new supply in the market. For the government that thinks it's all about supply and pretends demand doesn't exist, that would be a sensible thing to do as well. People who want to invest in the housing market could get a tax deduction because they're building new houses, bringing new supply on and putting downwards pressure on prices. That is a good thing. That is our policy.

Labor would do a positive thing for the budget over 10 years, particularly in the out years; we'd return a lot of money to the budget in a progressive way. It wouldn't hurt those who have least. It would moderate the damaging price rises we've seen. No sensible society in the world, you would think, wants to see house prices going like that. Let the Hansard say my hand went straight up in the air because that's the nature of the curve in the last couple of decades. You might want house prices to go up. They go up and down by a few per cent in a normal market environment—sometimes they go down a bit and sometimes they go up a bit. That's okay. You can have house prices going up roughly in line with inflation but you don't want to see house prices go up by five and 10 per cent year on year. That's a nonsense. It is completely distorting to the economy and it locks ordinary people out.

We hear a lot about Menzies. We had the 75th anniversary of his seminal 'Forgotten People' speech last year—it was a big moment. He had a vision for the country as a nation of home owners. St Menzies would be appalled seeing the current Liberal Party. A nation of landlords and renters is their vision. That is unsurprising, as I said, from the party of wealth and capital.

We have a sensible plan to address the nation's housing crisis. Ultimately, it should come down to the fact that it should not be easier for someone to buy their 17th investment property with a great big kick along from the Australian government: 'Well done you. You've already got everything; let's give you a little bit more.' It should not be easier. Our housing policies should not be set up like that at the expense of people who have no chance of getting into the market.

Bringing this back together: as I said, we'll stand up every time you bring forward a nonsensical little teeny-tiny measure and pretend that it's going to do something about the housing crisis in this country. If the government were serious they would understand that we live in a cooperative federal environment, that no level of government can deal with the housing crisis alone, that you have to have cooperation between the Commonwealth government and the states and indeed local governments, particularly with the planning and development levers that they control in housing approvals. You have to actually sit down and have a national conversation and a plan. What do we have from the government? There's no minister for housing. They roll out muppet 1 or muppet 2 or muppet 3 every now and again, saying something on it, but there is no minister for housing. That's a disgrace.

We just saw one of the other silly measures, in the other chamber, about the national agreements. They're going to impose, as part of their housing policy, a requirement on the states to have a housing strategy.

An honourable member interjecting

Mr HILL: They're going to impose a requirement on the states to have a housing strategy.

An honourable member interjecting

Mr HILL: Sure, that is reasonable, but there is no Commonwealth housing strategy. You say to the states: 'You have to have a housing strategy, but we don't. We don't have a housing strategy. We have no coherent plan. We'll just come and pick off little bits and pieces. Meanwhile, let the system rip.' Those who have most can keep milking the taxpayer through tax deductions that are clearly unsustainable.

Labor senators in a number of the Senate inquiries have included the radical recommendation that the government get a housing strategy.

An honourable member: That's socialist!

The DEPUTY SPEAKER ( Mr S Georganas ): Order!

Mr HILL: Apparently that's socialist—we hear the assistant minister telling us—despite the overwhelming evidence from every expert that it would be a good thing to have a housing strategy to guide your policy, instead of little bits-and-pieces initiatives to make people think that you're doing something.

In closing, I again remind the government that it's not actually a socialist policy plot to say, 'Hey, those big tax concessions need to be reformed.' Indeed, it's a position the Prime Minister used to hold and articulate publicly—you know, him. We had a question yesterday in question time about policy consistency. If you noticed, we laughed, but we're all decrying it. Which inconsistency do we mean? We could talk about the republic, climate change, negative gearing—that's certainly up there. The IMF, the International Monetary Fund, only in the last week, said:

The capital gains discounts on housing should be reduced and other tax incentives limited.

The OECD says that. The government's own Financial System Inquiry said that. So did the Grattan Institute and ACOSS—we could dismiss them because they're worried about poor people; we don't want to know about them! The Australian Institute of Company Directors and the Treasury, the government's own Treasury, said, 'Fix your unsustainable tax concessions.' For every stupid bill you bring forward, we'll keep saying the same thing. Hopefully, we'll win the election, and then we'll do something about housing.