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Wednesday, 8 February 2017
Page: 398

Mr HOWARTH (Petrie) (11:45): I rise to talk on the Report on the inquiry into homeownership, by the Standing Committee on Economics, as well. It is disappointing that there were no recommendations that came from that committee. I would like to put on the record for those in the parliament and for those people in my electorate that Australians love property. Australians love investing in property. I think you would find that, regardless of some of the concessions for investors that are currently in place, Australians invest in property because they understand it. They know that bricks and mortar are generally a safe investment, because in this country over the years property investment has continued to go up and up and up. Not as many people understand the share market or have had experience in the share market, so naturally property investment is a safe investment.

I do not think it is just investors who are causing property prices to go up. If you look at self-managed super funds and so forth, more people are investing in property, not because they get a tax deduction—because they do not in that case—and not because they can negatively gear it, because they cannot in that case. It is because it is a safe investment. It is because they understand that bricks and mortar are something that continues to go up, and they are confident in investing in that area.

My concern is that those opposite make out that scrapping negative gearing and tax concessions will all of a sudden make it so much more affordable for people trying to enter the market. I want to say to people in my electorate: if only it were that simple. If only I could stand here and say, 'Yes, let's do what they want to do and scrap negative gearing, scrap those incentives for investors, and all of a sudden you'll be able to own your own house.' They make it sound so simple, but the fact is that some of the comments from my senior coalition colleagues are very true and are also open to young people in my electorate.

I bought my first home when I was about 23. It cost me $93,000, I think, at the time, and I was earning about $27,000 a year working full time in retail. That was quite a lot of money, and it was hard for me to buy it back then. But my father obviously taught me. He said: 'Luke, this is a good thing to do. Invest younger'—

An opposition member interjecting

Mr HOWARTH: Sorry, what was that?

An opposition member: Why did you leave retail?

Mr HOWARTH: That was off topic, but thanks for your interruption! Please listen. He said, 'Look, it's a good thing to invest in and get involved in,' so I took the plunge. He encouraged me to save from a young age.

To say to young people that there is some sort of easier path than saving for a deposit, working hard and trying to put away money to invest is simply going to leave people disappointed. In years to come, if this policy or incentive that is currently in place is abolished, I think you will find a decade later that those opposite advocating for this might just look silly, because it is not as simple as, 'Let's scrap those procedures, and then all of a sudden young people will be able to invest.'

Let us not forget, as well, that the state governments also have massive increases in state stamp duty for investors, so to say that there is no barrier for investors is not altogether true. In most cases stamp duty is double the cost for investors compared to owner-occupiers. It certainly is in Queensland. So to say that there are no disincentives is not true.

For those opposite to say, 'If we get rid of negative gearing and we get rid of incentives for investors, rents will not go up,' I think is also not true. If investors cannot negatively gear then of course they will need to positively gear. Of course they will need to make more in rent than what interest payments to hold that property are going to cost them. It is just common sense. I know that the Labor Party scrapped this policy before, years ago. Then it was quickly reimplemented.

The other thing you have to look at, too, is some of the comments by the Deputy Prime Minister on first home buyers. I think one was, 'Go bush. Move out to Tamworth or to the electorate of New England.' Right now in my electorate you can buy a house for $300,000 in some suburbs. Part of my electorate is in Brisbane. Thirty per cent of my electorate is in Brisbane. Seventy per cent is in Moreton Bay. In the suburbs in Moreton Bay you can pick up a house for $300,000. There is a rail line into the heart of Brisbane city. It takes about an hour. So there are places you can buy for around that in my electorate. Other places in the southern end of my electorate, closer to Brisbane city, are much more expensive. They are probably up around the $600,000 or $700,000 mark. That is not like Sydney, though, which is well over the top. In Brisbane City Council in Bald Hills you can also buy houses in my electorate for around $400,000. So to say that capital cities everywhere are unaffordable is not true.

I will say for the benefit of those opposite and other people in my party that I am finding that there are younger people now who are becoming a bit more savvy. I will just pick up the Deputy Prime Minister's comment again that, 'You can move bush and have a bit of a lifestyle change.' Sure. But also more and more young people now want to live in the city in units. They want to live where the entertainment is. They want to live where the shopping centre is. They want to live where the night-life is. Often they will buy a property for $300,000 or $400,000 and live in that property for six to 12 months. They might get a couple of their mates to move in with them. Then sometimes they will rent it out after that and go rent themselves at a unit in the city. So they are also able to take advantage of the incentives that are in place for investors. Not everyone wants to nest and live in their own home. Some are quite happy to buy a property in a different area, rent somewhere else, pay that off, use those investments and then make a bit of a capital gain so they can buy a bit closer in.

I raise these issues in particular because I do not want people to think that it is all so simple. We need to be educating young people about money. We need to be encouraging young people to save, just like my dad did with me. He encouraged me to save. He encouraged me to invest. My dad left school when he was 10. He only went to year 5. He has done very well for himself. Something I try to do when I talk to the young people in Petrie is encourage them to set goals. I ask, 'What is it that you want to achieve in 2017?' If they listen to those opposite they will tell them that home ownership is never going to happen and that young people are incapable of it. I say, 'That is not true.' I say, 'Set yourself some goals.'

One of the things that the former Treasurer said is, 'Get a better paying job.' Perhaps he could have used a bit more tact and not said it so bluntly, I agree, but there is truth in what he said, isn't there? There is truth in the fact that we all want to work our way up and get a better paying job. That happens over time. The older you get the more experienced you get, the more education you get and the more opportunities you get. We are finding now that fewer people are in the same job for 20, 30 or 40 years. We are finding that more people have three or four careers in their lifetime.

The Prime Minister mentioned that parents may help out with loans. In some cases they are able to do that—that is true—but it is not in all cases. Not in all cases in my electorate are parents in a position to help out. But in some cases that may be true. That is a good thing. But we should not discount all of that advice as though it is crazy. Let's look at this thing in context and let's not promise the world to people as though one little change that we make in this place around investment is all of a sudden going to make it so that they are able to own their own home. Everyone has that opportunity. I say to every young person in my electorate: you can do what you want to do. It does not matter if you are uneducated and you left school in year 10. You are able to go back and get an education and do what you are able to do. So let's not limit ourselves and, to those opposite, let's not make promises that this one little change will all of a sudden make a difference where everyone will be able to achieve home ownership and that the way things are now no-one will. In my experience there are some places in the electorate that are still affordable. Yes, house prices have gone up, but that is not such a bad thing. We would not want prices to come down and for people to be left with mortgages and a lot of outstanding debt.