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Wednesday, 8 February 2017
Page: 403

Mr HILL (Bruce) (12:05): I rise to speak and make some comments on the Report on the inquiry into home ownership. I was not planning to do so—I was here on chamber duty—but I have actually had a cathartic moment. I have listened to the debate—and there have been some sensible points made—and was inspired to add a few words. I want to record my thanks, in particular, for the sensible and very measured contribution and tone of the member for Bennelong and, indeed, also some of the comments from the member for Petrie—I say 'some'.

I shared a meal last night, by accident, with the member for Bennelong. I think that, with problems like this that are complex, we would do a better job if we spent some time actually talking around where we can agree and find common solutions. It is a critical issue, and there are different ways you can measure or think about making public policy. Unfortunately, the member for Petrie seems to rely more on anecdotes than data. It is lovely, I am sure, that there are a few affordable houses still left in his electorate, as he recounted to us, but, as has been said, we have to look at the data. On any reasonable measure, whether it is average prices to incomes, median prices to median incomes or repayment ability, housing affordability in this country is stuffed.

The point that the member for Petrie made, in one sense, is fine: of course we want rising prices in housing—but modestly rising prices. I cannot understand how anyone could say that the price rises that we have seen on the average or the median in the last 10 to 20 years are in any way desirable or sustainable. No society would want house prices to continue to outstrip the growth in incomes in the way we have seen. If you were drawing it as a curve—I am not sure how the Hansard records finger gestures; I do not think it does—the steepness of the curve is completely unsustainable.

Another way that we as elected representatives gauge sentiment and where we need to put our efforts and thinking is, of course, through community feedback. I, like others, have been bombarded in the last few months. The despair at their sense that they would never be able to afford their own home was certainly one of those barbecue stoppers over the summer break amongst young people—my daughter, who is 20, and her friends. But it is not just young people, of course; it is parents and grandparents worried about their children's and grandchildren's ability to have what they have taken for granted.

Sledging will not help. I will make a few critical remarks, but I will try to do them in a way which echoes and follows the tone of the member for Bennelong, and perhaps we may get somewhere. I do agree with the member for Petrie: there is no simple solution. Equally, I think he was profoundly wrong to suggest or assert that we on this side would claim that negative-gearing and capital gains tax reform was going to solve the problem. Manifestly, that is not the case. We would never claim that that will suddenly make housing affordable for everyone, but we do, with a lot of evidence behind us, put forward the proposition that this is absolutely essential as one part of the puzzle to, at the very least, stop the problem continuing to get vastly worse.

I had a hallelujah moment. I just record that the member for Bennelong's point 6 in his propositions sounded a lot to me, frankly, like the recommendations that he thought of before he was sacked by the government as chair of the committee—the kinds of recommendations that he would like to make—and they are a sensible set of propositions. Point 6 was a recognition that supply is not the only factor. Who knew! We have demand as well! I thought those who were the greatest proponents of free markets might remember that there is demand and supply, but apparently it is all the state and local governments' fault—head in the sand!

Of course, we have seen with the election of this government that we have no minister for housing, no national housing plan, stalling on the Commonwealth-State Housing Agreement and, indeed, moves to abolish one of the few Commonwealth mechanisms to keep an eye on supply, which was the National Housing Supply Council.

It is true to say that the majority of supply issues are within the province of state and local governments. As someone who, almost 20 years ago, was the mayor of a major inner metropolitan council and then served as executive director of metropolitan planning in the public service for Melbourne and Victoria, I know quite a lot about the difficulties and the challenges. But I do know that critical evidence—updated, market-based information about supply—is absolutely essential for governments to make good policy and release supply.

If you look across Australia, not all of the states have that data in the right form. I think there is a legitimate Commonwealth role, if you like, to shine the mirror back at the states and to have a basic, common set of data as to how we are going and which cities need to improve. Melbourne, of course, is leading the pack in that regard, I think—and not just because some very wise people helped to establish the program many years ago.

With regard to demand, I do have to make a couple of comments on negative gearing and capital gains tax, and they have to be bundled together. There is a political objective, I understand, by those opposite, through the heat of an election campaign, to send out the myth—the untruth—that Labor is trying to abolish negative gearing. That is completely untrue—completely untrue. What we have said is for an evidence based, sensible proposition to refocus negative gearing and to put it to work to add to supply: there is a supply initiative that the Commonwealth could think about. I think now that only in the order of seven per cent of negatively geared properties are new properties. That was never the intention when that tax concession was introduced. It was not intended to be the vehicle by which if you were someone with a few spare dollars—let's say, people in this room; we are well paid so let's say we had a few spare dollars—then the most rational thing to do now is perverse. It is to go to an auction and bid up the cost of an existing house. That is nonsensical. We cannot maintain and seriously defend the situation where the most rational thing to do and which the tax system rewards is to keep pushing up the cost of housing.

I might note also that we hear a lot in the House of Reps in a sort of automated and repetitive fashion about the importance of growing investment. Despite the lack of evidence, apparently if we give tax cuts to multinationals to take offshore somehow that is going to grow domestic investment. But anyway, putting aside magic pudding economics for a moment: we could have a veritable golden shower of investment, we might argue, if we rebalanced the current tax arrangements to encourage people that rather than putting their spare money into an unproductive use in the economy—to bid up the cost of existing housing and therefore have to force up of the cost of rents to recoup repayments for unsustainably rising prices—we could encourage them to put their spare capital into the real economy, to invest in businesses and to grow jobs. There is an idea for you! I think that other people like the World Bank, the IMF, the Reserve Bank and respected economic commentators have already passed that little gem onto the government.

Fundamentally, I think we have both a political and a policy problem. We do have—notwithstanding the member for Hughes, who tends to know more than the experts, be it on energy policy or anything else—a broad consensus amongst the experts. Respected economic commentators and independent economic agencies all say that we should refocus negative gearing and capital gains tax concessions. This is one, but by no means a sufficient, solution to start to deal with the problem of housing affordability. As has been well recorded, the government's Treasurer, Treasurer Hockey, when he was leaving the parliament, pointed this out in no uncertain terms. Unfortunately, the current Prime Minister and Treasurer got rolled in cabinet.

But in the spirit of responding to the member for Bennelong and some of his ideas, the tax reforms do stop the problem getting worse. But there are other ideas to add. He outlined some which I had not thought about in relation to superannuation and some of the changes there. Perhaps they are things that we could consider. There was a 2015 report by the Senate Economics Committee, I think, which I am part-way through reading, actually. It is still a pretty good report. It is only a couple of years old and it has a very comprehensive look. It has a couple of hundred pages about all of the supply-and-demand factors, and the member for Bennelong and others interested in this would be well advised to have a look at that as opposed to the ridiculous report we are considering now, which has no recommendations. I also commend the work of AHURI, particularly in relation to looking at how we can increase the supply of affordable rental accommodation for those not in a position to or not interested in seeking home ownership.

The other thing I would say in the time remaining is that we do seem to have lost our way in this debate, with the overfocus on tax arrangements. Housing is for living. This is a truism; I could write this in a fortune cookie, you might think. Housing is for people to live in. That has to be the public policy purpose of us thinking and talking about housing. It should not be a conversation solely about how we get investments and investment arrangements right. In that regard, the inquiry's scope was, I think, too narrow. It was just focused on home ownership. When we are thinking about how to deal with the housing affordability problem—do people have somewhere affordable, reliable and secure to live and call home?—we have to pay the same amount of regard to the whole spectrum of issues, which includes rental ownership.

I for one think Labor's policy is worth pursuing and it is a platform on which we can build, but no-one has ever said it is sufficient, and we can propose more. There are things like co-ownership models, of which Western Australia has some experience and there is international experience, and how we get rental accommodation at scale. If the Treasurer ever returns from England with some ideas, we should listen to them; perhaps they will be good.

In closing, I commend the member for Bennelong and those opposite prepared to engage in some sensible, moderate debate, because we cannot do this with one party or one level of government alone. It is a problem that can only be addressed through cooperation amongst levels of government.

Debate adjourned.