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Thursday, 15 June 2017
Page: 6633

Mr VAN MANEN (FordeGovernment Whip) (11:42): It is always a pleasure to sit in this House and listen to the contributions from the member for Fenner. I look at his pious amendment. That is the only way I can explain it. It adds nothing to the debate—nothing of substance, nothing of value whatsoever. But that is typical of those opposite. The member for Fenner, given his experience prior to being in this place, should really know better. But I do have a lot of time for the member for Fenner because he has had some good things to say over the years. It just appears that, now that he has come into this place, they have gone somewhat on the backburner and have been filed in the 'Do not pull out the file anymore' file, somewhere in the archives.

It is pleasing to be able to speak on another piece of legislation that the government is introducing in order to deal with the issue of ensuring that foreign investors, whether they be individuals or companies or multinationals, as we have seen with other pieces of legislation, pay their fair share of tax in this country. This bill deals with the issue of foreign resident capital gains withholding tax. As part of our 2017-18 budget, we announced a range of reforms to lessen the pressure on housing affordability in this country. This particular measure seeks to address capital gains tax outcomes for foreign investors and, importantly, address the low levels of tax compliance that plague this sector and is a key part of this reform.

The government understands that the issue of housing affordability is very topical at this point in time. We see a wide range of statistics bandied around, and the member for Fenner outlined a number. We accept that, over the past 20 or 30 years, the affordability of housing for many people has decreased. But it is also important to look at different markets around Australia. In Sydney and Melbourne and in parts of Brisbane there are issues with housing affordability, but in my electorate of Forde that is not the case. I was talking to one of our real estate agents only yesterday, and he said to me that he has done an exercise which shows that it is actually cheaper for somebody to buy a house in my electorate than it is to rent. But we never hear that discussed, and I am sure, if it is occurring in my electorate, that it is occurring in other electorates around this country.

The issue, as this real estate agent pointed out to me, is that the high cost of rent means people do not have the capacity to accumulate and save a deposit. Even if they can get a 10 per cent deposit there is the cost of mortgage insurance. So it is not necessarily about the price of the house per se but about some of the other on-costs. Part of that could be offset by ensuring that first home buyers have access to the first home buyers grant whether the property is a new property or an existing property so that they have proper choice. I know there is the argument that first home buyers grants are directed at new property to increase supply, but supply will increase anyway because that is what the market requires; it requires new houses. But it is not just new houses that first home buyers are looking to buy. Sometimes they are looking to buy established houses, and that creates turnover in the established housing market as well. So there are a number of inefficiencies and inequities in the system that make housing affordability an issue.

This bill, the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017, obviously does not deal with those issues, and some of those issues are state-level issues for state governments to look at. Importantly, this bill seeks to deal with the issue of investors buying property and not paying the appropriate level of taxation. Whether it is through our multinational tax avoidance bills—which, interestingly, those on the other side of the House voted against—or this piece of legislation, or our changes to foreign investment rules, we on this side of the House are constantly seeking ways to ensure that those investors from overseas, whether they be individuals or multinationals, pay their fair share of tax in this country.

This bill, dealing with the capital gains tax withholding regime, is one part of a range of solutions that we are applying. It is designed to help to turn around some of the statistics I have outlined. Expanding the regime as outlined in this bill aims to improve its integrity by capturing more property transactions and encouraging greater compliance with our capital gains tax rules. The changes to the withholding tax rate will see it rise from 10 per cent to 12½ per cent, and it will apply to assets with a market value of $750,000, down from some $2 million. The changes in this bill will affect a wide range of foreign purchasers in Australia, but I do not have an issue with that because I want to see them pay their fair share of tax.

I commend the bill to the House in its original form. As I said in my opening remarks, it is disappointing to see that, rather than add to the bill, all those opposite can do is move some pious amendment that does nothing for the substance of this debate. I commend the original bill to the House.