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Thursday, 15 June 2017
Page: 6640

Mr DICK (Oxley) (12:12): Listening to the member for Petrie, it is little wonder that most people in his electorate think that he is living in an alternative universe, because he thinks this is as good as it gets. He thinks that the Australian dream is to own a house, but not because of any incentives that the government will give to first homeowners. The member for Petrie, just like his government, believes that the only way you get a house is to have rich parents. Remember that great advice? Who can forget the budget a couple of years ago, when the then Treasurer and finance minister were chomping on their cigars as they lectured everyone about tightening their belts. Those opposite were cranking up the music on the night of the first Abbott-Turnbull budget, cranking up 'The Best Night of My Life', and meanwhile giving up on housing affordability.

I rise to speak on the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017 and to support the amendment, which notes 'the government's failure to deliver any meaningful measures to deal with housing affordability'. This bill gives effect to some of the government's proposed changes to the foreign resident capital gains tax regime announced in the 2017-18 budget. We know that the bill contains amendments that will increase the capital gains tax withholding rate for foreign taxed residents from 10 per cent to 12½ per cent and that will reduce the capital gains tax withholding threshold for foreign taxed residents from $2 million to $750,000. We know that the government has announced this as one of their 'measures to reduce the pressure on housing affordability'. Labor will be agreeing to this bill, but, when we look at this government's record on housing affordability, we hear a lot of platitudes but do not see a lot of action when it comes to getting young people into the housing market.

Under the current regime there is a non-final withholding payments obligation imposed on a purchase of certain Australian real property and related interests where it is required from a foreign resident vendor. The purchaser is required to pay 10 per cent of the first element of the cost base, usually the purchase price, to the ATO. This amount may be withheld from the payment the purchaser makes to the vendor. Such an obligation does not arise if the market value of the asset is less than $2 million and the asset is taxable Australian real property or an indirect taxable Australian real property interest the holding of which causes a company title interest to arise. So the government changes will increase the 10 per cent of the first element of the cost base required to 12 per cent and lower the threshold for the market value from $2 million to $750,000.

While this is a minor step, we know that there is much, much more that this government should and must be doing to help housing affordability. We only need to look at the UBS report last week which showed first home buyers in Sydney need 40 years worth of savings for a deposit. This is a common theme we hear when we are out in our communities. It beggars belief that the member for Petrie does not see this as a serious issue and believes that his measures are even going remotely close to dealing with housing affordability.

We know from the latest data that the price of housing is going through the roof. We know from the data that owning your home in Australia is becoming unattainable for many in the community. We hear a lot from the government talking about the great Australian dream. Well, it is becoming a great Australian nightmare. We have long enjoyed the highest rates of home ownership in the world, but, sadly, no longer. From 1971 until 2001, 68 to 70 per cent of all Australians owned their own home, according to the ABS stats. But we know economists have now demonstrated that there has been a real decline in home ownership rates since then. A study by the Melbourne Institute predicted that sometime this year we will see a tipping point reached and fewer than 50 per cent of Australians will own their own home. We will have gone from 68 to 70 per cent from 1971 until 2001 to now in 2017 down to 50 per cent of Australians owning their own home.

The typical Australian house now costs 5.6 times the median household income, meaning Australia is one of the world's least affordable countries according to the list put out by the US urban policy consultant demographer. Prior to Australia's property boom in the late 1980s, most Australian cities, including my home state's capital of Brisbane, had ratios of house prices to incomes of around three or less, which had been classed as affordable.

We know in looking at their record in the four years that they have been on the Treasury benches that the Abbott and Turnbull governments have closed the National Rental Affordability Scheme. This is the scheme which provided 38,000 new affordable housing units. We know it was on track to achieve a target of 50,000. They refused to provide funding certainty through the national partnership agreement. They cut $44 million per year in capital funding for emergency accommodation for women and children escaping domestic and family violence. They also cut funding to homelessness Australia, National Shelter and the Community Housing Federation of Australia, reducing the effectiveness of their advocacy and policy functions.

A little earlier this year I did an affordable housing and homelessness roundtable in my electorate with Senator Doug Cameron and a number of key stakeholders and community organisations. This was the message delivered loud and clear. And it would not just be in my electorate; it would be in every electorate in Australia. Those people dealing with housing and homelessness and the crisis that we see across this nation are saying the same thing: the direct negative result of the coalition government under Prime Minister Malcolm Turnbull scrapping the first home saver accounts scheme and cutting capital funding for emergency accommodation is pushing some of these groups to the absolute limit and having a huge impact. It is not just about people getting into the housing market but about people even having a roof over their head.

We on this side take a different view. We on this side understand the issues facing those in Australia who simply are at breaking point when it comes to crisis accommodation, and young people wishing to get into the housing market. Under the Leader of the Opposition, Bill Shorten; and the shadow Treasurer, we know that tax reform could include increasing the supply of affordable and social housing, improving rights for private rental tenants, inclusionary zoning for affordable and social housing, adequacy of income support measures, a focus on those groups that are really supporting vulnerable Australians and housing for people with disabilities. These are all issues that this government chooses not to engage in and areas this government chooses to remove funding from. All of this means a lot of stress for people looking to get into the housing market, but also, even before they are able to scrape enough money together for a purchase, the pressures they are under in rental accommodation at the moment.

We know the government's record has been pretty much divided, just like most things that the government does as an increasingly right-wing, divided government. We are seeing a crazy—and that is the only word I can use—proposal to allow early access to superannuation for housing deposits. We know that, when push came to shove, the biggest policy announcements in the lead-up to the budget were 'maybe you should get rich parents', 'find a better paid job' or, as some of the National party members indicated, move to the bush. When it comes to the government's record, they have failed to deliver any meaningful measures, just as the amendment moved by the shadow minister indicated today, to deal with housing affordability.

In my home state of Queensland, what the state government has announced this week, which I am fully supportive of, is 5,000 social housing homes being built. That is a demonstration of what governments can do to deal with the issue of housing and housing affordability—a $1½ billion plan to create 4,000 jobs. We know that the state Labor government in my home state of Queensland, the Palaszczuk government, will seek to partner with the private sector and aim to target vacant and underused properties already owned by the state as development sites. We know that the plan has been welcomed by the construction sector. We know that we are seeing a huge uplift in the economy in Queensland by investing in the construction of housing. By investing in real homes, in real affordability, you are going to see the largest investment in housing that this nation has seen.

Mr Deputy Speaker Vasta, when you look at what the government has delivered, while the bill today will be supported by both sides of the chamber, we as the opposition say that the opportunity has been lost—all of the opportunities where this government has basically run up the white flag. I noticed the minister before. He is not the housing minister, because this is a government that refuses point-blank to have a housing minister; it is not interested in actually appointing someone with portfolio experience or capabilities. A media report says:

Industry Super Australia has warned the scheme will hurt returns by requiring funds to 'maintain more liquid asset allocations to deal with unpredictable withdrawals'. This means funds may have to invest more in cash and short-maturity securities, which carry lower returns.

The government has this crazy scheme of raiding superannuation, which we know will put the cost of housing up, not down.

What have expert economists said about the government's so-called affordability measures? Economists have questioned whether this package of measures will have a significant impact. The Grattan Institute described the package as 'a grab-bag of easy "solutions"'. They said:

A few of them sound good; fewer still will make much difference.

KPMG's chief economist said that it is not enough and argued that other tax changes would be more effective.

The Australian Council of Social Service welcomed what it called 'the first steps to address housing affordability' but argued that 'the extension of super tax breaks to people buying a first home or downsizing is a backward step that will increase house prices and waste public revenue'. The Property Council of Australia supported the package in general but argued that 'the initiatives targeting foreigners will damage Australia's reputation and will do nothing to help housing affordability'. These are experts in the field commenting on this government's performance when it comes to housing affordability.

On the day before we see the net debt blow out to an absolute all-time record we know that we are going to be paying the highest amount of net debt since World War II. Simply, without negative gearing and supply-side reform we know that what the government is proposing could ultimately lead to price increases. They are not flatlining. The government is not doing anything about putting downward pressure on prices. The measures that it wants to support, as part of its so-called reform, will actually increase the costs for Australians when they want to buy a house.

Labor will be standing firm on the announcements that we have made to date about reforming negative gearing and capital gains tax concessions, limiting direct borrowing by self-managed super funds, facilitating a COAG process to introduce a uniform vacant property tax across all major cities, increasing foreign investor fees and penalties, and establishing a bond aggregator to increase investment in affordable housing. We know that this package of measures will assist many young Australians, including in my electorate, where we are seeing young families moving to the south-west of Brisbane, a high-growth corridor, doing everything they can to try and get into the housing market. What they need is a government that is prepared to make the tough decisions. They need a government that will stand with them and help them to enter the housing market—to do everything that it can to give them the opportunity of achieving the great Australian dream. Sadly, under this government we are seeing a nightmare unfold, and I only hope that the government will start listening to Labor's sensible proposals to deal with housing affordability.