Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Hansard source

Yes. The Minister for Foreign Affairs is such a genius. He says, ‘That’s because houses are more expensive.’ Actually, we are talking about the problem of housing affordability, so, yes, the fact that houses are more expensive does relate to that—genius, bingo, well done!

Australian households are now spending a record 9.3 per cent of their disposable income just on paying the interest on their mortgage repayments. Let me say that again, because the Minister for Foreign Affairs was yapping away and might not have heard it: Australian families are now spending 9.3 per cent of their family’s disposable income just on paying the interest on their mortgage. When mortgage interest rates were at their highest point in September 1989, guess how much families were paying of their disposable family incomes on interest payments? They were paying 6.1 per cent. So families are paying a greater proportion of their family income now than when interest rates were at historical highs.

We have seen four interest rate increases since the last election. Do you know what that has added to the average loan? If you take a loan of $450,000 over the course of 25 years—which is pretty reasonable—then the four interest rate increases since the last election alone have added $88,000 to the cost of that property over the course of repaying the loan—$88,000 from those last four interest rate increases alone!

I will tell you what else is happening. Because of this enormous pressure on families, from this enormous housing affordability problem that families are facing, we have seen the emergence of low-doc/no-doc lenders—we have seen dodgy lenders emerging. We have seen that sector grow from zero to $8 billion over the past 10 years. And do you know what is happening? Those lenders are foreclosing on families much faster than banks do. So we have seen an enormous increase in the number of families losing their family homes—families going bankrupt because of the high cost of housing and their inability to pay these loans. If you have mortgaged to the absolute hilt to afford these extremely expensive houses—which the foreign affairs minister thinks is so great—then even the tiniest little increase in your interest repayments might send you over the edge.

Mortgage defaults have doubled in Sydney since 2002. In fact, last week we heard evidence before the Senate Standing Committee on Legal and Constitutional Affairs from Terry Gallagher, Chief Executive of the Insolvency and Trustee Service Australia. He said:

You could go back 10 or 15 years, when bankruptcy numbers were 13,000 a year, and now they are 30,000 a year.

And the Prime Minister tells these families, struggling to afford their mortgage, that they have never had it so good! I do not think those 30,000 families a year feel like they have never had it so good.

We have talked about the difficulty that young people find in getting together a deposit for a house. In fact, for many Australians saving a deposit is the greatest barrier. Once they have borrowed the money and bought a house, the repayments on the mortgage are not much more than their rent—the problem is saving the deposit. But how do you save a deposit when, week after week, month after month, we have seen increases in rent? BIS Shrapnel estimates that rents are set to accelerate in the next three years. They are looking at rental growth of 10 per cent per annum in Sydney and six to eight per cent for Melbourne, Brisbane and other capital cities. The government’s response is: that is fantastic, because the market will correct itself and in three years, five years, eight years, 10 years—who knows when—there will be more investment in rental accommodation. The problem is that almost all of the investment in rental accommodation under this government is targeted at the high end of the rental market—it is great penthouses in beautiful locations in the middle of capital cities; it is not rental accommodation that is suitable for low-income earners and it is not rental accommodation that is suitable for families. That is where you are letting Australian families down. So, buying is too expensive, renting is increasingly expensive.

We have seen $2.71 billion cut over the last 10 years from the Commonwealth-State Housing Agreement, so there is enormous pressure on public housing. We have seen emergency accommodation slashed under this government. Its own report is saying we need to see a 15 per cent increase in emergency accommodation just to keep the doors of existing services open and more like 40 per cent to begin to meet unmet demand. We have the minister for Indigenous affairs, whose brilliant solution to the enormous problems in Indigenous housing is to take money from poor Aboriginal people in cities and give it to poor Aboriginal people in remote areas. God forbid that you would actually take from some other pot of money rather than moving funds from one lot of disadvantaged people to another lot of disadvantaged people.

There is no simple answer to housing affordability. One of the enormous frustrations is that they pretend that there is some simple answer. There is not a simple answer. Of course mortgage interest rates need to stay low, to bring housing into the reach of first homeowners in particular. But we need to look at innovative ways of helping people into the first homeownership market—things like the shared equity scheme of the Western Australian government. Other governments, including the Northern Territory and the ACT, are looking at that. We need to look at those schemes. We need to make sure that there are enough tradespeople to build these houses, given that this government has presided over 10 years of destroying the skills of the Australian workforce through neglect. We need to look at ways of encouraging investment in rental accommodation to be spread more evenly so that there is rental accommodation at the affordable end of the market as well. We need to look at proposals like the national affordable rental incentive scheme that organisations as diverse as ACOSS and the Housing Industry Association have come together to promote as a way of getting more investment into the affordable housing end of the market. We need to invest more in social housing and homelessness services. All of these are things that the federal government could be doing. Instead, we have a federal government that says, ‘Not my problem—it’s all the states, it’s all local government.’

What I would desperately like to see, and what all those hundreds of thousands of Australians who are under housing stress want to see, is that the federal government would just for once take responsibility, just for once show some leadership in this area. The government say, and they said again today, that it is all about land release. I will tell you what happens if the federal government march into the states and makes them release land in the outer suburbs of Western Sydney or Melbourne. There is a lot of land release already underway there, but if this federal government try to force the states to do mass land release in those outer suburbs, do you know what you will see? You will see those homeowners driven into negative equity. Who does that help? You will see negative equity in those suburbs, but you will not see greater housing affordability across the board.

There is a lot of extra land release underway, and maybe there needs to be more. But in most areas there is a great deal of land already in the pipeline. Lend Lease has said that it has 10 years worth of the land it needs. Michael McNamara, the operations director of Australian Property Monitors, said in the Australian in March this year:

Demand for housing is extremely flat and developers haven’t been able to sell the projects they’ve got, let alone launch new projects—so we totally dismiss the argument that releasing more land on our cities’ outskirts is going to affect affordability.

Here is another one. Peter Icklow, the managing director of major Sydney developer Monarch, said:

Every time I see John Howard blaming land supply (for low affordability) I see red because it’s just not true—there are literally thousands of lots available.

So, what can the federal government do when it comes to land release? They could help out a little with the cost of infrastructure. They have totally walked away from that in the last 10 years. I will tell you what they should not be doing. The most insulting thing to Australian families is this Prime Minister telling them, often with millions of dollars of taxpayer funded advertising, that they have never been better off. We know that an increasing number of families are finding it very hard to make ends meet. They are finding it hard to pay the mortgage, hard to save a deposit and hard to pay the rent. Australian families are experiencing the worst housing stress figures in history, and all this Prime Minister can say is that it is someone else’s fault.

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