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

We are facing a housing affordability crisis in Australia, and the only people who do not seem to know it are members of the government. On every possible measure we have a housing affordability crisis in this country. We have over half a million people facing rental stress—that is, one in three families who are paying rent are paying more than 30 per cent of their household income on their rent. We have well over half a million people in mortgage stress, paying more than 30 per cent of their household income on their mortgage repayments. Families are paying more interest than ever before because their mortgages are higher than they have ever been.

The average house in 1996 was worth four years of the average wage. Do you know what the average house is worth now? Seven years average annual wages. We know that today 9½ per cent of gross household income is spent on interest repayments alone—almost 10 per cent of household income goes on interest payments alone. The government like to talk about the historically high interest rates under Paul Keating. They go on and on about it. They forget, conveniently of course, that interest rates were 22 per cent under Treasurer Howard, but they like to go back to high interest rates under Paul Keating. At the highest level under Keating, people were spending 6.1 per cent of the family income repaying their interest. What is it now? It is 9½ per cent, almost 10 per cent, of the family income. We also have almost 200,000 people on waiting lists for public housing around this country. So it is a crisis in any way you look at it.

The rate of homelessness is up. We have seen a 30 per cent increase in the number of homeless families in the last five years. We have seen $3 billion ripped out of the Commonwealth-state housing agreement, and now we have the Minister for Families, Community Services and Indigenous Affairs, who is at the table, talking about privatising the Commonwealth-state housing agreement. He did not like the good media we were getting on Labor’s housing affordability summit, so he came up with some thought bubble: ‘Let’s privatise public housing—throw the whole thing open to the market.’ What that means is that people who are currently housed in public housing around this country will lose their homes. That is what the minister’s announcement means. We know that one in two people are turned away from emergency accommodation each night. Two out of three children going to emergency accommodation are turned away each night. There are 100,000 homeless Australians every night—half of them are under the age of 22 and 10,000 of them are children. We are told again and again that working Australians have never been better off, and at this time housing affordability and homelessness are worse than they have ever been in the history of Australia.

We also know that young Australians are quickly losing their dream of homeownership. Many young Australians have given up on the dream of homeownership. Many people in their 20s, 30s and even 40s have resigned themselves to the fact that they will never own their own home. In fact, it is not crazy that they have given up on homeownership. If you look at the average mortgage for the median priced home in Australia’s capital cities, you need over $115,000 a year of family income to afford the mortgage on the average home in Australia’s capital cities. Perhaps that is okay if you are two middle-income earners and you are both working full time—you might just get by. What happens when someone is on maternity leave? What happens when someone loses their job? What happens when Work Choices kicks in and you lose your penalty rates and overtime? It is not unusual that people have given up on their dream of homeownership. In fact, we have seen that the proportion of 18- to 30-year-olds buying their first home has declined from 48 per cent to 44 per cent between 1994 and 2004 and that the proportion of first home buyers as part of the market has actually declined from 21.8 per cent in 1996 to 17½ per cent earlier this year. We are seeing a drop in the proportion of young Australians looking at buying their first homes.

We know that more families are defaulting on their mortgages. That is because of nine back-to-back interest rate increases. There have been five back-to-back interest increases since this Prime Minister promised, everywhere—in his election advertising, in his speeches, in his interviews, at his lectern, on his billboards, on his website—that interest rates would stay at historic lows. What have we seen? Five increases since that promise. And we see the effects of it every day with the families who are losing their homes.

What can we do? Is this an impossible problem? Has the government given up because there is nothing governments can do to improve housing affordability? Of course not. With three levels of government working together and working with the private sector and the community sector, we can beat this problem. We can actually make housing affordable, particularly for first home buyers entering the market; we can improve the situation for renters who are facing historic high rentals because rental availability is so low; and we really can do something about social housing and homelessness. What it takes is some political will, and that is plainly what is missing here. We have no minister for housing. Sometimes it is the minister sitting at the table and sometimes it is Senator Scullion. Who knows who is responsible? Who makes this a priority for the government? Who stands up in cabinet meetings and says, ‘Hang on a minute, what you’re proposing is going to make housing less affordable in this country’? No-one. Who is responsible?

The first and most important thing we have to do for housing affordability is, obviously, to keep interest rates low. Everyone agrees with that. The government are very quick to start making promises about keeping interest rates low, but what about their policies? They have repeatedly ignored warnings from the Reserve Bank of Australia that infrastructure and skills constraints will push up interest rates in this country. They are now reaping the rewards of ignoring those warnings. But keeping interest rates low is just one thing that we can do; we need to do more. That is why Labor have promised, if we win government later this year, a $0.5 billion housing affordability fund that will reduce the cost of new homes by cutting red-tape delays and consequently cutting holding charges and by reducing infrastructure charges that state and local governments are forced to charge for roads, libraries, parks and other amenities. So that is $0.5 million to help people get into the housing market. That is the first practical thing that we can do.

The second practical thing we have promised is in an announcement this week from Kevin Rudd that Labor will commit $603 million to a national rental affordability scheme that will help draw in $2½ billion worth of private investment. We know that the superannuation funds and the big institutional investors want to invest in affordable rental accommodation in Australia. They would do it if there were such a scheme—they have said they would do it if there were such a scheme. They do it overseas. Australian companies invest in these sorts of schemes overseas. We know it works; we have seen it work in other countries. The government could pinch our policy. I would be quite happy for them to pinch our policy because what we would see is 50,000 new affordable rental dwellings built with $2.5 billion worth of private investment. This would really make a dent in the affordability of rental accommodation.

There are a stack of people in the press saying that it would make a difference. We have Ron Silverberg from the HIA saying:

The measure is targeted sensibly and appropriately at new rental housing ...

And:

... it’s a positive move ...

We have Peter Verwer from the Property Council of Australia saying that it is a step in the right direction and:

Institutional investors hold lots of property in other countries, so there’s no reason why they can’t do so in Australia. In fact they’re very keen to do so.

We have the Real Estate Institute of Australia saying that the national rental affordability scheme is a ‘good start at addressing the rental affordability issue’. We have Gary Weaven from Industry Super Network and half-a-dozen different endorsements in the press saying that this is a step in the right direction.

Does the government say, ‘Why don’t we do something similar?’ The Prime Minister says, ‘Maybe it is a good idea; we will have a look at it.’ They have had 11½ years to look at this problem. How much longer do they need? Another 11½ years? This government have turned a blind eye while first home buyers are locked out of the market and while renters are paying more than ever before for their rental accommodation. Consequently, they are not able to save a deposit to go into their first homes because they are paying $300 to $400 a week to put a roof over the family’s head. How do you save a deposit when you are paying $300 or $400, or 30 per cent of your gross family income, on rent—or 50 per cent as some families are doing?

The $603 million leverages another $2½ billion of private investment. That is a substantial new investment. We heard from the Treasurer today a lot of carping ‘won’t work’ criticisms. Not once have I heard a practical recommendation from the Treasurer or the Prime Minister—I was going to say the housing minister, but of course there isn’t one—or from anyone on the government side to actually draw new investment into the affordable end of the rental market. We see investment in the rental market, but because people are mum and dad investors they are particularly interested in capital gain and they are looking for high-end investments—expensive investments—that are not going to help your average family in your average suburb.

Labor are also committed to a National Housing Supply Research Council to analyse the adequacy of land supply across the nation as well as rates of construction. We had a note from the Reserve Bank just yesterday talking about the critical shortage of new rental properties and what it is doing to the Australian economy. One of the reasons they give is that the number of houses and units being built is currently well short of estimates of underlying demand for new housing. Over the year to the March quarter, 147,000 dwellings were completed. They go on to say that they are not exactly sure how many we need, but it is probably around 175,000 a year. Because we have not increased the number of units and homes being built, this ongoing shortfall has meant that ‘the vacancy rate at 1.4 per cent remains close to its lowest level for 30 years’. We are also seeing that the annual increase in rents at 5.2 per cent is well above the rate of underlying inflation. One of the reasons for that is that we are not building enough new housing to keep up with historically high immigration rates. We know that we are getting well over 100,000 new immigrants each year under the Howard government. We also see that people are living alone and living longer, so we need more houses to be built all the time. One of the reasons why rent is so high and new home prices are so high is that we are just simply not building enough of them.

The National Housing Supply Research Council, designed to analyse the adequacy of land supply across the nation as well as rates of construction, will help us to determine where we need new building and what sorts of policies we need to make that happen. We have also committed to a national affordable housing agreement with the state and territory governments and with the Local Government Association.

I cannot tell people how tired I am of hearing the Howard government say it is all the fault of the states. One minute there is no housing affordability problem and it is all in our imaginations, and the next minute it is all the fault of the states. Well, it is one or the other, but let us go with ‘all the fault of the states’ for the moment. There is no simple solution to this problem. I certainly do not believe there is a simple solution. The government’s one simple solution that is going to fix everything is releasing more land in outer suburban areas. Land supply is part of the solution but it is not the whole solution. If we simply flood the market in outer suburban areas with lots of land, what you will see is a big drop in prices in a ring of surrounding suburbs, pushing homeowners in those areas into negative equity but having little effect across the rest of the market. So we are not going to get increased affordability across the rest of the country.

Pretending that there is one simple solution is so simplistic and so fuzzy headed. What has this government done to improve housing affordability? Big fat zero. The only thing the Treasurer could think of today was Commonwealth rent assistance—I think that was a Labor policy, actually. So big fat zero from the federal government on what it has done.

At the end of the day we have to improve housing affordability for first home owners. We have to improve the availability of affordable rental accommodation. We have to improve access to emergency accommodation and to community and public housing. To do that we need cooperation between three levels of government. We need a suite of policies targeted at the different areas and different aspects of affordability. At the end of the day the most important thing is that we see new homes being built, and this government has no proposal to see that happen. (Time expired)

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