Kerry Bartlett (Macquarie, Liberal Party) Share this | Hansard source

No-one has a monopoly on concern for those people wanting to buy a house. We are all concerned to see that young people and young families have an opportunity to buy a home of their own. We all want our children to be able to have access to housing at an affordable price. But we need here to separate the rhetoric from the reality. What we have heard from the other side is a lot of rhetoric but very little in terms of substance. If we are going to look at solutions to the issue, we need to understand the causes for the crisis, if there is a crisis in the first place. The member for Kennedy was quite right to say that the issue is a supply-side issue rather than a demand-side issue.

In looking at the situation and the facts, I want to turn to the very thorough and exhaustive report released earlier this year by the Property Council’s residential development council. It was a thorough report which analysed the causes for the expensive state of housing in Australia. I think this is very instructive in understanding the reasons for the situation and therefore what we ought to be doing to try to address the situation. The Property Council outlines five reasons for the high and growing cost of housing in Australia. The first is this:

Limited land supply, induced by restrictive land release policies of the state and local governments, is a significant driver of housing costs.

That is, the shortage of land due to the failure of the state governments and local authorities to release adequate land for people wanting to buy a home. For instance, the Property Council said that in 2003-04 in Sydney alone there was a shortage of over 3,000 blocks of land. There was a demand of 7,600 blocks of land and a release of only 3,500 blocks. It goes on to estimate that the shortage of land in Sydney is adding around $30,000 to the cost of blocks of land and therefore $30,000 to the cost of a new house-land package. So the first factor it identifies is inadequate land releases.

The second factor the Property Council identifies is government fees and charges. It says:

Government related taxes, fees, levies, charges and compliance costs are also adding enormously to the cost of new housing.

The Property Council says that typically this is adding in our capital cities anywhere between $50,000 and $100,000 to the cost of a new house and land package. In fact, in some parts of Sydney—in north-western Sydney, according to the Property Council—up to $100,000 and even $130,000 is added to the cost of a new house-land package by the charges, levies and costs of state and local authorities. This is outrageous, this is exorbitant and it is crippling the chances of first-home buyers of buying a home and getting a foot into the housing market. The council estimates that between a quarter and a third of the cost of a new house and land package is state and local government charges. It estimates that they can be greater even than the cost of the land itself—that you are paying more to the state government and local authorities than the actual cost of the land because of those charges.

The third cause the Property Council identifies is the state and local infrastructure levies applied to new homebuyers under a user-pays argument. It says that they are ‘adding significantly to the combined weight of government taxes and compliances’ and that, in many cases, they are far in excess of the actual cost of providing the relevant infrastructure. In other words, state governments are using their utilities—Sydney Water and Integral Energy, for instance—as milk cows for the state government. They are beefing up the cost of developing a new block of land by greater than the actual cost of development so that the surplus goes via those authorities, via those utilities, back into the coffers of the state government. In other words, as the Property Council says, new homebuyers are in effect being forced to subsidise community-wide upgrades of infrastructure beyond the cost of providing it to their own particular block of land and being forced to add to the coffers of the New South Wales government.

We have the outrageous situation in the Blue Mountains where Sydney Water has just announced that it will add $16,000 to the sewerage and water costs on a new residential block of land. That is, a young couple wanting to buy a block of land in the Blue Mountains have to pay not only all the surcharges, infrastructure costs, levies and stamp duties that were already there but an extra $16,000 on the cost of getting Sydney Water to attach water and sewerage to their block of land. That is an extra $16,000 that these young families cannot afford.

We have to ask why this is happening. It is happening because those utilities—Sydney Water, for instance—are being used as cash cows by incompetent state governments that cannot manage their own finances. They have to use every opportunity possible to get cash out of unsuspecting residents—in this case, unsuspecting homebuyers—to prop up their own budgetary incompetence. It is typical of what we see around the states and typical of Labor’s mismanagement. It is a warning of what would happen if we also had Labor in government federally.

The fourth point that the Property Council mentions is the environmental compliance costs. They estimate that anywhere between $14,000 and $25,000 extra has been added to the cost of developing a block of land or building a home. None of us would deny the importance of environmental issues, but we ought to see the state government taking some responsibility and not slugging new homebuyers for this.

The fifth point is that ‘systems of development assessment nationally are dysfunctional’ and that applications are taking longer and are increasingly complex, expensive and subject to unpredictable and undisciplined political intervention. So there are the reasons for the problem. As the report points out, new homebuyers are subsidising existing homebuyers in leafy suburbs such as Mosman and other suburbs on the North Shore. The solution, in the executive summary of this report, is simply this:

The remedies for the worsening housing affordability’s situation are relatively simple: fix the systems of development assessment; move away from heavily prescriptive and regulated restrictions on land supply so that the competition is created in the market and pressure on land prices is relieved; and decrease the tax and regulatory burden on new housing by moving from ‘user pays’ infrastructure levies to public debt for urban public infrastructure.

In other words, instead of the summits, the stunts and the spin that we have from the other side—

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