Jim Turnour (Leichhardt, Australian Labor Party) Share this | Hansard source

I welcome the comments of the member for Blaxland. I know that he is a passionate advocate for his local community and that he has many young families struggling in his community to meet the mortgages that they have, particularly given that inflation is at 16-year highs and we have, by international standards, very high interest rates in this country. It is a result of 12 years of irresponsible economic management by those opposite. Sadly, the member for Blaxland has many constituents struggling under mortgage stress at the moment, as I do in my electorate. There are those out there tonight who are trying to balance the family budget and looking at how they can meet the needs of their kids going forward while they have to pay off significantly large mortgages.

The First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008 are part of our overall plan to tackle housing affordability in this country. First home saver accounts were a very important election commitment that the Rudd Labor government made in the lead-up to the election late last year. We are delivering on this commitment as we deliver on all of our election commitments.

These bills are very important for those young Australians out there who still want to achieve the Australian dream of homeownership. From doorknocking in my community before and since the election, and from running mobile offices, I can tell you, Mr Deputy Speaker, that people welcome this commitment, whether they are parents who have kids and are looking to buy a home or they are young people who have not been able to save up to buy a home. They welcome the fact that the Rudd government is delivering on this commitment, as we do on all our commitments. This a real opportunity for people all across the nation, but particularly in my electorate, to actually save up a deposit and buy a home in the future. From 1 July 2008, a couple, each earning average incomes, will be able to save a deposit of more than $88,000 after five years of disciplined saving. That is up to $12,600 more than they would have saved using an ordinary deposit account, depending on returns. Young families out there now have a way forward to save that very important deposit.

This is part of an overall plan that we have to tackle housing affordability in this country. Unlike the opposition, unlike the Howard-Costello government, we have a Minister for Housing, a minister who is fully focused on tackling the housing crisis in this country and tackling issues like housing affordability. We have a $1.2 billion investment in first home saver accounts, which these bills are a very important part of delivering. But we also have a Housing Affordability Fund and a commitment of $512 million over five years to target the planning and infrastructure costs that are incurred when building new home developments. Tens of thousands of new home buyers are set to benefit from grants of up to $10,000 per home as a result of this initiative. So we have initiatives like the first home saver accounts on the demand side, allowing people to save a deposit, but we also have the Housing Affordability Fund looking at the supply side.

There are also, partly due to the fact that we have had high inflation and high interest rates, real pressures on rental housing because people are struggling to meet their mortgage repayments and they are pushing up rents in a lot of situations. In my electorate there are not only many people who are under mortgage stress, paying more than 30 per cent of their income in mortgage repayments, but many who are paying more than 30 per cent of their income in rental repayments, and they are also under stress. If we are serious about tackling the housing affordability crisis in this country we also need to recognise that that has an impact on rental affordability. So we have the $623 million National Rental Affordability Scheme to encourage the building of up to 50,000 new rental properties. I know that the housing minister is progressing all of these policy areas, and there have been recent policy announcements on all of these areas in the last few weeks as well as this legislation.

One of the things about a Labor government is that we also recognise that there are really disadvantaged people out there. There are people struggling to save up for a home and people struggling to pay their rent, but there are also homeless people out there—people who do not have a home to go to each night. Looking at the housing challenges in this country, we recognised that we needed to tackle homelessness. That is why we committed to the $150 million A Place to Call Home initiative—to build hundreds of new homes for the homeless across Australia. The First Home Saver Account scheme is a commitment to deliver an initiative for those looking to save up to buy a new home, but we also have commitments on the supply side and on the rental side. So we have an overall plan to tackle housing affordability in this country and to support people who are doing it tough.

As I said earlier, one of the most important things that we can do as a government is manage responsibly the Australian economy. If we are going to ensure that we have affordable housing in this country then we need to tackle the 16-year-high inflation rate left to us by the former government and continue to put downward pressure on interest rates. We know that high inflation leads to high interest rates and we want to see inflation in this country return from the current rate of 4.5 per cent to within the Reserve Bank governor’s forecasted range of two to three per cent. I welcome the fact that Glenn Stevens in a recent statement said that they are forecasting that, if we keep going the way we are, that will occur in 2010. But the reality is that we are currently facing high inflation in this country. In the governor’s statement of 2 September 2008 he says:

Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand. In these circumstances, the Board has been seeking to restrain demand in order to reduce inflation over time.

So it is not just me, a member of the Labor Party, saying this; the RBA governor recognises that inflation has been high over the last 12 months.

We need to do our share of heavy lifting as a government and not just leave it to the RBA to tackle inflation. That is why one of the first things that we did as the Rudd Labor government was frame a budget firmly and squarely focused on tackling inflation, a budget with a $22 billion surplus, to take pressure off the demand side of the Australian economy and put downward pressure on interest rates. It was also a budget focused very much on the long term and on tackling the capacity constraints in the Australian economy—constraints that the RBA governor gave 20 warnings to the former government about—in the areas of education and infrastructure. We framed a budget focused fairly and squarely on a strong surplus, a $22 billion surplus, and also on the long term. It focused on investing in infrastructure through the $20 billion Building Australia Fund and focused on the long term through the $11 billion Education Investment Fund. If we are to tackle inflation and put downward pressure on interest rates we need to ensure that we are easing demand in the economy but we also need to do things on the supply side.

The budget that we brought down was strongly welcomed by independent commentators. Saul Eslake from the ANZ, a well-known commentator, said on 13 May:

The Budget embodies a very modest tightening of fiscal policy and as such is more appropriate for the circumstances than recent Budgets have been.

Heather Ridout from the Australian Industry Group said:

It is an on-task budget that is disciplined and ambitious … The government has taken a pretty hard-nosed approach to spending to address inflation …

We are a government that focus very much on tackling inflation and putting downward pressure on interest rates. The favourite that I have in terms of independent comments is one from Goldman Sachs on May 13, who said:

After two years of notable conflict, finally we have fiscal policy that is pushing in the same direction as monetary policy.

Finally we have a government that is focused on ensuring that fiscal policy is not forcing up inflation in this country. Finally we have a government that is not leaving all the heavy lifting on inflation and interest rates to the Reserve Bank. That is the critical issue in ensuring that we build and strengthen the economy going forward.

The former government, particularly in the last few years, following on from when John Howard in 2004 said he was going to keep interest rates at record lows, were fiscally irresponsible. They spent like drunken sailors and they failed to invest in infrastructure and skills to build capacity and productivity in the Australian economy. Sadly, as a result of that, we have seen eight interest rate rises in a row since 2004 and 12 since 2001. Mortgage holders, young families, those out there doing it tough trying to pay off their family home, have been the ones that have suffered as a result of that.

So when we came to office we had plans to tackle housing affordability—plans like the First Home Saver Accounts initiative, investment in housing funds to tackle the supply side, and investment in funds to build more rental properties and properties for the homeless—but we also had a fundamental plan to tackle inflation to put downward pressure on interest rates. I welcome the fact that just recently, in the last few weeks, we have seen, for the first time in seven years, families and homeowners get some interest rate relief. That interest rate relief has seen them get on average a $43 a month reduction in mortgage repayments. So those people in my electorate struggling to pay their mortgages have finally seen some interest rate relief. We welcome that and we will continue to act responsibly to deliver a responsible budget into the future.

Debate interrupted.

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