Bob Baldwin (Paterson, Liberal Party, Shadow Minister Assisting the Shadow Minister for Defence) Share this | Hansard source

I rise today to speak on the First Home Saver Accounts (Further Provisions) Amendment Bill 2008 and the First Home Saver Account Providers Supervisory Levy Imposition Bill 2008, which include various provisions to make the first home saver account scheme operational. Let me say from the outset that these bills introduce savings measures, which is always to be commended. The idea of people saving, putting money in the bank, putting it away is a great idea, but this legislation does absolutely nothing to make housing more affordable. The rhetoric from the Labor Party is simply this: we now have a minister for housing and that is going to fix all of the problems. A minister does not fix the problems of housing affordability. This requires positive action by a government in reducing taxes and charges and in stopping itself from being one of the inflators of property prices. This is particularly so in New South Wales, where one of the government’s arms, Landcom, has become a commercial developer. It has walked away entirely from its original ideal and goal, which was to provide affordable land. By increasing its land, Landcom has kept the commercial price of land up and made housing so much less affordable in New South Wales.

While these schemes do a couple of good things, and while these bills are designed to introduce a system for dealing with the unclaimed money that is saved into those accounts—they will introduce amendments to secrecy and information sharing provisions between the Australian Taxation Office, the Australian Prudential Regulatory Authority and the Australian Securities and Investments Commission and will also deal with issues surrounding family law situations—again, they do nothing to make housing more affordable. It matters very little how much money you are able to put away in the bank if, indeed, property prices keep escalating because of a restriction on supply that is being driven by state governments and supported by local governments. This makes the price of property go up. Property values go up because there is demand. Demand is driven by the amount of supply in the marketplace. It is simple economics 101—something that the Labor government has failed to address.

While these savings provisions are good, they will have very little effect on the ability of a young person who struggles to put petrol in their car to go to work, who struggles to pay the rent, who struggles to feed themselves and who, hopefully, has a little bit of money left over at the end of the week to put money into this savings account. It is clearly true that, because of the financial pressures placed on them today, young people are living beyond their means. How often do we hear of escalating credit card debt, massive mobile phone bills and texting accounts that they cannot pay? Where are they going to get the money from to put into a home savings account? Most of them give up the dream of owning a home not because there is no financial savings incentive program in place but because the cost of the home far outweighs their ability to purchase that home.

The cost of housing has risen so much that young people just feel that they are totally alienated from the market. Young people feel that they have been let down in times gone by. Even though the property prices in areas like mine have reduced by 10 or 20 per cent through the market crashes that have occurred, property is still unaffordable. It is unaffordable when a group like Landcom, a government instrumentality designed to promote and provide affordable housing, now holds some of the most expensive land in the region. The average price of a block of land provided by Landcom is in excess of $300,000. In my area, the cost of a block of land at a new estate around Koala Shores at Tanilba Bay is $130,000.

When we talk about housing affordability, more important than a savings scheme would be to reduce the taxes, the charges, the levies and all of the other costs kept by government from developments. In fact, if Landcom were doing what it should be doing, it would be providing land to the marketplace without government taxes and charges. If it were indeed going to fulfil its obligation to provide affordable land to bring competition into the marketplace, it would live by its original charter. Its original charter was to provide affordable land. I can remember people camping out for nights and lining up in queues to make sure they had the opportunity to be the first ones to bid for that block of land. But that has got lost in the government’s desire to be a commercial entity—not a competitive entity, a commercial entity.

The Minister for Housing stands up and says that the problems with housing are going to be fixed because the Rudd government has appointed a housing minister. That will not fix the problem; action will. As she sits around the COAG table with all of the planning and housing ministers, she needs to make sure that they reduce the taxes, the levies and the burdens applied upon land development to make that land competitive. She needs to make sure that restrictions on property development are lifted and that the period of time applications are held in planning departments of both the state and local governments is reduced.

One thing that seems to have been obfuscated in this whole issue is the actual holding costs in undertaking developments. A developer will acquire the parcel of land. They will then proceed with the planning, the environmental impact statements, all of the due diligence required and then put it to council. Council might sit on that development for six, 12, 18 months or two years and beyond. All that time that developer is building holding costs. You do not need to be Einstein to work out who pays for those holding costs. It is not the developer. Those costs are passed on to the home purchaser and that drives up the cost of property in that area.

If the minister really wanted to affect the cost of housing, particularly in New South Wales, she would get whoever the New South Wales planning minister is this week to sit down, go through the issues in relation to Landcom and make it competitive by a reduction in the taxes, charges and profit that it makes. That would then bring other developers into line in a commercial and competitive environment to make sure that they are not overcharging and to make that land affordable. It even gets ridiculous—Landcom in a promotion of their house and land packages now offer a free fishing boat. This is a government entity that is designed to make housing affordable but to promote their commercial land sale packages they are offering a free Quintrex 395 boat with the next seven lots sold. I know what the punters want. They do not want a free boat, because they would not have time to use it. They would not be able to afford the petrol to put into it as they are paying the inflated prices for this property.

Around 40 per cent of the cost of land is involved in fees, charges, taxes and compliance costs. If a government wanted to do something serious—remember it is not the federal government that gets those fees, taxes, levies and charges; it is local and state governments—they would bring pressure to bear on state and local governments to clean up their acts, to be more competitive and to look at an opportunity to be can-do governments. If indeed they have a genuine heart of concern for people to have affordable homes they would drive this issue singularly. But they do not, because they have their hands in the pockets of the battlers. It is the battlers, at the end of the day, who pay all of these passed-on costs. My colleague the member for Charlton said in a speech yesterday something that I do agree with:

In 1996 the average house cost was about four times the annual wage, and today it is no less than 7½ times the annual wage. A typical first home buyer now spends a third of their income on mortgage repayments. This compares to a figure in 1996 of less than $2 of every $10 earned.

In that time costs in providing the land have escalated. Delays in development in New South Wales, while Frank Sartor sat on his hands, have driven costs up. There have been restrictions on opening up green belt areas. As our population increases the only way that you will address the situation is to open up further land development. If people are opposing increases in the height of buildings, the only other direction you can go to provide accommodation is outwards. We have the double effect from those who claim to wear their environmental heart on their sleeve. They do not want you to go up and they do not want you to go out. The question is: where do you want to put the people?

In looking at this bill we support the idea of increasing savings and providing an incentive for people to save. If this bill is to address the issue of housing affordability and availability for young people then the core root of the problem needs to be addressed. These days in development, when a developer puts in a lot and the sewerage comes through, the developer has to pay all of the costs in providing that sewerage to that house. If they happen to be the first developer into that multiowned development site, they pay all of the costs. It is more logical for the person who is collecting the fees for sewerage and water to install the infrastructure and then for the individual lot owner to pay a connection fee.

Groups like Hunter Water in my area are state owned corporations with a profit motive and they need to earn a profit to return to the state government. Well, I say government is about providing services to the people; government is not about making profit out of the people. And the sooner government gets out of the business of being in business and allows private entities to provide commercial competition, the better—then real progress on these issues will be made. If we had competition in the marketplace, at least, in the provision of water and sewerage then prices would be much different. But, no: our consumers, the people that we represent in this House, all pay the penalty.

What I would like to see is an urgent meeting, with all of the COAG ministers and heads of local government authorities sitting down to map out a real plan that will address the issue of housing affordability. What needs to be taken to this issue is a clean sheet of paper. We need to start from the very beginning: a greenfield site. We should look at all the costs that are involved in providing housing and work out a way to make that housing more affordable. But, no. What do we have? We have bandaid measures like: ‘Let’s have a little home savings account.’ That is good in itself, but it will not address the issue because people struggling to buy houses usually struggle to put away extra money into savings accounts. As I said, they need to go back to the very beginning and address the issue: what is driving up the cost of housing? It is supply and demand. And when governments are a part of that supply chain, and want to make a commercial return and a profit on being part of that supply chain, it just falsely inflates the prices.

So in supporting this bill I urge, on behalf of my constituents, that governments look at the issues. Very shortly, just around where I live, another couple of thousand home sites will be developed—the new town called Chisholm. But when I look at the cost of the infrastructure that is going in there, which is being borne and should be borne by the broader state entities, who then seek a long-term return on their investment, the cost of that housing will be high; it will be very expensive. And if there are delays in rollouts and in the approval of development applications for parts of it then that will increase the demand on a very specific area. What we need is more global planning, with long-term consideration of population growth throughout Australia, and even support and establishment by the federal government of new areas away from major cities that will open up large greenfield sites to further development of housing, to industry and to population, thereby shifting the pressure of population from our capital cities and major regional centres to the new centres being established. That is how you address it.

If everyone wants to live in the one town on the one block of land and it becomes a supply and demand game then prices will become falsely inflated and unsustainable. And the reason why people’s property assets have been deteriorating is simply that the prices have been largely falsely inflated through supply and demand. So if we were to increase supply, spread demand and make land more affordable, and if the governments at local and state level got the taxes and charges down to realistic levels, then it would truly benefit all Australians. I commend this bill to the House.

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