Kerry Rea (Bonner, Australian Labor Party) Share this | Hansard source

It is with great pleasure that I rise 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. These bills provide very important additions to the government’s First Home Saver Accounts policy. They provide greater certainty and security over these new accounts for both providers and account holders. These amendments enable APRA to collect levies to fund the supervision of the accounts. They ensure that privacy for account holders is maintained. They ensure there are the necessary arrangements to protect the interests of those people who have direct access to the accounts when it comes to issues of family law being upheld. It is very important and very necessary to ensure the proper administration of the accounts and that account holders and account providers can benefit from this exciting new initiative with confidence.

Most importantly, though, these amendments allow the proper implementation of the government’s first home saver accounts. In short, they enable many Australians to make their dream of owning their own home a reality. The statistics are frightening. Housing affordability in Australia is at historic lows. A typical home now costs 7½ times the average annual wage, compared to four times the annual average wage in 1996. The average first home mortgage has more than doubled in less than eight years from $123,000 to around $246,000. The typical home buyer now spends around one-third of their income on housing costs. The proportion of median family income required to meet the average home loan repayment has increased by 8.3 per cent since March last year—since only last year.

The term ‘mortgage stress’ was very unfamiliar to us but it is now a very common phrase. It is in this context that the Rudd Labor government have recognised our responsibility to provide whatever incentive and assistance we can to enable people to own their own home. It is now a possibility whereas last year and the year before it was a dream that not many could achieve. From 1 October, many more Australians will be able to start saving towards their own home. Recent events in America have rocked the financial world. They involved Lehmans, Merrill Lynch and Bear Stearns—names that belong to the world of high finance, which many ordinary working families in Australia did not feel they had any connection to. But now they are very real. The current financial uncertainty has developed as a result of many Americans taking on mortgages they simply could not afford in a desperate attempt to own their own home. This underlines that the apparently old-fashioned but not so outdated notion that owning your own home provides some financial buffer in a time of economic downturn is actually quite true. It is so important for the certainty of individuals but more importantly the nation’s economic security that more Australians are able to invest their income into their own property.

On a personal level, I believe that using the taxation system as a mechanism to create incentives for all Australians aged between 18 and 65, and particularly for younger Australians, is a very progressive and responsible way to encourage people to save for their own home. Enabling those who are eligible to contribute to a savings account from their before-tax income, and supporting that with an extra 17 per cent contribution from the government based on the first $5,000 of personal contributions made into the account each year, makes sound financial sense. It is responsible encouragement and that is why it will work.

The opposition often laugh when the government refer proudly to Labor’s tradition of nation building. This phrase is used most commonly in reference to our commitment to build the infrastructure we need for our economy and society to prosper. But these first home saver accounts are just as much a part of our commitment to nation building. We are building a nation of people whose hard work can pay off. Our commitment to building a community includes a commitment to individual long-term certainty—and the most fundamental long-term certainty is owning the roof over your head. This initiative will build on those great Labor traditions of providing free universal education and superannuation, which have given so many Australians opportunities they would not otherwise have enjoyed. That is nation building.

The first home saver accounts are a significant $1.2 billion part of the government’s four-year, $2.2 billion commitment to increasing housing affordability for those who are most in need. This $2.2 billion package addresses housing needs for the most vulnerable through to average- and middle-income earners who in days gone by would have assumed that buying a house was a given—but not anymore. That is why the introduction of the first home saver accounts is a critical part of the government’s overall housing affordability strategy. There are a lot of young people out there who are paying rents the size of a mortgage. I know many of them in my electorate and I know many friends and relatives who are in this boat. If it were not for the incredible increase in house prices and the struggle to save a deposit, they could use the rent they pay to invest in their own home. This means that many people out there in the rental market not only do not have the security of a property investment but are placing real pressure on housing opportunities for those who are less financially independent.

Higher income earners clogging up the rental market affect everyone in the housing spectrum. Their staying in the rental market reduces the vacancy rate, which inevitably puts up rental costs due to an increase in demand. That means that many people who are in a position to move out of public or community housing and into the private rental market cannot do so because they simply cannot afford the private rents. In turn that means that those people who have found themselves in need of supported accommodation but are now able to move on, into independent accommodation, cannot do so. Those many vulnerable people languishing in emergency accommodation, desperately in need of more longer term housing, have to wait because there are no vacancies. This then means of course that many people living on the street today would not be homeless except for the fact there are simply no beds for them. We need to move everyone through the housing market in order to be able to provide housing, a roof, for those who are most vulnerable and in most need, particularly in the case of emergencies. That is why this initiative is a fundamental plank in the government’s overall housing affordability strategy, but it must be considered in conjunction with the whole scheme.

The Prime Minister’s announcement of $512 million to bring down housing costs complements the First Home Saver Accounts policy. A fund that will bring down costs associated with housing construction is a practical measure that could see housing costs reduced by up to $20,000. Having served as a local councillor on Brisbane City Council, I know firsthand what a difference funding holding costs, in terms of developers wanting to develop, and infrastructure charges can make to the cost of a house. It is a reality that councils have to charge developers over the infrastructure to provide essential services such as water, sewerage, footpaths and parks. All of those things that we associate with housing and take for granted as going with a house come at a cost. Unfortunately, the costs are often passed on to the homebuyer at the point of sale. This $512 million package will ensure that the homebuyer is relieved of those costs while benefiting from the services. It will assist homebuyers to move into the housing market. I commend this initiative of the Prime Minister and look forward to seeing it implemented throughout the suburbs of Bonner.

But the commitment does not end there. The Rental Affordability Scheme recently announced by the Prime Minister and the Minister for Housing underpins the need to focus on moving people through the rental market as much as on moving those who are able to move out of the rental market into home ownership. It provides $623 million to help build 50,000 new, affordable homes over the next four years. I am sure that the planned provision of another 50,000 by the year 2012 will become a reality because this scheme will be extremely popular. Institutional investors and other eligible organisations will receive a $6,000 refundable tax offset to build new homes for rent, providing that the rent is kept 20 per cent below the market rent. Also, the states and territories will contribute a further $2,000 for each dwelling. This will make a difference to those middle- and low-income earners out there struggling to make ends meet. You simply cannot get on with the rest of your life if you do not have a roof over your head—we know that for a fact. I am pleased that the government is honouring its commitment to make that reality much broader for the Australian community.

I know housing organisations in my electorate of Bonner will welcome this initiative. The Winnam Aboriginal housing association, who provide community housing for a large number of Indigenous people within the bayside suburbs of Bonner, will certainly embrace this initiative. They already do a fantastic job. They have done so at times when housing has certainly not been on the national agenda, still managing to provide housing for many in their community. I know that this package will do a great deal to support them to provide an even better and broader service. Mangrove Housing, also located in the bayside suburbs and based at Wynnum, are also a community housing provider that will welcome this initiative, having also struggled in those difficult times when providing community housing was not a popular move. They are a very innovative and effective organisation. You know that they are one of the very sort of community organisations that, with extra money and a lot of bright ideas from their people, will do a lot more to provide housing to those people very much in need down in the bayside suburbs of my electorate. There is also the Bayside Tenancy Advice and Advocacy organisation, who do so much to support people who are struggling in the rental market as they look for a place to rent. I know the organisation, which supports families in need at very difficult times, will also welcome this initiative. I wish them well for their AGM on Friday, when I know they will be discussing with great enthusiasm this new scheme.

This particular approach to housing—to look at the whole spectrum whether it is finding beds for the homeless, whether it is providing extra support for people to go into the private rental market or whether it is encouraging to buy their own home young people and those other Australians who without this particular savings account would not be able to buy it—is really important to my electorate of Bonner. I believe the electorate provides what is probably a very good snapshot of the housing diversity that we find in many of our major cities. We have the older suburbs of Wynnum, Manly, Lota and Tingalpa, in which we have a lot of pensioners and elderly people, some lucky enough to live in their own home but many who are renting. As we know, support for them is high on everyone’s agenda and there can be no greater support for them than providing subsidies and support for their rents. Public and community housing is stretched right across the electorate. Throughout the suburbs of Holland Park West, Mount Gravatt and Mount Gravatt East, there are significant areas of public housing where families are struggling and doing it tough. Many would be able to move out of that public housing and into the private rental market if they just had some form of support. The government is providing that in the form of rental affordability support. That will then free up that housing for people who are struggling and in need but unfortunately are on waiting lists that are far too long.

There is a whole cross-section of the rental market. Students live around the south-eastern suburbs of Mount Gravatt, Mansfield and Holland Park to take advantage of their proximity to Griffith University, and now, with the wonderful bus way and green bridge enabling access to the University of Queensland, there are even more moving in to rent accommodation around that area. There are a number of high-income earners finding houses in the lovely bayside suburbs of Wynnum and Manly who have come in connection with the port, the oil refinery and other industries around Lytton Road and who may only stay for a short time but are using the rental market to provide housing for their families.

There is the social struggle that we often see with the issue of gentrification. Those bayside suburbs once provided housing for a number of low-income earners. People are now seeing the beauty of Moreton Bay and the value of those bayside suburbs, and the cost of houses there is increasing astronomically. The change in the cost of those houses between the time I lived there as a kid and now is quite extraordinary, and it is an issue that we have to deal with. Hopefully, first home saver accounts and support for keeping those increasing rents below market rent will assist people to stay in their own homes and keep the diversity in those communities that we so enjoy.

There are people living on acreage who, as we know, have often taken out big mortgages, to provide a lifestyle for themselves and their family, which they are now really struggling with. Increasing interest rates and the increasing cost of living are certainly putting some of those people under stress. There are new estates. There are suburbs in Bonner that within three years will have 3½ thousand people moving into them. New housing estates are mushrooming almost overnight, particularly around the areas of Wakerley, Manly West and parts of Tingalpa. These are people who are realising their dream. They are finding housing that suits their family, their lifestyle and their work commitments but they are struggling with mortgage stress; we know that. We want to support them but we also want to give other people the opportunity to buy their own home.

It is really important when you look at an electorate like Bonner—and I know this is reflected amongst many electorates across the major cities of this country—to understand how fundamental this $2.2 billion housing affordability package is to the residents of that area. It is fundamental to the young people coming up through the workforce and the education system to know that when they become income earners there will be an opportunity for them to save and to purchase their own home rather than wasting up to 30 per cent of their income on rent by paying that income to somebody else.

We always know that more can be done. Unfortunately, this government has to deal with the neglect that has occurred over the last 12 years when we had a boom; when we had revenue coming into the Treasury in amounts we had not seen before. If only the opportunity had not been wasted—if the former government had not spent the money on wasteful advertising, fridge magnets, Work Choices mousepads and pens, and all the bells and whistles it believed it needed simply to get re-elected in marginal seats; if those hundreds of millions of dollars had been spent on providing support for people struggling in the housing market, getting people off the streets and into accommodation, giving young people the chance of not simply wasting money on rent but saving for a deposit, because so much of their income goes into the private rental market and therefore they are not able to realise their dream of owning their own home—I believe that the residents of Bonner and the residents of Australia would be far better off and we would all see a much more prosperous future. But I am pleased that the Rudd government was elected just in time, and I congratulate both the Treasurer and the Prime Minister for initiating what is a significant amount of money to a very, very important issue not just for individual security but for the economic and social security of our country in the future.

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