Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Hansard source

We are told that this legislation establishes a scheme designed to encourage large-scale investment in affordable housing. It does this through tax and cash incentives to providers of new dwellings on the condition that they are rented to low- and moderate-income families at 20 per cent below market rates. The Rudd government has talked long and hard about the housing supply and the affordability crisis. Indeed, in doing that it talked up the expectations of low- and moderate-income families who look forward with bated breath to a solution. However, we have not found one.

I have probably one of the greatest crises of accommodation of all time across the Pilbara region of my electorate. I know full well the problems. Recently I had a staff member in South Hedland move on from a $51,000-plus a year job. I am unable to replace that person because the person who replaces her needs to go to town and find accommodation that they can actually afford. What is available is going to cost somewhere between $850 and $2,500 a week. Do the math. It does not work.

Before the last election and ever since, everybody has been looking forward to this great day when we find a solution to housing affordability. This certainly is not it. Why would somebody contemplating building a house in the Pilbara forgo at least $20,000 a year rental so as to get $8,000 a year from combined governments? It does not add up.

There has been some interesting stuff talked about. I will quote Kevin Rudd’s Black Book of Broken Promises:

Kevin Rudd’s efforts in the area of housing affordability are doomed to fail, because he does not seem to understand that the problem in Australia lies on the supply, not the demand side. In other words, there are a lot more interested buyers than available houses and land, causing the prices to go up. This is the elementary economics of supply and demand, which the “economic conservative” Kevin Rudd fails to grasp—

sorry, Mr Deputy Speaker, I am referring to our Prime Minister—

instead preferring to paper over cracks and appear to be doing something, alas, without actually achieving tangible results.

For example, the Rudd government’s First Home Saver Accounts (FHSA) will not make entry level housing more affordable for first home buyers, quite the contrary, they are unlikely to increase house prices by giving buyers more money to spend, whilst doing nothing to increase the supply of housing.

Labor’s recently re-launched $512 million Housing Affordability Fund (HAF) cannot possibly cut $20 000 from the cost of a home, as claimed by Kevin Rudd—

our Prime Minister—

Instead, it is nothing more than a slush fund designed to bail out failed state governments.

Before you rise up in alarm, eligible organisations under the program are state and local governments and, according to the Rudd government’s guidelines, typical projects would include the installation of sewerage, roads and parks as well as funding that reduces holding costs imposed on developers by government planning systems. Isn’t that propping up state governments? It is a clear instance of picking up the tab for the responsibilities of other levels of government whilst doing nothing about the other major contributors to problems with housing affordability—the outrageous levels of taxes, fees and charges claimed by the state government. They are using housing as a convenient cash cow.

I do not know whether the government really understands the full national scope of these housing issues. I say that because I think this is intended to be a positive solution, and it possibly is if you work and live in a metropolitan area. But I am afraid that, like the former state Labor government in WA, this federal government has no idea of what is happening out in regional Australia—and I include Tasmania in that; it is part of Australia. The electorate of Kalgoorlie is a far cry from the comfortable metropolitan electorates where the Prime Minister, Deputy Prime Minister and Minister for Housing live.

Years ago, if Australians talked about high rents, they may have with bated breath told each other stories of the unbelievable rental prices they heard of in Sydney, maybe even of the prices in some of the suburbs in the housing minister’s electorate. That was before the mining boom. Now we hear stories about the unbelievable rental prices in mining towns and the seemingly ridiculous prices people will pay and the lengths they will go to just to secure a caravan site, a shipping container or a shed to live in. If you are lucky you will get a two-storey shipping container, and that is high living!

Some of the stories that have been reported in newspapers and on current affairs shows on TV are not funny. They are very tragic in fact because these are real people trying to make their way in real jobs in my electorate in the Pilbara. It is a sad reflection of the state of the regional commercial housing market. Mining is a key industry in the Kalgoorlie electorate and it is not just my electorate but Western Australia at large and, indeed, nationally. The economy’s big benefit from the boom, of course, has been national. Everyone is getting a slice of the Pilbara cake but they do not suffer the pain would-be residents are suffering.

There is a predictable effect when an industry that generally operates in remote areas increases exponentially almost overnight. The Pilbara has made its name in iron ore and, as iron ore boomed, the industry cried out for more workers and affordable accommodation in the Pilbara became harder and harder to find. It is especially true for permanent affordable accommodation. As I alluded to earlier, a modest three-bedroom, one-bathroom house can set you back $1,500 a week in rent and a brand new four-bedroom, one-bathroom house will set you back more than $2,500 a week—that is, if you are lucky enough to get a rental. There is such a high demand that landlords can choose from the many applicants for each house, and I know that when a tenant moves on, often because of the absolutely unsustainable rental prices, the landlord has the opportunity to increase the rent. In the early days—and I am talking as close as two years ago—rents were doubling from one tenant to the next. There is a very scary world out there if you have not been to the Pilbara and you lob in there expecting to find accommodation.

I am sure that you can pay these high prices in upmarket suburbs in the housing minister’s electorate but you have the choice to pay a lot less if you want to, and if you do have a couple of grand a week you would get a very swish house with a very nice view of Sydney Harbour for your dollars.

In the Pilbara you have to be on very substantial wages to pay that kind of money. It is common knowledge that our miners work hard in tough conditions and get paid well for it, but what about the rest of the community which supports those mine workers—government workers, nurses, teachers et cetera? The whole GEHA housing system in Western Australian regional centres has virtually collapsed because the Labor government, over the last eight years, has not put money into it. Local government employees and small councils simply have to acquire land and build houses to try to accommodate their workers. Small service organisations cannot get staff simply because they cannot accommodate those staff. So the level of service for all industries in my Pilbara towns deteriorates.

Why would any investor thinking of building homes in my electorate join the National Rental Affordability Scheme? As I said before, they have to forgo 20 per cent of the market rate, and with the levels of rent in the Pilbara, and in the Kimberley, that would start from about $20,000 a year and they would get back a paltry $8,000. It simply does not work. One of the major reasons in the early days that housing affordability slumped in the Pilbara area was LandCorp. I am sorry to say that LandCorp’s modus operandi was altered some years ago. Their initial responsibility was to provide a steady stream of land for building and a continuum of affordable housing. Some years ago they were asked to make sure that they contributed to the bottom line of government income. Profit became the incentive. Since those days they have dropped the ball when it comes to providing affordable housing. They have simply trickled land onto the market, ensuring that, as land becomes available, it will be fought over to the extent that maximum prices will be paid. That is certainly not the work of an organisation charged with the responsibility of providing affordable housing.

So much has been said about native title and how, in my vast Pilbara areas, land is not available because of the uncertainty of covering future costs when native title is finally sorted. So what LandCorp have been doing is spoiling what ought to be a positive economic loop. They have been trickling down land so as to push the price up, so as to make more money for LandCorp, so as to pay more money into the coffers of the previous Western Australian Labor government.

I have been in parliament for 10 years now, speaking volumes about the failings of LandCorp. I am pleased to say that there is now a glimmer of hope for changes. With a newly elected Liberal government in Western Australia, LandCorp just may be given a shake-up or at least brought to heel. I wrote to the former state Labor government practically begging them to do something about greedy LandCorp, but they remained a problem for housing of an affordable nature in my electorate. It does not matter how good the incentive is for investors to create housing when LandCorp will not release the land for them to buy and build on. There is just no way that prices will be affordable. Of course, the cycle is vicious. There is no land to build on except what has trickled down, so the price goes up. Then, when you secure the land on which to build a home, you pay exorbitant prices to builders because they have to factor in exorbitantly high prices for accommodation for their crew whilst they build the home. But the delays are extortive, often because builders cannot get accommodation of any nature. It happens to contractors time and time again. A good mate of mine, Doug Gould, finished up having to buy a hotel in Port Hedland so that he could accommodate his 28 truck drivers, so that he could fill the requirements of the contract, while working with one of the large companies in Port Hedland.

It is a situation that is certainly not going to go away as a result of any part of this proposed legislation. The situation in the Pilbara was so bad that it loomed large on the agenda of the Senate inquiry into housing affordability that took place last year. I draw your attention to the submissions to that Senate inquiry. They highlight the issues about which I have been speaking. In particular, the Chamber of Commerce and Industry Western Australia’s submission points out some very alarming factors about land release in Western Australia.

Broome’s population, for instance, is estimated to have grown by 3.4 per cent, or 2,400 permanent residents, between 2001 and 2007. There is also a significant demand for seasonal accommodation as a result of the boom in tourism in Broome. Despite this, the lots of land released onto the market did not increase over the same period, with a record low in 2004-05 of just 50 blocks released by LandCorp. During this time the median house price in Broome rose from $225,000 to $610,000. That is not bad for a very, very short period of time if you are an investor. If you are trying as a normal employee in the Broome area to find a house that is affordable and you are being forced to consider an increase from $225,000 to $610,000, you are not going to be very happy about it.

These are the same people I was talking about earlier whose eyes lit up at the mention of improving housing affordability from the then candidate to become Prime Minister of this country, Kevin Rudd. He was going to change the world when it came to simple employees, these working families he speaks so much about these days, and they were very impressed. In fact, I am sure it is why he did so well at the last election. There were so many people out in the electorate who thought he would honour his commitment and his promises. He did not, of course.

I cannot emphasise enough the severe impacts that house and land shortages are having in areas like the Pilbara and the Kimberley. Housing is a basic human need. People who want to move to the region to find work cannot afford the housing. We developed a pilot case to bring prospective employees from areas of high unemployment to the goldfields, the Pilbara and Kununurra, where people are screaming out for employees. With our principle of mutual obligation it seemed perfectly logical to ask individuals in high-unemployment areas to move to these areas where employers are screaming out for somebody with two arms, two legs and a head. It did not work, because there was simply no affordable accommodation in those areas for the unemployed people to move to. Much more needs to be done.

In many cases even if people can afford accommodation, they still cannot get housing because the demand is so high and the supply is so limited. Companies and organisations cannot get the workers they need because they cannot provide the accommodation either. Even though many offer generous housing subsidies, the houses simply are not available. This leads to a loss of services in areas where wages are not as high as in the mining industry. It all impacts on the quality of life for people in those communities, with few or no shops, restaurants, childcare facilities, medical and dental services and more. The lack of affordable housing is directly contributing to a deterioration in lifestyle in these centres.

We have had so many broken promises, so many failed statements of passion that have been realised in the months since the election of this government. There was the broken broadband promise, the broken border protection promise and the broken budget accountability promise. We have had the creation of ‘child care watch’ and we have had the creation of Fuelwatch. I believe it was mooted recently that we were going to have ‘watch watch’; ‘Defence watch’ we have now, too. I am appalled that, having promised so much to so many working Australians prior to last November’s election, now the goods are supposedly to be delivered our Prime Minister and his team are found to be so wanting. It is a disappointment to me but, my goodness, I have a roof over my head and I have a quid in my wallet. That is not the case for so many Australians, and they are severely disappointed. I believe it is a situation that will not be righted until such time as we have another federal election to set the record straight for the delivery of good governance and real services for the people of Australia.

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