Mark Butler (Port Adelaide, Australian Labor Party) Share this | Hansard source

This very extensive motion on housing raises an issue which our side of the House has taken very seriously—first of all, with the appointment of a housing minister, something not done by the previous government, and also, more substantively, with a range of measures that I will outline in the short time I have before the House. As well-intentioned and well-argued as this motion might be, those opposite wear like an albatross around their neck 12 years of neglect in the area of housing. This is another example of the creationist approach that they have to policy challenges being confronted by our side of the House—that on 24 November some higher being created the world and it had an existing housing affordability crisis, about which I see absolutely nothing in this motion.

We know that under the previous government there were cumulative cuts of almost $4 billion in real terms to the Commonwealth-State Housing Agreement. There was a cut of $50 million in the 1997-98 financial year. There was a four per cent efficiency dividend the same year. There was an ongoing one per cent efficiency dividend per annum. There was the removal of GST compensation in 2003-04, a year in which the housing agreement funding was cut by $100 million. There was no indexation by the previous government between 1996 and 2004-05. This trashing of the public and social housing sector under the previous government is taking some considerable time to unravel, which is why the government and the various state and territory governments are still in the process of finalising the National Affordable Housing Agreement.

It was not only to the area of social housing that the former government paid such little regard. At the same time as the agreement funding was being cut to such a degree, with almost $4 billion in real cumulative funding cuts over the 10 or 12 years that the last government was in place, there was no serious effort whatsoever to respond to dramatic developments in the private rental market. We know that after the dotcom bust, with a whole range of cheap interest rates and cheap money available, private money flooded into the housing sector leading to the biggest asset bubble in human history, worth in the developed world some $30 trillion, or 100 per cent of the combined GDP of those countries. We know that the Australian housing bubble was right at the top of the list. We know that Australia’s price-rent ratio, the best way of valuing the housing market, by the end of 2005 was 70 per cent higher than the 25-year average. Unsurprisingly, as the member opposite has indicated, private rents went up. That is what happens when the price-rent ratio gets so far out of kilter with the historic average. In the September quarter this year, private rents increased by 2.2 per cent, with an annual increase of about nine per cent. In my own electorate of Port Adelaide, 38 per cent of private renters are suffering from rental stress, paying more than 30 per cent of their income on rent.

We also know that vacancy rates across the country, as the member opposite has indicated, are at very low rates—in my city of Adelaide, at around one per cent, which is the lowest ever seen in South Australia. So what is the government doing about this? First of all, we appointed a member of the executive with particular responsibility for dealing with housing—the Minister for Housing, the member for Sydney—and she has started to fill a space left completely vacant by the previous government. Principally, in terms of the matters covered by this motion, that involves boosting the supply of affordable rental properties through $623 million of incentives over four years to increase supply by 50,000 rental properties rented at 20 per cent below market rates. If demand is still high, which I suspect it will be, there will be a further 50,000 rental properties from 2012.

This motion raises very important issues and raises them in a very eloquent written way. However, it does not get away from the fact that in 12 months this government has done more around housing, particularly affordable housing, than the previous government did in 12 years. (Time expired)

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