Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Hansard source

The Federal Financial Relations Bill 2009 and the Federal Financial Relations (Consequential Amendments and Transitional Provisions) Bill 2009 provide a set of new arrangements for organising Commonwealth payments to the states and territories. They do that in principally three areas: general revenue assistance, which includes most importantly the GST payments; the national specific purpose payments, which replace the Commonwealth-state agreements on programs such as housing; and national partnership payments, which I interpret as being a scaled-down version of the former national competition payments. Like many government bills which come before the House, they pretend to great reform and revolution, but on closer inspection they amount to little more than bureaucracy creep. But this is typical of this government because their popularity stems from never having to make a hard decision since they have occupied the treasury benches for just over a year now. They have never had to make a hard decision because all of the decisions that have been taken have largely been about doing popular things such as throwing money around. The hard decisions come when you have to make tough decisions on these issues and do unpopular things, but we are yet to see this government do one unpopular thing.

In our last budget in government, in 2007-08, the coalition allocated almost $42 billion for the states in the form of the GST. More significantly, this involved a windfall of $3.2 billion that would never have been received without that tax reform. I make mention of that because it was a hard decision, when it comes to federal-state financial relations, to introduce a GST—to introduce a major and radical overhaul of our tax system that previous governments had failed to do and did not have the stomach to do. That being in place enabled money to flow to the states and territories with a growth tax, something they had been after for many years, like never before. The fact that these revenues have been, frankly, squandered by the states since the GST was introduced is another story. The good voters of Queensland will have the opportunity to cast their opinion on that in a very short period of time.

If you believe the Treasurer when he introduced these bills, you would think that the reason for the manifest failure of the states in their financial management had nothing to do with their incompetence but rather had to do with the way the payments were being made—there was some administrative problem that needed to be overcome to ensure that states actually exercised some sort of financial responsibility. The Labor Party will blame anyone, and anything and everything, to avoid taking any accountability for their own financial recklessness; they will even blame blame itself. When you cannot blame anything else, why not blame blame. Hence we had the ‘blame game’. This became the great rhetoric of the government as to the reason why hospitals were falling over and schools could not be funded. It was not the fault of the state governments; it was the fact that people used to blame one another. Of course, without blame there is no accountability; and that is why the government fears blame so much.

The GST shows that you can lead Labor to the waters of economic responsibility but you cannot ever make them drink. Labor may be changing the colour of the envelopes in which the cheques are going to be sent to the states under these changes, which is fine, but they can hardly claim this as any great reform. Perhaps when coming to these measures they should have taken up one reform from their Labor colleagues in New South Wales and Victoria. I used to hear them constantly talking about removing the sunshine subsidy of GST payments to Queensland and other states. Strangely enough, when Labor came to power—after hearing them all talk about it; it did not matter which premier it was in New South Wales or Victoria, they would all make the same criticism and call on the coalition in state parliaments and in federal parliament to overcome this terrible injustice—at a federal level they fell silent. This bill does not address the sunshine subsidy problem that was highlighted by previous Labor premiers. In paragraph 1.10 of the explanatory memorandum it says quite clearly:

The Commonwealth will distribute GST payments among the States in accordance with the principle of horizontal fiscal equalisation as expressed in GST revenue sharing relativities.

So there has been no change. Perhaps this is because in Labor’s new system of collusive federalism, as I like to call it, the Prime Minister is happy to simply wave away the obligations of states to cut taxes, in particular, and renege on their GST undertakings—which were made some years ago in the introduction of the GST. We saw that recently when the Prime Minister sat down with the state treasurers and said, ‘You know all of those business taxes that you said you were going to cut as a result of getting this GST money, well, you just don’t have to do it now.’ We are in an economic downturn. Of course, it would be better for business to be paying less tax rather than more tax. But instead of taking the hard decision of making Labor mates in the states cough up on their commitment of cutting taxes, they simply waved it away. One Friday afternoon they just waved it away and said ‘not a problem’. It is not a very hard decision to let your Labor mates in the states off the hook of having to reform taxes.

The second area of this bill relates to specific purpose payments. I mentioned before the former Commonwealth-state-territory funding agreements, which covered a range of areas including health, schools, disability services and, in my area of shadow portfolio responsibility, housing. This bill provides for $1.2 billion to be spent in 2009-10 under the National Affordable Housing Agreement recently completed by the Commonwealth, states and territories, succeeding the previous agreement for Commonwealth-state housing between 2003 and 2008. The annual funding provided in this bill for the new Commonwealth-state agreement is in effect an additional $50 million in real terms compared to the last year of the previous agreement. So it is not a very significant change. The new agreement incorporates the Supported Accommodation Assistance Program, which was previously subject to a separate agreement with the states and which focused on providing crisis accommodation and support to people who were homeless or at risk of homelessness through 1,300 provider organisations, largely not-for-profit and charitable organisations, which I am sure we in this place would all agree do a tremendous and very worthy job.

The new agreement must address some serious issues in the management of the public housing stock by its state and territory agencies. During the period of the previous agreement around $4 billion over five years was spent in real terms on the construction of new public housing dwellings. Despite that $4 billion investment, the total number of dwellings actually declined by over 10,000. In fact, there were 10,146 fewer dwellings as a result of an investment of over $4 billion in expenditure of new money on new construction. It is therefore of concern that in this agreement—the NAHA, as it has colloquially been known—the states have still been left to run their own show in terms of how the moneys under this agreement are to be deployed.

I think it is a legitimate criticism that the coalition’s previous agreement failed to spoonfeed the states and territories on how they should manage their budgets. In hindsight, billions of dollars were provided to states and territories for these initiatives and the dwelling stock was allowed to deplete. That is because there were no specific requirements in the agreement to allocate funds between capital costs and maintenance and operating costs. The social housing sector made the point to the government that this sort of discipline should have been included in the new agreement—and, frankly, I think it should have, but it has not been. So as a consequence we are going to continue to write cheques to the states, providing them with no real guidelines on how they have to manage their stock. As a result, I think we can expect the states to continue their form.

Of particular concern is that under the former Supported Accommodation Assistance Program there was a requirement for matched payments from the states. Under the new National Affordable Housing Agreement there is no such requirement for matched payments from the states. So again we are writing cheques to the states and territories in this new era of collusive federalism and, frankly, not asking them to stump up in return in the same way, particularly in the area of homelessness, as we did previously for the Supported Accommodation Assistance Program.

Public housing accounts for around five per cent of households in Australia, which is less than three per cent of the residential construction industry. I make that point because I think it is important that we understand what is emerging as a key difference between the Labor government and those on this side of the House in terms of public housing and our housing policies more generally. The coalition is committed to providing people and families with a pathway to become self-supporting in private accommodation. That is our goal. Our goal is to see people be able to take responsibility for their own housing needs in the private sector market, which, frankly, 95 per cent of the population currently does. We need housing policies that address the housing needs of all Australians, not just those who unfortunately and for a whole range of reasons have to rely on the state system for their housing needs. We need housing policies that address everyone’s needs and put a roof over everyone’s heads. In the majority of cases this means ensuring that people are simply able to hold their own in the private housing market. It is of significant interest that, despite the fact that the number of dwellings declined by more than 20,000 during the period 2003-08, the number of people on public housing waiting lists across Australia in that period, most of which was under the coalition government, declined by more than 30,000. So we had a contraction of stock yet we also had a contraction in the number of people who were waiting for public housing.

The lesson in these figures is this: the best way to put Australians in homes, especially in their own homes, is to give them a job. Over two million jobs were created under the coalition government. The best way to keep them in their homes is to give them sustainable increases in their wages. Over the term of the coalition government we had a more than 20 per cent increase in real wages compared to a fall in real wages under the former Labor government. So you give them jobs; you give them wages that grow in real terms; you increase their wealth, which rose to the highest level on record under the former government; and you enable them to step up and take responsibility for their own housing needs wherever possible.

Our objective should be to have fewer clients in public housing, not more. Our objective should be to ensure that people can escape the clutches of social and public housing and be self-sustaining in the private market. We want to see fewer clients not more, just like we want to see Australians have jobs not redundancy payments, which is the focus of another debate in this place here at the present time. There will be those for whom social housing will be a permanent requirement, and no-one in this place doubts that. We owe it to those Australians to ensure they are not competing for services with those who can take control of their own housing future. Our objective must be to ensure that the experience of social housing is a temporary one, an opportunity to regain some stability in their lives, rebuild their confidence and move on.

The final area that this bill covers is the area of partnership payments, and there are quite a few that address the housing sector. There are four such agreements. They deal with social housing, homelessness, Indigenous housing and the government’s $6.4 billion public housing cash splash. Social housing and homeless agreements were both supported by the coalition when they were introduced—there were no questions, they were absolutely supported—along with the $150 million Place to Call Home initiative. They were all worthy initiatives. The social housing program provides capital funding of up to $400 million over two years to build new, affordable housing. The partnership on homelessness provides $318 million over four years from the Commonwealth. Again, this was welcomed by the coalition when it was announced in November and then curiously reannounced just before Christmas.

The third partnership agreement is for remote Indigenous housing, providing almost $2 billion over 10 years or $835 million over five years. Again, this agreement was supported by the coalition. The proposal was first announced in November 2008 and in this place just a few weeks ago when the Prime Minister addressed the House on the status of the Closing the Gap initiative. It involves building 4,200 new houses and upgrading a further 4,800 other houses to tackle overcrowding in remote Indigenous communities. This is a very worthwhile initiative.

However, according to COAG, the agreement provided for under this bill was to have been completed by 1 January this year. So it was disappointing that eight weeks after that time that agreement still had not been signed. When you look at the agreement you will see that all of the states and territories signed up in December. The only one not to have signed up for that agreement was the Prime Minister, whose signature was dated February—and I understand it was towards the end of February. So for around eight weeks this agreement sat on his desk. This agreement has now been completed; however, it highlights again why Australians are increasingly sceptical of the torrent of announcements and sentiment from the Rudd government. It is because time after time they fail to meet their own benchmarks and timetables for delivery.

This comes on top of the fact that a few weeks ago the Northern Territory government claimed they had barely broken ground on the 750 houses they were responsible for delivering with the federal government as part of the Northern Territory intervention. While the Rudd government now claims to have built 80 of these houses—we are not quite sure where they are, for what purpose they were built or if they were even for Indigenous people at all—that is pretty poor progress, even if you accept it at face value. Of 750 houses promised in September 2007, at their best guess 80 have been built. If the government could only build, on their own figures, 80 houses in remote areas in the 16 months since the election, I do not know how we can believe they will now build 20,000 public housing dwellings across Australia in the less than two years they have allocated to spend the $6 billion on new public housing. Too often the Rudd rhetoric is not matching the Rudd reality. Whether it is jobs, funding or houses, once Labor—or local government, for that matter—have made the big announcement, they seem to think the job is done. What the Australian people want of this government is not to make hairy-chested announcements and big populist gestures but to actually get on and do the things they claim to be doing.

In total the coalition has now supported almost $3.5 billion in social housing initiatives announced by the government since they were elected in November 2007. That is a lot of money. It is a serious amount of money and it is going to address a very serious problem which the coalition shares the government’s concern regarding. That does not include the $1.2 billion also annually provided under the affordable housing agreement. Labor then tried to accuse the opposition of not having any interest in addressing social housing needs in this country because we chose to draw the line at spending a further $6.4 billion on public housing which will not be delivered in that time frame and which will not provide an economic stimulus. We draw the line and we say no. This package fails to stimulate additional investment, it fails to address the very real needs in the private housing market and it is incapable of delivery by the states. I would not trust the Premier of New South Wales to take out the bins, let alone build 9,000 new houses in about 18 months. He is simply not capable of it and neither is his government. I think gambling billions of dollars of taxpayer debt on the ability of states to deliver this program is reckless and irresponsible.

The package focuses only on public housing and ignores private housing needs. In doing this, the government have overcapitalised their stimulus by failing to leverage additional investment in residential construction, beyond direct public expenditure, and thereby maximise the potential boost expected from a proper stimulus measure. $6 billion would pay for more than 280,000 new home construction grants. That is twice the number of annual housing starts each year. Today’s housing finance figures released just a few hours ago show that loans for new housing construction increased again by 2½ per cent in January, following a much larger 9.9 per cent increase in December. However, the number of commitments in January are still fewer than a year ago. In addition, the proportion of first home buyers taking on housing finance commitments rose again to 26.5 per cent in the latest figures in January, the highest on record, eclipsing even July 2001 after the initial grants were introduced by the coalition government.

Today’s figures highlight the need for the federal government to increase their focus on stimulating construction in the private housing market, where more than 95 per cent of Australians live and more than 95 per cent of housing construction workers have a job and are at risk of losing them. On 30 June, the government’s first home owners grant will expire. The program has so far produced some good results. I am happy to concede and applaud that. It has the potential to do even better if the scheme is modified to provide a greater emphasis on building new homes rather than buying just existing dwellings, which accounts for around 90-plus per cent of the funds that are being spent on that initiative. Under Labor’s plan, this can only be achieved by driving Australia even further into deficit and debt. Their failure to set aside funds as part of the $6 billion cash splash on the public housing program was reckless and irresponsible because it failed to provide for the extension of these grants which actually can make a difference to private housing. Australia cannot afford for Labor to allow their social agenda on public housing to override their economic responsibility to do what is right for the Australian economy. It is time to get some balance back into their housing program policies and acknowledge the urgent needs in our private housing sector.

Finally, I would say this: when this package was put together and we went through Senate estimates, the government had no idea how much it would cost or how long it would take; they simply rang the state governments and said, ‘Do you think you can deliver this?’ and the response was Obamaesque with a ‘Yes, we can’. They cannot deliver in less than two years what they could not deliver in eight years of spending on these programs. So we rightly highlight that the stimulus package for public sector housing will be unable to be delivered by the states and as a result should be directed towards private housing. (Time expired)

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