Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I was holding a street stall recently when a young couple came up to chat about their troubles buying a first home. She was a teacher, he was a builder, and they were thinking about having a family but they were worried that they would not be able to meet the mortgage repayments when their two incomes went down to one. Despite being in their late 20s, this couple were looking at moving back in with their in-laws. Changing nappies and juggling sleepless nights under the same roof as their in-laws was not their idea of the Australian dream. But their story is, sadly, typical.

Since the early 1980s the share of 25 to 34 year olds who own their own home has fallen from about 60 per cent to about 30 per cent. It used to be the case that the top fifth were just as likely to own a home as the bottom fifth but now there is a 15 percentage point gap in home ownership rates between the top and the bottom. In the early 1980s the average home loan for a first home buyer was $81,000. Now, it is $308,000. Over just the last two years we have seen house prices in Australia go up 20 per cent and yet we have got the slowest wage growth in 18 years. As the young Canberra couple said to me, 'It's hard to afford a mortgage when the prices are going up so much faster than your income.'

Those opposite want to pull up the ladder of opportunity on young Australians. The gap in homeownership is another part of the growth in inequality that Australia has seen over the course of the last generation, where earnings have risen three times as fast for the top 10th as for the bottom 10th, and where the wealthiest three Australians now have as much wealth as the poorest one million Australians.

How did we get here? The Ralph review—commissioned by Peter Costello—recommended that we halve the capital gains tax rate on long-held assets and immediately after that we saw net rental income in Australia, which had been about a billion dollars a year until then, immediately go negative and stay negative. In fact, in one year net rental income in Australia was minus $10 billion. The Ralph review did not contemplate that halving the capital gains tax rate on long-held assets would hit real estate. It said it would spur investment in productive companies. But, in fact, that combination of the capitals gains tax discount and negative gearing acted to drive up house prices.

Those opposite would have you believe that negative gearing goes to those of the bottom of the distribution but those in the top 10th have claimed more than half of all negative gearing tax concessions in recent years. The average surgeon gets 100 times the tax benefit of negative gearing as the average cleaner and 16 times the benefit of the average nurse.

Over the course of the last week we have had suggestions from the Prime Minister that Labor's policies would drive house prices down, and from the Assistant Treasurer that they would drive them up. Monday Malcolm said it would drive down inequality; Thursday Malcolm said it would drive up inequality.

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