Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I'm speaking in opposition to these bills, the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017, and I want to point out from the outset that the bills contain two measures. The first one allows contributions into superannuation accounts—with concessional treatment in terms of tax—to be later withdrawn for a home deposit. That aspect is opposed by Labor. The second measure is one which allows those over 65 the opportunity to make non-concessional contributions of up to $300,000 from the proceeds of the sale of a home and not be disadvantaged in terms of their treatment associated with the pension and other government payments. That is a measure that Labor is open to considering. In fact, Labor did a similar thing when we were in government, and the Abbott government, when they were elected, cancelled it. So here they are bringing back a measure similar to what they cancelled in the past, which doesn't make any sense. But, because they are coupling it with this disastrous proposal in respect of superannuation, Labor and I are unable to support this reform going forward.

This really is a weak response to what is a huge issue for many Australians at the moment, and that is not being able to afford to purchase or rent a home, particularly in the community that they grew up in. In the electorate that I represent, Kingsford Smith, people are waking up to household prices that literally rise every day. In the last three years, from 2014 to 2017, the price of homes in the suburb of Malabar, just around the corner from where I live, have grown by a whopping 46 per cent to an average of $2 million, adding $635,000 to their value. That equates to an increase of $580 in the value of that property every single day—every single day. It's not confined to that suburb; it's occurring everywhere in the electorate that I represent. Up the road, in Coogee, the average price has increased by $592 every single day to just under $2.4 million.

Particularly in the last five years, property has become so expensive that many young people in our community fear that they'll never be able to afford to buy their own home and be close to family and social support networks, and that is a great shame, because, in my view and in Labor's view, access to housing is not a privilege; it's a human right. Governments and the people of this country, given the high living standards that we enjoy and the wealth of the nation, should be able to provide reasonable and affordable housing for its citizens. And it's not occurring at the moment, because this government is unwilling to do what is necessary to tackle the issue of housing affordability and the distortions in the housing market, fuelled by taxation policies that are the most generous in the world and encourage investment over owner-occupiers. I'm speaking, of course, of negative gearing and the capital gains tax discount that was introduced by the Howard government.

It's not just the electorate that I represent where people are doing it tough in terms of housing. Home ownership in Australia is at a 60-year low. Home ownership rates for 25- to 35-year-olds have collapsed from around 60 per cent to less than 40 per cent in the last 30 years. Rental stress is on the rise, with the proportion of low-income households in rental stress now at more than 40 per cent—and you see it every day. I was in Melbourne on the weekend. While walking through the streets I saw there was, unfortunately, an alarming number of people who are now homeless and literally living on the streets, particularly in our major cities, because they can't get access to public housing, because they can't afford rents or because they can't afford to buy their own property.

For Sydneysiders, the issue of housing affordability and the sad fact that many homes are completely out of reach for so many has now become a topic in all conversations around our community, bar none. Literally not a week goes by in the electorate of Kingsford Smith when someone doesn't come up to me and complain about housing affordability and their anxiety and their stress and worry that their kids will not be able to afford to buy a home in the future—and I'm not talking about children in their 20s or 30s; I'm talking about children in their 50s and 60s—in the community that they grew up in and alongside family.

These measures that we're debating here today don't do anything to deal with the heart of the problem, and that is the overly generous tax concessions that exist around negative gearing and capital gains tax discounts in this country at the moment. Basically, if you are not tackling those issues, if you are not talking about reducing the generous negative gearing concessions and capital gains tax discounts that exist at the moment, you are not fair dinkum about housing affordability in Australia. These bills don't do that; they don't go to that measure. Again, they're tinkering around the edges. These bills seek to introduce two measures that the government introduced in this year's budget. The first is the super home saver scheme, and the second is the contributing of proceeds from downsizing to superannuation. The government's first home saver super scheme plan would mean that first home savers who make voluntary contributions into their superannuation system can withdraw these contributions up to certain limits, and an amount of associated earnings, for the purpose of purchasing their first home. Concessional tax treatment applies to amounts that are withdrawn under the scheme.

I and my Labor colleagues feel that this sets a very, very dangerous precedent. You're setting a dangerous precedent by seeking to tinker and chip away at the foundations of the universality of our superannuation system. Superannuation accounts are meant to be working-life savings accounts that generate retirement incomes, not to be used at the whim of governments to try and tackle problems that don't actually do that and be accessed for whatever they wish. At the moment, quite a large proportion of Australians, on the trajectories that we have at the moment with the compulsory superannuation contribution level at 9½ per cent and very few people contributing on top of that, won't be able to afford to retire on their own. They'll have to rely on at least a part-pension or the full pension into the future.

Basically we're not saving enough as it is at the moment, through the current superannuation system, and this government wants to allow people to tinker with that and to potentially reduce it over the course of their lifetime by getting concessional treatment for contributions up to $30,000. Now, I can tell you, $30,000, in the context of where I live in Kingsford Smith, doesn't buy you a window pane. What an affront to young people to say, if you're going out to try and buy your first unit—which in reality is at least $800,000 to $1 million, in the area that I represent, for a one- or two-bedroom unit—that we'll give you a leg-up with 30,000 bucks, which you'll have to save yourself through the superannuation system. What an affront to young people, while at the same time they allow massive tax concessions to the wealthiest property investors in the country. Someone who's seeking to negatively gear their seventh or eighth investment property gets more support from this government than that first home buyer who they're asking to put 30,000 bucks into their superannuation when they go to an auction on the weekend to try to buy their first home unit or their first townhouse. What an affront to Australians who are seeking to get into the housing market.

And of course we all know that with superannuation those who miss out the most in this country are, unfortunately, women. If there is a category of people who are going to be defined as those who will have inadequate savings to fund their own retirements when they reach retirement age, it is women, because women have intermittent breaks from the workforce, and unfortunately we still have a gender pay gap in this country. Policies such as this are blind to issues associated with superannuation and saving for adequate retirement among women.

The other measure in this bill is about contributing proceeds of downsizing to superannuation. The government proposes to allow people aged over 65 to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. These contributions will be exempt from the age test, the work test and the $1.6 million balance test for non-concessional superannuation contributions. Labor doesn't have any objections to this measure. If it were split from this bill and put up on its own—and if you look at the full title of this bill, they are two separate measures, but the government has played politics with this and sought to bring them together, just to try to wedge the Labor Party—then this is something that I and my Labor colleagues would be of a mind to support. The reason is that we did a similar thing when we were in government. In the 2013-14 budget we instituted a pilot program that had the aim of doing just that: trialling a means-test exemption for aged pension recipients who were downsizing from their family home. Our threshold was that up to $200,000 of proceeds was to be put in a fund which would have been exempt from the pensions means test for up to 10 years.

So, when Labor was in government, we actually did this; we did something like this. And what did the Prime Minister, Tony Abbott, do when he was elected as Prime Minister, and his government? They got rid of it. And here they are trying to bring it back? I mean, what sorts of fools do they think the Australian people are? The waste of all that time and effort, the bureaucracy that was undertaken to get rid of this measure, purely because, I suspect, the member for Warringah didn't support it, because it was introduced by the Labor Party—no other reason; he wouldn't have looked at the sense associated with it. Purely because it was introduced by the Labor Party, they got rid of it, and here they are bringing it back. It makes no sense whatsoever. And they've sought to couple it with this disastrous amendment to our superannuation laws. That's the reason Labor is not supporting this.

This bill comes on the back of much spruiking by this government. Indeed, they've been very enthusiastic about their so-called housing affordability plan—out there, like used car salesmen, spruiking just how good this will be for housing affordability in this country, when really what they're trying to offload is a lemon. The assistant Treasurer promised and proclaimed in the 2017 budget:

The housing package will be extraordinarily large … It will be an impressive package. It will be a well-received package.

What we got was a hotchpotch and a shambolic mess of measures that have done nothing to address the key drivers of housing affordability that are in Commonwealth control. I'm speaking, of course, of the negative gearing and the capital gains tax concessions. This is an issue that Labor takes very seriously. In fact, for the last three years we've had a policy of reducing these excessively large concessions that exist for people. Labor will seek to reduce those concessions, because they're overly generous and don't benefit those whom they should.

Currently 50 per cent of the benefit of negative gearing goes to the top 10 per cent of income earners in this country. That says it all about what is wrong with housing affordability in this country. The wealthiest Australians are armed with this tax concession through negative gearing and may be going to invest in their seventh or eighth investment property. They're armed with the support of the government. They have the support of the government when they go to an auction on the weekend and seek to buy an investment property, and the poor old little first-home buyer, who has no support from the government whatsoever, is battling against someone that's getting a massive tax concession from the Commonwealth government—a housing tax concession, by the way, that is the most generous in the Western world. Fifty per cent of that negative gearing benefit goes to the top 10 per cent of income earners.

For capital gains tax discounts, it gets even worse, because 70 per cent of the benefit of capital gains tax concessions goes to the top 10 per cent of income earners, and 30 per cent of the benefit of superannuation concessions goes to the top 10 per cent of income earners. That is unfair, that is what's wrong with the system and that's why Labor will reform negative gearing. We will reform capital gains tax discounts by reducing them by a half, because we are fair dinkum about tackling housing affordability in this country, taking the pressure off the housing market and ensuring particularly that first-home buyers can get a leg up into the market, can establish themselves either with a rental property or with housing and set themselves up for a better life around the family that they grew up with and in the community that they love so much.

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