Andrew Broad (Mallee, National Party) Share this | Hansard source

It gives me a lot of pleasure to talk about the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, because I want to bring out some key principles. A society remains stable when people believe that there are greater opportunities for their children than there were for themselves. I think about an example where I was once in a very remote part of China, standing in the house of our interpreter, who was very poor. Quite a contrast here: the farmer said to me: 'I have been able to double the size of my house. My children have a better opportunity than what I had. I am happy.' That is something that I think that creates a strong society.

You might ask why I am pointing out that at the start, but I think the issue of housing affordability harks very much back to that key principle. There are many Australians now who feel that they are unable to achieve the standard of living that perhaps their parents had, who feel that they may never be able to own a house. I want to say to them that that is not the case, it should not be the case and the government that I am part of is contributing towards ensuring that won't be the case. The two things that make a great and stable society are if a person has a job and a person has a house, a roof, something over their head, somewhere they can make a home, somewhere they can raise a family. If you want to get your economy right, you get those two things right and things have a way of falling into place. You get up, you work, you have purpose, you have somewhere you can invest, you have stability and you have a family life, and that is something that I think makes a great society.

But increasingly we're seeing it's becoming more difficult for young Australians, particularly, to save for that deposit. I do find it quite remarkable that the Labor Party would be against the first part of this measure. I understand that it is very close to super. It holds it to its heart as a dear reform and says we shouldn't touch it. But if you think about what the key purpose of superannuation is, it is to provide or increase your net financial worth in order to be able to self-provide in your senior years. If you are unable to own a house, that does draw on your ability to self-provide in your senior years. In fact, the sooner you can enter the housing market, the sooner you can grow your net worth, which therefore does contribute to your ability to self-provide in your senior years. I think the first part of this schedule of this bill actually is in line with the aims of providing for your retirement, allowing Australians to use the superannuation vehicle to make voluntary contributions of up to $15,000 per year to get to a contribution of $30,000 as a first start to get a deposit.

Often in my patch, which is rural Australia, there are opportunities to purchase houses that are somewhere in line with what you would pay in rent. Mildura, to give an example, has a population of 50,000. It's a place where I live—a wonderful place where I can look out the window and see the vineyards. It has everything: private schools, good infrastructure and community infrastructure. It's a beautiful place to live. It is possible to purchase a house there for about $200,000—and quite a reasonable house, I might say. For a person living in Mildura, for example, one of the things they are finding if they are paying rent is their rental repayments are higher than what their home loan repayments would be if they were able to get a deposit. To provide a mechanism to allow a person to accelerate their capacity to get a deposit actually puts them in an opportunity where their weekly outgoings would be the same. But instead of paying rent to an investor who is building up their net worth, they're paying it to themselves to pay off a home that will eventually build up and eventually be theirs, and they will no longer have to make that repayment in the fullness of time. I think a tax incentive around savings is very worthwhile and a very good policy, and I would encourage the Labor Party not to be so opposed to it because it actually is in line with their super reforms.

I have a view that we should be accelerating that opportunity even more. I believe that in some regards the banks put too high a threshold on the level of deposit that a person has to have as proof of their capacity to pay. I'll give you a consideration that I would ask the banks to look more favourably at. If a person has a three-year rental history and they've had the capacity to pay rent and have not dropped a payment for three years, I think that too should be a consideration as to eligibility for a loan. Instead of requiring as much as a 10 per cent deposit before they are able to purchase that property, if they've been renting for three years and they've clearly demonstrated that they've got the ability to manage money and that they've been able to earn and make rental payments, then, if those rental payments are somewhere near what they would pay in repayments, I think the deposit amount that a bank asks should be somewhat less. I think that is another way of accelerating the opportunity for someone to become a purchaser rather than a renter.

I see the challenge that a lot of young Australians have at the moment, where they're paying rents and those rents are going up at the same time as they're trying to save deposits, and the requirement for a deposit is going up at the same time as house prices are going up. They feel that the more they swim, the further away the shore is getting from them. I think that is heartbreaking for a lot of Australians. If we can address some of those things that allow them to get on that first rung of the ladder, that certainly is an advantage. I know from my personal experience. I didn't go to university; I worked in shearing sheds. The hardest dollars you ever earn are the first dollars you earn. When I was able to save enough of a deposit to get started on a farm, then I could actually make some money. Saving that deposit and getting started as well as trying to pay rent, as well as having the price running away from you, is something that we do need to be addressing, and this bill is a pretty good first attempt at addressing that.

Can I just touch on negative gearing. I do think negative gearing has a real role to play in encouraging investment in housing. The government doesn't build enough public housing across the country. As a result of that, we incentivise investment for Australians to buy houses that will be available for people who want to rent, but I do think there is an argument that there should be a cap on the amount that you can deduct through the property purchases and rental return through negative gearing. It might be in the vicinity of a tax deductibility of $30,000 a year. I do think that, like anything, there are never two extremes of policy—there is always somewhere in the middle. I do believe that there should be consideration given to incentivising the person to be able to buy one, maybe two, investment properties to make provision for their self-funded retirement, but I don't think there should be a tax benefit if you are up to seven, eight, nine, 10—that is just a personal view which I want to put on the record here.

Schedule 2 of this bill is very, very wise, and I'm pleased to hear that the Labor Party are supportive of it, because it will actually facilitate growth in regional Australia. Increasingly, we are seeing people who are in their senior years living in cold old Melbourne. Now, Melbourne is a wonderful place to visit, but not a wonderful place to be—not a wonderful place where you want to live out your winter. Why would you want to live winter in Melbourne? It's freezing. It's only worth being in Melbourne in wintertime when it happens to be the year when the Western Bulldogs win the grand final! But, apart from that, you do not want to be in Melbourne at wintertime. What we are seeing is many Australians from Melbourne now selling their houses for pretty good money, and they are using that money to build a new house in regional Victoria where the sun shines and where it is warmer. For example, this last year there has been over $100 million worth of new housing go up in Mildura, and largely the people who are going there are Australians who are 65-plus; they come and build a new house. They can sell a house for $1 million, build a house for $300,000 and have $700,000. They can have their caravan. They can have their overseas trips. They can have a quality of life that they never thought possible. They can go fishing down the river. They are 38 minutes in a 737 from Mildura airport to Melbourne if they want to go down and watch the Western Bulldogs win another premiership, hopefully, in 2018! It goes to show that there are people making these decisions.

With schedule 2 of this bill, we are allowing people who are going to sell a property to still be able to put a non-concessional contribution of up to $300,000 into their superannuation after selling their main residential home. This will actually incentivise them to downsize, which does make a property available for another young Australian who wants to live in Melbourne, for example. This does a lot of other things that are not just a financial benefit for these people but also a great thing for our country towns. I want to touch on this. We love to harness the skills and the passion of Australians. I'm a strong believer that our grey-haired Australians and our no-haired Australians—I have to encompass everyone—have so many skills and so much to offer. What we want to do is use them in regional Australia. We are increasingly seeing these people who have had international careers, who have had very successful careers in the cities, shifting to regional Australia. They are active and they are getting out because, frankly, they don't need to sit in front of the heater in Mildura. It was 33 degrees today. They are warmer—no arthritis—and they are contributing to making our towns vibrant and strong. I think this is such a wonderful thing, so I would encourage the opposition to think broadly about just how important schedule 2 of this bill is. This is about incentivising our senior Australians to go out and live life in an area where they can downsize and shift out to the regions.

In order for this to happen, there is, of course, a strong argument for good public transport links. If you talk to those senior Australians who have downsized and shifted to the regions, the things they look for are adequate health services, communications services so they can make contact with those they love and also public transport. One of the great concerns for me in my patch, which is north-west Victoria, is that there certainly is not adequate public transport to Horsham, to Stawell or—with the exception of air transport—to Mildura. Addressing those three things—adequate health services, public transport and telecommunications—will facilitate the greater decentralisation of our cities. It will also increase the opportunities for these people with skills to come to our regions.

Giving a financial incentive to people to put some money into their superannuation is a welcome thing. When we lift the wealth of average Australians, we lift the wealth of Australia. Sometimes we lose sight of that fact in this place. Sometimes we spend too much time thinking the government's got to do it. But if you can actually incentivise Australians to make good financial decisions, if you can lift their individual wealth, then ultimately, collectively, we are a wealthier country as a result.

This bill really is about that. It's really about a first step in helping young Australians into the property market: it's clear that we believe that you've got a future; it's clear we want your standard of living to be equal to or better than that of the generation that came before you; we want you to have a house; we want to help you. It's our government that's delivering that in this bill, and I'm very pleased to be able to speak about this very important bill in this parliament.

Debate adjourned.

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