Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

I'm going to make a big call at the outset of my contribution to this debate on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I'm going to say that from my point of view the greatest disappointment in this year's budget, in the Treasurer's pathetic speech, was the sheer lack of understanding shown by the government towards young people looking to buy their first homes. I say that's a big call because there was a lot that was disappointing in this budget. Mainly, though, I think you can say they were bad calls: a tax cut for everyone in this chamber and a tax rise for everyone else in Australia, $65 billion of unfunded company tax cuts, cuts to education—I could go on. But I say that this is disappointing because in the lead-up to the budget the newspapers were full of speculation. Government ministers were on the telly talking up the big housing reform package we were going to see. Did we see a strategy? Do we have a minister for housing? Still—in the fifth year of this government—there is no minister for housing. Did we see anything real? No. Like the Prime Minister—who has now lost, I think, 21 Newspolls in a row—the housing reform package is a fizzer. There is nothing substantial in the budget. There's a mishmash of teeny, tiny, little measures that don't do much harm but don't really do anything.

We've had a few bills through to give effect to this 'nothing much' of a package. Most are actually integrity measures. You might remember in June, for those avid listeners at home, the foreign resident capital gains withholding payments bill, which apparently was part of the housing reform package—innocuous, but it didn't do anything in relation to housing reform. It was honestly described as an integrity measure. When we finish this debate, the next couple of bills to be debated cognately are three measures. Two are actually described, in a moment of honesty by the government, as 'integrity measures'. I won't breach the standing orders by debating those bills now, but I just note the impact, because it is relevant to the second reading amendment. Those two measures are travel deductions and previously used asset deductions. I am entirely unclear on what the impact on housing affordability might be—tighten up the tax system? Sure. There's a vacancy tax. It might pop a few more houses into the supply. Great. But there's negligible impact on housing affordability.

But those bills that masquerade as a housing affordability package are more evidence that the government has no clue. They are not listening to experts. They are not listening to people in the community. they have no idea. They are seriously out of touch. In fact, they've given up, as we've seen this week with the energy package, any pretence of actually governing. Just do whatever the member for Warringah says in the party room. I notice there's a bill on the Notice Paper as well that talks about new offences for impersonating a Commonwealth officer. I'd be very worried the Prime Minister might actually be charged under that bill for impersonating the Prime Minister! This is a housing affordability sideshow—say some words and maybe someone will believe you're doing something.

The re-election strategy has started to become clear this week: burn coal for higher power prices, spread copper for slower internet, and spin crap for—well, I don't know, just because. Context, however, is important. As our second reading amendment makes clear, the government's housing affordability package is a sham and Labor's policies are superior. The context in this country is house prices keep going up, year after year, quarter upon quarter, faster than incomes. Meanwhile, homeownership rates have plummeted to record post World War II lows. You simply cannot be credible, as speakers before me have said, on housing affordability unless you're prepared to tackle the distorting, unsustainable, regressive and damaging tax concessions. These tax concessions, negative gearing and capital gains tax—indeed, the deadly, toxic combination of the two—are fuelling investor demand for established housing, and they are pricing first home buyers, people who actually want to live in the house and create a home, out of the market. The fact is it is still easier in this country to buy your second, your third, your fourth, your fifth, your 10th or your 39th investment property than it is to buy the most important one—the first. We hear about supply and demand. It is a market, so there is supply and there is demand. But the government point-blank refuses to look at demand. I say it's damaging, because no society, no sensible society, no decent society, wants to see house prices keep rising faster than incomes.

The party of Menzies, the mob opposite, get very sensitive when you talk about their patron saint, Menzies. I think it's the 5,000th year or something, so we've heard all year from his seminal 'forgotten people' speech. He had a vision for a nation of homeowners, versus today's vision for a nation of landlords and renters, with the landlords on that side of the House and the renters being everyone else. The fact is we have too much growth in prices driven by investors. This is not a leftie, communist, socialist plot; it's what every sensible economic commentator and every sensible academic tells us.

The fact is that, for a high-income earner in this country with a bit of spare cash in their pocket—perhaps due to the government's tax cut of two per cent that we got in the last budget, when we're the least deserving people in the country of getting a tax cut—the most rational thing to do on a Saturday morning after having your coffee and reading the paper is to trot down the street to the nearest auction and, with your spare cash, bid up the cost of an existing property because you get a great big tax concession which means more to you than anyone else in the country. I say it's unproductive and distorting. You'd think, with the current investment levels in the productive part of the economy, you'd want to re-engineer the tax system to encourage people with a bit of spare money to do something productive with it, like invest in a business, or a start-up, or shares—something apart from bidding up the cost of an existing property, which does nothing for the economy. I say it's unsustainable, as has been said, because the cumulative cost of these regressive tax concessions is tens of billions of dollars to the budget when we're lectured that fiscal responsibility and structural repair is needed, and I say it's regressive because overwhelmingly the benefits go to those who have the most.

This is perhaps the clue, as many speakers before me have wondered, as to why the government refuses point-blank to address these glaring problems in the budget. Every sensible economist, economic body and policy expert says change is needed, and even Joe Hockey—remember him?—and the person impersonating the Prime Minister, when he was old Malcolm, used to know that. Just like we saw with superannuation, when you strip away the pretence of care for the middle class, when you get past the waffle about, 'Oh yeah, we care about poor people; inequality is not a thing, but we're kind of a bit sympathetic to people in poverty,' they are the party of the rich. They are the party of the people who have the most. They have wealth and privilege, and reducing inequality runs against their very purpose. It is at the core of Liberal Party DNA that its members and donors jack up if it does anything to make a structural change that reduces inequality and makes things a little fairer, or if it takes away any perk or loophole that helps money flow back to those who have the most and levels the playing field.

We saw this most clearly in the last couple of years when they wrestled pathetically with the need to reform the unsustainable superannuation tax concessions—those concessions that meant you could have $15 million in an account and pay not one cent of tax. We've made that point for years and we've been clobbered over the head. We put forward sensible policy in an election. At the last minute the government went, 'All right, okay, you've got a point; let's not talk about it, but we'll pocket some savings,' and then all hell broke loose, to put it politely, in the Liberal Party. They lost donors, they lost volunteers, and they say they almost lost the election through that stopping of the flow of cash from people who pay no tax. And now the poor member for Higgins is under siege and may not even be here if the preselection challenge is successful, because Jack Rush QC left the Liberal Party and has started up the 'anti the member for Higgins group' because he thinks he shouldn't have to pay any tax. That is exactly the kind of thing that happens to those opposite, so I do understand it's difficult for them when they try to make things a little bit fairer.

I said at the start that most of the housing affordability package is a nothing package; it's actually integrity measures. That relates directly to the second reading amendment we have moved, suggesting that this is a sham. Unfortunately—and this goes very directly to the bill—not all of the housing measures are innocuous. Indeed, some of them, the supposed budget centrepiece, are truly ridiculous. They're worse than a sham because they're actually damaging, like the ridiculous scheme to bastardise the superannuation scheme. We have the first home buyer super saver tax scheme. It is a mouthful. It's like the government thought, 'We'll throw as many fun words as we can into one policy and that will be appealing to young people.' It's a bad idea. It's a bad idea because, firstly, it fuels demand—remember that old supply-demand thing we touched on earlier? It puts more cash in buyers' pockets. It gives a tax break, which again is regressive, to save up to $30,000 to put towards a house. If you increase the demand for housing in an already hot market, it can only increase housing prices. The scheme will make matters worse for young people trying to buy their first home, and the only people this scheme really helps are those who want to see prices rise even further.

I say this tax break is regressive, that r-word—making things better for people who have most and worse for those who have least—because the scheme, by its very nature, through the tax break, delivers the greatest benefit, surprise, surprise, to the highest income earners. Who knew? From the Liberal Party! It's fundamentally inequitable for those who are at the bottom of the income ladder and still dreaming of buying a home one day. The government's answer, and we've heard this story before, is to blame young people for not saving enough. At the same time that the government is already asking young people to put up with cuts to schools and universities; to pay more for a university degree; to run up bigger debts to go to uni or TAFE and then to pay their loans back earlier, when they start earning $42,000, which apparently is wealthy for this mob—who knew?—it is getting them stuck in a debt trap as they are trying to climb up this ladder of opportunity we keep hearing about, this mythical ladder. It is now asking young people to raid their retirement savings just to try to buy a house in a market that is already warped by investors. In a sensible world—the one where you listen to the economists and your advisers and all that kind of stuff—this is not only bad economic management but also ethically wrong. We are a parliament and a generation that is at serious risk of handing a lower standing of living to the next generation. That is shameful. It's no accident though. This government is complicit in this and is driving it. This scheme is also dangerous, as it undermines Australia's world-class superannuation system and hurts young Australians whose future is already uncertain, and I'm pleased and proud that the Labor Party is standing against this bill. Labor, of course, created Australia's superannuation guarantee and we will not see it undermined by the Liberal Party.

Here is a fun fact as I drift towards closing: it was this government that introduced the Superannuation (Objective) Bill 2016 to parliament, and that bill proposed to legislate that the primary objective of the superannuation system was to 'provide income in retirement to substitute or supplement the age pension'. It doesn't say anything about providing a tax break or a tax rort for people to save $30,000 towards housing, to push up the cost of housing—even though that's about one-quarter of the median price rise in the capital city markets over last year. But that bill seems to have quietly dropped by the wayside.

In the last couple of minutes of my time I'll add a couple of comments about the proposed downsizing incentives for older Australians. I'm supportive of the notion that we should encourage downsizing. My mum was one, like many, who sat in her big house that she didn't need primarily because of the stamp duty barrier. I know that some state governments are starting to think about this, but I'm not convinced that the government's current policy as expressed in this bill will achieve the desired objective.

The cruel hoax in this policy was laid bare in an excellent essay by Richard Denniss, in The Monthly a few months ago, called 'Grandfathering the Australian dream'. It looks at the consistent wealth transfer to those who already have property and are in the market away from those who are trying to get a foothold as the next generation. He said:

There is some logic to encouraging older people to downsize their residence. But to suggest that allowing older Australians to tip some of their multimillion-dollar capital gain into tax-free superannuation accounts is an effective or equitable way to help young people buy or rent a house is yet another cruel hoax.

If Australia is to be a genuinely fair nation we need to have genuine policies that are achieving genuine solutions to the housing affordability problem. First and foremost, residential property must be for providing affordable homes for people to live in, and policy has to be organised around that central objective. Fuelled by the tax system and those opposite we've ended up in la-la land, where housing has preferred tax treatment and is the destination of choice for spare capital. This is profoundly dumb economic policy by the economic geniuses opposite.

The Australian people had a clear choice in this area at the last election and will have a clear choice at the next election. We will reform the unsustainable, regressive, damaging, distorting tax concessions that overwhelmingly benefit those who already have a foothold in the property market and who continue to work to push up prices faster than incomes and so lock out young people from the hope of ever owning a house.

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