Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I am very pleased to follow the member for Macquarie. She did make some very good points about the importance of housing affordability and giving all Australians, especially young Australians, an opportunity to own their own home. But I am confused as to why, if the member for Macquarie believes in all of those things, she will not be supporting the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. The member for Macquarie was correct when she said that young people often find that, after they go through all their living expenses and pay their rent, they don't have enough left over to make significant savings contributions to build up savings to pay for the deposit for a home. That's exactly correct. That is what this legislation tackles exactly. So I'm at a loss as to why members of the Labor Party, including the member for Macquarie, acknowledge that that is a problem but will not actually support this bill. It shows a difference in the concept of superannuation between the coalition and the Labor Party. On this side of the House, we understand that every dollar that gets put into someone's superannuation account has to be earned first. The money doesn't come from some mythical magic money tree. That money must be earnt. The wealth must be created. The money that would otherwise be in a person's salary gets taken out of their salary and put in a compulsory super contribution.

I am in my mid-50s and when I first started to work—before there was any superannuation scheme of any significance—I was able to take 10 per cent of my salary and save that up as a deposit for my first home. We tell this generation: 'We're sorry; you can't do that. Of the total wealth that you earn or create in the job that you do, we're going to take around 10 per cent of that and force you to put that into compulsory savings that you cannot touch until you are 65 years of age. And when you are 65 years of age you can then go and invest that money in a house.' Unless a person owns their own home when they reach the retirement age of 65, they will be reliant on the pension scheme from the government. The best savings that any Australian can have is to own their own home. That is what we are trying to do with this legislation.

We do have an issue with housing affordability in this nation. It is clearly more difficult for young Australians to get into the market today than it was a generation ago. If you look at the raw numbers, the actual mortgage repayments as a percentage of salary may not be that much higher but what is significantly higher is the cost of the deposit that they must pay. That is exactly the problem that we are attacking. With this bill, from 1 July 2017, individuals will be able to make voluntary contributions of up to $15,000 per year and $30,000 in total to their superannuation account to purchase their first home. These contributions, which will be taxed at 15 per cent, along with the deemed earnings, can be withdrawn from a deposit. Withdrawals will be taxed at the marginal tax rate, less 30 per cent offset and allowed from the 1 of July 2018. For most people, the First Home Super Saver Scheme could boost the savings they put towards a deposit by at least 30 per cent compared with savings in a standard deposit account.

This is exactly the way that this parliament can help young people get into their first home. If they can get into their first home, the greatest forced savings is their ability to pay off their mortgage. But those on the other side of the chamber say no, because they don't want to let people have control and make a decision about how they can best use their superannuation savings. They would rather that money go to some union controlled fund. That is what their opposition against this is all about. Those opposite don't want individuals to have a say about where their savings should go and how their savings should be used. They don't want anything that affects the money that flows into their union controlled funds and which their union mates get control of. That is what their opposition is all about. They're putting their union buddies ahead of young Australians and the opportunity for young Australians to get a deposit and get into the housing market. Support for their union buddies is more important.

The second part of this bill deals with the issue that we find in our society when many couples who own their own homes look to downsize when their kids move out of home. They're couples who were able to buy a house many years ago and have enjoyed a massive appreciation in the value of their house. When they look to downsize—which would normally be the common-sense thing they would like to do—and they do all the sums, the taxation arrangements and the superannuation arrangements deter them from making the decision to downsize. So we find in many of our suburbs a lot of housing stock—four- and five-bedroom homes in the outer suburbs of Sydney—and we have couples in retirement, aged over 65, that, all things being equal, would prefer to move to a smaller unit but don't do so because of the taxation and superannuation arrangements. If we were able to allow the market to work normally and people who lived in a four- or five-bedroom home who preferred to live in a two- or three-bedroom unit could do so, that would free up supply in the market. Freeing up supply is one way that we can get downward pressure on housing prices and make housing more affordable for young Australians. But, yet again, we see the Labor Party opposing this.

These are the principles we are proposing to help couples that have four- and five-bedroom homes downsize. From 1 July 2018, people aged 65 and over will be able to make a non-concessional, post-tax contribution to their superannuation of up to $300,000 from the proceeds of selling their home. The existing voluntary contribution rules for people aged 65 years and older—work tests for 65- to 74-year-olds, no contributions for those aged 75 and over—and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under the new special downsizing cap. This measure will apply to a principal residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home, meaning that $600,000 per couple can be contributed to superannuation through the downsizing cap. These new contributions will be in addition to any other voluntary contributions that people are able to make under the existing contribution rules and concessional and non-concessional caps.

This is another sensible measure from this coalition government to try and get some downward pressure on housing, to try and change the supply and demand mechanisms that work in the market, to try and give young Australians greater opportunity to get into the housing market. Yet, like we see time and time again from this opposition, it puts its vested interests ahead of the interests of young Australians wanting to get into the housing market.

I will leave my comments there. I hope that members of the Labor Party will give some thought to this before they vote against this bill—will give some thought to those young Australians that are struggling to get into the housing market for the simple reason that the current superannuation laws that we have in this country force them to invest the money that they earn, the wealth that they create, in a way the government tells them, and it cannot be put into their house. Anyone who is over 55 or 60 and has a house will know that that is the best form of savings that they have had in their life. If we are talking about giving young people the opportunity to save, to build wealth for retirement, the best thing we can do is to give them the opportunity to get into their own home. So I ask members of the opposition to please put aside your union ties and think of those young Australians that this legislation will help save for their deposit. I commend this bill to the House.

See this speech in context