Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

This initiative contained in the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 was put forward by the coalition. It was a good initiative then, and it's a good initiative now. Given the tightness of the housing market in Australia, the government should respond in this way, and it gives the lie, somewhat, to the general perception of the public that we always disagree on these matters when we get to federal parliament. While the cooperation of the coalition on this isn't necessary, it's good to see the parties working together.

As I said, the housing market in Australia is extremely tight, and any extra resource we can bring to the market at the moment should be welcomed, and assisting pensioners to downsize will assist in this. I do suspect, however, that the housing market in Australia and this crisis—and it's fair to call it a crisis that we're in at the moment—will return more to normal, given time. It was largely caused, I think, by the COVID crisis, and it's worth reflecting on the expert predictions—and I'm given to reflect that, when I was in primary school, we thought 'ex' stood for someone who was a has-been, and a 'spurt' was a drip under pressure. The expert predictions were that the housing market in Australia would crash, due to COVID. It's difficult for governments to always make exactly the right response at the time, given that expert advice. That's not what happened, of course; the housing market in Australia has surged.

It was predicted that, because the immigration programs were stalled due to COVID, there would be all this spare capacity in our construction industry and in our housing market. In effect, what happened was that half a million Australians came home because Australia looked like a far better place to live than the rest of the world. The issue was not only that they came home but that they came with cash in their pocket and wanted houses to live in. That's my assessment of what has happened to the housing market. As COVID is put behind us, I think that position will reverse itself. Those people who returned to Australia will probably not suddenly decide to sell up, pack up their bags and move overseas again, but there will be whole a new generation of Australians—we are an adventurous lot—that will seek to spend the next portion of their lives overseas. I think some of this tightness in the market will evaporate over the next few years and, as I said, things will return to normal.

We have a shortage now and, indeed, we have a crisis, and anything we can do to encourage owners to rent or lease their second homes and holiday homes may help. Neither party has come up with any initiatives in this area, but it's quite obvious to me, as a member representing a lot of seaside communities, that there is a lot of housing sitting around in Australia. I can understand why people don't rent out these properties, because they've got them for their own personal use, and sometimes the rental market can be difficult. Unfortunately, there are a lot of people who have had the experience of being landlords who wished afterwards they had never gone down that pathway.

Removing barriers to people downsizing as their peak need for accommodation has passed will encourage people to shift. The member for Spence went through the situations where some families need a larger home and others had their families leave home, so that they no longer needed all that space or wanted that size yard to look after. But shifting real estate can take time, and many cannot, or do not want to, commence the construction of a new building or even the purchase of a new building until they are sure that they can sell their current housing. Consequently, that time of uncertainty between selling a house and buying a new one—which has been limited to a 12-month period before that asset would come into consideration as affecting the pension—has become too short, so it's being extended out to 24 months and then, I think, there can be even a further exemption after that on special application.

I suspect that, in itself, this policy will not make thousands of new homes or previously occupied homes available for the general public, but anything we can do to reduce the barriers and disincentives should be welcomed. The fact that we're talking about the exemption of the family home from the assets test for the purpose of the pension means, I think, that it's not a bad time to raise the prospect of whether or not the family home should be exempt, full stop, from that assets test. I suspect that in the long-term no political party in Australia will go to the electorate saying, 'We're going to take away the exemption for the family home from the assets test.' Politics can be divisive, and having just given a good word for our cohesiveness in this place at the beginning of this speech, if one side of politics suggested to remove the exemption for the family home from the assets test, the other side of politics would dig its heels in and probably give it a good clip under the ear. Having said that, should someone who lives in a $5 million or $10 million house be able to draw a pension?

I often think these difficult decisions in life are all a matter of grey—not the electorate of Gray, I'll point out. For instance, if someone lives in a $1½ million or a $2 million house, most of us would cut them a break and say, 'Yeah, well, that house has grown in value since they've lived there; they should be given some kind of exemption.' But, if someone lives in a $20 million house, should they be able to draw a pension? They could claim to be penniless and say, 'I'm asset and income poor.' But, of course, there are any amount of financial products on the market now that would allow somebody to unlock the wealth of that house and live in it for the rest of their lives but actually draw down on the value of the asset. Sure, it might affect their children's inheritance, but it would not affect their particular outcomes in life. As I said, that's a difficult subject. I can't see anybody in politics leaping into it. But it is difficult to have sensible debates around taxation and taxation reform in Australia unless we throw all of these things into a melting pot so that they can at least be considered.

While I'm on such a theme, there are other big impediments to people downsizing or, indeed, upsizing or to businesses changing premises. They might say: 'My business has grown and I need to get into a bigger premise. I want to get into a more active area where there are more people walking past my shopfront.' Or they might say,' I want to get something smaller.' These are the entrepreneurs and movers and shakers in our society. Yet, anyone who wants to make these changes are then hit with stamp duties from state jurisdictions.

There was a time—before my time in this parliament and before your time, Mr Deputy Speaker—when it was proposed that, with the introduction of the GST, we would get rid of state stamp duties. Now, that didn't happen. In getting that legislation through, and with the agreement in those days with the Australian Democrats, the tax was narrowed so that it only covered about 50 per cent of Australian GDP, and then some of those aims were abandoned. If we are considering taxation reform, we should once again find a way for the states to replace that stamp duty collection, because it is really counterproductive. The very people who are taking risks to employ people and expand the economy are the ones who get hit with the tax.

For my brothers—once again, I'll stick my neck out here—I would rather see a flat land tax across the states that would not reflect on a particular activity at the time so that income space is borne by the whole community and not just by the people who actually want to do stuff. The most completely illogical way to raise money is to get stuck into the people who do the right thing. It's a bit like payroll tax. I don't think anyone can make a really good argument about the idea that the more people you employ who are over a certain threshold, the more money you should pay in tax. Once again, it's a nonsensical type of tax when it comes to talking about the decisions that need to be made to generate modern economies.

In the broader sense—and I'm not recommending any specific here—this parliament and the parliaments around Australia should be discussing how we can remove these artificial impediments to the efficient expansion and growth of business and employment in Australia so that, when a burden should be worn by the whole community rather than just these individuals, it is spread across that whole community. I certainly don't argue that we don't need to raise taxes in Australia. We run a very high level of service not just in our welfare economy but right across our economy. Our education system, our health system, our disability support system—all those things cost money, and are the kinds of thing that a good, civilised, wealthy country should have. Of course, you need taxation to support that, but the very idea that we tax the most productive in the economy on their entrepreneurialship seems to me to be a false economy.

Like this disincentive for pensioners to downsize their living arrangements, and like my suggestion that we should be looking at whether or not the family home should be exempt from the pension test, or whether states can find another way to raise that same amount of money that they raise out of stamp duties at the moment—which are counterproductive—all of those things are, I think, things that our parliament should be discussing in a mature and nonpolitically abrasive way, where people seek to take cheap advantage of members trying to put forward ideas and propositions that we should give consideration to. I'll leave this debate with those comments.

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