Allegra Spender (Wentworth, Independent) Share this | Hansard source

The crisis in housing affordability is one of the biggest challenges facing Australia today. Since I was elected, there has been no issue that has been raised with me by more people more often. Young people worry about whether they will ever own a home, older people worry that they are one rent hike away from homelessness and many, many parents worry that their children will never have stable homes either as owners or as renters and that this will be an obstacle to them having families of their own as well.

Wentworth is a very expensive part of the country. It puts huge pressure on people in the area who might be well off by national standards but struggle with the local cost of living. I think of one young man from Wentworth who recently approached me to say that he'd done everything he thought he was meant to do. He'd worked hard at school, he went to university, he worked hard at university and he got a good job. He now has a $50,000 HECS debt and is struggling to make his rent and has no vision at all of his own ability to ever have home security or own a home. He's not alone. Too many struggle to secure an affordable home close to their families, their friends, their support networks, where they grew up and where they want to raise their kids. Many residents worry that rising prices mean our communities are becoming less diverse and there are fewer opportunities for people on moderate or low incomes, key workers or migrants to make their homes in Wentworth.

But it's not just Wentworth where people are struggling. This is a national issue, and it requires a national solution. According to Demographia, the typical Sydney property costs 11 times the median wage. Ours is the second most expensive property market in the world. In the time it takes a young person to purchase a property in Sydney, they could have purchased two properties in Canada or the UK. This is why the proportion of young people renting has increased by more than 10 per cent in the last two decades. It is no wonder that affordability has gone from being a concern to an absolute crisis. Real action is long overdue.

I welcome the government's actions with this bill, the Help to Buy Bill 2023, and other policies to try and address the crisis. Help to Buy is a shared-equity scheme that will enable governments to support low-income workers, particularly those who struggle to save for a deposit, into homeownership. It could be a very valuable source of support for those who are in desperate need of assistance and so I will be supporting the bill. But I have concerns: the first relates to eligibility, the second to parliamentary oversight and the third to housing policy more broadly.

On eligibility, the government has not formally released the income thresholds or price caps which will apply to the scheme. The policy which they took to the 2022 election included an annual income threshold of $90,000 for individuals and $120,000 for couples. It is appropriate for the scheme to include income caps, but these thresholds will mean that some of the support will go to middle-income earners when I believe it could be better targeted to where the affordability crisis is most acute. In contrast, the Grattan Institute recommended income thresholds of $60,000 for individuals and $90,000 for couples. The Grattan model explicitly targeted support to low-income earners, particularly older single women who would otherwise not be able to afford a home and run the risk of retiring in poverty. The government's position is that the property price caps will be set low enough to deter those on high incomes from taking advantage of the scheme. I'm not sure if I share that optimism. It is likely the program will be oversubscribed, but nothing in the government's materials explains how they will choose between eligible applicants. Who will get priority? We have no idea.

On oversight, this is a broader issue. This legislation is, frankly, just an implementation framework which enables the government to engage with state governments. I appreciate the legal and constitutional necessity for this, but I am very concerned that the legislation will circumvent the proper role of parliament. We are being asked to support a scheme without any detail of how it will operate, who will benefit, how it will be managed or what information will be published about how the scheme is working. This, of course, provides the minister with the flexibility to negotiate with the states as she sees fit, but it also provides the minister with a substantial degree of freedom without parliamentary oversight. It is particularly concerning that the minister is able to issue directions to the board which could include income thresholds, investment amounts, property price caps, the number of properties, reporting obligations and virtually anything else without parliament's approval or the ability of parliament to disallow any directions which are unreasonable, unfair or excessive. The only limitation placed on these directions is that the minister cannot direct the board to enter into particular arrangements or support particular properties or individuals. I feel this is absolutely and grossly inadequate for a scheme which will invest, potentially, more than $20 billion worth of public money. No minister should have such broad discretion over such a huge sum of money. It is not clear why the bill explicitly removes the ability of parliament to disallow the minister's directions.

I note that, in opposition, Labor repeatedly raised concerns over the finance minister's discretion to spend billions of dollars during COVID. In response to this pressure, the previous government agreed to weekly reporting, opposition approval for significant expenditure, a rolling Senate inquiry and an independent review by the Auditor-General. Those controls are not suitable for this scheme, but it does demonstrate Labor's par support for the principles of oversight and transparency, as does Labor's voting to disallow similar instruments when in opposition, such as the former energy minister's changes to the Clean Energy Finance Corporation's investment mandate in 2021. I will therefore be moving a consideration-in-detail amendment which restores the disallowability of the minister's directions. I hope members will seriously think about whether any minister should have so much power over so much money without parliamentary oversight.

Finally, my third concern is with housing policy in general. I broadly support the direction of where the government has been going on housing supply—increased rental assistance, shared equity, social housing and tenant rights. These actions will make a difference to the lives of people who are struggling with housing affordability, but I am absolutely frustrated with the speed of reform and the refusal to consider other areas which are really critical as well. Housing affordability is not an abstract, long-term challenge that requires action today to avert a crisis tomorrow; it already is a crisis. We should have acted in the last two decades to deal with these problems, and every federal government and every state government in this land, and also the local governments, bear some responsibility for the situation that we are in right now.

This is why we need to act quickly now, particularly in implementing planning and zoning reforms that would improve housing supply and therefore affordability. This is because of the long lead times associated with housing development and construction. Reforms today may not deliver more supply for years to come, and we can't afford to waste weeks or months working through bureaucratic processes. Until we can deliver those changes, we should be really focused on renters and how we can give renters what they need, which right now is more security in maintaining their tenancies, protection against unreasonable or frequent rent hikes, and providing opportunities to enter into secure, long-term leases.

Renting has changed in this country. Previously, this was something that young people did for a period of time before they started in homeownership. As I've already indicated, 10 per cent more young people under the age of 35, and now also young people under the age of 45, are renting because they cannot get into homeownership. Fifty per cent of single-parent families rent. That's 50 per cent of single-parent families who need that certainty about whether they're going to be near schools, whether they're going to be near child care and whether they're going to be near the parent they're trying to share the care of their children with. Currently, tenants do not have the protections that they need. We need significant changes at the state level to enable long-term leases to give renters security, so that they know where they're going to be for those critical, primary-school years and so their kids have that same sense of security. I know the government is taking action and talking to the states on this, and I'm here to urge the government to move much faster and to put more pressure on the states on these issues, because they are absolutely critical.

I'm also frustrated that the government has shown so little interest in supporting a reform that would make a real difference to housing affordability: replacing stamp duty with land tax. It is a reform which needs to be carefully designed so it does not disadvantage low-income people or those who have recently paid huge sums in stamp duty, but the economic benefits of abolishing stamp duty are abundantly clear. It's not just economics; it's the lives of Australians who want to get into homeownership and are absolutely locked out because of the current regime.

Stamp duty is an enormous barrier to homeownership. According to e61, stamp duty now accounts for five months of a purchaser's after-tax income. That's five months of pay that they must give to the government if they want to buy a home. Abolishing stamp duty would remove a significant barrier to homeownership. It would also remove a barrier to people moving home, either to a property which better suits their circumstances—such as young people getting into a larger home as they start having children, or older people moving into a smaller home as their children move out and start their own lives—or to pursue new career opportunities.

It's also unfair. If you are someone who has to move for work and so you have to sell one house to move to another area and buy another house there, you might be paying twice or three times the amount of tax paid by somebody who gets to stay in one place. Is that fair? You haven't had more homes. You've had to move, and so you're being taxed for that desire to move and to move around. When we think of issues such as the lack of key skills in regional areas—doctors and nurses, for example—the disincentives are huge because, if they want to move to a regional area and buy a house in a regional area, they will have to pay the stamp duty. It just creates more and more barriers for people to move where they need to.

The high level of stamp duty also means that it's harder for young people who are buying their first or second home to buy the right home. Because they're so conscious of stamp duty, they can overextend themselves, saying, 'I don't need three bedrooms now, but, if I buy a two-bedroom now and in four years time I need another bedroom, I'll have to pay more stamp duty, so let's go further now.' It means they are putting more pressure on themselves financially, when they can't necessarily afford it, just because of the tax system—the tax system that is not working.

If we could transition from stamp duty to land tax, it would complement planning reforms and it would create incentives to get more properties onto the market which can be bettered matched with residents or redeveloped to produce more supply. New South Wales Treasury estimates that replacing stamp duty with land tax would lead to a 6.6 per cent increase in homeownership in that state. That is moving more than 300,000 people from rented properties into their own homes. It is huge. There are few other policies in the country which would have such a large impact on housing affordability or improving the quality of people's lives.

The challenge for state governments is that the transition entails a temporary deferral of revenue—billions of dollars which are put off to future years—which needs to be borrowed to continue financing state government functions. Given that this reform would create significant fiscal benefits for the Commonwealth through increased economic activity, raising personal income and company tax receipts, and, given the Commonwealth's lower borrowing costs, it is appropriate for the Commonwealth to underwrite the states in making this transition. It would remove one of the key barriers to state governments embracing a reform that will benefit their residents and their own budgets. It is something I hope the government embraces in this year's budget.

Notwithstanding my concerns, I am a supporter of the Help to Buy scheme and the government's housing agenda more broadly, and I look forward to voting in favour of it and similar legislation in the future.

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