Terry Young (Longman, Liberal National Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 and the Capital Works (Build to Rent Misuse Tax) Bill 2024. This proposed legislation again highlights the stark difference between the two major parties. In fairness, I want to say that I believe that the government actually believes that what they have proposed is a good thing and will benefit the Australian public. However, as always happens, starting with an ideological view—that bigger governments and more government control of individual citizens' rights and lives is a better way than allowing people the freedom to choose with as little government interference as possible and to be masters of their own destiny—is always going to create policy that limits freedoms in our democratic nation. The build-to-rent component of the omnibus bill is a classic example of this ideology at work.

The greatest solution for rentals is to legislate and fund pathways for ownership, not rental schemes. Yes, there are the odd individuals who make a choice to rent and never want to own their own home—I understand that—but in my experience, of talking to hundreds of people, this would be less than one per cent of those people. The vast majority of people would love to own their own home and take away the uncertainty that comes with renting: the uncertainty of your landlord selling what has become your home; the uncertainty of being able to make changes like hanging pictures, buying a pet, painting a wall or planting a garden; and the uncertainty of your rent increasing, mainly due to landlords having to meet mortgage repayments that have increased, in some cases, by $400 to $500 per week.

Most of us, including me, started our journey after leaving home by renting until we were in a position to buy our first home. But this dream is evaporating. With the rising cost of dwellings; interest rates that have risen 12 times since Labor came to government; and the difficulty in living week to week, let alone saving for a deposit on a home, no wonder this generation see no hope in owning their own home. Rather than work on initiatives that encourage and give people hope when it comes to the great Australian dream of homeownership, the Labor government instead comes up instead with ideas on how to push more Australians into the rental market. It's astonishing. It smacks of a government that has simply given up or run out of ideas when it comes to the next generation of Australians owning their own home.

I say to these young Australians—in fact, all Australians regardless of their age—that the coalition hasn't given up on you or your dream of owning your own home. Although the numbers according to the ABS say that the percentage of first home buyers dropped from 23 per cent in 2020 under the coalition to just 19 per cent in 2023 under the Labor government, I'm saying to you: don't stop believing. When the coalition are back in government, homeownership will be a reality again for all Australians.

One of the many reasons Australians can't buy their own home is affordability. This legislation will only exacerbate this problem. The vast majority of investors in the scheme will be superannuation funds and foreign investors, both who have much deeper pockets than the average Australian family. Imagine a young twenty-something person or couple going to an auction to buy land to build a new home on, and bidding against a superannuation fund or foreign investor with deep pockets. I wonder who will come out on top there.

The deputy leader got it bang on in his budget reply speech when he said that, if the coalition were elected, we would freeze foreign investment on housing for two years to free up stock, allowing Australians to buy these homes, not foreign investors, who then rent the same home they purchased to those Aussies who actually wanted to buy it in the first place. This, coupled with another policy announced by the Leader of the Opposition in that same budget reply speech, of allowing Australians to use part of their super for a deposit to get into the housing market, will again give Australians hope they can buy their own home. I cannot see how anyone could honestly believe that a family that wants to buy a home having to rent their whole life with their own money locked up in super—which means the first home they will buy will be when they retire and get their super—can possibly be better than using that money to get into the market when they're younger and, in all likelihood, owning the home when they retire. It makes no sense to me.

The reduction of the instant asset write-off back to $20,000 is another kick in the guts to many already struggling small businesses. COVID showed us the benefits of having unlimited asset write-off. The purchasing of equipment went through the roof. The problem with Treasury is, quite simply, a very good accounting acumen but what I would say is a pretty poor business acumen simply through lack of real-world experience in business. I can tell you from personal business experience and from speaking to the business community that any money the government thinks they will lose based on Treasury advice by going to an unlimited instant asset write-off will be more than made up in the extra tax generated on purchases made by businesses through GST, the tax made on additional profits made by said businesses, the income tax paid by the extra employees on the higher sales made by these businesses and supplying the goods to the businesses that have placed the orders. The other issue is that, in defence of Treasury, they are simply not allowed to include estimates of any perceived secondary benefits. That could be changed by government if they had any guts to take that risk.

The difference here is that we have actual data from the pandemic when we introduced these measures. I know that, in one of the small businesses I had ownership in during the pandemic, we had held off buying some equipment for years due to the size of the expenditure and the fact that we would have to wait four years to receive the full tax benefit under the depreciation schedule. The business and employees suffered because we couldn't afford to invest the money in equipment that would have made our lives easier and improved our customers' experience. The company we were looking to purchase the equipment from missed out on a sale of around $200,000. The government missed out on $20,000 in GST, the tax on the profit of the company supplying the goods, the income tax from the extra staff the supplier could have hired and all the benefits around the logistical and installation work, all because of stupid depreciation.

When COVID hit and the coalition finally took the limit off the amount of the asset you could write off, the first thing that that business I was involved in did was buy that equipment, so the government got the $20,000 in GST, tax from the profits of the supplier and the extra income from all associated workers. Our business increased by 20 per cent with the new equipment, which meant we paid more tax as a business, with more GST collected and more profits made. We employed more staff to handle the extra sales, and of course they all paid tax. If we had not had the unlimited instant asset write-off, none of this would have happened.

A division having been called in the House of Representatives—

Sitting suspended from 17:12 to 17:25

Depreciation has got to be the most single-minded, stupid policy ever instigated, and someone needs to have the courage to get rid of it altogether. Whoever does will reap the benefits of that courage. Tradies and other businesses will upgrade their equipment, like their utes, more often if they can write off the entire amount and not depreciate it. This creates greater tax income for the government through extra GST and other associated taxes I have already mentioned. That's not to mention that this will increase the supply of second-hand vehicles and therefore reduce the price of these used vehicles for those starting out or not in a position yet to purchase a new vehicle. Again, it is all winners and no losers in this scenario.

The buy-now pay-later scheme is something I have personally seen the development of in my previous life in retail. I can remember the days of Avco and AGC CreditLine in the 1980s, when interest rates from those companies and those credit providers were in the high 20s. I can see one of the clerks smiling there who might be familiar with that. For a generation who had mortgages of up to 20 per cent, this wasn't a deterrent. Slowly, we have seen this market evolve to interest-free programs where the retailer and, really, all consumers pay. It's now just another cost of doing business. A business has to put in their budget the cost of doing these interest-free programs when pricing their goods or services, now that we're at the buy-now pay-later offering made by companies like Afterpay and Zip Pay.

The preferred option, of course, is that people would not require any type of loan to pay for goods and services. We'd much rather that they just pay cash and pay for the goods. But the reality is that, in times just like this, when we have a cost-of-living crisis and the average mortgage holder is paying an extra $500 a week on their mortgage due to this Labor government's management—or, should I say, mismanagement—of the economy, they now more than ever need access to fast, easy, affordable credit that allows them to purchase essential items. I would much rather that they use these reputable buy-now pay-later lenders than the payday lenders. It should be noted that these buy-now pay-later lenders and the providers of all other interest-free credit in the main are far more ethical, in my experience, than these payday loan sharks, who prey on the vulnerable in our communities with exorbitant interest rates and destroy innocent Australians' credit ratings. These companies, in contrast, are paid fees by retailers and employ over 140,000 Australians, and they do not impact the credit rating of their customers.

The coalition did much good work in this space, with a minister specifically dedicated to this space to ensure the fine balance of ensuring consumers were protected from unscrupulous finance companies while ensuring Australians were not deprived of receiving their goods and services. In some cases, they are desperately needed. This is just another example of government interference and overreach in a space that, in the main, has been working well. Of course, this government interference will increase the cost to providers, which then will need to be recouped by these companies. And you guessed it—it will be the already stressed average Aussie that will bear this cost in this cost-of-living crisis. Australians need legislation and policies that cut red tape and therefore the cost to businesses so that this can flow through to financially stressed Australians, not legislation that adds to financial stress.

When the coalition is next in government, whenever that is, we have got a plan to get Australia back on track as far as the economy goes. We will rein in inflationary spending to take the pressure off inflation. For example, we will not spend $13.7 billion on corporate welfare for green hydrogen, which many experts say is completely a myth, and critical minerals. We will wind back Labor's intervention and remove regulatory roadblocks, which are suffocating the economy and stopping businesses from getting ahead. We will condense approval processes and cut back on Labor's red tape, which is killing mining, jobs and those who have an entrepreneurial spirit. We will provide lower, simpler and fairer taxes for all, because Australians should keep more of what they earn—as to which, I'm so flattered that something we coined four years ago is now being taken up, with gusto, by the Labor Party. We will deliver competition policy, which gives consumers and small businesses—not lobbyists and big corporations—a fair go. We will ensure Australians have more affordable and reliable energy, as well as cleaner energy. Our economic plan, with its tried and tested principles, will restore competitiveness and rebuild economic confidence.

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