David Hawker (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Sydney proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The refusal of the Government to acknowledge and adequately address huge rises in the costs of living.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Link to this | Hansard source

It is no surprise, perhaps, but an enormous disappointment that when we ask questions of the Prime Minister about housing affordability in this country, a critical issue for young Australians, in particular, his attitude is to look around for someone else to blame. It is never his fault and never his responsibility. It has nothing to do with interest rates and nothing to do with years of neglect by the federal government when it comes to housing. It is never his fault. But I tell you what: there is no amount of advertising and no amount of taxpayers’ dollars that the Prime Minister can spend to convince Australians that they have, as he says, never been better off when it comes to housing affordability.

We know that households are paying more than ever before as a proportion of their income on their mortgages. We know that young people are struggling to buy their first homes and that first homebuyers have fallen as a proportion of all homebuyers from 21.8 per cent in June 1996 to 17½ per cent in February this year. Young Australians are giving up on the great Australian dream of homeownership, because this federal government is presiding over the worst housing affordability in Australia’s history. In fact, if you look at a recent NATSEM report, you will find that this does not just apply to home purchases; it also applies to rental accommodation. NATSEM show that one-quarter of a million Australians are paying more than 30 per cent of their family income on rent. So you have high purchase costs and high rental. In this environment, is it any wonder that young Australians feel as though they are never going to be able to save the deposit for a home? How do you save a deposit for a home when rents are higher than they have ever been before?

We have seen that this government is very quick to point the finger; it is always someone else’s fault. In this case, the government is very quick to blame the states. But let us just have a quick look at what some of the states have done. Mind you, all the states have done something to help with home affordability—but not the federal government. Victoria have spent $510 million on public housing in the last budget. They have cut land tax and made more people exempt from it. Land tax is being paid at a lower rate. They have stamp duty exemptions for owner-occupiers buying properties worth less than half a million dollars, and they have an extra first home buyers grant of another $4,000. Western Australia has a shared equity scheme, worth $300 million, where the government will purchase 30 or 40 per cent of the home with the homebuyer and the homebuyer can later buy that back from the government. That is to help people into home ownership. Western Australia have more community housing and they are fast-tracking land development applications. In Queensland you see the very successful Brisbane Housing Corporation. There is also a proposal from the Queensland government for a scheme called Homelink, which very specifically has all three levels of government working together on housing affordability. But do you think the federal government will come to the party on this? No. It is someone else’s responsibility.

All these measures help, but at the end of the day the thing that is driving Australian families onto the breadline are interest rates. The Minister for Families, Community Services and Indigenous Affairs was sitting on the front bench while his Prime Minister was talking, saying, ‘It’s nothing to do with interest rates.’ Actually, it is something to do with interest rates, because, if you look at the figures, you will see that Australian families are paying a bigger proportion than ever before of their family income on mortgage repayments. And, do you know what? They are paying a bigger proportion of their family income on interest repayments than they ever have before.

Alexander Downer (Mayo, Liberal Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Mr Downer interjecting

Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Link to this | Hansard source

Yes. The Minister for Foreign Affairs is such a genius. He says, ‘That’s because houses are more expensive.’ Actually, we are talking about the problem of housing affordability, so, yes, the fact that houses are more expensive does relate to that—genius, bingo, well done!

Australian households are now spending a record 9.3 per cent of their disposable income just on paying the interest on their mortgage repayments. Let me say that again, because the Minister for Foreign Affairs was yapping away and might not have heard it: Australian families are now spending 9.3 per cent of their family’s disposable income just on paying the interest on their mortgage. When mortgage interest rates were at their highest point in September 1989, guess how much families were paying of their disposable family incomes on interest payments? They were paying 6.1 per cent. So families are paying a greater proportion of their family income now than when interest rates were at historical highs.

We have seen four interest rate increases since the last election. Do you know what that has added to the average loan? If you take a loan of $450,000 over the course of 25 years—which is pretty reasonable—then the four interest rate increases since the last election alone have added $88,000 to the cost of that property over the course of repaying the loan—$88,000 from those last four interest rate increases alone!

I will tell you what else is happening. Because of this enormous pressure on families, from this enormous housing affordability problem that families are facing, we have seen the emergence of low-doc/no-doc lenders—we have seen dodgy lenders emerging. We have seen that sector grow from zero to $8 billion over the past 10 years. And do you know what is happening? Those lenders are foreclosing on families much faster than banks do. So we have seen an enormous increase in the number of families losing their family homes—families going bankrupt because of the high cost of housing and their inability to pay these loans. If you have mortgaged to the absolute hilt to afford these extremely expensive houses—which the foreign affairs minister thinks is so great—then even the tiniest little increase in your interest repayments might send you over the edge.

Mortgage defaults have doubled in Sydney since 2002. In fact, last week we heard evidence before the Senate Standing Committee on Legal and Constitutional Affairs from Terry Gallagher, Chief Executive of the Insolvency and Trustee Service Australia. He said:

You could go back 10 or 15 years, when bankruptcy numbers were 13,000 a year, and now they are 30,000 a year.

And the Prime Minister tells these families, struggling to afford their mortgage, that they have never had it so good! I do not think those 30,000 families a year feel like they have never had it so good.

We have talked about the difficulty that young people find in getting together a deposit for a house. In fact, for many Australians saving a deposit is the greatest barrier. Once they have borrowed the money and bought a house, the repayments on the mortgage are not much more than their rent—the problem is saving the deposit. But how do you save a deposit when, week after week, month after month, we have seen increases in rent? BIS Shrapnel estimates that rents are set to accelerate in the next three years. They are looking at rental growth of 10 per cent per annum in Sydney and six to eight per cent for Melbourne, Brisbane and other capital cities. The government’s response is: that is fantastic, because the market will correct itself and in three years, five years, eight years, 10 years—who knows when—there will be more investment in rental accommodation. The problem is that almost all of the investment in rental accommodation under this government is targeted at the high end of the rental market—it is great penthouses in beautiful locations in the middle of capital cities; it is not rental accommodation that is suitable for low-income earners and it is not rental accommodation that is suitable for families. That is where you are letting Australian families down. So, buying is too expensive, renting is increasingly expensive.

We have seen $2.71 billion cut over the last 10 years from the Commonwealth-State Housing Agreement, so there is enormous pressure on public housing. We have seen emergency accommodation slashed under this government. Its own report is saying we need to see a 15 per cent increase in emergency accommodation just to keep the doors of existing services open and more like 40 per cent to begin to meet unmet demand. We have the minister for Indigenous affairs, whose brilliant solution to the enormous problems in Indigenous housing is to take money from poor Aboriginal people in cities and give it to poor Aboriginal people in remote areas. God forbid that you would actually take from some other pot of money rather than moving funds from one lot of disadvantaged people to another lot of disadvantaged people.

There is no simple answer to housing affordability. One of the enormous frustrations is that they pretend that there is some simple answer. There is not a simple answer. Of course mortgage interest rates need to stay low, to bring housing into the reach of first homeowners in particular. But we need to look at innovative ways of helping people into the first homeownership market—things like the shared equity scheme of the Western Australian government. Other governments, including the Northern Territory and the ACT, are looking at that. We need to look at those schemes. We need to make sure that there are enough tradespeople to build these houses, given that this government has presided over 10 years of destroying the skills of the Australian workforce through neglect. We need to look at ways of encouraging investment in rental accommodation to be spread more evenly so that there is rental accommodation at the affordable end of the market as well. We need to look at proposals like the national affordable rental incentive scheme that organisations as diverse as ACOSS and the Housing Industry Association have come together to promote as a way of getting more investment into the affordable housing end of the market. We need to invest more in social housing and homelessness services. All of these are things that the federal government could be doing. Instead, we have a federal government that says, ‘Not my problem—it’s all the states, it’s all local government.’

What I would desperately like to see, and what all those hundreds of thousands of Australians who are under housing stress want to see, is that the federal government would just for once take responsibility, just for once show some leadership in this area. The government say, and they said again today, that it is all about land release. I will tell you what happens if the federal government march into the states and makes them release land in the outer suburbs of Western Sydney or Melbourne. There is a lot of land release already underway there, but if this federal government try to force the states to do mass land release in those outer suburbs, do you know what you will see? You will see those homeowners driven into negative equity. Who does that help? You will see negative equity in those suburbs, but you will not see greater housing affordability across the board.

There is a lot of extra land release underway, and maybe there needs to be more. But in most areas there is a great deal of land already in the pipeline. Lend Lease has said that it has 10 years worth of the land it needs. Michael McNamara, the operations director of Australian Property Monitors, said in the Australian in March this year:

Demand for housing is extremely flat and developers haven’t been able to sell the projects they’ve got, let alone launch new projects—so we totally dismiss the argument that releasing more land on our cities’ outskirts is going to affect affordability.

Here is another one. Peter Icklow, the managing director of major Sydney developer Monarch, said:

Every time I see John Howard blaming land supply (for low affordability) I see red because it’s just not true—there are literally thousands of lots available.

So, what can the federal government do when it comes to land release? They could help out a little with the cost of infrastructure. They have totally walked away from that in the last 10 years. I will tell you what they should not be doing. The most insulting thing to Australian families is this Prime Minister telling them, often with millions of dollars of taxpayer funded advertising, that they have never been better off. We know that an increasing number of families are finding it very hard to make ends meet. They are finding it hard to pay the mortgage, hard to save a deposit and hard to pay the rent. Australian families are experiencing the worst housing stress figures in history, and all this Prime Minister can say is that it is someone else’s fault.

Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Link to this | Hansard source

I welcome the opportunity to talk in this matter of public importance discussion in relation to the costs of living, because it gives the government the opportunity to talk about an issue which is, of course, very important to the Australian people. It is important to the Australian people because they have costs that they need to meet each week, each month, to balance their budgets in order to provide support to their families. It is an issue that the government are very keen to talk about and to offer a view on because we believe we have been a significant part of providing more affordability, in housing in particular, over the last 11 years.

We have had the capacity to manage the economy well and to bring interest rates down from the 17 per cent highs experienced under Labor. We have had the capacity to manage the economy to reduce taxes so that people can provide more support to their families. In our management of the economy over the last 11 years we have had the capacity to say that we will provide more support for families who choose to use long day care or other forms of formalised child care. This government has provided significant funding for child care and for all those other measures that we are very proud of.

We are very proud of the fact that we have been able to release some of the pressure that applied when Labor was last in government. This debate today really gives the government the opportunity to say to the Australian people that the election that is due in only a few months time really will be about who is best able to support those families and small businesses as we go forward over the next decade. We maintain that the coalition will always be better for families, for those in small business and for the balance in the Australian economy and community, because we have a principle of running well-managed economies and providing dividends to families in the interim.

Of course this government recognises that families have debts to pay. They have home loans to pay and credit card debt to pay. They have motor vehicles and school fees and all those other things that go into a family’s budget each fortnight. There are petrol prices to deal with, holidays and those sorts of expenses. The government is the first to recognise that it needs to provide support for families to help them to meet all of those obligations.

I say this is an important debate today because it is an opportunity to say to the Australian people that the next election will be about whether, with the levels of debt that they have today, they can afford higher interest rates under a Labor government. One of the crucial messages that we now understand from the way in which Labor manages the economy not just at the federal level but at the state and territory level, where they have forced up taxes and have gone into debt to borrow on the government’s behalf, which in turn puts upward pressure on inflation and interest rates, is this: can families in our country today, with the levels of debt that they have, afford to return to Labor’s interest rates of 17 per cent? That is the question that the Australian people need to ask themselves in the run-up to the next federal election.

People who at the moment are paying eight per cent on their mortgages—for argument’s sake, if they are paying for an average mortgage of, say, $350,000, in an area like mine that might mean that their current interest repayment is about $2,713 per month. If interest rates were to go up, as they did the last time Labor were in government, if they are elected—let’s be generous and assume that they only go up to 12¾ per cent under the ALP, that would mean that their interest payments would increase to $3,882 per month. By my quick calculations that is an increase of about $1,169 per month. So the question to the Australian people is: can you afford to vote for a Labor government? Can you afford to return your family to 17 per cent or to 16, 15, 14 or even 13 or 12 per cent interest rates, as they were when Labor were last in government?

When we are talking about the very important issue of affordability, not just in housing but also in other costs of living, people need to ask themselves whether the Labor Party would return them to a better position than this government would be able to after the next election. That is a crucial point that needs to be underscored. This government has been about managing the economy well so that we can return dividends to the Australian people. We know that people in this country have levels of debt and that they need to service those debts; we know that they have obligations to raise their children, to send them to school and to meet all of those costs. We respect all of that but we say to you, when considering the opportunity at the next election to cast your vote, if you take the decision to cast it for the Labor Party what will that mean for your family’s household budget?

Much has been said today by those opposite, including the member for Sydney, about housing affordability and about the way in which house prices have increased in this country over the last three or four years in particular. No mention was made by the member for Sydney about the role of the state governments in that very important issue of housing affordability. No mention was made by the member for Sydney about the way in which some of the green policies of some of the state and territory governments have tempered some of the supply of land and how that, in turn, has forced up the prices of land. Nobody from the Labor Party has mentioned in this debate about how in some states planning schemes are imposed on local council authorities and about how other taxes and levies need to be raised by councils to meet their obligations under state government legislation, all of which adds to the end cost for the consumer.

If we are going to have an honest debate about housing affordability and the cost of living in this country, we need to recognise how it is that Labor at a state level have managed these issues over the last decade or so. When you take a close inspection of the way in which Labor have managed their state economies, the way in which they have pulled back on the supply of some land, you need to recognise that that is what is causing some Australian families pain out there in the community this very day. The member for Sydney referred to developers as being happy with their land stocks, not being happy at seeing any more land come online. Has she asked herself why that is so? Has she said to herself: ‘I’m a socialist, but I have to try to understand some basic economic policy’? Perhaps it is because the developers are happy for land prices to remain high, for supply to be pulled back so that they can maintain those high prices.

The thing that people should know about Labor is that 80 per cent of them come from a union background. Nobody in the Labor Party has made any real effort to employ people and, as they proved when they were last in government, nobody in the Labor Party has the capacity to manage the economy well. The majority of the Labor Party—80 per cent of them—come from a union background, where they have never employed anybody and never had a job outside of the union movement. In the run-up to this election, they ask the Australian people to believe that they are now ready to manage the Australian economy. Let us imagine that Labor were elected at the next election, and the Labor government cabinet first met to talk about economic policy. When you look around the cabinet table, you see that they have five former ACTU bosses, and the balance of the people have never had experience in small business, never had experience in employing staff. Can anybody for a moment believe that that assemblage of union hacks would have the capacity to make good economic decisions in the best interests of Australian families? Does anybody in small business today believe that the reintroduction of unfair dismissal laws by the Labor Party or a return to control by some of the union hacks and lunatics in the union movement would be good for small business? Does anybody in small business, in particular, believe for a moment that the Labor Party would create opportunities for business to grow?

When you look at Labor’s record on unemployment, you see that when they were last in government unemployment was in double digits—it was over 10 per cent. One million people were in the unemployment queues in this country due to the economic policies of the Labor government. If we want to have a serious debate in this parliament about affordability, about the cost of living, let me say to those opposite—in particular, to the member for Sydney—that somebody who is unemployed; who is forced out of a job because the economy turns sour, as it did under Labor; who does not have the opportunity to own their own home; who is lining up in the dole queue—there were one million when Labor was last in government—who does not have the capacity to put their children through education, which they might want to afford themselves of; who does not have the capacity to create wealth by saving for their retirement, or to create a better position for their family, feels the pressure of higher petrol prices and the pressure of all of those taxes that are passed on to small business. And somebody who was in the unemployment queue when Labor were last in government would realise that the Labor Party do not stand for helping families in this country with respect to home affordability.

The Labor Party really contributes to people’s capacity not to be able to afford housing. The Labor Party, through its bad economic management, now contributes at a state level—as it did previously at a federal level—to people being priced out of their homes, to people not being able to afford to run their cars or to small businesses not being able to afford to expand. All those points need to be reinforced to the Australian people, as they are approaching a very serious time in this country’s history and they will be reminded about them in the run-up to the next election.

I also want to talk today a little about petrol prices and to say to the Australian people that the government does understand the difficulty when the prices of petrol rise. We do understand that families, which need to fill the family car to run the kids to sporting events, or people who need to travel distances to work, or people who just want to take their family to the beach or to a movie on the weekend, have expensive costs in running their cars and filling them with petrol when it is at a higher price. We do understand that. The reality, though, is that those opposite, on occasion—in a moment of honesty—have recognised that petrol prices are largely out of the control of the federal government. Petrol prices are determined by international factors. If petrol prices increase, the government does not benefit. From a federal government perspective, if the price of petrol is $1 a litre and it goes up to $1.30 the revenue that flows to the Commonwealth remains the same.

The point needs to be made that we do recognise the difficulty that families face in relation to petrol. We do recognise the difficulties of people who have high levels of debt because they have purchased a new house, put an extension on or accessed equity in their home. We do recognise that they have expenses. But what we say to Australians who find themselves in that position is: if you were in the position that you are in today 10 years ago, when Labor was last in power, you certainly would not be able to afford to stay in your own home and you certainly would not be able to afford to maintain the lifestyle that some people are able to maintain today. We have cut taxes in this country. We have brought down unemployment and interest rates in this country. We have managed the economy well solely so that we can return benefits to the Australian people.

When we talk about good management of the Australian economy, people need to recognise that if Labor is elected at a federal level then all that we know today about the Australian economy would be at grave risk. We say to Australian families and to people in small business that the Labor Party are dominated by, and answerable and accountable to, the Australian union movement. The election of a Labor government would be a bad outcome for them and for the future of this country. This MPI moved today by the Labor Party is a farce. It is a joke. If they were serious about these issues then they would confess their own failings when they were in government and come out and criticise state governments—who are solely responsible for the way in which housing prices have increased in this country. What we know about the modern Labor Party, at both a state and federal level, is that they do not have the capacity, the wit or the understanding to manage the Australian economy. (Time expired)

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The matter of public importance today is about the Howard government’s refusal to acknowledge and address the huge rises in the cost of living. Having listened to the member for Dickson, I can only say that his understanding of the rising cost of living is very lame and pitiful indeed. I welcome the opportunity to speak to this matter of public importance. I am frequently asked by residents living in my electorate of Calwell—and I imagine that the same holds true for all members in this place, including the member for Dickson; I am certain that he gets asked this question as well—why it is that, at a time when Australia is supposedly experiencing strong economic growth, more and more Australians are finding it harder and harder to make ends meet. If the Australian economy is doing so well, why are so many working families struggling just to keep their heads above water?

The Howard government never tires of telling us that Australia’s economy has never been in better shape—a message that it repeats here on a daily basis and will certainly take to the next federal election. But at a time when Australia has supposedly become more prosperous as a nation, what this government continues to overlook is that many working families are finding themselves under growing financial pressure and are just simply managing to get by. The reason for this is simple yet entrenched: the cost of living today has far outstripped any growth in household disposable income, and the Howard government has proven itself either unable or unwilling to do anything about this. Everything today has become more expensive. Petrol prices have risen by over 40 per cent since December 2001, biting into household budgets in a way that is simply unsustainable for working families. Instead of giving the ACCC the teeth it needs to get to the bottom of petrol pricing in Australia by directing it to conduct a formal price inquiry into petrol prices, the Howard government has been content to go along with a ‘name and shame’ campaign that has gone nowhere and has all but been forgotten.

Like petrol, the price of basic groceries has gone up sharply. Taking a trip to the supermarket is more expensive now that it ever has been. The cost of buying food continues to rise daily. Child care, health care and dental care are all less affordable. Personal debt levels are at record highs. Of course interest rates have risen despite John Howard’s promise to keep them low. Job security is disappearing as the Australian workforce undergoes casualisation and as Work Choices takes effect. First-home buyers are spending on average more than 30 per cent of their disposable income on mortgage repayments. House repossessions are soaring and there is a housing affordability crisis continuing for new homebuyers. The list goes on. All of this has happened under John Howard’s watch, and all of this has made life close to impossible for many working families across Australia.

Following on from the member for Sydney, who spoke about housing, I would like to concentrate on the rising costs of child care, dental care and education. The degree to which working families are able to afford basic services like child care and health care gives us a strong indication of the level of social prosperity in Australia. Measuring social prosperity is a way of determining whether all Australians are sharing in the dividends of a healthy economy. Access to affordable and adequate health care, to quality child care and education for our children, and to other services like these plays a crucial role in supporting the quality of life that every Australian wants both for themselves and for their children. How affordable and accessible services like child care and health care are tells us how well the Howard government is doing when it comes to converting Australia’s economic prosperity into social prosperity, and whether our strong economy is making life easier for working families across Australia.

To build social prosperity you need to reinvest money back into the community and into those community services that help support our standard of living. Without social prosperity, economic prosperity begins to sound very hollow indeed. Statistics suggest that the Howard government’s record is less than exemplary on this matter. Over the last decade, the cost of child care has risen by 126 per cent in my home state of Victoria. Each year, childcare costs rise by an average of over 12 per cent. According to the Australian Bureau of Statistics, since December 2001 alone childcare costs have increased by a massive 82.5 per cent. To put this in perspective, this increase in the cost of child care over the last six years is nearly six times the consumer price index average of 14.8 per cent over the same period. Today, the average cost for child care in Victoria is somewhere in the vicinity of $240 a week, with many parents having to pay a lot more. The net result of all of this is that increases in childcare expenses are far outstripping any growth in household disposable income, pricing many families out of the childcare market altogether. Since 2001 childcare affordability has plummeted by over 50 per cent. Despite all logic, the Howard government continues to deny that there is a childcare crisis in Australia, and it has done very little to fix the problem. As working families continue to raid their household budgets to pay for child care, the Howard government is telling those working families that they have never had it so good.

When it comes to dental care, the picture is even bleaker. The Howard government has had 11 years to fix Australia’s public dental health system. All the government has done in that time is to play the blame game—pointing the finger of responsibility at state governments in an attempt to wash its hands of any responsibility for the state of Australia’s failing public dental health system. We have not forgotten back in 1996 that it was John Howard who ripped $100 million of Commonwealth funding out of Australia’s public dental health system when it scrapped the Commonwealth dental health program. It was a Labor government that introduced the Commonwealth dental health program in order to channel much needed Commonwealth funds into Australia’s public dental health system, and it was John Howard who decided to scrap this program. After 11 years of neglect and chronic underfunding by the Howard government, there are now over 650,000 Australians on public dental waiting lists across the country.

In my own electorate of Calwell, waiting lists for public dental care have blown out to over 30 months. Nationwide, up to one in 10 visits to a GP are related to dental problems and more than one in five Australians are going without recommended dental treatment because it is too expensive. Dental conditions account for a quarter of all hospitalisations for children and in the vicinity of 50,000 Australians are now hospitalised each year for preventable dental conditions. Why is this so? Because going to the dentist today means raiding the bank for an overwhelming majority of Australians. Families simply cannot afford to pay for regular dental health checkups or expensive dental work and they have absolutely no hope of accessing subsidised public dental care services in a timely fashion.

Education does not fare much better under this government. Whilst education spending has increased on average by 48 per cent among OECD countries, in Australia it has fallen by seven per cent since John Howard became Prime Minister. Similarly, whereas higher education spending per student has gone up on average by six per cent among OECD countries, in Australia it has fallen by six per cent. Under John Howard’s watch, Australia has tumbled to last place among OECD countries when it comes to investing in early childhood education. Commonwealth recurrent funding for Australian universities stood at 0.9 per cent of GDP in 1996. Even after factoring in the education announcements made in this year’s budget, recurrent funding to universities will still only make up 0.6 per cent of our GDP. This gives some indication of how bad the Howard government’s funding record for education has been over the last decade.

The point of all this is that working families, especially young students, have had to take up the slack for the Howard government’s negligence. Today education costs and it often costs an arm and a leg for many young Australians and for many families. Students face rising HECS fees and record levels of HECS debt. In my electorate of Calwell alone, students owe a staggering $58.5 million in HECS debt. After the budget, HECS fees for students studying accounting, economics or commerce will climb even higher. There was no reprieve in the budget this year for students in their HECS fees.

The 2007 budget provided the government with an important opportunity to make a significant investment in services such as aged care, child care and health care that are crucial to maintaining living standards in Australia and to find ways to help working families fight the burden of today’s rising cost of living, but the Howard government missed this opportunity. It has failed to provide any real or sustainable long-term relief for countless working families who are struggling to keep their heads above water and the basic cost of living continues to rise unchecked. (Time expired)

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, have you ever sat in a meeting, listened carefully to every word and then gone out of that meeting and heard somebody else’s account of it and wondered whether you had been in the same room? That is how I feel when listening to the allegations that have come as a result of this matter of public importance put forward by the member for Sydney. There were allegations of reducing options for employment when our unemployment rate has fallen from 8.2 per cent to 4.5 per cent, an all time 30-year low. Other allegations were that wages have been reduced. Rubbish! The truth is that real wages have increased by 20 per cent—that is a fact. It is also a fact that the Australian economy is in the longest expansion since Federation in 1901 and, as a result of this growth, over two million jobs have been created. I cannot understand some of the rhetoric or how it has been collected. An opinion piece by the member for Sydney in the Sydney Morning Herald today, which obviously gave rise to this matter of public importance, mentions the four successive interest rate rises.

Let me just say to you that a report from the Reserve Bank of Australia noted that the new mortgagee today is better off compared to when standard variable interest rates were 17 per cent in 1989 under the previous government. That is a significant factor that needs to be recognised. There is a myriad of information here that I could dispel and it is sad that we only have 10 minutes, because I could go on for hours on this issue. We also have the RBA Financial Stability Review for March 2007 that said:

Overall, the household sector remains in good financial shape, which is not surprising given the ongoing strength in the economy.

And our household finances are supported by ‘continued strong employment growth, with the unemployment rate at around 32-year lows, strong growth in household income and a substantial increase in the wealth of the household sector’.

What we have to recognise when we look at many of the comments that were made as a result of this report is that households’ financial assets have increased by substantially more than their debt. And, as a result, even though household debt has increased, the net financial position of the householder has improved noticeably—in fact, it is true that household wealth has actually doubled in the past 10 years, which again makes me feel that I must have been in a different meeting room.

Under this government, the nominal wealth of households has increased by almost 10 per cent per annum. The major factor behind the increase in the proportion of our income that has been devoted to mortgage repayment is that low interest rates and a strong domestic economy have provided home buyers with the confidence that they never had under the previous Labor government, when you had a 17 per cent household interest rate. And home buyers now have the confidence to go out and buy bigger and better houses because they can afford to service larger mortgages. And that is a choice. Nobody forces anyone to buy a bigger or better house. But the choice is there. There is now an obvious choice, and that has been available to all Australians due to the financial management of this government.

In her opinion piece in today’s Sydney Morning Herald, the member for Sydney spoke, as she did in her speech, about:

... an increasing number of homeowners defaulting on loans and losing their homes ...

But when we look again at the facts, at reality, as per the RBA’s Financial Stability Review for March 2007, it is truly stated that:

The bank home-loan arrears remain at levels well below those seen in earlier periods, indicating that the majority of mortgaged households do not appear to be experiencing difficulty in meeting their debt servicing requirements.

The RBA goes on to say that:

Overall, the ratio of non-performing loans remains lower than at any time in the 1990s and low by international standards.

We also have Moody’s Investors Service reports saying that the record low unemployment rate has ensured that, while some Australian borrowers are coming under increased pressure, the absolute level of defaults and personal bankruptcy remains low.

Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

They’ve never had it so good!

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

Never let the truth get in the way of a good story or a good MPI, Chief Opposition Whip! Let us look at the facts regarding first homeowners. It is a fact that the First Home Owners Scheme was brought in by this government to enable Australians to be able to gain their own houses.

Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Link to this | Hansard source

Prices have doubled since then. Prices have doubled!

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

The member for Sydney does not like anything that may be coming out that may just be factual rather than a slight case of fiction. But we must agree that the First Home Owners Scheme has assisted over 973,000 Australians to purchase their first home since 1 July 2000, with over $7.2 billion worth of grants being distributed to date. The states love to take credit for, but never put money toward, the billions of dollars worth of grants.

A problem has been highlighted. But it was not highlighted by the member for Sydney in her address to the parliament. It has actually been highlighted that, yes, we have these increasing numbers of people owning their homes, but do you know what the problem is? We have found that the problem is, as the Property Council of Australia believes, that government taxes and charges are now the second-highest costs faced by new home buyers, behind construction costs. Do you want to know who leads the field in government taxes and charges? It is the state governments. I quote from an article in the Australian on 21 March 2007:

State governments are driving Australia’s housing crisis.

That was not mentioned in the member for Sydney’s address to the House—that the wall-to-wall Labor state governments are driving the housing crisis:

... with stamp duty on residential conveyances alone tipped to hit $8 billion by 2007-08.

The article goes on to say:

Taxes on a typical house and land package have grown—

‘have grown’; not ‘are’ but ‘have grown’—

... by an average $77,000 in the past six years.

Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Link to this | Hansard source

What’s the GST on that?

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It is not $77,000; it has actually grown by $77,000, Member for Sydney. You have failed to highlight those little things that the Labor governments are responsible for.

Honourable Members:

Honourable members interjecting—

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Order! Members on both sides will cease interjecting.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

And, in particular, the article goes on to say:

In Sydney’s fast-growing northwestern suburbs—

the member for Sydney should take notice of this—the increase is not around $77,000—

... the increase is more like $115,000 ...

Let me repeat: that is not tax of $115,000, it is an increase of $115,000—

... the highest of any region in the nation.

We have a significant problem with the way in which we present our evidence in this House—the evidence is selective, and carefully chosen so as not to implicate the state governments as any part of the reason householders are having difficulty. Yet it is the costs that are put upon them by the state government that are the reason. Here is the Commonwealth providing people with an incentive and the ability to be able to go and purchase their new home, and here are the state governments knocking them off. (Time expired)

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I would like to address a number of issues, the first of which is fuel prices. If the government needed a clear indication of why it is slipping in the polls, it was given today by the Assistant Treasurer. The argument continually put up by the Prime Minister and others that the price of fuel in Australia is driven purely by international factors is an absolute farce. The member for Macarthur and, I think, the member for Lindsay have highlighted in the press in recent days some of the difficulties they perceive in terms of the coalition getting its message through to its constituency—and this is being compounded daily in this place. It is not my duty to advise the coalition, but I would suggest that they start listening to what people are saying to them. The price of fuel and its impact on the cost of living is a very real issue in the broader community. It is not right for the Prime Minister, the Assistant Treasurer or anybody else who talks about it in this place to say that this is purely about international factors. Time and time again, the NRMA and other organisations have spoken about the taxation component of fuel prices in Australia. The taxes are about 51c a litre at the moment—the excise is 38c and the goods and services tax is 10c or 11c. I know that the goods and services tax goes to the states and they are probably abusing the money et cetera, et cetera—we have heard all those arguments—but the artificiality of that component in fuel pricing in Australia, which we can do something about, has an impact on the cost of living.

The argument put is that we have to collect that money so that roads, railways, bus stations et cetera can be fixed, but only 12c of GST and the Commonwealth component of 38c is spent on anything that vaguely resembles a road or rail network. I suggest to the government that they look very closely at this. Particularly in an era of surplus budgets and a boom period—and I congratulate them on running a surplus budget—there is room to move on this issue. It will have a positive effect in voterland and at the browser, and it will have a flow-on effect on the cost of living.

The government sends mixed messages on the renewable fuel industry. I will not labour that particular issue, but we have the absurd situation whereby we are getting the message almost daily in the parliament that the government is very concerned about renewable energy, carbon trading and global warming et cetera. The rhetoric is good but people do not believe it because we have other strange messages coming through the system—such as that, in 2011, if you produce renewable fuel in this country you will be taxed. Rather than putting in place incentives that send the economic message—which in my view the Treasurer has in the past always been good at—we are getting a mixed message now. The carbon debate is taking place. At the end of the week, a report will be received. Landholders—the farm sector—are not even involved in the resolution of the carbon problem in Australia; they are not included at all.

Another issue I want to raise is the impact of the cost of living on pensioners. I am sure that all members have people coming to their office saying that the indexation process—the way the pension is increased—is not keeping pace with the cost of living. I think that is a fact. Maybe other people can convince me that it is not a fact, but it is not me they have to convince; they have to convince the people who are sending that message. Those people have made a positive contribution to the development of the nation. In a boom, where we have a budget surplus and some excess funds, surely those people are entitled to a share. I recognise that the government is keeping them on a string with $500 here and $500 there, but that is not good enough in terms of providing them surety into the future and true indexation of their cost of living. Those things can be looked at, and again I congratulate the government on their economic management, but the message they are delivering to the constituency is not what the constituency want to hear and it is not one the government can deliver. (Time expired)

Michael Keenan (Stirling, Liberal Party) Share this | Link to this | Hansard source

This is a typically silly MPI from the ALP. Even though we have an economy that has been expanding rapidly for the past 16 years, it has been accompanied by a historically low rate of inflation. Today in the House we have heard opposition speakers attacking the government on issues that, realistically, are largely outside of the government’s control—and not once did I hear them outline what they might do differently if they were in government. The reality is that, for the past 11 years, the Howard government has pursued responsible economic policies that have delivered economic growth without the accompanying large increase in prices. Indeed, real wages, which reflect people’s purchasing power, have actually risen by 20 per cent.

Sadly, there is a political party in this House which does not pursue policies that would continue these same results. Mr Deputy Speaker, do you know what would put pressure on the cost of living? Do you know what would drive inflation up? Pattern bargaining. If we were to turn back the clock on industrial relations reform, that would drive up the cost of living. If we were to return to an industrial relations policy that predates the reforms of the Hawke and Keating governments, that would drive up the cost of living. ALP members come into the House crying crocodile tears about the cost of living, whilst supporting an industrial relations system that would put heavy upward pressure on inflation—policies that would put extra pressure on families in my electorate of Stirling. This is an IR policy that would drive a stake through the heart of the Western Australian economy. If the members opposite actually cared about inflation and the cost of living, they would immediately repudiate their job-destroying IR policies that would drive up prices.

Members opposite spend most of their time talking about the increased cost of housing. But what would the abolition of the Australian Building and Construction Commission do to the cost of housing? What would abolishing the only thing that stands in the way of a return to lawlessness on building sites around the country do to the cost of housing? What would a return to the thuggery of the CFMEU do to the cost of housing? When Kevin Reynolds and Joe McDonald get their hands back on building sites around Perth, as they are fully expecting to do if a Rudd Labor government is elected, you can expect housing prices in WA to skyrocket.

The biggest determinant of the cost of living is housing prices. Basic economics tells us that high land prices are ultimately dependent on the supply and demand of land. That means that they are ultimately dependent on the planning policies pursued by state Labor governments. I come from Western Australia, where housing affordability has become critical. In Western Australia, the tax-gouging state Labor government, with its record stamp duty revenue windfall, has an insatiable appetite for public money. I would not be so outraged about this if it actually did something with its taxpayer funded windfall. But the state Labor government does not build anything or do anything; all it ever seems to do is run around the state blaming infrastructure shortfalls on the federal government. It takes its taxpayer funded windfall and employs more public servants. I would not be so outraged if they were police, nurses or teachers. But what it does is employ more administrators and more ministerial staff.

Planning policies are a key determinant of housing affordability. Coming from Western Australia, I note there is something perverse about a state as large as Western Australia—not obviously a state that is short of land—having such a housing crisis. The state government continues to fail to provide the conditions for more land to come onto the market. It is the policies of the state Labor governments around the country that are increasing the cost of land and putting upward pressure on the cost of living. The reality is the best way to control inflation and keep the cost of living down is to do the hard years on managing the economy. It is to pay off debt, which relieves pressure on interest rates. It is by providing tax relief, which means people can spend more of their hard-earned cash.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allotted for this discussion has now expired. The discussion is concluded.