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 Government’s failure to address the crisis in housing affordability.

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

We are facing a housing affordability crisis in Australia, and the only people who do not seem to know it are members of the government. On every possible measure we have a housing affordability crisis in this country. We have over half a million people facing rental stress—that is, one in three families who are paying rent are paying more than 30 per cent of their household income on their rent. We have well over half a million people in mortgage stress, paying more than 30 per cent of their household income on their mortgage repayments. Families are paying more interest than ever before because their mortgages are higher than they have ever been.

The average house in 1996 was worth four years of the average wage. Do you know what the average house is worth now? Seven years average annual wages. We know that today 9½ per cent of gross household income is spent on interest repayments alone—almost 10 per cent of household income goes on interest payments alone. The government like to talk about the historically high interest rates under Paul Keating. They go on and on about it. They forget, conveniently of course, that interest rates were 22 per cent under Treasurer Howard, but they like to go back to high interest rates under Paul Keating. At the highest level under Keating, people were spending 6.1 per cent of the family income repaying their interest. What is it now? It is 9½ per cent, almost 10 per cent, of the family income. We also have almost 200,000 people on waiting lists for public housing around this country. So it is a crisis in any way you look at it.

The rate of homelessness is up. We have seen a 30 per cent increase in the number of homeless families in the last five years. We have seen $3 billion ripped out of the Commonwealth-state housing agreement, and now we have the Minister for Families, Community Services and Indigenous Affairs, who is at the table, talking about privatising the Commonwealth-state housing agreement. He did not like the good media we were getting on Labor’s housing affordability summit, so he came up with some thought bubble: ‘Let’s privatise public housing—throw the whole thing open to the market.’ What that means is that people who are currently housed in public housing around this country will lose their homes. That is what the minister’s announcement means. We know that one in two people are turned away from emergency accommodation each night. Two out of three children going to emergency accommodation are turned away each night. There are 100,000 homeless Australians every night—half of them are under the age of 22 and 10,000 of them are children. We are told again and again that working Australians have never been better off, and at this time housing affordability and homelessness are worse than they have ever been in the history of Australia.

We also know that young Australians are quickly losing their dream of homeownership. Many young Australians have given up on the dream of homeownership. Many people in their 20s, 30s and even 40s have resigned themselves to the fact that they will never own their own home. In fact, it is not crazy that they have given up on homeownership. If you look at the average mortgage for the median priced home in Australia’s capital cities, you need over $115,000 a year of family income to afford the mortgage on the average home in Australia’s capital cities. Perhaps that is okay if you are two middle-income earners and you are both working full time—you might just get by. What happens when someone is on maternity leave? What happens when someone loses their job? What happens when Work Choices kicks in and you lose your penalty rates and overtime? It is not unusual that people have given up on their dream of homeownership. In fact, we have seen that the proportion of 18- to 30-year-olds buying their first home has declined from 48 per cent to 44 per cent between 1994 and 2004 and that the proportion of first home buyers as part of the market has actually declined from 21.8 per cent in 1996 to 17½ per cent earlier this year. We are seeing a drop in the proportion of young Australians looking at buying their first homes.

We know that more families are defaulting on their mortgages. That is because of nine back-to-back interest rate increases. There have been five back-to-back interest increases since this Prime Minister promised, everywhere—in his election advertising, in his speeches, in his interviews, at his lectern, on his billboards, on his website—that interest rates would stay at historic lows. What have we seen? Five increases since that promise. And we see the effects of it every day with the families who are losing their homes.

What can we do? Is this an impossible problem? Has the government given up because there is nothing governments can do to improve housing affordability? Of course not. With three levels of government working together and working with the private sector and the community sector, we can beat this problem. We can actually make housing affordable, particularly for first home buyers entering the market; we can improve the situation for renters who are facing historic high rentals because rental availability is so low; and we really can do something about social housing and homelessness. What it takes is some political will, and that is plainly what is missing here. We have no minister for housing. Sometimes it is the minister sitting at the table and sometimes it is Senator Scullion. Who knows who is responsible? Who makes this a priority for the government? Who stands up in cabinet meetings and says, ‘Hang on a minute, what you’re proposing is going to make housing less affordable in this country’? No-one. Who is responsible?

The first and most important thing we have to do for housing affordability is, obviously, to keep interest rates low. Everyone agrees with that. The government are very quick to start making promises about keeping interest rates low, but what about their policies? They have repeatedly ignored warnings from the Reserve Bank of Australia that infrastructure and skills constraints will push up interest rates in this country. They are now reaping the rewards of ignoring those warnings. But keeping interest rates low is just one thing that we can do; we need to do more. That is why Labor have promised, if we win government later this year, a $0.5 billion housing affordability fund that will reduce the cost of new homes by cutting red-tape delays and consequently cutting holding charges and by reducing infrastructure charges that state and local governments are forced to charge for roads, libraries, parks and other amenities. So that is $0.5 million to help people get into the housing market. That is the first practical thing that we can do.

The second practical thing we have promised is in an announcement this week from Kevin Rudd that Labor will commit $603 million to a national rental affordability scheme that will help draw in $2½ billion worth of private investment. We know that the superannuation funds and the big institutional investors want to invest in affordable rental accommodation in Australia. They would do it if there were such a scheme—they have said they would do it if there were such a scheme. They do it overseas. Australian companies invest in these sorts of schemes overseas. We know it works; we have seen it work in other countries. The government could pinch our policy. I would be quite happy for them to pinch our policy because what we would see is 50,000 new affordable rental dwellings built with $2.5 billion worth of private investment. This would really make a dent in the affordability of rental accommodation.

There are a stack of people in the press saying that it would make a difference. We have Ron Silverberg from the HIA saying:

The measure is targeted sensibly and appropriately at new rental housing ...

And:

... it’s a positive move ...

We have Peter Verwer from the Property Council of Australia saying that it is a step in the right direction and:

Institutional investors hold lots of property in other countries, so there’s no reason why they can’t do so in Australia. In fact they’re very keen to do so.

We have the Real Estate Institute of Australia saying that the national rental affordability scheme is a ‘good start at addressing the rental affordability issue’. We have Gary Weaven from Industry Super Network and half-a-dozen different endorsements in the press saying that this is a step in the right direction.

Does the government say, ‘Why don’t we do something similar?’ The Prime Minister says, ‘Maybe it is a good idea; we will have a look at it.’ They have had 11½ years to look at this problem. How much longer do they need? Another 11½ years? This government have turned a blind eye while first home buyers are locked out of the market and while renters are paying more than ever before for their rental accommodation. Consequently, they are not able to save a deposit to go into their first homes because they are paying $300 to $400 a week to put a roof over the family’s head. How do you save a deposit when you are paying $300 or $400, or 30 per cent of your gross family income, on rent—or 50 per cent as some families are doing?

The $603 million leverages another $2½ billion of private investment. That is a substantial new investment. We heard from the Treasurer today a lot of carping ‘won’t work’ criticisms. Not once have I heard a practical recommendation from the Treasurer or the Prime Minister—I was going to say the housing minister, but of course there isn’t one—or from anyone on the government side to actually draw new investment into the affordable end of the rental market. We see investment in the rental market, but because people are mum and dad investors they are particularly interested in capital gain and they are looking for high-end investments—expensive investments—that are not going to help your average family in your average suburb.

Labor are also committed to a National Housing Supply Research Council to analyse the adequacy of land supply across the nation as well as rates of construction. We had a note from the Reserve Bank just yesterday talking about the critical shortage of new rental properties and what it is doing to the Australian economy. One of the reasons they give is that the number of houses and units being built is currently well short of estimates of underlying demand for new housing. Over the year to the March quarter, 147,000 dwellings were completed. They go on to say that they are not exactly sure how many we need, but it is probably around 175,000 a year. Because we have not increased the number of units and homes being built, this ongoing shortfall has meant that ‘the vacancy rate at 1.4 per cent remains close to its lowest level for 30 years’. We are also seeing that the annual increase in rents at 5.2 per cent is well above the rate of underlying inflation. One of the reasons for that is that we are not building enough new housing to keep up with historically high immigration rates. We know that we are getting well over 100,000 new immigrants each year under the Howard government. We also see that people are living alone and living longer, so we need more houses to be built all the time. One of the reasons why rent is so high and new home prices are so high is that we are just simply not building enough of them.

The National Housing Supply Research Council, designed to analyse the adequacy of land supply across the nation as well as rates of construction, will help us to determine where we need new building and what sorts of policies we need to make that happen. We have also committed to a national affordable housing agreement with the state and territory governments and with the Local Government Association.

I cannot tell people how tired I am of hearing the Howard government say it is all the fault of the states. One minute there is no housing affordability problem and it is all in our imaginations, and the next minute it is all the fault of the states. Well, it is one or the other, but let us go with ‘all the fault of the states’ for the moment. There is no simple solution to this problem. I certainly do not believe there is a simple solution. The government’s one simple solution that is going to fix everything is releasing more land in outer suburban areas. Land supply is part of the solution but it is not the whole solution. If we simply flood the market in outer suburban areas with lots of land, what you will see is a big drop in prices in a ring of surrounding suburbs, pushing homeowners in those areas into negative equity but having little effect across the rest of the market. So we are not going to get increased affordability across the rest of the country.

Pretending that there is one simple solution is so simplistic and so fuzzy headed. What has this government done to improve housing affordability? Big fat zero. The only thing the Treasurer could think of today was Commonwealth rent assistance—I think that was a Labor policy, actually. So big fat zero from the federal government on what it has done.

At the end of the day we have to improve housing affordability for first home owners. We have to improve the availability of affordable rental accommodation. We have to improve access to emergency accommodation and to community and public housing. To do that we need cooperation between three levels of government. We need a suite of policies targeted at the different areas and different aspects of affordability. At the end of the day the most important thing is that we see new homes being built, and this government has no proposal to see that happen. (Time expired)

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Today we saw the Treasurer tear apart yet another ill-thought-out, ill-prepared and unfortunately dishonest Labor Party proposal, which they put on television last night. Yet again we saw the Leader of the Opposition in a can-do moment, sitting in someone’s kitchen lamenting the cost of a rental house; there he was, empathising. He is a great empathiser. He has empathised about fuel costs, he has empathised about food costs and he has now empathised about rental costs. But what has he actually done for the lady on television last night? What has he done for the pensioners? What has he done as the Leader of the Opposition, in the form of policy, that would help that lady? He actually misled that woman in her very own kitchen. Talk about the used-car salesman or the door-to-door salesman—be careful who knocks on your door! The Leader of the Opposition and the member for Lilley—the fellow who would be Treasurer—knock on your door, slick back their hair and say, ‘I’ve got a deal for you: I’m going to make you $50 or $60 a week better off.’ That woman was sitting there thinking, ‘If I vote Labor I’m going to get another $50 or $60.’ When they left, the poor woman found that there was not one iota of truth in that. It was shown today to be what it was—a fraud, a con, nothing more than a set-up for a television picture, in the hope that, on the television news, they would get the equivalent of free advertising, where people would get the perception but not the reality of something positive being done by the opposition.

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

What’s your policy?

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

That is exactly what happened when the shadow spokesman for Treasury, the member for Lilley, got up and said, ‘We’re going to talk about the prices of fruit and vegetables and groceries.’ When he was actually asked the hard question, ‘Are you going to deliver lower prices?’ he said, ‘No, I can’t do that. But we’ve already got what we wanted—we got the headline—but we are actually interested in it.’ Being interested in things is not enough. It is difficult and challenging to run a billion-dollar economy, to keep it on track, and to give people jobs and security and affordable interest rates. By the way, Mr Deputy Speaker, do you realise that interest rates are lower today than they were at any time during the 13 years of the Labor government? Not once, not in one quarterly period, did they manage to get interest rates to the point that they are at today. Labor never got to that as their low point—not once. Their best in government for 13 years was not as good as the worst is today. What an extraordinary admission. So, when the Prime Minister stands up and says, ‘We guarantee to keep interest rates lower than the Labor Party,’ we know that we have delivered for 11 years straight.

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

That’s not what he said.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Sydney has had her time; she will listen to the reply.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

In fact, interest rates have averaged seven and a bit per cent. They averaged over 12 per cent under Labor. The member for Sydney stood up here today and said that 9.5 per cent of family income is what is required to service a loan. My God, what would it be at 10 per cent, at 11 per cent?

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

What a stupid argument!

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

The member for Sydney says ‘stupid argument’. What is stupid about running an economy into the ground, requiring interest rates to go up and having people thrown out on the streets? Fortunately, there are enough people out there who still remember what it was like. They say that to me all the time. They say: ‘Mal, I know what it was like on 17 per cent interest rates. And I tell you what: maybe some of those who sit on the front bench don’t, but I did; I had the pain of it.’ Or they say, ‘I had the pain of 26 and 27 per cent interest rates on my overdraft and I was trying to hold a job together.’ Is it any wonder there were a million people unemployed under the Labor government? Do you think they were people who were worried about house affordability? It was just a distant dream. It was something that the rich people thought about. The rich people, by the way, were those who had a job. Today these people have a job. Today they are actually building wealth for themselves, and they are doing it in an environment where the taxes that they are paying are lower than they have been in living memory.

Today, under a Howard government, the average Australian family—mum and dad and two kids—pays no net tax under $50,800. When the mob that sit opposite, the Labor Party, were last in office, if you were one single dollar over $50,000, you paid 48½c of tax and Medicare levy. It was a case of, ‘Half to the government, half to me.’ It is no wonder people did not want to add to the economy and take overtime. Today they do not have that problem. Today they put it in their hip pocket and make those decisions for themselves.

The member for Sydney said that we are always blaming the state governments for the affordability of housing. Let’s not blame anyone. Let’s state some facts. Let’s talk about the member for Sydney’s home town, Sydney, particularly the north-west. I refer to Boulevard of broken dreams, a report by the Residential Development Council, and the Property Council’s publication from January this year, Voice of Leadership. These are their figures, not the government’s. They are straight from the people that the member for Sydney was happy to quote. How do the people in Western Sydney cope with getting a house? What is driving up the costs in the electorates of the member for Lindsay or the member for Macarthur? This is what they have to deal with. When they turn up at the auction, they do not realise that what they are doing is pouring money into Mr Iemma’s Labor government at an unprecedented level. In the north-west of Sydney a house and land package is $570,240, with $50,000 in GST. Where does it go? Every last cent goes directly into Mr Iemma’s pocket under the Commonwealth-state GST regime. Is the Labor Party suggesting we change it?

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

Ms Plibersek interjecting

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

No, it is not. There we go.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Sydney must be well aware that when the chair warns someone there are very few chances after that.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

Secondly, there are state government taxes above $50,000, and stamp duty to the developer is $6,320. So every time they put the bid up—to $550,000 and then $555,000—$5,000 goes straight to Mr Iemma. The stamp duty to the purchaser is $20,240. So they put in another bid—straight into Mr Iemma’s pocket. Land tax is $3,471. The state infrastructure charge in Sydney’s north-west is $50,000. The bidding could have stopped at $435,000 but they are still going at $450,000, $480,000, $500,000 and $550,000. It settles at $575,000. Bingo, sold to Mr Iemma for $130,000. A Labor government gets $130,000 from the sale of the property. Who has to pay it? The poor people of these electorates. They look their families in the eye and say, ‘That’s what Labor has done to us: $130,000 of taxes ripped out of our pockets.’ At 8.25 per cent interest, they are going to have to find that money every year. That is just over $10,000—nearly $1,000 a month in interest payments that they will have to fork out year after year to the Labor government in New South Wales.

Turn your mind to Brisbane—to Redlands, down in the south-east, a beautiful part of the country. Property is a little cheaper down there, at $464,225. The one thing they have to contend with in Redlands that they have to contend with in north-west Sydney and south-west Sydney is a Labor government that is drunk on taking money in stamp duty at the expense of homebuyers. The hide of the Labor Party to stand up here and talk about housing affordability! Have a listen to this: in Redlands the price is $464,000 and the GST is $40,900—which goes straight to the state; stamp duty to the developer is $3,200 and stamp duty to the purchaser is $14,225. There is a lovely little sting in the tail. People say, ‘I think we can buy this property, darling; I think we can do it.’ They are about to do it and the bank manager says, ‘You have calculated stamp duty to the state Labor government, haven’t you?’ ‘What is that?’ ‘That is $14,225 of your hard-earned cash. By the way, you can put it on the never never and we will give you some interest for that and you can keep paying off Mr Beattie’—or Ms Bligh or whomever is going to be Premier up there in the next few months. Then there is land tax of $3,750. That totals $62,000 out of $464,000. Again, this whole process could have stopped at $400,000 but, no, it had to go another $60,000, which the poor punters from Redlands and electorates such as Bonner and Bowman have to find for these people to be able to fund the excesses of Labor governments in every state.

Whilst the numbers change from state to state, it is the same story. Have we heard one thing from the Leader of the Opposition or Labor’s housing spokesman about state taxes? No. Why? Because they are Labor mates. Anyone in their right mind will ask themselves in a calm, clear and concise moment: ‘Is the Leader of the Opposition, Mr Rudd, going to have the strength to stand up to Labor premiers like Mr Iemma and Mr Beattie or is he just going to be a patsy? Is he just going to roll over and keep giving other state Labor governments money?’ I think anyone in their right mind would know, from the eight or nine months that Mr Rudd has been the Leader of the Opposition, that he will roll over to the unions and the premiers and give them what they want and scratch their backs. Who is the loser? It is the people who live in the electorates of Macarthur and Lindsay. They just think that it is property prices going up; they do not think it is the Labor governments, in their back pockets, ripping out taxes and making home ownership an impossible dream.

The member for Sydney said in her speech that the institutional investors would put money in if there were such a scheme. She is right. I was reading a brief during question time. This brief is the result of government policy that actually has been enacted. Over the last 10 years, we have been providing Commonwealth money, taxpayers’ money, to the states. We give the states $1,000 million in round figures every year for public housing. Over 10 years, that is $10 billion in round figures. So, of course, we would expect that there must be more public houses today than there were 10 years ago. That is a pretty logical conclusion.

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

Ms Plibersek interjecting

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

‘It costs nothing to maintain them,’ says the member for Sydney. They get rent, they contribute themselves, and then they get $1 billion from the Commonwealth. The real facts are that, under Labor stewardship, there are fewer houses, after a $10 billion injection from the Commonwealth government, than there were 10 years ago.

Some states are better than others. New South Wales has in fact gone backwards over the last five years. As I recall from the last figures we have, New South Wales has gone from having 140,968 houses in 2000-01 to 138,580 houses in 2004-05. So they have managed to lose around 2,500 houses—not a bad effort. If you are wondering where these figures come from, they are from the Housing Assistance Act 1996 annual reports. They are not my figures; they are from annual reports that tell you how many houses the state Labor governments have built and owned.

Mr Schwarten has been the minister up in Queensland since about 1998. He has declared war on me. Why doesn’t he declare war on state taxes and do something for the people of Queensland who want to have the opportunity to have a low-cost house? In 1998, Queensland had 57,752 houses; today there are 57,289. He has lost around 400 houses.

But who is the blue ribbon, world champion, gold medal winning minister? It is Mr Jay Weatherill, from South Australia, who is without a doubt the best Labor minister for losing houses. In 1996-97, South Australia had the proud record of having 60,698 public and community houses. By 2004-05, Mr Weatherill had managed to drop that number to 51,628. I am not reading that incorrectly. Even though we have given them hundreds of millions of dollars, Mr Weatherill and the Labor Party have managed to lose some 9,000 houses in that time. What an extraordinary feat!

What did the coalition say? We said, ‘Let’s go and test the market and see whether the market has any better ideas.’ I have here the first report from my department since I announced that policy and said, ‘Let’s just see whether someone can do it better than the state Labor governments.’ So far, we have had 274 organisations, individuals, local councils, community housing organisations and small, private companies, as well as financial institutions, express an interest in bringing forward this sort of valuable information to the debate.

A Howard government will always hold state Labor governments to account. It is not the blame game. It is about saying to state Labor governments: ‘You have failed the people that you are elected to support. You have not provided the housing. You are overcharging in taxes and charges.’ What we get here is the pious behaviour of the Leader of the Opposition and the member for Sydney, who not once will stand up for their constituents and say to the Labor governments: ‘Hey, enough’s enough. You can’t just keep taking it out of the back pocket of these families. They can’t afford it.’

You cannot continue to mislead the public. You cannot mislead the lady sitting at the kitchen table and tell her untruths such as: ‘You are going to get $50 or $60 from a Rudd government.’ She will not get it. That was a lie. You know it. It is time you came clean and did the right thing by the Australian public.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Minister, you will withdraw the word ‘lie’.

Mal Brough (Longman, Liberal Party, Minister Assisting the Prime Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I withdraw. I say that only one party can be guaranteed to provide real housing opportunities: the coalition. (Time expired)

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

This is not a new issue. When we were in government in Queensland in 1988 the then Deputy Premier and I had lengthy discussions about this. It is a matter of supply, but it is not about the supply of houses. There are firms that build prefabricated houses. Some of them are quite nice houses now. I live in a Logan unit, which is a pretty humble house but it does the job. Force 10 International can produce a kit for probably $60,000 now. They can have a kit erected for some $50,000. So that is $110,000. There is no housing problem if a house costs $110,000. The housing problem arises because of the cost of land that is added to the $110,000.

As I said, this is not a new phenomenon. In 1988, we as a government looked at a system of spoke roads radiating out from Brisbane, Bundaberg and Rockhampton et cetera. Those spoke roads were to be high-speed roads. I am particularly talking about Brisbane. We looked at divided high-speed roads with speed limits of 120 kilometres an hour that would enable people to live a long way from Brisbane. Quite frankly, they could live up to 60 kilometres away and still get to work in 20 or 30 minutes.

What is the reason that this housing situation has arisen? I must strongly back the government’s contention that the responsibility sheets back to the state government. In Queensland we have the most extraordinary phenomenon. While most of Australia is reeling under a housing crisis, the Queensland government is proceeding to put footprints around every local government area in Queensland. You will not be able to subdivide beyond that footprint. They are in the process of restricting subdivision.

I have the honour of representing Mount Isa in this place. There is the most extraordinary situation in Mount Isa. You can pay $85,000 for a quarter-acre allotment in Mount Isa—let us say a 10th of a hectare—or you can go to the other side of the jump-up and pay much less. When you drive into Mount Isa there is a very big jump-up and you go in through a break in the jump-up. On one side of the jump-up, you have the city of Mount Isa. A block of land there costs $85,000. On the other side of the jump-up, a hectare of land costs $40—not $40,000 but $40! How can this extraordinary situation arise? It arises because of local councillors whose stupidity is beyond belief or who may have vested interests. If you own a lot of property in Mount Isa you do not want land on the other side of the jump-up to be opened up.

In Cloncurry, the mining company there wanted accommodation. We bless Charlie Sartain, the then head of the mining company, who is now head of Xstrata Copper worldwide. He was head at Cloncurry at the time. He said, ‘We will base the people here but you’ve got to give us some land. There’s got to be somewhere for them to live in Cloncurry.’ He did not want to fly people in, but he had no alternative because there was no housing in Cloncurry to enable him to house people there. I am quite sure they would have come into a land guarantee deal.

I do not want to criticise some of the councils in my own electorate, but they most certainly have something to answer for here. However, we are dealing with the background of the state Labor government. The government of Queensland really is a fascinating phenomenon. Here is a government that cannot deliver doctors who speak English. They cannot deliver the water supply to two-thirds of the population of Queensland. They announced blithely last Christmas that they would not be able to guarantee electricity supply to the Gold Coast over Christmas. What exactly can they supply? In housing they are actually moving to restrict, not facilitate, the opening up of areas.

We desperately require the local and state governments to get out of the way. They should allow a station property owner or an owner of any type of property to subdivide that land. You have to supply services. Quite apart from economic rent and supply and demand factors that have driven the price up, there is a separate factor altogether. If you want to put on that land curb-to-curb bitumen, curbing and channelling, floodwater drainage and sewerage, then you are notching back up over $50,000. But there is no necessity for that. In a country where you can fly an aeroplane from Kingaroy all the way across to Karratha and drop a series of atomic bombs and not kill anyone because there is nobody living there, it is absolutely outrageous that people are paying this amount of money.

In Cloncurry, the then mayor, Noel Robertson, because of the situation with respect to Xstrata, actually costed two-acre blocks with a median strip and bitumen with a water pipeline running beside it at $14,000 a block. The cost of two-acre blocks with a narrow frontage onto median strip bitumen was $14,000. Let us add the cost of the land to that—$50 a hectare—and you have very cheap land. It may not be as good as that. In the area that I represent outside of Townsville, which is now an area reaching up to 300,000 people, 15,000 acres was purchased for $650,000 some three years ago. Land is still enormously cheap in these areas. One of the reasons for that is the difficulty with subdividing and getting subdivisions done. It means that people are not going to buy properties for subdivision, because they know they will not be able to get the subdivision through in their lifetime because of local government and state government requirements.

I applaud the opposition today, who are going to lean upon the state government. We applaud their resolve, not their actions, because the only actions we have seen are from the Labor Party in Queensland, and they are heading in the exact opposite, 180-degree direction. If the ALP fail to win this election they can thank no-one else except the Premier of Queensland because, if it is possible to undo any chance the ALP may have had of winning this election, he most certainly has left no stone unturned in the pursuit of the demolition of his own political party.

But I do not come here today to criticise; I come here to say that the honourable member for Wentworth, now the Minister for the Environment and Water Resources, and an Oxford don did a paper for the New South Wales government on housing affordability. It quite frankly said that the federal government had it wrong. They said that the federal government was continuing down the way of helping demand—increasing demand makes the price go up—instead of looking at the supply side. The supply side was being choked off by local government and state government laws. Those were the findings of that report. Their solution did not flow along the lines that we were working on in Queensland when the government fell in 1989—or, should I say, when Bill Gunn and I really lost control of the government whilst the Premier was going to Canberra. Therein lies the solution to the problem. But it is no solution so long as the state governments and the councils are allowed to continue with bumbling incompetence and maybe cold-blooded arrogance as far as the issue of subdivisions goes.

We would urge the government to look at the solutions provided by one of their own ministers. We would urge the opposition to continue to act with great aggression towards the state government, if in fact they are acting with any aggression at all. But if they are, we applaud them in that and would encourage them to keep moving down that direction. We have a desperate housing crisis in Mount Isa. People cannot live in the town. We have to fly people in for almost every form of employment because we simply have no land for people to build a house on and live there. It would also be nice if people in Mount Isa were able to have 10 acres instead of a quarter of an acre. (Time expired)

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

No-one has a monopoly on concern for those people wanting to buy a house. We are all concerned to see that young people and young families have an opportunity to buy a home of their own. We all want our children to be able to have access to housing at an affordable price. But we need here to separate the rhetoric from the reality. What we have heard from the other side is a lot of rhetoric but very little in terms of substance. If we are going to look at solutions to the issue, we need to understand the causes for the crisis, if there is a crisis in the first place. The member for Kennedy was quite right to say that the issue is a supply-side issue rather than a demand-side issue.

In looking at the situation and the facts, I want to turn to the very thorough and exhaustive report released earlier this year by the Property Council’s residential development council. It was a thorough report which analysed the causes for the expensive state of housing in Australia. I think this is very instructive in understanding the reasons for the situation and therefore what we ought to be doing to try to address the situation. The Property Council outlines five reasons for the high and growing cost of housing in Australia. The first is this:

Limited land supply, induced by restrictive land release policies of the state and local governments, is a significant driver of housing costs.

That is, the shortage of land due to the failure of the state governments and local authorities to release adequate land for people wanting to buy a home. For instance, the Property Council said that in 2003-04 in Sydney alone there was a shortage of over 3,000 blocks of land. There was a demand of 7,600 blocks of land and a release of only 3,500 blocks. It goes on to estimate that the shortage of land in Sydney is adding around $30,000 to the cost of blocks of land and therefore $30,000 to the cost of a new house-land package. So the first factor it identifies is inadequate land releases.

The second factor the Property Council identifies is government fees and charges. It says:

Government related taxes, fees, levies, charges and compliance costs are also adding enormously to the cost of new housing.

The Property Council says that typically this is adding in our capital cities anywhere between $50,000 and $100,000 to the cost of a new house and land package. In fact, in some parts of Sydney—in north-western Sydney, according to the Property Council—up to $100,000 and even $130,000 is added to the cost of a new house-land package by the charges, levies and costs of state and local authorities. This is outrageous, this is exorbitant and it is crippling the chances of first-home buyers of buying a home and getting a foot into the housing market. The council estimates that between a quarter and a third of the cost of a new house and land package is state and local government charges. It estimates that they can be greater even than the cost of the land itself—that you are paying more to the state government and local authorities than the actual cost of the land because of those charges.

The third cause the Property Council identifies is the state and local infrastructure levies applied to new homebuyers under a user-pays argument. It says that they are ‘adding significantly to the combined weight of government taxes and compliances’ and that, in many cases, they are far in excess of the actual cost of providing the relevant infrastructure. In other words, state governments are using their utilities—Sydney Water and Integral Energy, for instance—as milk cows for the state government. They are beefing up the cost of developing a new block of land by greater than the actual cost of development so that the surplus goes via those authorities, via those utilities, back into the coffers of the state government. In other words, as the Property Council says, new homebuyers are in effect being forced to subsidise community-wide upgrades of infrastructure beyond the cost of providing it to their own particular block of land and being forced to add to the coffers of the New South Wales government.

We have the outrageous situation in the Blue Mountains where Sydney Water has just announced that it will add $16,000 to the sewerage and water costs on a new residential block of land. That is, a young couple wanting to buy a block of land in the Blue Mountains have to pay not only all the surcharges, infrastructure costs, levies and stamp duties that were already there but an extra $16,000 on the cost of getting Sydney Water to attach water and sewerage to their block of land. That is an extra $16,000 that these young families cannot afford.

We have to ask why this is happening. It is happening because those utilities—Sydney Water, for instance—are being used as cash cows by incompetent state governments that cannot manage their own finances. They have to use every opportunity possible to get cash out of unsuspecting residents—in this case, unsuspecting homebuyers—to prop up their own budgetary incompetence. It is typical of what we see around the states and typical of Labor’s mismanagement. It is a warning of what would happen if we also had Labor in government federally.

The fourth point that the Property Council mentions is the environmental compliance costs. They estimate that anywhere between $14,000 and $25,000 extra has been added to the cost of developing a block of land or building a home. None of us would deny the importance of environmental issues, but we ought to see the state government taking some responsibility and not slugging new homebuyers for this.

The fifth point is that ‘systems of development assessment nationally are dysfunctional’ and that applications are taking longer and are increasingly complex, expensive and subject to unpredictable and undisciplined political intervention. So there are the reasons for the problem. As the report points out, new homebuyers are subsidising existing homebuyers in leafy suburbs such as Mosman and other suburbs on the North Shore. The solution, in the executive summary of this report, is simply this:

The remedies for the worsening housing affordability’s situation are relatively simple: fix the systems of development assessment; move away from heavily prescriptive and regulated restrictions on land supply so that the competition is created in the market and pressure on land prices is relieved; and decrease the tax and regulatory burden on new housing by moving from ‘user pays’ infrastructure levies to public debt for urban public infrastructure.

In other words, instead of the summits, the stunts and the spin that we have from the other side—

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

Ms Plibersek interjecting

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Sydney will remove herself under standing order 94(a). She has been warned persistently.

The member for Sydney then left the chamber.

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

The solution is very simple: the Leader of the Opposition needs to get on the phone to Morris Iemma and the other premiers and push them into reducing the taxes and infrastructure costs on new housing and land packages. Why doesn’t the Leader of the Opposition do that? Because we would not have television cameras filming the Leader of the Opposition on the phone to the state premiers; we only have television cameras filming when there is the sort of stunt that we saw from the Leader of the Opposition yesterday. The answer is simple: put pressure on the state premiers to reduce the cost of those charges, taxes and levies.

Let me come back to the question of interest rates. If on top of all these charges, levies, stamp duties and infrastructure costs we had the sort of interest rate regime that we had when Labor was in office, then we would have something to worry about. If we had interest rates still at the 12.75 per cent they averaged when Labor was in office, we would seriously have something to worry about.

Let us not just think about the past; let us think about the future. Look at the warning from Econtech about the impact of reintroducing Labor’s industrial relations policy. Econtech warn that, within the next couple of years, we would have interest rates going up by 1.4 per cent if Labor’s policies were adopted, if Labor were elected. On a mortgage of only $200,000—which is less than average—that 1.4 per cent interest rate rise would cost homebuyers an extra $233 a month. So homebuyers would pay an extra $233 a month if Labor’s industrial relations policies were introduced and, according to Econtech, we got that 1.4 per cent rise in interest rates. The cause is the state government costs and charges, and the fear is that Labor’s policies would push up inflation and interest rates and create a massive extra burden on homeowners in this country.

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I expected better from the member for Macquarie. I was listening last Wednesday to the member for Macquarie speak in the MPI debate and he said this:

The promise that we would keep interest rates at record lows still stands.

If he goes back and looks at Hansard, he will see it.

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

Mr Bartlett interjecting

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

He is perpetuating the lies and deception of the Prime Minister and his party prior to the last election that they would maintain interest rates at record lows.

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I take offence at the word ‘lies’ used by the member opposite, and I ask you to ask him to withdraw it.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

I did not hear the word ‘lies’, but if the member used the word ‘lies’ he had better withdraw it.

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

He should have been listening.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Will the member withdraw it?

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

No. The speech of the member for Macquarie continued the very pious and sanctimonious contribution that was made by the minister, who promptly left the chamber after delivering his lecture to us. This is the same old mantra that is engaged in by the government. It shows how out of touch, stale and arrogant this government is. It is not dealing with the issues. The minister gave a very shoddy and shifty speech, giving us a pious lecture on interest rates under Labor. Did he or the member for Macquarie say anything in relation to the Prime Minister’s form when he was Treasurer and had high housing interest rates? I believe the cash rate then was about 22 per cent. Did he say anything about that? Of course he did not. Did he say anything about the dishonesty of the Prime Minister and the Liberal Party to this day—perpetuated last week and again today by the member for Macquarie—in claiming that they would keep interest rates at record lows? That still stands. No, of course he did not. Did the minister acknowledge that since the last election there have been five consecutive interest rate rises and that the government has failed in its promise to keep interest rates at record lows? Of course he did not. The minister, like the member for Macquarie, exonerated himself and then proceeded to leave the chamber in a typical out-of-touch fashion. The minister left the chamber.

Kerry Bartlett (Macquarie, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I thought the member for Lowe accused me of leaving the chamber.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

There is no point of order.

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Government members are calling points of order because they do not want to listen to the truth. The minister was the person who left the chamber, Member for Macquarie. As I said, he was allowed to leave the chamber. He was not prepared to listen. He did not acknowledge the five interest rate rises that have occurred under this Howard government. The member for Macquarie typifies just how out of touch and stale the government is by saying that it is going to keep interest rates at record lows, which it clearly is not. In my electorate of Lowe there is a tremendous crisis in housing affordability. I draw to the attention of the House my campaign to make the wider electorate aware of just how serious the problems are.

I have a constituent in my electorate by the name of Mr Rhys Brett-Bowen. Rhys is 24 years of age. He is on a moderate salary. He has a HECS debt of tens of thousands of dollars. He is living with mum and dad in Croydon Park and saving like mad because he wants to get a house. I joined Rhys and his father on a house-hunting exercise in my electorate. We went to Croydon to have a look at something that the real estate agent described as an ideal first home. It was also described by the real estate agent as a rough diamond property. You can be sure of that! It was also described as ‘an opportunity come knocking for a prospective buyer’ and a ‘renovator’s delight’. Well, it was an opportunity come knocking; it was an opportunity to knock this house down because the house had a collapsed roof, holes in the floors and termite damage. It went at auction for more than half a million dollars. It is little wonder that people like Rhys Brett-Bowen have no opportunity to get a house when we have had five interest rate rises and the government not honouring their commitment made to the people of Australia at the last election. Then we have to listen to the minister and the member for Macquarie engage in this blame game of blaming the states for everything. It is called projection. They will not accept any responsibility—(Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Member for Lowe, I understand that the Hansard is likely to record that you did use the word ‘lie’. Will you withdraw that, please?

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

If I used the word ‘lie’, I will withdraw it and just doubt the veracity of the statements made by the minister and the member for Macquarie.

Louise Markus (Greenway, Liberal Party) Share this | Link to this | Hansard source

Before I talk about the challenge of the New South Wales Labor government and some of its policies with regard to land—supply, access and, of course, levies and taxes—I would like to highlight the contrast between the state Labor governments and the federal coalition government. We believe that improving families’ access to income by effectively cutting them out of the tax system, increasing rent allowance and delivering better family tax benefits will improve the position of families as a result. Most importantly, we have the best opportunity in 33 years for a member of the family to get into the workforce. This definitely has an impact on their capacity to afford a home.

In contrast I will focus on the policies of the New South Wales state Labor government in particular. It has presided over the highest level of taxes and charges levied on the cost of a new home and the largest shortfall of broad-hectare land release provision of any state or territory. The member previously spoke about searching for a home and finding that the house itself was not worth much though the price of the house and land was close to half a million dollars. I think that highlights what I am about to say and confirms the argument that I and members on this side have been putting forward today. The number of new lots released, for example, in New South Wales 15 years ago was 7,931. Last year, in contrast, it was 2,780. That is a 65 per cent decrease. The average lot size in New South Wales 15 years ago under Liberal Premier Nick Greiner was 600 square metres. Last year it was 450 square metres. That is a 25 per cent decrease. The average price for a lot in New South Wales 15 years ago was $75,000. Last year it was $310,000. That is a 400 per cent increase. The New South Wales state taxes and charges and the large shortfall in the release of broad-hectare land are critical factors in that unnerving statistical picture.

At their core, New South Wales land and property taxes are not only restrictive but also inequitable. It has become more difficult to enter the property market in that state, and families and individuals have been driven out of the state to more tax-friendly environments. Local infrastructure levies applied to new homebuyers are now levied at a rate far in excess of the actual cost of essential housing infrastructure such as water and sewerage. For example, in Sydney total levies now average about $68,000. The actual cost of the infrastructure is around $1,700. So what happens to the difference? What happens to the $66,000? Where does it go? Does it go into state government coffers? What do they do with it? Maybe nothing. Environmental compliance costs have also added to the costs of new housing.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allotted for this discussion has concluded.