Tony Smith (Speaker) Share this | Link to this | Hansard source

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

The failure of the Government to have a plan to improve housing affordability.

I call upon those honourable 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—

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

All around Australia, people understand that there are challenges for housing affordability, that there are young people in particular trying to buy their first home and finding it harder and harder. All around Australia, there are parents and grandparents who are wondering how their children are going to get into the housing market and have the sort of security that they have had through their lives. All around Australia, people understand that, except in that chair—except for the Prime Minister of Australia and those who sit behind him. They do not seem to understand that at all. They seem to treat this matter with contempt. What we see is a government which completely does not understand housing affordability and does not have a plan to deal with it.

It started before the last election. I recall the debate between the former Treasurer, the former member for North Sydney, when he was shadow Treasurer, and me, when I was Treasurer, in the lead-up to the last election. It was a Q&A debate. The then shadow Treasurer was asked about housing affordability. He got into full bluster mode, full Hockey bluster—you remember what that was like. That was quite a sight to behold. He said:

I have some plans on that—

on housing affordability—

which we'll be talking about before … the election.

He meant the last election. What followed was tumbleweeds, not a word about housing affordability, and it has been tumbleweeds ever since—except that of course this government has form when it comes to housing affordability.

While I am on the topic of the former Treasurer, the former member for North Sydney, remember his great contribution to the housing affordability debate? Firstly, he denied that it existed, because he said:

If housing were unaffordable in Sydney, no one would be buying it …

He declared it not a problem by Treasurer's edict. Housing affordability was not a problem because some people were buying houses. And then he went on to say that the answer to housing affordability was to 'get a good job', at which the dentists and the people who were all working hard across Australia, all of the nurses and teachers and everybody, said: 'Oh, that's good advice; I hadn't thought of that. Go and get a better job? I hadn't thought of that!' Then we had the wonderful contribution from the former Treasurer suggesting that young people access their superannuation to buy their first home, which would have had the obvious impact of driving up the price of housing at the same time as driving down the retirement incomes of Australians. So bad was that idea that it was dropped within an hour.

And of course it goes on. The government has cut funding from the National Rental Affordability Scheme, axed the help-for-seniors program, abolished the national affordable housing council, abolished the National Housing Supply Council and cut funding to Homelessness Australia. The Liberals just do not get it. They do not get that the government of Australia is looked to by Australia's young people in particular for assistance when it comes to housing affordability.

Then the new Prime Minister came in, and there was a sense of relief around the country. People said: 'I'm glad that there's a new Prime Minister. He might be able to have a sensible conversation about some of these big issues. He might be able to make a big difference on some of the challenges facing the nation, like housing affordability.' And yet what we see is the now Prime Minister refusing to do so, instead engaging in a scare campaign and doing so in a condescending fashion.

Just yesterday the Prime Minister was asked about housing affordability. A journalist asked the Prime Minister about negative gearing and housing affordability:

Do you have a message—

this is a very important point—

to young people who don't have parents who can act as a guarantor on a mortgage, who can't afford a deposit of say, $100,000, and probably face the prospect of renting for the rest of their lives? And only ever seeing housing going up … in the capital cities? Do you have a recommendation for what those young people can do?

There was an opportunity for the Prime Minister to send a message to those young people, to talk directly to those Australian citizens, about his plans for housing affordability, about how he understands the challenges and their problems. He said this:

Look, let me just say this to you. The Labor Party's policy on negative gearing and capital gains tax are calculated to lower the value of Australians' homes.

Not an idea, not a plan, not a bit of vision, not even a bit of empathy for Australia's young people, but a scare campaign. And it gets worse, because the journalist pulled him up and said:

But, young people can't afford homes?

And this was his answer:

Turning to capital gains tax, let's just consider this—

and he went on with the rest of the scare campaign.

He had two opportunities to send a message to Australians concerned about housing affordability. He sent a message all right. The message is: 'I don't care.' I am indebted to the member for Griffith, who said on national television that the Prime Minister could condescend for Australia. Well, there was an example of it: condescending to Australia's young people, saying to Australia's young people that he does not care about their opportunity to get a house; he does not care about their opportunity to get into the housing market.

We hear a lot about aspiration from those opposite. We hear about how they embrace aspiration. How about the aspirations of young people to own a home? How about the aspirations of young people to build their wealth through their house? One house would do it. That is what they want to start with: to get into the housing market. All they have is condescension and a lack of a plan.

We are told that the government have taken decisive action on housing affordability on the matter of foreign investment. What they have done is that they have told the owner of a $39 million mansion in Point Piper that he must vacate the premises. I was deluged by people in my electorate saying: 'Thank goodness, I can now afford a house! I can now get that $39 million mansion in Point Piper!' 'That's housing affordability for me,' said people in my electorate and the electorates of all my colleagues! They were so grateful to the Prime Minister for that decisive action on housing affordability!

But we on this side of the House recognise the challenge. We recognise the problem. Since the 1980s and 1990s, ownership rates have fallen, and the largest decline is amongst those aged between 25 and 44. Thirty years ago, you needed 3.2 times an average income to buy a house. Now it is 6.5 times. First home buyers are now just one in seven purchasers right across Australia and investors are 50 per cent. It is harder and harder for young people in particular to buy into the market. It is harder and harder for parents to put aside money to help their children. We understand that and we understand that when looking at housing affordability we do need to look at the taxation treatment. We understand that we have the most generous taxation treatment of property investment in the world. What we need to know is that that has an impact.

I had thought that the government were running an outrageous scare campaign deliberately. After their question time performance I am prepared to give them a little benefit of the doubt. Maybe they just do not understand it because we had the Treasurer of Australia stand at the dispatch box and call negative gearing 'claiming deductions against investment income'. That is what is allowed under Labor's policy for existing properties and that is not negative gearing. If the Treasurer of Australia does not understand the policy, no wonder he does not support sensible changes to the policy. I thought he was bad, but I did not think he was that bad. I did not think he actually misunderstood the complete basis of the policy.

We know that the answer to housing affordability is to boost supply, to get more supply into the market. We are not the first ones to think of this; many housing experts will tell you this. Other governments have dealt with it—state governments, Labor and Liberal. We all know about the first home owner grants that were introduced many years ago and have been implemented by governments of all persuasions. State after state, Labor and Liberal, have said: 'What we need is more supply. We will only allow first home owner grants for new housing.' Has the market collapsed? Has there been Armageddon? Has there been a major collapse in housing prices because state governments have said, 'We are going to focus our policy on supply, on getting more houses and apartments into the market'? No, there has not.

Here we have the alternative government making a sensible suggestion for better targeting negative gearing, putting negative gearing to work for all Australians, keeping negative gearing and saying, 'We want to see a dividend for every single Australian from negative gearing.' Ninety-three per cent of existing negative gearing goes into existing houses. That is a 93 per cent failure rate if your objective is new housing construction. If we had a 93 per cent failure rate, you would want to review that government program. We on this side of the House are up for that discussion. We on this side of the House are up for leading the debate. We on this side of the House are up for suggesting and proposing better and new policies.

Those on that side of the House, robbed of their plan to increase the GST, have nothing—not a jot of an idea, not a jot of a vision or a jot of a proposal; just old-style Liberal scare campaigns. The Australian people deserve better. The Australian people are looking at this Prime Minister and they are very disappointed because they hoped for better. They hoped for this Prime Minister for a bit of character, a bit of honesty, a bit of hope and a bit of ticker. Instead, he has given them nothing. This Prime Minister has reverted to the old-style Liberal scare campaign when robbed of his plans. It can now be truly said of this Prime Minister:

His promises were, as he then was, mighty; but his performance, as he is now, nothing.

Alex Hawke (Mitchell, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

It is a pleasure to rise today to talk about housing affordability. It is the case in Australia today that we do have an issue with housing affordability. It has risen over a period of time to a point where it is greater than at any point in many years. It is also the case that housing affordability is a complex issue related to supply and demand in the market. What we heard for the first eight minutes of the shadow Treasurer's presentation was not an explanation of quality policy that would improve the situation of housing supply in Australia because he knows, as we know, that supply is a function of state planning policy and state governments.

I have some experience and understanding of this as I am a New South Wales member from north-west Sydney, Sydney's main growth corridor for property over the last decade. It is good that the shadow Treasurer comes from another growth corridor in Sydney, the south-west of Sydney. The state Labor government and the federal Labor government have been in place for most of the time we are talking about in the creation of unaffordable housing. We in this place do not have short memories, economists do not have short memories, people in the housing market do not have short memories and people who have been to rental auctions all over Sydney and bid to get a rental property do not have short memories either. They remember when the Carr Labor government declared in 2000 that Sydney was full. They remember when the state Labor government deliberately slowed to a trickle the release of new land. They will not forget the impact of Labor deliberately slowing to a trickle the release of land in a major market like Sydney and the impact that that had. That meant a decade of an increasing housing prices, increasing rents and in Sydney having to lodge a bid to get a rental property. This was the result of a previous Labor intervention in the housing market.

Every time Labor turns up with a 'plan' or, as the Leader of the Opposition said last week, a 'positive plan'—there is no reason why it is positive; it is just a 'positive plan'—to intervene in the market you know it is part of the famous lingo that came from Ronald Reagan that the shadow Treasurer it is fond of espousing: 'I'm here from the government and I'm here to help.' When you hear that from the shadow Treasurer it is time to run the other way. If you own a house in Sydney or you own an investment property and you are negatively geared and you hear the shadow Treasurer say, 'I'm here from the government and I've got a plan for you; I am here to help you with your investments,' it is time to pack your bags and run.

What happened in Sydney that was one of the biggest contributors to GDP? We saw a big fall over the decade while the Carr government restricted the principal part of the economy—housing. We saw a drop in Sydney's contribution to GDP. I am sorry to say as a proud New South Welshman that we saw tens of thousands of people leave for Brisbane and tens of thousands of people leave for Melbourne. What could you possibly do to make people flee one of the best cities in the world, the city I grew up in? What could you possibly do to make people leave a beautiful city like Sydney for the likes of Brisbane or Melbourne? You could be a state Labor government, intervene in that market and make housing affordable.

So Labor have form. They have history in intervening in the property market. They know exactly what they are doing with their new policy on negative gearing. I want to talk a little bit about that, because the shadow Treasurer then turned to his magic way of increasing supply, which is his changes to capital gains tax and negative gearing. He believes that that will somehow make housing affordable in Australia. That is your proposition: that your changes will make housing more affordable. That is in the face of all of the contradictory evidence that we have been presented with by the Labor Party. They will not acknowledge to us that prices will fall from their policy. They are hiding from that implication. Will they come out and say how much existing property prices will fall when their policy is implemented? No, they will not. In fact, they refuse to release any of their modelling that they have used to construct their policy in relation to negative gearing.

Why are they hiding their modelling? By what percentage does it show that existing property prices will fall if you make the changes that they are suggesting—if you remove one-third of the investors from the existing market and you stream them only into new properties? What impact will that have on existing prices? We do not know. Nobody knows, except that, if you take one-third of the investors out of the existing property market and you put them into new properties only, you are going to have a downward pressure on price for existing properties. Everybody knows that. By how much? Only the shadow Treasurer knows. Only he has modelled it.

In fact, Bill Shorten, one week ago in a doorstep here at Parliament House, on 24 February, when he was asked about negative gearing, said, 'Our proposals have been modelled to death.' Well, I say to the shadow Treasurer: if you have modelled them to death—which is an interesting phrase; is it the death of the property market or the death of the opposition?—you can release your modelling for the comfort of the investment market and the property market here in Australia. You have modelled them to death. That means you have modelled them, presumably, so many times that they have died. Then release your modelling. Show the public. Give them some confidence in your policies.

I do not suspect that you have modelled them to death, because, as the Treasurer said in question time today, just 12 months ago the Leader of the Opposition, in answer to the question, 'Will you be grandfathering or winding back negative gearing?' said, 'That policy's not on our radar.' Again as the Treasurer outlined, just nine months ago the Leader of the Opposition said, 'Negative gearing changes are not the focus of the Labor Party.' So just nine months ago the Leader of the Opposition did not even know that you were already modelling to death your policies, but now he has discovered, one week ago, that the shadow Treasurer has modelled to death the Labor Party's policies. So where is that modelling? Who have you relied on? Please do not tell us the McKell Institute, shadow Treasurer, because I am not sure that is going to fly.

The fact is that the Commonwealth spends a lot of money on housing every year. Every single year, the Commonwealth spends significant funds: $1.3 billion in the National Affordable Housing Agreement, and $4.4 billion and climbing in Commonwealth rent assistance. It is only right that the Commonwealth continue to work with the states to work out how we can get the best bang for our buck when we are spending $1.3 billion per annum, and $4.4 billion in Commonwealth rent assistance. How can we unlock, critically, more supply in combination with the states? It is the focus of this government, the Prime Minister and the Minister for Social Services—who the opposition do not understand has responsibility for housing and working with the states on housing. They should look it up in the order of government, because it is there. They want to make some cheap point in question time.

But they also should look up a little bit of their own record. They should look up the report of the ANAO and the Auditor-General on the National Rental Affordability Scheme, which was their only contribution to affordable housing when they were in government. We know that when they were in government, between 2007-08 and 2013-14—and this is an important statistic for everyone to listen to—the proportion of low-income households in rental stress increased from 35.4 per cent to 42.5 per cent. That is during the period of the last Labor government. That goes to show the effect of their affordable housing polices. The Auditor-General and the ANAO found that the NRAS, the National Rental Affordability Scheme, Labor's policy, has been slow in delivering. What that means is that you are not bringing on supply. It is slow. But wait; there is more. That is not all they said. They said it had failed to meet its delivery targets, despite ongoing government funding.

Mr Bowen interjecting—

The point is this, shadow Treasurer: if the Australian National Audit Office says that, in spite of ongoing government funding, you are slow in delivery and you are not meeting your targets, it is time to get a more effective program. It is time to use taxpayers' money more wisely. It is time to use that money, in combination with the states, to unlock supply.

What you will see with the Baird Liberal government, for example, is $1 billion on the table to unlock institutional investment in social housing and affordable housing. If you bother to talk to the social housing sector and the affordable housing sector in New South Wales, what you will find is that they are over the moon about the Baird government's policies. You will find that this new approach that the Baird government is taking is going to unlock more social housing and affordable housing, which is a component of affordable housing in Australia—something you have ignored in your presentation.

The fact is that Labor do not have a plan to ease the housing affordability crisis in Australia today. There is no reputable economist who will put their name to the view that Labor's negative gearing changes will reduce affordable housing stress in Australia today. The evidence is not there, and they will not release modelling to show that it is. This government is working on this issue and will continue to develop good policy to ensure we have more affordable housing in Australia.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I was amazed to find myself briefly agreeing with the Assistant Minister to the Treasurer. It always surprises me when that happens. When he said that housing affordability issues were the fault of the Baird and O'Farrell governments, I found myself agreeing.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Even a broken clock's right twice a day.

Tanya Plibersek (Sydney, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

As the shadow Treasurer says, even a broken clock is right twice a day. The assistant minister was right a second time as well: he said, 'Labor know exactly what they are doing with their new tax policy.' Well, we do.

Of course, the agreement did not last very long when I found the Assistant Minister to the Treasurer starting to talk about what a great job the Baird government was doing with social housing. It is the housing in Millers Point in my electorate that he is talking about. It is being sold, throwing communities out of their homes. They have been there, in some cases, for generations. In comparison, I remember a government that built 21,600 new social housing dwellings. That was a Labor government under Kevin Rudd. So that is the comparison: you can throw old people out of their homes in Millers Point, the Baird government's approach, or you can build 21,600 new social housing dwellings. The shadow Treasurer said earlier that Joe Hockey's answer to housing affordability in Australia was a long time coming, and we did not really get an answer, other than people should go out and 'get a good job'.

It made me really think about my own family and the circumstances of their buying a home. My parents came to Australia in the 1950s with nothing, like most migrants. They worked extraordinarily hard to put a deposit on a block of land, pay it off and build a house themselves—they were living in the house before there were floorboards. Each week, my dad would spend a bit more money, buy some more building equipment and do a bit more work on the house. They bought that block of land—this is from memory, so I would have to double-check this with my mum on the weekend when I see her—for 250 pounds in the late 1950s. In those days, an ordinary man with an ordinary job, married to a woman who stayed at home to raise her family, worked hard but could afford an ordinary home. Compare that to the circumstances of my niece and her husband today—a teacher and a geologist, both professional people and both very good savers. They have been saving for years—in fact, they had one of our first home saver accounts before that lot opposite abolished the first home saver accounts. They are saving as hard as they can and wondering whether they can possibly afford a home of their own, particularly before they start a family. It is not the case with my niece and her husband, but people moving into their 30s are still living at home. Many people will tell you about parents of my age and older with adult children living at home because those adult children feel that they will never be able to afford to both pay rent and save a deposit for a home. They feel they will never be able to afford a home of their own.

We are changing our entire society because of this issue of housing unaffordability. We know that only one in seven homes bought now is bought by a first home buyer. We know that in 1985 you needed a bit more than three times the average income to buy a house, but today you need about 6½ times the average income to buy a house. We know that in 1985 the average housing debt was 27 per cent of average income. Today it is 136 per cent. We see that an ordinary couple or an ordinary person with an ordinary job can no longer afford an ordinary home. And what have those opposite done in response to this? They got rid of first home saver accounts, they got rid of the Housing Supply Council and they got rid of the COAG council that was set up specifically to deal with what the Assistant Minister to the Treasurer talks about: the responsibility of state governments and local governments to release housing supply. They got rid of that. They got rid of the Housing Supply Council. Of course, they also abolished the National Rental Affordability Scheme, which 'only' built 26,000 homes before they killed it off. That is not much of a contribution! What have the Romans done for me lately, apart from those 26,000 homes they built! They got rid of the help-for-seniors housing program. More recently, they have been bagging us for our tax policies. What is their tax policy? It is a 15 per cent GST on everything. Would that have applied to rents as well? (Time expired)

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

I am afraid the blinkers have been on for this debate for some time. We have heard a lot about house prices in Sydney, but there is a big, brown, wide land out there. It is not just about one capital city in this country. I am about to speak about some good activity in Queensland. I note my friend and colleague the member for Rankin has slid around on the front bench here. It is only a little bit further, Jim, and you will be in the big chair! It is not far away.

Mr Deputy Speaker Scott, you are a passionate Queenslander. The Housing Industry Association report on 10 February 2016 said that the number of Queensland home building approvals was the highest it has been in 21 years. In 2015, 48,000 new residential buildings were approved in Queensland—the highest since 1994, according to the Housing Industry Association. When you are out in the regions, housing is much cheaper. They have also said the level of home building approvals are now double the rate reached during the post-GFC trough in industry activity—that information is from Warwick Temby. Multiunit developments have been the main driver behind the growth in activity in 2015. The detached housing market has also shown solid growth. This is good news for Queensland, where, of course, the downturn in the mining industry has had a detrimental effect, particularly on Central Queensland. In Central Queensland, there are tens of thousands of highly skilled people who want a job. The issue for them is that they want a job. Those are the things that we need to be focused on. The Housing Industry Association also said that the home building industry in Queensland can look forward to about $10 billion worth of work in 2016 and starting the construction of around 42,000 new homes. This continues to be good news.

Once again, I acknowledge that, clearly, house prices in Sydney certainly appear to be very high and very difficult to meet. But there are real opportunities in regional Australia, and I would encourage people who are out there listening to this broadcast: if you own a company, if you own a business, if you are out there on the ground and you want good opportunities for your people, shift to regional Australia; move your company somewhere else where housing is affordable. We have the infrastructure, we have the connecting links, we have the roads, we certainly have the telecommunications and, of course, we have airports with direct links to Sydney. Look at Harvey Bay in my electorate of Hinkler. There are direct flights to Sydney every single day. It is a beautiful part of the world to live in, and that is certainly why many Australians choose to retire there.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

You have taken the words out of my mouth!

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

I have taken the words out of your mouth! Housing there is certainly more affordable. But the opportunities are around jobs. Those are the things that we need to focus on. What do those opposite want to do? They want to destroy the housing market. Their proposal for negative gearing will destroy the housing market. I am advised by the Property Council of Australia that there are currently 5,576 investment properties in my electorate of Hinkler. Do you know who owns those investment properties? They are the mums and dads of my electorate. They are hardworking people on wages. They are the ones who take a risk. They are the ones who go to work and take an extra job so that they can get ahead. It is them that the Labor Party want to destroy. It is very straightforward. It does not matter whether you are selling houses or selling bananas. It comes down to supply and demand. If you take 30 per cent of the buyers out of the market, then clearly prices will fall. Eventually, you will have an oversupply and the prices will fall even further. What happens then? Mr Deputy Speaker Scott, I know you know what happens. Looking at farming properties in particular, when the value of properties fall, the banks do a review and the immediate action by the banks is to put up interest rates, which makes things far more difficult. If you are trying to meet repayments in difficult conditions and interest rates go up, it makes it harder again. What happens after that? Clearly they then look at serviceability—can you actually pay for the loan that you have? Then, if the price continues to fall, they start to look at foreclosing and they take your house away, which will then flood the market.

The proposal from the Labor Party is very straightforward. They want Australians who are out there right now who own these properties to go broke. They want them to lose their properties so that they can drive down the housing price market, particularly for Sydney. Out there in regional Australia, things are actually fairly bloody tough. Things are tough right now. I can tell you there are areas in regional Australia—I can look at somewhere in Flynn, for example, and, in particular, a couple of the smaller centres—where housing is incredibly cheap, under $200,000. One hundred and fifty thousand dollars will get you a nice little two-bedroom place. But the issue of course is jobs. That is what we need to be focused on. We need to be focused on that right now.

The proposal from those opposite is absolutely diabolical. The idea that we would destroy the housing market in this country I find absolutely incredible. It simply cannot go on. So, to the voters who are listening to this broadcast: do not vote for the Labor Party. They want to take your house away. They do not want you to have anything of value. They want to ensure that it goes down in value. It should not happen.

Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

It is little wonder that Australians are doubly disillusioned with the Turnbull government. There are reds under the bed everywhere, according to the Turnbull government. And how have we got here? We all knew, up until three or four weeks ago, that they had a solution, a plan for our economy. It was an increase of 50 per cent in a big fat tax on everything. If Australia increased the GST, everything was going to be fine. That hit the dust, and we saw some chaos.

Then we saw the Treasurer go to the Press Club and, in an incredible humiliation, stand up and say that there had been $80 billion worth of savings over 2½ years under the Turnbull and Abbott governments and then turn round and whisper, 'Oh sorry; we spent the $80 billion that we saved.' So they have got back to zero—no 50 per cent increase in the GST, no net savings. 'What are we going to do now? What is plan Q, or plan Z? What are we going to do?' So they come up with a great idea: conduct a scare campaign against the Australian Labor Party. Who has done that before? Malcolm Fraser—reds under the bed—and Tony Abbott.

We all know what the government have been about from day one. What joins Tony Abbott to Malcolm Turnbull is simply this: they are going to conduct a campaign of ripping up the social safety net and increasing the tax burden on low- and middle-income earners, because that is what Liberal Party people do. It is in their DNA. They want to hit working families hard and they will hit them first. Having no net savings after 2½ years, what are they going to do? As we have heard, in the past they seemed to think that we should be concerned about deficits. If you were concerned about deficits, why would you save $80 billion and then spend $80 billion? They are severely embarrassed about the state of the budget.

We do the responsible thing on this side of the House. We say to ourselves that we should responsibly look at the tax concessions, just as the government should have done 2½ years ago and are being forced to do right now. But, if they are going to have to do that, what are they going to do to save some money? 'We're going to go back and target working families.' They are going to continue to do what they have done for the last 2½ years, which is to smash the payments going to families.

In the last budget, nine out of 10 of the lowest income families lost, and nine out of 10 of the wealthiest families gained. Let us just go through what they did to people on family payments. People on $65,000 a year, with two children, lost up to $115 a week. People on $120,000, with two children, lost up to $60 a week. The government are severely embarrassed that we have got the guts to try and clean up the tax system, to put some fairness in it, to drive economic growth. We understand that a fair tax system is the basis of a strongly growing economy. It rewards people who work hard and it rewards people who invest.

But guess what—if you put out tax concessions that discourage the market, that actually inflate the market, you give all of the benefit, through those concessions, to the highest income earners. What you are about to do, because of your failure in the budget, because of the fact that you have spent all of your savings, is to target us for making responsible savings, by running a scare campaign.

The Australian people are absolutely onto you, because the Australian people value the safety net. The Australian people value a fair tax system and they know that every Liberal in this parliament will sit here and vote for proposals which will take money away from working families. You will sit in this parliament and take money away from pensioners whilst you are protecting the tax concessions of some of the wealthiest Australians.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I would ask the member for Lilley to direct his questions through the chair.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Corangamite is right. The member for Lilley has the call and will direct his comments not at the chair but through the chair. The use of the word 'you' points to me.

Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

And you're a good bloke.

Anyway, the unfairness of what is happening with negative gearing is something that does not really resonate with everyone on that side of the House, because you are into trickle-down economics. Ten per cent of the top income earners get 50 per cent of the tax concessions. That is what you are doing. You are defending the wealthy against the many.

Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

It is great to have the member for Lilley back in the chamber. We have missed you! Where was he for all those years? Looking for those four surpluses that you promised? Did you find them, Member for Lilley? Did you find them under the bed?

Joanne Ryan (Lalor, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. I think the member is using the word 'you'.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Yes. It has been used on both sides, yesterday and again today. I remind the chamber that the use of the word 'you' is directing a comment to me. Please desist from that. Comments should be to the other side or to a person other than the Speaker.

Matt Williams (Hindmarsh, Liberal Party) Share this | Link to this | Hansard source

I will conclude on my search for the member for Lilley. I understand that he was overseas and that he went to the coalition school of government looking for how to manage an economy and finances better than what they did for many years.

The member for Mitchell said it is back to 2007. I do not think we want to go back that far. I do not think we want to go back to their time in government at all because that was not the greatest period. People would say to us, 'They were the worst government since the Whitlam government,' and that was said many a time out in the electorate. 'They were the worst government—the Rudd-Gillard-Rudd government—since the Whitlam government.'

Let us reflect on the member for Lilley's comment about targeting working families. As we have heard so much over the last couple of weeks, where are the targets of the Labor policy for negative gearing? They are at middle-income Australians. They are at hardworking Australians. Let us get some statistics on the board. There are 10 times more negative gearers who are nurses, teachers and Defence Force personnel than there are surgeons, anaesthetists and finance managers. I can give you some statistics, too, on the numbers and percentages: there are around 10,000 fitters around Australia, and there are close to 10,000 steel workers. These are not the high-income-earners and the rich. These are everyday Australians who Labor's negative gearing policy is going to be targeting. It will target their hard-earned money that is invested in property and invested in wealth to help our country grow.

Looking at some of the comments from industry experts, the Urban Development Institute of Australia says:

… when seen as a package of taxes …, the government ends up making a lot more out of property investment than it gives in support to investors.

They also say that, 'The housing policy model is unique and is under threat with the proposed changes to negative gearing.' It goes on to refer to incentives for private investment for rental supply in a fast growing population and rapid urban expansion; and we know that there is rapid urban expansion through our big cities, whether it be Melbourne or Sydney. Part of the solution is the investment by the private sector in the supply of housing and that is where negative gearing does have an important impact and does help this policy challenge that we have. It is why our approach is a much better considered approach. We are weighing up what the appropriate response is to a policy challenge.

We know that Labor's rushed, reckless negative gearing policy hits mum and dad investors and does not hit those people who are working hard and doing the right thing in Australia. Going to the results of the analysis, we can see that if house prices were to fall by five per cent, as the Prime Minister has said, it would leave households in the lowest income quintile—those in the lowest 20 per cent, not the highest—just under $12,000 poorer. Their house prices will decline. That is the impact of this negative and reckless negative gearing policy of the Labor Party.

We promote hard work, we promote investment in our country and an appropriate policy that incentivises people to do the right thing, to go out and invest, to go out and make a living—those teachers, those police personnel and those Defence personnel who are doing the right thing investing and trying to make a difference in our country.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I was holding a street stall recently when a young couple came up to chat about their troubles buying a first home. She was a teacher, he was a builder, and they were thinking about having a family but they were worried that they would not be able to meet the mortgage repayments when their two incomes went down to one. Despite being in their late 20s, this couple were looking at moving back in with their in-laws. Changing nappies and juggling sleepless nights under the same roof as their in-laws was not their idea of the Australian dream. But their story is, sadly, typical.

Since the early 1980s the share of 25 to 34 year olds who own their own home has fallen from about 60 per cent to about 30 per cent. It used to be the case that the top fifth were just as likely to own a home as the bottom fifth but now there is a 15 percentage point gap in home ownership rates between the top and the bottom. In the early 1980s the average home loan for a first home buyer was $81,000. Now, it is $308,000. Over just the last two years we have seen house prices in Australia go up 20 per cent and yet we have got the slowest wage growth in 18 years. As the young Canberra couple said to me, 'It's hard to afford a mortgage when the prices are going up so much faster than your income.'

Those opposite want to pull up the ladder of opportunity on young Australians. The gap in homeownership is another part of the growth in inequality that Australia has seen over the course of the last generation, where earnings have risen three times as fast for the top 10th as for the bottom 10th, and where the wealthiest three Australians now have as much wealth as the poorest one million Australians.

How did we get here? The Ralph review—commissioned by Peter Costello—recommended that we halve the capital gains tax rate on long-held assets and immediately after that we saw net rental income in Australia, which had been about a billion dollars a year until then, immediately go negative and stay negative. In fact, in one year net rental income in Australia was minus $10 billion. The Ralph review did not contemplate that halving the capital gains tax rate on long-held assets would hit real estate. It said it would spur investment in productive companies. But, in fact, that combination of the capitals gains tax discount and negative gearing acted to drive up house prices.

Those opposite would have you believe that negative gearing goes to those of the bottom of the distribution but those in the top 10th have claimed more than half of all negative gearing tax concessions in recent years. The average surgeon gets 100 times the tax benefit of negative gearing as the average cleaner and 16 times the benefit of the average nurse.

Over the course of the last week we have had suggestions from the Prime Minister that Labor's policies would drive house prices down, and from the Assistant Treasurer that they would drive them up. Monday Malcolm said it would drive down inequality; Thursday Malcolm said it would drive up inequality.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, on a point of order: I would ask the member to refer to members by their proper titles.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Corangamite.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Today we had the Minister for Social Services telling us that two-thirds of Australians negatively gear—a patently false claim. Right now we have 93 per cent of property investment going towards existing properties, not new ones. If this is a policy aimed at boosting housing supply, it has got a 93 per cent failure rate.

In 2001, when Peter Costello expanded the First Home Owner Grant for new homes, making it twice as large for new homes, Mr Costello said, 'This measure will stimulate the building sector, including many small businesses.' But that idea that we ought to give more generous support to those buying new-built homes, seems to have been forgotten by those opposite, who will praise Peter Costello whenever it suits them but forget that he provided more assistance to new home buyers.

Before the election we were promised more jobs, more growth, more investment and less debt. But what we have got is rising unemployment, GDP downgraded, capex tanking and debt up. We have got a Prime Minister who, over the last six months, is less agile and more Abbott; less genial and more Godwin. He has promised to change his party, but let's face it: they are changing him. Only a few bites of the onion and we will be back where we were in 2013. (Time expired)

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

I am really pleased to speak on this matter of public importance put forward by the member for McMahon. The member for McMahon is in fact a neighbour of mine in Western Sydney. What I find so disappointing about the member for McMahon is that his electorate, like mine, is wedged in one of the fastest-growing regions of our country. The south-west growth sector, which goes through the member for McMahon's electorate, is seeing unprecedented growth right through the region. This growth is so important for the future of Sydney. Earlier another Sydney colleague, the member for Mitchell, was talking about the issues of supply and demand. The supply and demand of real estate in Sydney is absolutely crucial. He was right when he said that Bob Carr, when he was Premier of New South Wales, made that bleeding statement: 'Sydney is full'. And let us not forget the Wran government, who sold off our corridors so that those of us who live in Western Sydney are not able to have jobs where we live and corridors to move from our homes to our work.

This supply and demand problem in Sydney is a failure in planning that was created by the former state Labor government. This is the failure of the former Labor government. The Baird government has been working to create a diverse supply of real estate for people at all income points. In my own electorate of Lindsay, on the north side of the Penrith train station UrbanGrowth—the New South Wales state government organisation—has been working to provide a diverse supply of real estate options and affordable housing. Those opposite think they can tax their way out of anything. What we need is houses for people to live in, not reckless comments by Labor premiers.

In Western Sydney, west of Parramatta, we will see one million people move west of Parramatta between now and 2031. What we need is visionary ministers—like the member for Bradfield, who is working to create roads and corridors to connect these suburbs. We are investing to be able to create these suburbs, release the land and build a diverse housing mix for the people who are choosing to call Western Sydney home.

The key aim of Thornton is to provide more diverse housing choices including innovative compact housing, seniors living accommodation, affordable housing and housing for people living with disabilities. This is a wonderful thing. Evolve Housing is one of the developers within this estate, and this developer has said:

The mixed tenure model has been expanded to private market apartments in addition to affordable and social apartments.

The mix is made up of 50% private market and 50% is a combination of affordable and social. There will be 10 social apartments, 124 affordable apartments and 134 private market apartments.

It is expected that these will be completed by mid 2017. This is what we need to see. We need to see tangible construction. We need to see housing that meets the demand. The increase in housing right across Sydney and including Western Sydney is a result of simple Year 9 economics of supply and demand. If you do not have enough supply the demand goes up. If demand goes up the price goes up. So what do you do? You supply more real estate.

The other thing about the former Labor government that completely failed New South Wales in every shape and form is that they were not investing in real estate, they were not building and they were not meeting the needs of our community. We saw their contribution to the GDP of our country fail. But under the Baird government we have seen the New South Wales economy go from last to first. I would like to congratulate the Baird government. I would also like to congratulate the member for Bradfield, who has been working tirelessly to ensure that we build the infrastructure that will release our land and that will surely provide the housing to make affordable housing for the people in Western Sydney. And that is to be commended.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

In question time today we saw the ashen-faced look on the faces of those opposite, as it slowly dawned on them that all they did in September last year was to replace one barely adequate scare campaign with another terrible scare campaign. It was a hangdog expression on their faces as they realised that all they had done in September was to elect somebody who is long on words and short on deeds. The revelation slowly dawned on them that, even though neither the member for Warringah nor the member for Wentworth can run a government, at least the member for Warringah could run a scare campaign.

Like all Australians, those opposite expected better from the member for Wentworth. He promised them leadership and instead they got shambles. As the Prime Minister turns around in question time, as he did today, because he does not want to answer a question and he almost throws it to the Treasurer, and he thinks, 'No, I can't do that, I’ll throw that to another minister instead' that is just an indication of the free-fall that the Treasurer of Australia is in when it comes to credibility. The Treasurer, whose answers are so pathetic in this place, is now routinely ignored by his colleagues.

The most effective symbol of the chaos and confusion on that side of the House is when it comes to housing policy and tax policy. There is a whole range of issues on housing, as other speakers before me have raised—issues around housing affordability, particularly for our young people; home ownership rates that have dropped among young people; and the fact that it takes many more years of a normal person's income to pay off a house. These are the issues we are dealing with in the housing sector.

Instead of a plan for housing or a plan for tax from those opposite, we get this humiliating spectacle which was best encapsulated last week when they tried to argue that our policies would drive prices up and down and flat line all at the same time. It is an absurd and humiliating spectacle to see an Assistant Treasurer, a Treasurer and a Prime Minister who cannot get their facts straight. The Prime Minister looks around him now and sees that his scare campaign is in rubble all around him, shards of credibility lying all around the Prime Minister as he gets up in question time, again and again, and tries to argue that black is white when it comes to housing.

After 2½ years of government, there has not been a whiff of a policy from those opposite on capital gains, not a skerrick of a policy on negative gearing, not even a hint of an idea about housing and housing's role in the broader economy. You can see why these two blokes across the table are so grumpy, because it has even dawned on them. They are not the sharpest tools in the shed, but it has even dawned on these two that in September last year they traded down, not up. What a remarkable thought: when they replaced the member for Warringah, they traded down, not up. And it is dawning even on these two sitting across from me right now—what a waste of time.

No wonder The Financial Review asked of the Prime Minister: what is the point of Malcolm Turnbull? No wonder the Prime Minister is getting shirt-fronted by the member for Warringah in his own party room. No wonder the backbenchers are in open revolt, taking away from the Treasurer the tax-making policy of this country. No wonder the Prime Minister throws to the Minister for Social Services, they are in such disarray. No wonder the Prime Minister has appointed the head of his own department so that the Treasurer of Australia has no role in the making of tax policy in this country.

This is what happens when you do not have a plan for the economy—this kind of chaos. When the Prime Minister does not deliver on the leadership that was promised this is what happens. When there is no direction in economic policy that was promised by the member for Wentworth this is what happens. It affects their ability to come up with a housing plan just like it affects their ability to come up with a broader economic plan.

How humiliating for the government and for the colossal ego that sits in the big chair that the opposition are making the running on economic policy in this country. How humiliating for the two B-graders at the table that it is the opposition that are making the running on policy. We have the plans to fund health and education in this country. We have the plans to level the playing field between investors and first home owners in the housing market. We have a plan to boost the supply of housing in this economy. We have a plan to boost construction jobs in this economy. We have the plans for housing and for tax. It is humiliating and embarrassing for those opposite that after 2½ years and two treasurers and two prime ministers that they have no idea what they want to do for the economy. This election will be a contest of ideas on the economy and we are going to win it.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

For those who were listening, those chill words of 'working families' have come back to haunt us. Of course, we just had the member for Rankin, who was the one who loaded the gun that said we were going to have four surpluses; the poor, old member for Lilley was the one who had to fire the gun. Do you remember that? Do you remember those hollows words, 'the four surpluses that we announce tonight'? We have moved on, thankfully. The Australian people spoke very clearly in 2013.

It has always been difficult for young people to get into the housing market. It has always been thus. But we do know that removing the incentives and encouraging people to invest is not the reason why. It is to do with local government quite often and state governments in respect of land releases. It is around local planning. In my own electorate in the south-east of Tasmania, it is issues around infrastructure in supporting commuters in Sorrell, Dodges Ferry, Lewisham, Forcett, Copping and places on the Tasman Peninsula. People who commute into Hobart each morning from these areas are met with traffic problems at the roundabout at Hobart airport. For example, if a taxi is turning right at eight o'clock in the morning to go into the airport, the traffic banks up for about three kilometres back towards the Sorrell Causeway. It is that sort of lack of infrastructure that is impeding the development of houses in the south-east of Tasmania. So I will be fighting, I can assure the people of my electorate, for an upgrade to the roundabout at the Hobart airport, which will open up south-east Tasmania.

The attitudes of banks to young borrowers looking to enter housing market for the first time is also problematic, but it has always been thus. What we have from those opposite is a rushed and reckless policy that is about destroying the single biggest asset that most Australians have—that is, equity in the family home.

I have spent a lot of time at sheep sales, I am proud to say, and I know what it is like when the mainland buyers do not come down to a sheep sale in Tasmania. I can tell you that the prices do not go up; they go down. I have spent a lot of time bidding for wool, albeit with other people's money, in sale rooms all around Australia. My biggest joy was when one of my competitors competing on a particular type of wool would walk out of a sale room because the price did not go up but went down. So it is if you remove from the market a third of those potential buyers in the housing market, the single biggest asset for most Australians will go down. And it is the schoolteachers and the nurses who will suffer, because they are the majority of people who are trying to get ahead.

What has become of this country when we do not celebrate people who are prepared to take a risk? What is wrong with our nation when all those on the other side want to do is knock them down? We should be celebrating these people who are prepared to invest more money and take a risk. Unfortunately, those on the other side want to support the dentist who has a share portfolio worth $700,000 or $800,000 and has dividends coming in of $40,000 or $50,000 and allow them to use that for negative gearing. This is a world gone mad. We should be celebrating the majority of people who are trying to get ahead.

My message to those people in Sydney or Melbourne is: 'Come on down to Tasmania; we want you in Perth, Tasmania.' As I look at realestate.com.au, I see that, in Phillip Street in Perth, Tasmania, there is a three-bedroom house for $279,000. This is an opportunity. I am the proud owner of one investment unit. I must say that it is a very modest investment, and it is declared on my register of interests. I can tell you that it is not negatively geared; it is positively geared. There are opportunities for so many young people in Sydney and Melbourne to come on down to Tasmania and enjoy the opportunities of the state that is, as I stand here right now, the most confident in the nation with respect to small and medium businesses. That is something that I am truly proud of. When I came to this place in 2013, after five years of Labor and the Greens in charge, confidence was at a low—and we have fixed that.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The time for the discussion has concluded.