John Alexander (Bennelong, Liberal Party) Share this | Link to this | Hansard source

I would like to talk about the role of inquiries in this place and the role of political debate. When we commit in standing committees—bipartisan committees—to undertake an inquiry, we do so because we believe there is an issue that needs to be investigated. As chair of the Economics Committee, I shared a concern with many, particularly young people, that housing affordability was a thing of the past. We all had anecdotal stories of how high the cost of housing was and how out of reach it is for the next generation. So, to move past anecdotal information and to address the concerns of affordability and rising concern about the volatility of the market, we undertook an inquiry to gather the facts. We set about gathering evidence.

We knew that we had gone from a rate of home ownership of under 40 per cent after the Second World War to over 70 per cent in the early seventies. It was a golden era of housing affordability. It was an era in which we judged our national wealth by the percentage of home ownership—by how many people owned their home. It was the creation of wealth for many families. We discovered, during evidence, that home ownership is now at a 60-year low. We understood that volatility was driven by investors, armed with the lowest interest rates in our history, who could buy properties that were neutrally geared, relieved of negative gearing when interest rates were higher than rental returns and losses had therefore to be funded. With neutral gearing and positive gearing, there was no limit to how many properties investors could buy. Borrowing 100 per cent, having the renter pay for the property and with prices going up—these were all of the components of a Ponzi scheme. The investor had moved from the point of providing affordable housing for those who couldn't afford to buy it to creating a greater division of wealth. We were comforted sometimes with the knowledge that 84 per cent of investors only own one property, but that means 16 per cent own the rest.

The trajectory is such that within 10 years we will have less than 50 per cent of Australians owning their own home. We are moving away from what it was—a commonwealth of Australia—to a country that is owned and controlled more and more by fewer and fewer, a land of lords: landlords. These findings were alarming. When we went to the last budget, we understood that there would be measures in the budget to address this volatile situation and to try to give new home owners the opportunity of getting into the market. After that budget, the three ratings agencies cited the exposure of Australia to the housing bubble as the biggest threat to our economy.

We play politics with this, as we do with many things in this place. One party says, 'We're not going to touch negative gearing,' so the other one says, 'We're going to get rid of it.' These policies entrench and the development of policy ceases. It was very interesting in this room a few weeks ago when the issue of terrorism was addressed between our two leaders. The Leader of the Opposition met with the Prime Minister and, in a short period of time, they came to resolution. They spoke beautifully about each other and congratulated each other on their good work. Mr Shorten made the comment that this was too important an issue to play politics with. I would like to put forward that housing—the spreading of wealth and the stabilisation of families through the ownership of homes and communities—is too important an issue to play politics with. It is the opportunity for young people to buy homes, to be more stable in themselves or their families and to have the opportunity of creating wealth. I would ask our leaders to set aside politics and entrenched positions and work together in a positive way to develop policies that will spread wealth and give every Australian the opportunity of having a stake in Australia and owning their own home.