Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

My 26-year-old daughter moved house yesterday. She and her flatmates have been through the hunt for a property in Sydney's inner west. They found one, were given verbal approval and then were gazumped when someone offered $150 more a week. They found another one, got approved and then had to find replacement tenants for their current home, which young people reckon is easier than trying to go through the tedious bond recovery progress. These rental properties are not bargains. They take a huge chunk of weekly earnings even when shared between as many people as can comfortably fit into a property.

The owners of these properties are not looking to provide a long-term home for anyone most of the time. They're looking to return a profit or benefit from negative gearing and make a capital gain, which hasn't been hard to do in the Sydney market. This is my daughter's fourth house in as many years, and her story is pretty typical of what young people from my electorate of Macquarie who gravitate to the inner west for study or work go through.

So what? They're young—they can do it. In fact, many of us would have had a similar nomadic experience in our 20s as we got through study and our first jobs. But unfortunately the likelihood is that this pattern will be repeated throughout my daughter's 30s, 40s and even 50s, given how unaffordable homeownership is becoming. In fact, far fewer people in their 30s, 40s or 50s own their own home, in spite of having steady relationships and steady jobs. Women nearing retirement who don't own a home are in an extremely precarious position.

The past five years have seen national home prices rise by 19 per cent while household incomes have risen by half that, at 9.2 per cent. Right now we're seeing the lowest wage growth on record. The 13th annual Demographia international housing affordability survey: 2017 shows that all but seven of 54 Australian markets that were studied are rated as either seriously unaffordable or severely unaffordable. There are the options of Karratha, Kalgoorlie, Gladstone or Port Hedland, which are rated as affordable, but they won't necessarily match up with people's employment options. By contrast, in the early 1980s every market except Sydney was rated affordable, which is actually how I came to live in the Blue Mountains on Sydney's fringe.

The 2016 census confirms that over the last decade home ownership rates have fallen significantly for all age brackets below the age of 55. Prices in my electorate have certainly risen fast. Analysis by the Grattan Institute shows that this will lead to generations of Australians becoming permanent renters. A report in August this year from the Committee for Economic Development of Australia called for 10-year or five-year lease agreements, acknowledging that an increasing percentage of Australians will become lifetime renters. The report also warns that the affordability crisis is likely to continue for another 40 years, unless there are major changes. That means it's not only the generations of Australians who are currently under 55, but many more to come, who will struggle to save enough to access the housing market, and the dream of home ownership may remain elusive.

So, this is the issue we face, and here we have a scheme by the government that purports to be trying to improve the affordability issue for first home buyers. But, without addressing the key driver of demand—namely, the investors competing in the market—it is doomed. Australian Bureau of Statistics data shows that investors make up 47 per cent of mortgage demand nationally, and in New South Wales it's 55 per cent. So, in New South Wales, a home is more likely to sell to an investor than an owner-occupier.

What's more, the measures being proposed by the government undermine the integrity of the superannuation system. It's a bit like building a new road: they simply shift the problem to another stage of the journey—in this case, retirement. I remember the first time in this place that I heard about superannuation. It was the early 1980s—in fact, it was in the old parliament. As a 21-year-old I had just begun in the Canberra press gallery. The then Prime Minister, Bob Hawke, his Treasurer and the ACTU leader, Bill Kelty, talked about employers paying three per cent of wages into superannuation. I don't think we'd even shortened the word superannuation to 'super' at that stage. I'm not really sure I cared about it, and that's the problem. When you're in your early 20s, and just starting out in a job, the least of your worries is how you will fund your retirement. But Prime Minister Keating recognised that we needed to talk about super. In 1991, he proposed a retirement income scheme where the age pension was augmented by a privately funded and employer related national scheme.

Superannuation accounts are supposed to be secured savings for generating retirement income, and not for use by governments for other reasons. This government is contradicting its own stated primary objectives for superannuation—that is, to provide income in retirement. The problem with this legislation is not just the exemption it is creating for first home buyers but the precedence it sets for many other possible exemptions. How many are you going to make? Will the government let someone access their super when their house burns down and they are under-insured, when they want to upgrade to a new home, or when they want a pool? This so-called First Home Super Saver Scheme will actually work to undermine Australia's world-class superannuation system.

If it's about encouraging young people to save, you can create other incentives for them to save for their first home, if you think that's a game-changer. But what I hear from young people is that they are barely able to cover their costs, let alone put away any savings. According to experts, including National Shelter, super saver accounts will make the housing crisis worse by pushing up prices. So this on its own is not going to help with housing affordability, and may make things worse.

As for the other measures in the bill, let's look at the measure about contributing the proceeds of the sale of a home to superannuation. I have no problem with the principle of helping people to downsize. Large family homes designed for children, and then visiting grandchildren, may not suit people's lifestyles and they may want to downsize. If this measure were split from the First Home Super Saver Scheme, we would be open to supporting it.

However, does it really reduce pressure on housing affordability? Labor piloted this idea in 2013-14, trialling a means test exemption for age pension recipients who downsized their family home. Up to $200,000 would have been put in a fund exempt from the pensions means test for up to 10 years. Sadly, this government scrapped that pilot program, so we don't really have a number of years of watching it to see what the impact might have been. And this version 2.0 has no data from Treasury to support its impact on housing supply—not a piece of evidence to show that it will make a difference. Industry Super Australia says the measure will be used by self-funded retirees rather than age or veteran pensioners because there are no changes to the pension income or assets test, and the numbers won't add up for people who, right now, would qualify for a pension. Typical of this government—a half-baked idea, poorly executed.

When it comes to tackling housing affordability, there is no doubt that there is urgency to act. If we want our current generations, who are looking at housing prices rising, to aspire to have a home, then this parliament does need to do something. But, if the government doesn't act on changes to capital gains tax and negative gearing, it is just going to make the situation worse. It really can't run away from that as a general principle. I'm reminded—and I think this bears repeating—that John Daley from the Grattan Institute described it really well when he said, with regard to this package of measures that the government has put up, 'You'll need a scanning electron microscope to see an impact on prices.' I gather that they help you zoom in and look at really tiny changes. That's what needed to see whether this would make any difference. Mr Daley says you won't see a discernible difference in the number of young people that buy a house. That's a tragedy, because we have a responsibility to make sure that every 26-year-old who moved house yesterday, no matter where there are in this country, can aspire to own their own home.

Many of us would appreciate the benefits of home ownership: the security of knowing that you actually have a place to age in and the security of knowing that you don't have to have three-monthly inspections where someone comes along and tells you whether you've been keeping the house neat enough. These are the sorts of invasions that people face. A common situation for so many renters in New South Wales is that you can't have pets in your home, unlike the situation under the Victorian government— (Time expired)

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

I am very pleased to follow the member for Macquarie. She did make some very good points about the importance of housing affordability and giving all Australians, especially young Australians, an opportunity to own their own home. But I am confused as to why, if the member for Macquarie believes in all of those things, she will not be supporting the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. The member for Macquarie was correct when she said that young people often find that, after they go through all their living expenses and pay their rent, they don't have enough left over to make significant savings contributions to build up savings to pay for the deposit for a home. That's exactly correct. That is what this legislation tackles exactly. So I'm at a loss as to why members of the Labor Party, including the member for Macquarie, acknowledge that that is a problem but will not actually support this bill. It shows a difference in the concept of superannuation between the coalition and the Labor Party. On this side of the House, we understand that every dollar that gets put into someone's superannuation account has to be earned first. The money doesn't come from some mythical magic money tree. That money must be earnt. The wealth must be created. The money that would otherwise be in a person's salary gets taken out of their salary and put in a compulsory super contribution.

I am in my mid-50s and when I first started to work—before there was any superannuation scheme of any significance—I was able to take 10 per cent of my salary and save that up as a deposit for my first home. We tell this generation: 'We're sorry; you can't do that. Of the total wealth that you earn or create in the job that you do, we're going to take around 10 per cent of that and force you to put that into compulsory savings that you cannot touch until you are 65 years of age. And when you are 65 years of age you can then go and invest that money in a house.' Unless a person owns their own home when they reach the retirement age of 65, they will be reliant on the pension scheme from the government. The best savings that any Australian can have is to own their own home. That is what we are trying to do with this legislation.

We do have an issue with housing affordability in this nation. It is clearly more difficult for young Australians to get into the market today than it was a generation ago. If you look at the raw numbers, the actual mortgage repayments as a percentage of salary may not be that much higher but what is significantly higher is the cost of the deposit that they must pay. That is exactly the problem that we are attacking. With this bill, from 1 July 2017, individuals will be able to make voluntary contributions of up to $15,000 per year and $30,000 in total to their superannuation account to purchase their first home. These contributions, which will be taxed at 15 per cent, along with the deemed earnings, can be withdrawn from a deposit. Withdrawals will be taxed at the marginal tax rate, less 30 per cent offset and allowed from the 1 of July 2018. For most people, the First Home Super Saver Scheme could boost the savings they put towards a deposit by at least 30 per cent compared with savings in a standard deposit account.

This is exactly the way that this parliament can help young people get into their first home. If they can get into their first home, the greatest forced savings is their ability to pay off their mortgage. But those on the other side of the chamber say no, because they don't want to let people have control and make a decision about how they can best use their superannuation savings. They would rather that money go to some union controlled fund. That is what their opposition against this is all about. Those opposite don't want individuals to have a say about where their savings should go and how their savings should be used. They don't want anything that affects the money that flows into their union controlled funds and which their union mates get control of. That is what their opposition is all about. They're putting their union buddies ahead of young Australians and the opportunity for young Australians to get a deposit and get into the housing market. Support for their union buddies is more important.

The second part of this bill deals with the issue that we find in our society when many couples who own their own homes look to downsize when their kids move out of home. They're couples who were able to buy a house many years ago and have enjoyed a massive appreciation in the value of their house. When they look to downsize—which would normally be the common-sense thing they would like to do—and they do all the sums, the taxation arrangements and the superannuation arrangements deter them from making the decision to downsize. So we find in many of our suburbs a lot of housing stock—four- and five-bedroom homes in the outer suburbs of Sydney—and we have couples in retirement, aged over 65, that, all things being equal, would prefer to move to a smaller unit but don't do so because of the taxation and superannuation arrangements. If we were able to allow the market to work normally and people who lived in a four- or five-bedroom home who preferred to live in a two- or three-bedroom unit could do so, that would free up supply in the market. Freeing up supply is one way that we can get downward pressure on housing prices and make housing more affordable for young Australians. But, yet again, we see the Labor Party opposing this.

These are the principles we are proposing to help couples that have four- and five-bedroom homes downsize. From 1 July 2018, people aged 65 and over will be able to make a non-concessional, post-tax contribution to their superannuation of up to $300,000 from the proceeds of selling their home. The existing voluntary contribution rules for people aged 65 years and older—work tests for 65- to 74-year-olds, no contributions for those aged 75 and over—and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under the new special downsizing cap. This measure will apply to a principal residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home, meaning that $600,000 per couple can be contributed to superannuation through the downsizing cap. These new contributions will be in addition to any other voluntary contributions that people are able to make under the existing contribution rules and concessional and non-concessional caps.

This is another sensible measure from this coalition government to try and get some downward pressure on housing, to try and change the supply and demand mechanisms that work in the market, to try and give young Australians greater opportunity to get into the housing market. Yet, like we see time and time again from this opposition, it puts its vested interests ahead of the interests of young Australians wanting to get into the housing market.

I will leave my comments there. I hope that members of the Labor Party will give some thought to this before they vote against this bill—will give some thought to those young Australians that are struggling to get into the housing market for the simple reason that the current superannuation laws that we have in this country force them to invest the money that they earn, the wealth that they create, in a way the government tells them, and it cannot be put into their house. Anyone who is over 55 or 60 and has a house will know that that is the best form of savings that they have had in their life. If we are talking about giving young people the opportunity to save, to build wealth for retirement, the best thing we can do is to give them the opportunity to get into their own home. So I ask members of the opposition to please put aside your union ties and think of those young Australians that this legislation will help save for their deposit. I commend this bill to the House.

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

That is 11½ minutes that we are never getting back, unfortunately! These housing bills have all of the things that we have come to expect from those opposite, all of the ingredients that characterise and comprise the policy failures of a struggling government—a government so out of touch that it has only just dawned on them, entering their fifth year in office, that there's a problem with housing affordability in this country. Housing affordability is at 60-year lows, and disproportionately it is young people who are finding it harder and harder to get a toehold in a very important market, a very important part of the economy. It is a government so dysfunctional that, having finally worked out that it's an issue, it has absolutely no idea of how to go about fixing it, a government so prone to overpromising and underdelivering, a government so incompetent that it introduced these bills 68 days after the initiative was supposed to begin. It announced the initiative in the budget in May. It was supposed to start on 1 July, and 68 days after 1 July the Treasurer got around to introducing the bills. It is a government so divided that it can't agree to pull the most important lever of all, which is the negative gearing and capital gains tax lever, even though we know from credible, authoritative reports that both the Treasurer and the Prime Minister were in favour of doing so but got rolled in the cabinet room.

It is a government so held hostage to the knuckle draggers and naysayers in the party that it is unable to do anything meaningful at all lest it be vetoed by the people who gather around the member for Warringah. It is a government so determined to shower largesse on the top end of the town, running a protection racket for a system that gives the biggest tax concessions in our budget and in our economy to those who need them the least. It is a government so welded to extreme ideology that it is compelled to threaten, diminish, undermine and tear at the foundations of superannuation, which is one of Australia's proudest policy achievements. All these elements, which poison its approach across the board—whether it be energy policy or whether it be the budget and the economy or, now, housing—are here in the bill we are debating today.

The bills implement two of the government's budget measures—the First Home Super Saver Scheme and contributing proceeds to super, allowing people to use the proceeds from one sale of their main residence to contribute up to $300,000 to their super if they are 65 or older. Other speakers have made it very clear that we on this side don't support the First Home Super Saver Scheme, and we don't think the downsizing measure is the best way to genuinely deal with barriers to downsizing. But we're always prepared to be constructive. If the government were to separate the two measures, we would likely not oppose the downsizing measure.

To truly understand what we are trying to deal with here, we need to go to the factual basis of the problem we're trying to address, because that will show how inadequate the measures contained in the bill are in dealing with a crisis in housing for a lot of people in our country. Homeownership is at a 60-year low. Just one in four young people aged 18 to 39 now own a home, which is down from more than 35 per cent 15 years ago, a fall of more than 10 percentage points over that 15-year period. Rates of property investment are at record highs, and rates of first homeownership are at record lows. That gives you a sense of the problem this side of the House is trying to address. We have the most generous tax concessions in the world, which preference property investors who are purchasing their fifth or sixth residential properties over young first home buyers trying to get their first crack in the market. At the same time, more broadly, living standards are under pressure, household debt is at record highs, underemployment is at near-record highs and wages growth is at record lows. All of these factors are combining to make it hard if not impossible for a lot of people to buy their first home.

In response to this, having finally discovered that this problem that has developed over the last few years is an issue, the government—true to form—overdid it. Before the May budget, some of those opposite were promising that their housing affordability package would be extraordinarily large, that it would be an impressive package, a well-received package. Talk about setting yourself up for failure! It's like a parent promising a kid a brand-new bike for Christmas and instead giving them a toothbrush or a pair of socks. This is the policy equivalent of a pair of socks. We get this package where the only retail item, the first home super saver package, won't work. It will undermine superannuation and obviously isn't even enough of a priority for the Treasurer to introduce it in time for it to be implemented by the start date that was promised in May this year. It can't be that great if the Treasurer can't be bothered getting around to introducing the legislation until 68 days after the thing was supposed to start.

When young Australians desperate for information, told that this is going to be some extraordinary breakthrough in housing affordability, they go to the ATO website, they are told, 'Legislation is currently being developed for this measure,' months after it was supposed to have started. And we have those opposite spruiking it as some kind of big policy triumph. That is embarrassing enough, but it's worse than that. It's worse than embarrassing for those opposite: it is a very dangerous development. They want to undermine superannuation. They don't believe in it. They say from time to time that they do, but they go out of their way to diminish it, to threaten the foundations of superannuation, to try to take the 'compulsory' out of compulsory super in lots of different ways. In this instance, they are ignoring the fact that super is supposed to be for retirement. It is not supposed to be for allocation at the whim of a government looking for something meaningful to say about the big and persistent problem that we have in our society with housing affordability. This really does reveal a deep obsession with superannuation. They can't understand what a proud achievement superannuation is not just for this side of the House—and we are proud of our role in developing and designing the system and making it a reality—but for the entire country, and it shouldn't be diminished and it shouldn't be undermined by those opposite playing their usual extreme-right ideological games.

Perhaps the biggest failure in these bills is what is not in them. The measures that they're proposing as they relate to superannuation are dangerous and we don't support them. What is even worse is that these bills show what the government are not prepared to do: they are not prepared to pull the most meaningful lever when it comes to dealing with housing affordability, and that is dealing with negative gearing and the capital gains tax concessions. They refuse to pull the lever. They will not do anything meaningful about negative gearing and capital gains, and, as a consequence, they will not do anything meaningful about housing affordability in this country, particularly for young people.

On this side of the House we are serious about levelling the playing field between first home buyers and investors. We don't think it's fair for a young couple, for example, to front up to an auction and to be competing against someone who might already own five or six homes and who is being subsidised by the Australian taxpayer in a way that makes it very difficult for that young couple to get into the market for the first time. That's why we announced our policies back in 2015—well ahead of an election, to give people the opportunity to hold our policies up to the light. We announced those policies on negative gearing and capital gains more than two years ago now. We took the reform out of the too-hard basket. We put it on the table and we said, 'Judge us on this policy,' and the Australian people responded. The Australian people appreciate that at least one side of this parliament is having a genuine crack at addressing housing affordability in this country.

And it wasn't just the Australian community that backed us in. A long line of people supported our policy on negative gearing and capital gains: former Reserve Bank governor Glenn Stevens; global organisations like the IMF and the OECD; the government's own Financial System Inquiry; the Grattan Institute; ACOSS; the Australian Institute of Company Directors; CEDA; Saul Eslake; and even a raft of Liberals, including Jeff Kennett and former New South Wales premier Mike Baird. Indeed, the former Treasurer from just over there in this House said in his valedictory speech that he wished he had dealt with negative gearing in this country.

On Friday we had a very important intervention in this conversation about negative gearing. At regular intervals the Reserve Bank puts out the Financial stability review, and we got one on Friday. The Financial stability reviewsaid something that is very troubling and that everyone in this House should be cognisant of:

The number of investors with multiple properties has grown relative to those with a single property … Indeed, the number of investors with five properties grew by 7½ per cent in that one year, compared with average growth of 4½ per cent over the previous nine years.

So there has actually been a substantial growth, a troubling and concerning growth, in people with a number of properties—in this case, people with five properties or more. That number is growing faster than the number of people with one property. That gives you a sense of the problem. When the taxpayer subsidises the investors and the speculators, that is the inevitable outcome, and that's what we're seeing.

The new data from the Reserve Bank showed that negative gearing increasingly does favour the most wealthy investors with multiple properties. That is more justification for our approach to negative gearing, so that first home buyers aren't going up against people with multiple properties who enjoy those big tax breaks from the government. In a tight budget environment it makes absolutely no sense to give the biggest tax concessions to the Australians who need them least. It's dumb. It's daft policy, and we need to fix it.

We need to fix it not just because of its impact on housing affordability—although that's its most important objective—but also because doing so will help repair the budget. There are not that many policies which can do a terrific job in pulling a policy lever and getting a good outcome and, at the same time, deliver substantial savings to the bottom line of the budget. We're talking about raising something like $37 billion over the medium term, $2 billion of that in the forward estimates. The budget needs that kind of savings. It needs that kind of strengthening. If we can do that at the same time as satisfying a policy objective on housing affordability, we'd be mad not to take up that opportunity.

Apart from negative gearing and capital gains, we've led the broader conversation on housing affordability on this side of the House. I pay tribute to Senator Cameron and to the shadow Treasurer and the Leader of the Opposition, who earlier this year put their heads together and announced what I think was a very substantial package of housing reforms on top of what we are proposing to do on negative gearing and capital gains. These were some of the elements. We said we should limit direct borrowing by self-managed superfunds, which was another recommendation of the government's Murray inquiry. We said we should work with COAG to get a uniform vacant property tax across all major cities. We said that we should establish a bond aggregator to increase investment in affordable housing. We said that with a bit of effort we can get better results from the National Affordable Housing Agreement. We said we should increase foreign investor fees and penalties. We said we should boost homelessness support for vulnerable Australians and that we should re-establish the National Housing Supply Council and actually have a minister for housing so we don't have this situation develop, as it has on that side, of a government which has taken until its fifth year in office to finally work out that Australians are hurting and struggling in the housing market, particularly those who can't get into it for the first time.

When all of our measures on negative gearing and capital gains and that Senator Cameron, the shadow Treasurer and the leader announced earlier this year are combined, we think we might be able to shift the needle, and we might be able to shift the needle to favour people who are working and struggling to get into the market for the first time. Our measures and our policies will help give people a real chance. They'll give people the opportunity to realise that great Australian dream of homeownership, not the nightmare of housing unaffordability that they have been experiencing under the Turnbull government—a government which is so out of touch, dysfunctional, incompetent and divided, so desperate to favour the top end of town and unable to lead on important economic policies like this one.

We have provided the alternative. We have shown that you can develop substantial, meaningful policy from opposition. We're happy to compare our policies on housing with the rabble of those opposite. And we're happy to fight an election, whether it be on housing or the mess that the minister has made on energy. We are prepared to put our policies up against theirs any day.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill. The aim of this legislation is very simple—to give Aussie families a better shot at realising the great Australian dream. The dream of owning your own home is being cast as being incredibly unobtainable, but this should not be the case and it does not have to be.

This legislation aims to assist those seeking to buy their first home by enabling individuals to put money into their superannuation account with the specific intention of using that money as a deposit to purchase a home. This contribution will be capped at $15,000 per year and $30,000 in total. These contributions can be withdrawn for a deposit at the marginal rate, less a 30 per cent offset. This measure is estimated to reduce revenue by some $250 million over the forward estimates period. What this means is that $250 million will be left in the pocket of those Australians saving for and buying their first home. That's a quarter of a billion dollars extra over the forward estimates period that this government will set aside to free up support for first home buyers, and this is a significant contribution from this government.

This government is delivering for those younger Australians not only with this bill but also in many other ways, and let's just look at our recent record. The PaTH program is offering avenues to employment across a range of industries and allowing young people, in particular, to engage with the industry to get the skills needed to advance their careers. Revitalisation in education with the New Colombo Plan is strengthening that sector and broadening the horizons of our students. We are increasing the number of medicines and vaccines available or supplied to young people, ensuring their health as they age, and our innovation and science agenda, along with the NBN actually being delivered, is transforming and empowering our economy.

Unlike those opposite, rudimentary economics is not lost on us on this side. We know that the best way to lower the price of a commodity, be it electricity, raw materials or housing, is to increase the supply of that commodity. Therefore, to complement the First Home Super Saver Scheme initiative, people aged 65 and over will be permitted to make an exempt non-concessional super contribution of up to $300,000, or $600,000 for a couple, after selling their main residence that has been held for at least 10 years. This reduces the barrier for older Australians to downsize from the home they no longer need, helping to free up existing stock of larger houses for those younger, growing Australian families. This bill will help those younger Australians buy their first home by helping them save for and better access a deposit, which we all know is increasingly difficult to come by. It will also increase the supply of housing by helping older Australians downsize, if they choose to do so, into more appropriate dwellings without those front and back lawns we all despise on weekends.

We are upping the number of available rental properties with a foreign-resident vacancy tax. This will incentivise foreign investors to make their property available to the Australian rental market. Further, foreign ownership in new developments will be limited through the introduction of a 50 per cent cap of the number of properties that can be sold to foreign investors through development pre-approvals. We are also providing $117.2 million to support frontline services to address homelessness. The fact is, if you are homeless, you simply cannot get a job let alone get a housing loan, so this is critically important for this particular sector. As you can see, this government is putting in place measures by which outcomes across the entire housing spectrum will be improved.

It would be remiss of me, at this point, to not at least touch on the subject of negative gearing. Negative gearing as a mechanism does contribute to keeping rents lower than they would otherwise be, and Labor plans to tamper with this mechanism, as we heard from the previous speaker. Labor's plan to abolish negative gearing will push up rent and impact on investments for millions of Australians, including those in my electorate of Durack. Within Durack, 15 per cent of constituents reported a net rent loss on their financial-year returns for the years 2014 and 2015—that is, 15 per cent of taxpayers in Durack own a negatively geared property, which is markedly above the Australia-wide level of 10 per cent. Within Durack, almost half—some 49.7 per cent—of occupied private dwellings were rented in 2016. That is far higher than the Australian-wide level of some 31 per cent. This number skyrockets when you head to the more remote parts of Durack, as you would expect. Within the Pilbara region of Western Australia, for example, which is wholly contained within my electorate, as you well know, Mr Deputy Speaker Vasta, over 80 per cent of occupied private dwellings are rented. So Labor's reckless negative gearing policy, as you would understand, Deputy Speaker, will disproportionately harm my constituents in Durack.

The only changes that the coalition are making to negative gearing—and these are contained within the housing tax integrity bill of 2017—will be to disallow travel expenses associated with investment properties, reining in an incredibly high-growth deduction, and also a redefinition of which plant and equipment can be depreciated. This, in stark contrast to Labor's policy, will expand confidence in the negative gearing system and will have no impact on rent prices and investment levels, and it is welcomed.

We are aware that the amendments contained within the bill represent a marked change in superannuation policy in this country, and we know how fond those opposite are of the current superannuation arrangements, for a number of reasons. Firstly, there are the millions of dollars from their union mates that they are able to take from it—and we know what a rort that is. Secondly, and most importantly, they like superannuation because it's someone else's money. Nothing excites those opposite more than the prospect of deciding how to spend large sums of other people's money or, for that matter, telling people how to spend large sums of their money.

So, when looking at these proposed amendments, it's worth reflecting on the purpose of superannuation. As we know, it's designed to provide a means by which people can support themselves in their retirement. If an individual feels that a house of their choosing may be a better investment than a government-mandated super account, which they often have limited control over, as we know, why should we stand in the way of that? The amendment bill that we are discussing today will give Australians the option to boost the savings they can put towards a deposit by 30 per cent compared to saving through a standard deposit account, which we know is becoming increasingly hard to achieve. This is not something which should be opposed. Those opposite should realise that, by doing so, they are making it harder, not easier, for people to buy their first home.

Some have referred to the current high house price situation as an affordability crisis. I doubt those who own homes and are looking to sell their homes would consider that to be a crisis—but I guess that's a debate for another day. While this bill will allow those who are trying to break into the housing market another more effective avenue to save for the deposit, whilst also increasing the supply of the housing, there are other ways that people seeking to break into the housing market can find affordable housing. What I refer to here is housing stock in regional Australia. In my electorate of Durack, in the thriving and beautiful regional hub of Geraldton, a three-bedroom, one-bathroom house can be found for under $200,000. In the Wheatbelt town of Merredin, a three-by-one or a four-by-one house sells for under $200,000. In Carnarvon, which is a beautiful town on the Coral Coast of Western Australia, a three-by-one can be sold for under $200,000 and a four-by-two for under $500,000. I appreciate that in the Deputy Speaker's own electorate the same would be the case, as indeed it would in many other parts of regional Australia. I would just like to put on record that all parts of regional Australia would welcome first home buyers should the need arise. So, Deputy Speaker, you could argue that there is no housing affordability crisis if you bothered to look outside the capital cities. We know on this side of the chamber that there is more to Australia than just Sydney and Melbourne. Certainly, in the electorate of Durack, there are many opportunities for affordable housing.

In summary, this proposed amendment will increase the supply of housing. It will put more money into the pockets of first home buyers, it will enable first home buyers to save for their first home and, at the same time, it will support empty-nesters. It should be supported on its merits. I call on those opposite to support this bill, and I commend the bill to the House.

Emma McBride (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to oppose the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017 and to support the amendment moved by the member for McMahon. Schedule 1 of the bill implements the First Home Super Saver Scheme announced in the 2017 budget. We oppose this measure because it simply fails to address the real problem with housing affordability in Australia—the government's failure to address negative gearing and capital gains tax reform. Until these issues are addressed, the system will continue to unfairly advantage investors over first home buyers.

Schedule 2 of this bill implements a budget measure to allow people aged over 65 to contribute the proceeds of downsizing to superannuation. We don't have any objections to the principle of helping people to downsize. If the government were to split this measure from the First Home Super Saver Scheme measure, we would be open to considering it. However, this is not the best option in terms of actually reducing pressure on housing affordability. In the 2013-14 Labor budget, we had a pilot program that aimed to do just that—by trialling a means test exemption for age pension recipients who were downsizing from their family home. Up to $200,000 in proceeds would have been put in a fund which would have been exempt from pensions means tests for up to 10 years. Of course, this short-sighted government got rid of it. Some important factors in the decision to downsize, such as the age pension income and assets tests and stamp duty issues, are simply not addressed by the government's measure.

The government's super scheme will do nothing to address housing affordability, but it will work to undermine Australia's world-class superannuation system. This system, underpinned by the superannuation guarantee introduced by the Labor government in 1992, is designed to generate improved retirement incomes for Australian workers. It is not there to be a plaything of the government of the day. It is not there to be white-anted to provide the government with an alibi, to pretend that it is addressing an issue when it is failing to face up to the real problems its own policies are creating.

As previous speakers on this side have noted, in the absence of any measures to improve the supply of new homes, any extra money in the pockets of first home buyers is simply eaten up by price rises. If you look at the details of this measure, you see that it offers a paltry level of assistance for first home buyers. If you divide the cost of this measure in the budget by the number of first homes sold each year, the government, with great fanfare, is allocating an average of $565 for each first home. This is the government's solution for first home buyers struggling to compete with investors who have a major tax advantage—$565. Labor will not support this hoax, but we will deliver on our plan for affordable housing, addressing the unfairness created by the capital gains tax discount and negative gearing. Labor will drive the construction of 55,000 new homes over three years, creating 25,000 jobs every year. We will commit to more public housing, including for women and children fleeing family violence.

Before entering this House, I worked as a pharmacist in mental health at Wyong hospital for almost 10 years. One of the most difficult things that I saw when people were recovering from mental illness and taking their first steps to transition back into the community was social workers giving them a phone book, pointing them to the phone in the unit and saying, 'You have to try to find yourself a place to live.' I won't forget that. People with an enduring mental illness, taking those steps back into the community, would be standing at a phone in a public place with a phone book in their hand and dialling through, trying to find somebody who would take them, who would give them a chance in a competitive rental market. Often they didn't have a rental record or the documentation that was necessary or the means to compete in the private rental market.

Over the school holidays, I bumped into a young family I'd seen a few months before, who are expecting their next child. When I first met them they showed me a picture their youngest child had drawn. It was of their house, with a dog. This was because the child always wanted to have a pet, but, because of their circumstances—they had to move, as they weren't in long-term accommodation—they couldn't have a pet. The child had started at a local school but, because of the competitive rental market and their circumstances, the child had done only one term at school before having to move to another school. These are the types of families in my community and in communities across Australia who aren't being helped by these measures.

Affordable housing is not just about being able to buy your home. It's about affordable rental housing. A Shorten Labor government will establish a bond aggregator to help community housing providers to access cheaper finance for new affordable rental housing. Giving community housing providers a new source of low-cost, reliable financing will boost the supply of affordable rental housing options for low-income families and vulnerable Australians, like those I have just mentioned. This is particularly relevant to my electorate of Dobell, on the New South Wales Central Coast, where almost a third of households live in rental properties and the proportion of households paying over 30 per cent of their income in rent is higher than the national average. In pockets of my community, combined household income is about $600 a week and, commonly, rents, particularly for homes for families, are nudging $400 a week and above. How can families meet this?

I want to tell you about something a constituent of mine, Amy, let me know. Amy has lived on the Central Coast for 20 years, working and raising her two children. In 2010, she became ill and last year began to receive the disability support payment. When her father died suddenly, she moved in with her mum to help out, but her mum is struggling on her own to make ends meet. This family's search for an affordable rental property has been fraught. Amy says agents and landlords are reluctant to accept her, as a DSP recipient. But, for the housing department to assist, she has to find a property for rent at half her weekly income, or less. There simply aren't properties at this price for housing a family of four. Amy said, 'I didn't ask to get sick or not to be able to work. Life on the disability support pension is not easy, each week struggling to decide what is more important to spend money on. I don't have fancy clothes, equipment or phones or anything like that. After I pay rent of $430 per week, I'm left with $10 a week out of that pension. Rental properties have got higher and the waiting list for affordable housing is a joke. I don't want my kids to miss out or live like animals just because I have an illness that stops me from working.'

Another constituent, Lilly, who is 18 years old, wrote to me about predictions that young people will be forced to save for 40 years to purchase their first home. This is what Lilly has to say: 'As a young person I find this deeply upsetting. The issue, however, does not seem to be entirely economic. Policymakers have favoured negative gearing, made university much more expensive, axed the first home buyers rebate and casualised the workforce. This has made it impossible to get a fair go as a youth and made it difficult for wealth to flow freely within the economy, allowing children of the wealthy to grow their wealth while children of the poor are denied the same opportunities.' She continues, 'To me this is about more than housing. It is symptomatic of a parliament that no longer cares about youth.' It is not surprising that a young person like Lilly, from my electorate of Dobell, on the New South Wales Central Coast, comes to this conclusion when you consider the additional barriers the government is putting in the way of young people starting out in life and saving for a home of their own—their first home.

As a result of the government's proposed changes to higher education funding and higher education loans, students will face higher fees, which they will have to pay back sooner. These policies will create considerable financial stress for many young people completing higher education and entering the workforce. How will these policies help young people save for their first home? And what about young people working on weekends? They won't be getting penalty rates to help them save for a home of their own. What's this government doing to help them? Nothing. Members of the Turnbull government campaign for cuts to weekend penalty rates, and the Prime Minister hasn't lifted a finger to stop these cuts from coming into effect—just as the government hasn't lifted a finger to address the real issue around housing affordability. To put housing affordability into perspective, in 1981-82 the median dwelling price was around three times the median annual household income. In 2016 it was over eight times. In the 20 years between the 1995-96 census and the 2015-16 census, homeownership amongst younger households declined from 44 per cent to 36 per cent.

Labor is once again leading on housing affordability. Only Labor has a comprehensive policy to tackle this crisis. For years the Abbott-Turnbull government have ignored warnings to act on unfair and distortionary housing tax concessions and on the risks associated with increased borrowing in superannuation funds. They have simply failed to act. Building on our existing proposals to reform negative gearing and capital gains tax, Labor have announced policies to improve affordability, increase supply, boost jobs and reduce the economic risks associated with distorted investment decisions. Labor have a clear housing affordability plan. It will reform negative gearing and capital gains tax concessions, facilitate a COAG process to introduce a uniform vacant property tax across all major cities, limit direct borrowings from self-managed superannuation funds, increase foreign investor fees and penalties, establish a bond aggregator to increase investment in affordable housing, boost homelessness support for vulnerable Australians, get better results from the National Affordable Housing Agreement, and re-establish the National Housing Supply Council and a minister for housing.

A Shorten Labor government will establish a COAG process to coordinate and facilitate a more efficient and uniform vacant property tax across all of Australia's major cities. Australia's housing stock should be used to put a roof over people's heads, not to allow property speculators to lock up assets. Labor will also restore the general ban on direct borrowing from superannuation funds, as recommended by the 2014 financial system inquiry, to help cool an overheated housing market partly driven by wealthy self-managed super funds, which has seen an explosion in borrowing from $2.5 billion in 2012 to more than $24 billion today. We will also further help level the playing field between first home buyers and property speculators by doubling the screening fees on foreign investment and financial penalties that apply to foreign investment in residential real estate.

Labor will also provide $88 million over two years for a new safe housing fund to increase transitional housing options for women and children escaping domestic and family violence, young people exiting home care and older women on low incomes who are at risk of homelessness. This will reverse the Liberal cuts made in the 2014 budget. Recently I was talking to a constituent of mine who has worked her whole life and found herself having to remortgage when she was unexpectedly let go. She was trying to work out how she was going to meet her volunteer requirements under Newstart. It reminded me of another woman I met in a shopping centre. She had a shopping trolley containing a saucepan, cutlery and the basics for setting up a kitchen. I asked her what she was doing, and she said: 'Well, I looked after my grandchildren. That was a decision that was made and it was in the best interests of them and their wellbeing, but now that the youngest is grown I don't have any means anymore. As one of the conditions, I wasn't able to do anything other than look after them.' So she had been out of the workforce for nearly two decades. She asked, 'What am I to do now?' She was buying the basics to set up a kitchen in a local caravan park. This is a mother and grandmother who dedicated her life to raising her family and particularly supporting her grandchildren, who were born into very difficult circumstances—and this is how we, as a society, are looking after her.

We need to do more. It has to be fixed. Labor's plan seeks to restore some of the important housing initiatives that were cut by the Abbott-Turnbull government while outlining new policy actions which Malcolm Turnbull and Scott Morrison refused to take. Labor's package will see the construction of 55,000 new homes over three years and boost employment by 25,000 new jobs every year. Only a Labor government will tackle the housing affordability crisis and put the great Australian dream back within the reach of middle- and working-class families.

Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Dobell for her insightful contribution today on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I say 'insightful' because it paints the picture of a government that, in an Orwellian manner, has labelled this bill as addressing housing affordability, but when you examine the bill and the government's response there is no answer for housing affordability. On this side of the House we understand the issues that have been outlined comprehensively by the member for Dobell—in particular, the personal stories of the effect of not being able to access housing.

It's important to note that, when you address the issue of housing, you're talking about not only those who aspire to homeownership but also those who are simply seeking to obtain shelter. This is of more than just peripheral relevance to the health of our communities; it's of vital importance to the health of our communities. There has been much work done, at both academic and practical levels, in joining up all the dots surrounding housing, education and health outcomes, particularly with respect to the social determinants of health. We know that, in circumstances of housing stress, whether it be access to social housing, access to a home that you are purchasing or the impossible rental market that the member for Dobell was describing in her contribution, there are real consequences. Those consequences don't just rest on individual families and individuals; those consequences are visited upon entire communities.

I am very fortunate to represent a community in northern Tasmania that has disadvantages and profound opportunities for the future, but, within those areas of disadvantage, housing is of prime importance. As the member for Dobell outlined, access to housing will affect your future employability, your access to education and your health outcomes for the long term. If we don't address in a real manner, with a proper comprehensive plan, the question of housing affordability and the issues of people that are mired in generational disadvantage then we will be making a greater problem for the future that will need to be addressed, certainly in the area of health, with overcrowded emergency services at our public hospitals, but also with long-term health outcomes, which are predominantly worse where there are significant issues with respect to housing stress, access to employment and the like.

I'm grateful that today I have the opportunity to rise and speak on this legislation, but I need to put on record my concerns about the measures that are being put forward in these bills. The bills seek to implement two of the government's 2017-18 budget measures which ostensibly relate to housing affordability. As I indicated in my outline, this government has a knack of, in an Orwellian fashion, saying one thing but delivering something completely different. The bills implement two key provisions. The first measure is the First Home Super Saver Scheme, which allows individuals who are saving for their first home to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under this scheme, first home savers who make voluntary contributions into the superannuation system can withdraw those contributions up to certain limits and an amount of associated earnings for the purposes of purchasing their first home. Under this scheme, concessional taxation treatment applies to amounts that are withdrawn under the scheme.

The second measure, something that Labor is prepared to consider if the bill is split, allows for the contribution of the proceeds of downsizing of housing accommodation to superannuation, which would allow an individual to use the proceeds of one sale of their main residence to make contributions of up to $300,000 to their superannuation provider if they are aged 65 years or over. This is called the downsizer contribution. These downsizer contributions could be made regardless of the other contribution caps and restrictions that might apply to making voluntary contributions. As I said earlier, this is something that Labor's prepared to consider, if the bill is split.

As I indicated earlier, there is a prime importance associated with the question of housing and housing affordability. It's obvious that something needs to be done with regard to housing affordability in this country. It had been a matter of national pride in recent decades that Australia enjoyed some of the highest rates of homeownership in the world. It's equally obvious that those days of record homeownership are long gone. It is a very telling statistic that close to 70 per cent of Australians are very concerned, or somewhat concerned, that they will never own a property in their lifetime, according to recent research undertaken by the Australian National University. The Committee for Economic Development of Australia released a research report last month investigating whether or not it's time for Australians, as a community, to let go of the great Australian dream of homeownership. The report indicated that Australia's housing affordability crisis is likely to continue for another 40 years—40 years!—unless there are major changes to the market. Historically low interest rates, an unprecedented period of continuous economic growth and strong levels of migration have contributed to increased demand and escalating house prices. The CEDA report concluded that demand pressures and supply problems are likely to continue for the foreseeable future. Between 1996 and 2006 Australian average house prices, relative to income, almost doubled. Indeed, this trend has been apparent for more than 20 years. While income doubled in the years 1985 to 2004, there has been a four-fold increase in house prices in the same time frame.

The impact of higher housing costs is most strongly felt by lower income groups, particularly low-income renters, for whom homeownership is increasingly out of reach. As I said earlier, this will have profound consequences for inequality in the future. This is an issue that this government denies is even a problem, while Labor wants to put inequality front and centre in the development of policy. There is, of course, a good reason for this. The government fails to understand or simply doesn't care about the interrelationship between inequality and health and education outcomes. In turn, education, housing and other factors, as I said earlier, are fundamental aspects of the social determinants of health. Labor's focus on jobs, health and education is designed to address the issue of inequality. Similarly, combating homelessness and addressing housing affordability is a constructive and practical measure in ensuring the health and economic security of our communities throughout Australia.

Labor wants to give those who are low paid and in insecure employment access to housing, including the opportunity to aspire to homeownership, whilst this Liberal government's policy favours those who are using negative gearing to acquire multiple properties. An estimated 875,000 households are experiencing housing stress—that is, they are paying more than 30 per cent of their income in housing costs. This is a contributing factor to increasing disadvantage and inequality, something the member for Dobell outlined in her speech. At the same time, these individuals and families who are struggling to afford their first home are being saddled with debt, ever increasing living costs and wage growth that has stagnated at the lowest level in decades. In contrast, those who are highly paid can, under this government, rely upon a tax cut, access to negative gearing and the capital gains tax discount. Indeed, those with access to family trusts can effectively elect how much tax they wish to pay with respect to investment or business income, unlike in the position adopted by Labor.

So, in the face of all this, what is this government going to do to address the housing affordability crisis that we are currently facing, which is an issue of profound concern to many Australians? A responsible government would listen to the concerns expressed by those who aspire to home ownership, but who are fearful that home ownership is, or will be, beyond them. A responsible government would look at the underlying supply-and-demand drivers of housing prices and deliver a comprehensive response—a plan for future home ownership. We have the government's grand plan before us in this bill, and I'm sorry to say that it does nothing to address the issues at hand. It only serves to undermine Australia's world-class superannuation system whilst at the same time failing to address housing affordability.

As a matter of public policy, superannuation accounts are supposed to be locked boxes to generate retirement income, not the playthings of a government of the day to give access to super savings for whatever priority they wish. Labor is justifiably proud of its track record in establishing and growing our system of compulsory superannuation—might I say, against the resistance of those opposite and the dead hand of successive Liberal coalition governments for over 20 years. Only Labor can be trusted to protect the national savings pool which is represented by our compulsory superannuation system.

The Treasurer's dodgy super scheme laid out in this bill will do nothing to address housing affordability. In fact, it will most likely have the exact opposite effect. Anyone with a basic understanding of economics knows that, if you stimulate the amount of money people have, it'll drive up demand—particularly if there's no further supply—and housing prices will consequently increase. The shadow Treasurer, the member for McMahon, explained this most succinctly in his speech on the bill just yesterday:

They don't understand that if two bidders, for example, at an auction—because this would be available to more than one person—come to that auction and said, 'We've got access to our superannuation, so we're going to bid higher', they're going to bid against each other, and they're going to bid the price up. The only winner in that scenario is the vendor, who can get more for their house. The actual person who purchases the house, having used some of the money that was set aside for their retirement income, is no better off. The person who missed out on the house is no better off. The person who is better off is the vendor, and that is making housing affordability worse. Whether it's an auction or whether it's just sold in the normal fashion through a real estate agent, the laws of economics are the same.

Only this Liberal government could so incompetently manage public policy as to introduce a housing affordability measure that does exactly the opposite of its intended effect and drives up prices. But there are other problems in principle presented by this absurd legislation. The government purports to be a friend of business and a supporter of the free market, but it makes clear with this bill and others that it indeed favours intervention, which will also have the effect of driving up prices, and it is not opposed to undermining our national savings.

Labor will oppose this legislation as the party that supports superannuation and as the party with a comprehensive plan to deal with housing affordability. Labor's plan to reform negative gearing and the capital gains discount will mean that a first home buyer does not have to compete with an investor who may be buying their fourth or fifth property. A reform of this kind creates a fairer tax system and a positive return to the budget. Yet those opposite refuse to even entertain the idea of such reforms, so concerned are they with protecting their mates from the top end of town, with their agenda based upon tax cuts for the well-off and cuts to Medicare and education. I do make the point, as I said previously, that if the government was to separate the two measures in this bill, Labor would not oppose the downsizing measure. However, I emphasise that any housing affordability package that does not deal with negative gearing and the capital gains tax discount is a sham.

Labor has been leading the way on housing affordability, and only Labor will properly deal with a system that advantages investors over the first home buyers. This is an area of public policy that we absolutely must get right. It's vitally important for our communities, particularly our disadvantaged communities, that we provide secure and affordable housing. If we don't provide secure and affordable housing, we will condemn future generations.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017. Over time the phrase 'the great Australian dream' has meant different things to different people, but for the better part of a century any reference to this phrase meant owning your own home. In his 'The Forgotten People' speech to a radio audience 75 years ago, Menzies said:

The material home represents the concrete expression of the habits of frugality and saving "for a home of our own." Your advanced socialist may rave against private property even while he acquires it; but one of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours; to which we can withdraw, in which we can be among our friends, into which no stranger may come against our will.

During his time as Prime Minister, there were a number of federal and state housing schemes that made buying a house more affordable and accessible. By 1966, the number of Australians who either owned a home or were living in a house that they were purchasing was significantly higher than in the early 1950s. At one stage, the dream was sold as a red brick home on a quarter-acre block with a Hills Hoist in the backyard. How things have changed! For many, owning a home is now becoming increasingly out of their reach, with the current state of the housing market meaning that many are missing out. The September Domain State of the market report revealed the median house price here in the ACT reached a record high of $723,980, and we have reports that the median house price in Sydney is now $1 million.

Despite the challenges facing first home buyers, an Australian National University report titled Attitudes to housing affordability: pressures, problems and solutions found that nearly three-quarters of Australians weren't prepared to give up the dream and viewed owning a property as part of the Australian way of life. Just seven per cent believe that owning a house is not all that important—just seven per cent from this ANU study. While views of the great Australian dream remain the same, confidence that it can actually be achieved continues to decrease. Close to 70 per cent of the participants said they were very concerned or somewhat concerned about whether they will own a property. For those who own a home, the poll highlighted the difficulties they face. One in five Australians reported difficulty keeping up with a mortgage or a rental payment, saying they're either falling behind with their payments or struggling to make their payments. Nearly a quarter said they would face financial stress in the event of a two percentage point interest rate rise, and to combat this they're spending less on essentials, they're working multiple jobs, they're working longer hours, they're delaying starting a family and they're even selling household items to make ends meet. The government's cuts to penalty rates do not help this one bit.

With housing affordability spiralling out of control, the government believes that part of fixing the problem is allowing first home buyers to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under the First Home Super Saver Scheme, first home buyers who make voluntary contributions into the superannuation scheme can withdraw those contributions and an amount of associated earnings for the purpose of purchasing their first home. What this fails to acknowledge is that superannuation was created to generate retirement income. It was created to ensure that Australians had a comfortable retirement. It was not created for buying a house. The government's scheme has received fanfare, particularly when it was announced on budget night, but it allows people to put away only $15,000 a year extra through contributions to their superannuation pre tax, and it can be used for only two years, equating to a maximum saving of $30,000 for singles.

The government also jumped the gun when the Treasurer talked up the scheme on social media in July, well before any legislation was introduced. Labor has long argued that the focus of the government should be on reforming negative gearing and the capital gains tax discount because 50 per cent of the benefit of negative gearing goes to the top 10 per cent of income earners and 70 per cent of the benefit of the capital gains tax concession goes to the top 10 per cent of income earners. Those figures are staggering. They clearly show that the current arrangements aren't to the benefit of first home buyers.

The other measure in this bill is about contributing the proceeds of downsizing. This will allow people aged 65 and over to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. If this measure were split from the First Home Super Saver Scheme there is a chance that Labor would consider this measure, because we're not opposed to the principle of helping Australians downsize. That's why when we were in government we made a multibillion dollar investment—historical investment—in social housing, to get those Australians who were in large family homes and who were empty-nesters into social homes, to free up that market for new families.

I've got areas in Rivett, I've got them in Curtin, I've got them in a range of suburbs right across my electorate, where we built these new social houses that were the brand new townhouses that assisted people in downsizing. These houses provided them with all the facilities they needed—a lovely terrace garden out the back; facilities allowing them to transition as they aged—and it freed up family sized social housing. It was an historic investment in social housing, the largest investment in social housing in Australia's history, all thanks to Labor when we were in government. So we understand the importance of downsizing, and we put our money where our mouth is. We did it when we were in government.

In the 2013-14 budget we also had a pilot program aimed at helping people downsize. We had that program that was designed for social housing; we also had a pilot program where people on aged pensions who wanted to downsize from their family home could do so. It's a means-test exemption. Up to $200,000 in proceeds would have been put into a fund that would have been exempt from the pensions means test for up to 10 years. It was this government's own short-sightedness that saw this measure scrapped. And questions on notice about the government's own downsizing measure saw Treasury fail to answer how many households would be expected to downsize as a result. It speaks volumes about where this government's priorities lie in this space, in terms of downsizing, housing affordability, negative gearing and capital gains tax, and just in terms of appointing a minister for housing and homelessness.

The top recommendation from a Senate committee on housing affordability in 2015 was:

… that the Australian Government appoint a Minister for Housing and Homelessness, with the portfolio to be located in a central agency such as the Department of the Prime Minister and Cabinet or the Treasury, or in the Department of Infrastructure with formal links to the central agencies.

This advice is two years old now, and what have we got from the government? Complete and utterly deafening silence. The government has ignored this advice, instead placing the responsibility for housing affordability and homelessness with the Minister for Social Services—and, right now, access and affordability just doesn't seem to be high on the priority list.

I am very concerned about where this government stands when it comes to housing affordability, particularly for those who are the most vulnerable in our community. This is a significant issue right across Australia, and it's a significant issue here in the ACT. It's a significant issue that was discussed at yesterday's ACT housing and homelessness summit. Community organisations, through that summit, are looking to the future when it comes to the types of affordable housing options being offered to Canberrans. We have to start looking at a range of options. We had that social housing model, the traditional family house I mentioned earlier, where we assisted with downsizing. That is one option, but we need to start getting creative and innovative in our housing options for the future, because one size won't fit all.

We need a range of solutions and a range of options for the many and varied families that we have in Australia. We have single women—I will speak about them in a motion later in this speech—and there's a significant challenge for older single women. In fact, this is one thing that keeps me awake at night: the tsunami of homelessness that is going to come for aged Australians, particularly older Australian women who have very little super and are currently in very low paying jobs. They are usually divorced and renting in the private rental market. The thing that keeps them awake at night is: 'What's going to happen to me when I retire from work? I own too much to be in social housing, yet I have limited super.' Facing being in the private rental market on a pension is a pretty grim future. That is the thing that keeps them awake at night, and it keeps me awake a night too. Every time I speak about this issue, I have women coming up to me after my speech, in tears, saying: 'You are speaking about me. You are talking about my future. I am worried; I am scared witless about what retirement means for me.' The options that we have at the moment are very limited for women like this.

Options were discussed at the homelessness and housing summit. There's the Nightingale option—the Nightingale model—which is a housing option that's growing in popularity. It was discussed as a possible alternative to lower the cost of housing in Canberra. It originated in Melbourne, and it focuses on sustainability and affordability. It cuts out the traditional developer, who limits investor profit margin, in an architect led model. The construction of the first Nightingale building in Brunswick is expected to be completed next month, so I look forward to hearing about the outcome of that.

Another model that I'm very attracted to is the model that the YWCA here in Canberra implemented a number of years ago, called Lady Heydon House. It is working very successfully. It's a housing arrangement for five older single women. Each woman has her own unit and her own access to her unit and carport, but there's also a communal living space. The units are metered and billed separately, but the cost of living in those units is not prohibitive; it's not crippling. As I said, these women are on modest incomes, have little super, are usually divorced and are still in the private rental market. This gives them the option of dignity in their retirement, and also the option of not being socially isolated by living in a one-room bedsit. How many of us, when we were students, lived in little one-room bedsits? Is that how we want to spend our time at the end of life? It was difficult and challenging enough as a student. That's not what I want for Canberran and Australian women in their retirement. I want them to have a dignified retirement, where they still feel they are contributing to the community, they are engaged and they are not socially isolated. That's why Lady Heydon House is very attractive, but there are other options for cooperative housing. We need to start exploring this and start getting far more innovative in this space.

As I said, the Equality Rights Alliance did a report a number of years ago where they were talking about this tsunami of homelessness for Australians. From memory, about 600,000 women in the next five to 10 years are potentially facing homelessness as they age, because of the circumstances that I outlined before. There are also 300,000 men. This is going to be a big problem and we need to start addressing it now. This is why the government's lack of a minister for housing and homelessness is a real concern. There is no-one actually focused on addressing this issue—this tsunami that is going to hit Australia in years to come of older Australians who have contributed all their lives to our society. Here they are, and how do we repay them? We repay them by making them homeless. It is a very, very big concern.

In the short time I have left, I want to underscore the fact that we have a significant issue with homelessness, potentially in older women, in years to come. We know that on the night of the 2011 census, 44 per cent of Australia's homeless population were women. The YWCA has been calling for appropriate, affordable and stable housing for women for a very long time now. It's why it's important that the government appoint a minister dedicated to housing and homelessness. It's why this government needs to show leadership on the housing affordability and homelessness issue—not tomorrow, not in the near future, but yesterday.

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

I rise to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I'm pleased to rise, following the member for Canberra, to speak on such an important issue, an issue that is alive in the electorate of Lalor—alive in the communities that I represent. Just this weekend I was in a conversation with a local person who wanted to talk to me about her family, her adult children, who she believes are locked out of ever affording their own house. She thinks the days of Australians owning their own home in communities like mine are over. Where does she get that impression? She gets that impression because the cost of buying a home in this country have spiralled out of control. With this bill, this government is putting an absolutely sham suggestion before us—the suggestion that allowing young people to access part of their superannuation for a short time, which would only create the possibility of a deposit to let them enter the market and only if they were already in recipient of superannuation payments, will somehow affect housing affordability. Well, it won't affect the cost of housing. It will have limited impact on young people in my electorate being able to break in to buying their own home.

This is the great Australian dream. It is a sad day when we have a Treasurer, the member for Cook, a Treasurer who comes up with the sham notion simply to get past the headlines, simply to kick this can down the road, at a time when we know that inequality is above 70-year levels. When wage growth is slowed and company profits are up, it is a sham to bring before this House a proposal that is next to useless.

We know that Labor created compulsory superannuation with a specific purpose: so that early contributions to superannuation will grow your investment over the long term to make for a dignified, comfortable retirement. That is the purpose of superannuation. This piece of legislation seeks to undermine that by encouraging young people to access that superannuation. There are a few problems I have with this from the get-go. The first of them is that it's not 12 months since I stood in this chamber to condemn the government because they were seeking to reduce the penalty for businesses who did not make superannuation contributions for their employees. We've gone from that to a government who says, 'We have a solution to housing affordability—it's allowing access to superannuation.' I have another local story. Quite recently I was in a conversation with a local young person working in retail in my electorate who was telling me about her two-year pursuit of a company she had worked for—a two-year pursuit, and she was still not in receipt of the superannuation that she was owed for a period of three years. What hope is there for her to access superannuation to get together a housing deposit when the superannuation hasn't been paid in the first place? It was taking longer than two years; it had been two years at the point I was speaking to her that she had been trying to chase down these funds and have them put into her superannuation.

We know that in this country we have a serious situation in term of housing affordability. No-one knows that better than me, because I represent the communities in Victoria that have the highest rates of mortgage default and tenancy evictions. People in rental properties in my electorate are doing it tough to keep up with paying their rent. The Victorian state Labor government has made changes to the tenancy act. They had a review and announced changes that they want to bring into the tenancy act. But really the only way to impact on both the number of evictions that are happening in tenancy and the mortgage stress that's happening in our community is to address housing affordability. Yet this government comes in here with a piece of legislation that will have no impact on housing prices in this country.

This proposal is a disgrace. It first encourages Australians to use superannuation for things that it was not intended for and second seeks to kick this can down the road and hope that headlines around housing affordability won't come back, while in a community like mine the number of renters massively increases and fewer and fewer young people can afford to break into the market. If the government were serious they would be addressing this issue. As the member for Canberra put so clearly, not having a minister for housing and homelessness speaks volumes about the care factor on the other side of this chamber about this issue and about the people in my electorate and electorates like mine. No action—this government's inaction—will see the housing affordability crisis worsen.

In contrast, Labor have clear policies, which we would dearly love those opposite to take with both hands and implement, that would have a real impact on the housing affordability crisis. Those opposite want to make an announcement with this piece of legislation that won't work, but it will take years to assess its effectiveness. Meanwhile, the housing affordability crisis will worsen. Fewer and fewer young people in electorates like mine will be able to afford to get into the property market at all. Labor have no problem with the plan, under the downsizing elements in this bill, to allow people over the age of 65 to make contributions of up to $300,000 to their super fund. If it were separated from the rest of this bill, Labor would support that measure. But we have real issues with the fact that this bill will not tackle housing affordability.

We need to be really clear in this place today that the government have many options. One of the ways in which they might support people in an electorate like mine would be to desist from their attacks on the take-home pay of the people who work in my electorate, which are best exemplified, of course, by the cuts to penalty rates that are occurring. In the electorate of Lalor 8,860 retail workers and 4,600 workers in food and accommodation, in total over 13,000 workers, have had their ability to afford a house directly affected by the inaction of those opposite towards stopping the cuts to penalty rates. If those opposite wanted to help housing affordability they could start there. We're in the fifth year of this government, so over the past four-year journey they could have not walked into this place and dared Holden to leave. They could have assured the 4,000 workers in my electorate whose jobs are linked to the auto industry, and the many more in Melbourne's west, that they would ensure the Toyota manufacturing plant in my electorate didn't close, with the consequential threat of the closure of many of the components-making factories in that industry. They could have done that. They chose not to. In fact, this week we've heard them try to whitewash history by suggesting they took no part, made no decision, that impacted on those things. We all know that's not true. We all remember being in this chamber when the Treasurer made that call to Holden and dared them to leave this country, which set about the closing down of not just Holden but Toyota as well. And their response to that closure has been far from satisfactory. Those workers who are in my electorate are not getting the level of support they had come to expect from federal governments when an industry closed. They are now scrambling to find jobs that will pay them a decent salary. Most of them will ultimately be looking to work in the transport and logistics field in my electorate because they see that as a growth industry. Unfortunately, that industry is dominated by labour hire practices which will not see them in secure work and will not see them receiving the rates of pay they were accustomed to in the auto industry.

If this government were serious about addressing housing affordability and, therefore, serious about addressing homelessness in this country, they would be taking a very different tack. Addressing housing affordability will help to alleviate some of the pressures that force people into homelessness. The shadow minister responsible, Senator Cameron, has visited my electorate. He has sat with people who are going through homelessness, who have fallen off that cliff into homelessness. He understands clearly housing affordability—what it means in terms of rent and what it means in terms of homelessness and the growing number of homeless in my electorate.

Next month, West Justice, the community legal centre in my electorate, will be releasing their report on couch surfing. I find it absolutely incredible that I am on my feet in Canberra talking about changes to superannuation to supposedly have a positive impact in this space while knowing the numbers of young people who are already unable to find employment and who are already technically homeless or casually homeless—in that they are moving from place to place with no fixed address, reaching out to community members for support, with no clear support from this government. These things are now going to compound, one after the other, as this government's inaction causes all these issues to be worse.

Achieving the Australian dream and owning a home is continually slipping from the reach of young first home buyers. As a mother of three adult children, I know this firsthand, and I speak to families in my electorate who do as well. The capacity to save for a house deposit while you are in the casual workforce is absolutely untenable. It is untenable that we would think that young people can be in those circumstances and save for a house. As they move from job to job, from workplace to workplace, and then spend time checking to see if their superannuation is actually being paid, we're a far cry from the stability of some of the communities those opposite may live in, where people have well-paid jobs, where people are not in casual employment and where people are having their superannuation paid in the first place.

We know that a former Reserve Bank governor, Bernie Fraser, has spoken against the current housing tax arrangements, calling them 'manifestly unfair'. Labor has put policies before this government that could assist in decreasing the cost of housing in this country and could allow young people to not be bidding against investors at every auction across my electorate. These are policies that this government should adopt. Two-thirds of those who negatively gear are on a taxable income of $80,000 or less. While they represent a large proportion of those who negatively gear, they only represent eight per cent of the population and only make up to 58 per cent of the negative gearing benefit. The top 20 per cent of income earners receive around half of the negative gearing benefit, and the top 10 per cent of income earners merely receive 70 per cent of the benefit. We can see that negative gearing disproportionately benefits a small wealthy minority. Changes, therefore, would manifestly assist the large majority. Limiting the use of negative gearing to newly built homes would result in a boost to housing supply while slowing the explosion in housing prices in established areas. As someone who represents a growth corridor, I can say that this policy would work for our community. We would see people continue to be employed in the housing building industry, while pressure on the middle wing of suburbs would be reduced. These changes would provide an extra $32 billion to the budget bottom line over 10 years.

This government continues to ignore the needs of the majority of Australians in order to support big business. This piece of legislation is about kicking the can down the road on housing affordability. It is about hoping that the headlines go away. Those opposite are living in a dream. The number of young people who can afford a house is dwindling every day, and the number of those in my electorate who are worried about this, concerned about this and prepared to talk about this is growing every day. I urge this government to adopt Labor's policies, to do something real about housing affordability in this country.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

About seven years ago, not long after being elected to this place, I went out with my now wife to look at buying a house. I'd previously bought a unit in Parkville, Melbourne, where I live, and we were then looking for a larger place around Melbourne. We went to quite a few auctions. As we went to those auctions, we kept seeing one person pop up every time. Every time this person was at the auctions, just when it got to the point where someone who, you could tell, was going to move into that house was about to buy it, she'd stick up her hand, increase the bid and say, 'I'm going to bid even more.' At one auction, she sat there, sticking her hand up time after time, buying on behalf of someone else, pushing the price up and up. We went to half-a-dozen or a dozen of these auctions, seeing the same person or similar people there every time. You could sense and tell that all of the people who wanted to buy a house to move into were sitting there and thinking: 'What can we do? We can't outbid this person. We don't know who they are, but we can't outbid them.'

It became apparent that this person doing the bidding, and winning these houses by pushing the price beyond where people could afford, wasn't about to move into the house; it was a property agent. They were there buying it on behalf of someone else. It became clear to us that they were bidding up the price of housing so that first home buyers couldn't get in, because they were buying on behalf of someone who could then take the house, rent it out and, if they made a loss on renting it out because they'd paid too much, write that loss off for a tax discount. Then in a few years time—so the agent was advising them—they could sell the house and get a tax break on that as well.

It was becoming crystal clear, as we were going around auction after auction and being outbid, that we were being outbid by people who had no intention of coming and living in these houses, starting a family in these houses, perhaps living close to where they worked. They were being bought by people who could rely on a tax system, which this place presides over, that would write them out cheques for buying their second, third or fourth house, at prices that put it out of the reach of first home buyers. Meanwhile the people who wanted to live in the house and buy their first home weren't able to do it.

That's what we have in this country. We have a tax system that rewards people who already have a house and says, 'We will give you billions of dollars in subsidies every year for you to buy your second, third, fourth or fifth house, and we don't care if that pushes up prices so much that aspiring first home buyers can't ever even buy their first.' This is coming from someone who's on a politician's wage, and my wife was working at the time as well. If a politician, earning the very good money that we do, whose partner is also working, can't even afford to buy a place near where they want to live, because the government is subsidising someone else to come in and buy that very same house as a tax write-off, at a cost to the federal budget, then the system is broken.

It is no wonder that I meet people in my electorate every week who have just given up on the hope of ever being able to afford to buy a house and those who have given up even being able to rent a house in inner-city Melbourne, near where they live or study. It's because we have this massive bubble that the tax system is pumping up and up, driven by negative gearing and capital gains tax. It means you can come in and buy a house and pay as much for it as you want—if you are lucky enough to have the money for it—because you can write-off your losses from it as a tax write-off, and then when you sell it you can get a tax break at the end, as well. It keeps the property agents, the accountants and the tax planners in business, because they develop these schemes that price everyday people out of the market. It means that if you have a couple of houses already you're doing all right. And I will tell you what: there are lots of people in this place who have quite a few houses and who take advantage of that lurk. But it comes at the expense of first home buyers.

In the 1990s the average house price was six times an average young person's income. If you finished university and went out and tried to buy a place it was about six times your average income. Fast forward to 2013 and it's 12 times an average young person's income, and it's gone up and up since then. At the same time, over a very similar period, the share of wealth that young people have in this country has gone down from about 10 per cent to about five per cent, and that's falling as well.

So we've got a huge problem in this country. The pea under the mattress that means no-one will get a good night's sleep until we remove it is the tax system—the tax system that rewards those who already have by giving them more at the expense of first home buyers. So we need to get rid of negative gearing and we need to get rid of the capital gains tax exemption which says that if you have the misfortune of having to earn your income by working you have to pay the full freight of tax but if you are wealthy enough to earn your income by being able to buy or sell houses or shares we will give you a 50 per cent tax break. We've got to get rid of that. That is going to start to make housing more affordable for people and it will mean the government will find more money for paying for things like schools and hospitals, to the tune of about $5 billion a year, if we do it right. If we wind it back right, we could find ourselves bringing in an extra $5 billion a year.

What should we do with that money? Well, it's time for a mind-shift in this country—not to do the kind of measures that the government is talking about in this bill, which is not to take away the tax breaks but to add more tax breaks into the system in the hope that somehow that will fix it. No. We need a mind-shift. We need to start thinking about housing the way we think about schools and hospitals. If there were 200,000 children being turned away from schools because not enough schools had been built, we would think it was a national scandal. If there were 200,000 people who couldn't get into the hospital in their local area because there weren't enough hospitals, we would think that was a national scandal. We need to start thinking about housing the way we think about Medicare. We need a Medicare for housing. Housing is a human right. It is not an opportunity to make a huge amount of profit. It is not something on which this government should be spending $5 billion a year giving tax breaks to people who have already have a house to go and buy their second, third or fourth. No. Let's think about housing the way we think about schools. Everyone deserves to have a roof over their head, in exactly the same way as every child has the right to go to a government school. In the same way as we would say that if you can't get into school we should build more schools and if you can't get a bed in a hospital we need to build more hospitals, it's time for the government to say that if you can't get an affordable house and a roof over your head it's time for the government to step in and build them and to make sure it happens. We need to think about housing the way that we think about Medicare.

That's what the Greens are campaigning on in Queensland at the moment—a home for all. We need to start thinking about housing and a home for all as a human right. They're pushing for a new Queensland housing trust that will start building a million affordable homes, that will create 16,000 jobs per year for 10 years and that will give people a home for life, and when you build the homes you get the rent that people pay on those homes and you plough that back into the system so that the system can continue.

In states like mine, in Victoria, we've suffered from the mining boom that drove up the dollar and put huge pressures on manufacturing. We've got 40,000 people, nearly, on the waiting lists for public housing, and if you're in the top category in Victoria you could be homeless for a couple of years before you find yourself a spot in public housing, but we haven't built more public housing on any large scale since the 1960s. What better way to deal with high youth unemployment and a rising homelessness problem than to engage in a large-scale build of affordable housing for people who are currently being locked out of the market?

We've got factories in Brooklyn and elsewhere in western Melbourne where they're creating modular homes on, largely, assembly lines in many places and doing amazing stuff. I've been down to Morwell where they've got a potential crisis facing them with unemployment, and we have the closure of Hazelwood Power Station and the potential closure of other power stations. Why not say that in the Latrobe Valley we will fund you to build affordable homes—perhaps even modular homes that we might ship up to Melbourne to house the people who are currently without an affordable home—creating jobs and homes in the process? So Australia becomes a place where everyone gets a roof over their head and where we do the two things that could start to make a real difference to housing affordability, not adding more tax breaks into the system for the wealthy as this government is proposing. It would actually do something real.

Firstly, we'd get rid of the tax breaks in the system that are pushing up prices to the point where people can't afford it anymore. Secondly, we'd do something that would start to drive rents and prices down, which is to increase supply of low-cost stock. At the moment, in my area of Melbourne, the general rule seems to be that if you find an old place, especially if it's an old warehouse in the city, knock it down and build on it the biggest, most expensive thing you can find. So we're getting more one- and two-bedroom units but they're out of the price range of many people. Let's start building properties that get rented out at less than market rent or that are sold only to people on lower incomes.

If I as a member of parliament with a partner who is working full-time find ourselves getting out-bid at auctions for very modest properties, then someone who is a cleaner coming into the city to clean the buildings at night—or a firefighter who works at a station or a nurse who works at a hospital—has almost no hope. Why don't we start building properties in the inner city for the key workers of the inner city, and say, 'You can only buy one of those properties if your income is below a certain point,' and the condition on it is it has to be resold at a certain amount? Why not start building some of the properties in the inner city and say we will only rent them out to people whose income is below a certain amount, and we'll rent them cheaply?

We've got a couple of trillion dollars floating around in superannuation funds. What a good place to invest them, in building affordable housing in the inner city. And then, when the government says, 'Well, we couldn't possibly start to think about housing the way we think about schools and hospitals and make it universally available for everyone,' I will remind them that there's $5 billion a year we could save by not giving tax breaks to people who've already got a house. Let's not give tax breaks to people who have a house so that they can buy their second, third or fourth house. Put $5 billion extra into the system and build more affordable housing. It will put housing back in the reach of young people and put renting a house back in the reach of young people. That's what a proper housing affordability strategy would look like.

Instead, because the government hasn't got the guts to tackle its base—the big donors who donate to it and the members of parliament who sit here with over a dozen properties in many instances under their name, while some people don't even have one; that's who this government is speaking for. Well, we will stand up for young people. The Greens will stand up for young people. The Greens will stand up for those who are being screwed over. The Greens will close the wealth gap that exists at the moment and push for real action to make housing more affordable for renters and for buyers. We will stand up to those vested interests, but the government clearly won't.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

For many young Australians today, the dream of homeownership feels completely out of reach. I speak with them every day in my electorate in Melbourne's west. A generation of young Australians have watched property prices break away from wages. They are a generation who, no matter how much they save, see property prices growing faster than the deposit they need to get a foot on the property ladder. They are a generation who wonder how they can afford to live near their jobs and near their families. They are a generation who have been failed by this government.

Unfortunately, the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017, which are before the House today, represent a continuation of this failure. Labor does not support them. They won't improve housing affordability, because they duck the main problems in our housing market in favour of a grab bag of bandaid solutions. This represents, it's fair to say, progress of a kind on the part of the government. At least the Turnbull government is no longer actively denying there's a housing affordability problem in this country or telling young Australians that they need to just get a good job that pays well in order to break into the property market. The first bill does seem to show that the government at least understand that they have a political problem with housing affordability—it being named the 'reducing pressure on housing affordability measures bill'. It's a bit of a giveaway in this respect. But the measures in this bill are little more than a fig leaf for a lack of real action on this front. There's a long way to go before young Australians will see a comprehensive plan to deal with the pressure on housing affordability from their government.

We should say from the outset of this debate that we have a housing affordability crisis in Australia today. For 25- to 34-year-olds, only four in 10 own a home today, compared to six in 10 who owned a home in 1982. It's a big change that has consequences throughout the housing market for first home buyers, renters, people in public housing and, indeed, the homeless. It's a problem that is being felt particularly acutely in Melbourne. The Demographia International Housing Affordability Survey: 2017 found that Melbourne was the sixth least affordable city in the world. Current ABS statistics show that Melbourne's median house price has risen to a record $880,902—an increase of more than $100,000. The Grattan Institute has found that housing prices have increased by over 40 per cent over the past five years. If you already own your home, particularly if you bought it 20 years ago, this is all to the good; for everyone else, though, this has big implications. By the end of last year, 37 per cent of average disposable income would be taken up by the monthly mortgage repayments on a median priced home, after a 25 per cent deposit had been put down. That's 20 percentage points higher than the equivalent call on disposable income in 1997. In Melbourne, 35 per cent of families are suffering from rental stress. Ten years ago, around one in three rental properties in Melbourne was considered to be affordable for a struggling family, according to the Department of Health and Human Services. Today, just 5.7 per cent of rental properties are considered to be affordable for these families. The impact on the number of Australians who live in homelessness is obvious.

These market conditions demonstrate just how lazy it is to bash generation Y Australians in this debate, to blame them for their inability to break into this market. All too often, young people's aspiration for homeownership is met with condescension from their government and from far too many people in our general community. They're frequently told that, if they want a house, they should stop eating smashed avocado on toast or stop buying take-away coffee. To put down a deposit on a typical house in Footscray, in my electorate, you would need to forgo about 38,000 coffees or 150 years worth of weekly smashed avo brunches. It's a nonsense. According to the Australian Bureau of Statistics, generation Y already spends less on food and recreation and much more on housing than their predecessors, their equivalent generation, did in 1989. That is hardly surprising, given that they also confront an employment market with the lowest wage growth on record and very high rates of youth unemployment. If they were lucky enough to go to university, young Australians today also carry debt repayments for their higher education that are orders of magnitude higher than the debt faced by previous generations.

We should be clear: this isn't a morality play of lazy young people refusing to make the same sacrifices that previous generations did to break into the housing market. Instead, young Australians are confronting a housing market that is structurally different from the one that confronted their parents and indeed their grandparents. There are a number of reasons why Australia's housing market has evolved in this way, but one reason is the fact that the Turnbull government continues to insist on giving a tax break to people buying their second, third, fourth or fifth investment property but nothing to young Aussies trying to buy their first home. These tax breaks cost the budget $10 billion a year, and almost half of the benefit goes to the highest 10 per cent of income earners. More than 90 per cent of the lending for property investment of this kind goes into purchases of existing housing stock, so it doesn't even increase the stock of housing in the market in a significant way. It has helped growth in property prices outstrip growth in people's incomes in a way that the current prevailing low interest rates can never offset. It has empowered a new investor class in our housing market that has muscled first home buyers out of the market. As a result, home ownership is at a 60-year low and the proportion of first home buyers in the market fell to a record low of just 13 per cent in July 2016, before moving up slightly in the last quarter, thanks to stamp duty concessions for first home buyers given by the Victorian and New South Wales state governments.

There are a number of things that governments should be doing to respond to these changes in a holistic way. The federal Labor Party released a comprehensive housing affordability policy before the last federal election. We committed to reforming negative gearing and the capital gains tax concessions for property; limiting direct borrowing by self-managed superannuation funds; facilitating a COAG process to introduce a uniform vacant property tax across all major cities; increasing foreign investor fees and penalties; establishing a bond aggregator to increase investment in affordable housing; boosting homelessness support for vulnerable Australians; getting better results from the National Affordable Housing Agreement; and, finally, re-establishing the National Housing Supply Council and reinstating a minister for housing.

Our reforms to negative gearing would limit future negative gearing concessions to new housing stock, and we would reduce the capital gains tax discount from 50 per cent to 25 per cent. These are responsible changes that would moderate the growth in housing prices and target tax concessions to where we need them—for investment in new housing stock, increasing supply. Indeed, the McKell Institute estimated that a 10 per cent increase in construction as a result of these changes would lead to up to 18,500 new homes being constructed per year. It's a smart, responsible policy that backs in young Australians wanting to buy their first home.

In this changed housing market governments also need to do more for the larger number of Australians who will be spending a longer time in the rental market. That is why I was very pleased to see the Andrews Labor government's recent package of reforms to make renting fairer in Victoria. This package gives tenants more rights, longer leases and smaller and fairer bonds. The Victorian government has committed to banning rental bidding, a practice where potential tenants are asked to bid against each other for the privilege of renting a property. Rental increases will only be allowed on an annual basis, to deliver financial stability for long-term renters. Landlords will no longer be able to force tenants to vacate their leases for 'no specified reason'. Renters will be given basic human dignities, like the right to own a pet unless there's a good reason for the landlord to deny them consent for a particular property. Renters will also be given the right to make minor modifications to rental properties, like installing hooks for picture frames, and when tenants are forced to make urgent repairs to the property landlords will be required to reimburse them more quickly. Bonds will be capped at one month's rent where the rent is twice the median rent, and bonds will be required to be released to tenants more quickly at the end of tenancies when there has been no dispute lodged by the landlord. These are important reforms that strike a new bargain for renters in the radically changed new structure of the modern housing market in Australia.

Housing should not be thought of as just another investment category. It's a foundation of human dignity. While successive governments have created a situation in which property investors have been given an unfair advantage in the market over people seeking a home for their family, it's important in this context that government provides these basic protections for people who are unable to buy their own home and are forced to rent for increasingly long periods of time.

Federal Labor's changes to the tax treatment of property and Victorian Labor's fair renting reforms are the kind of holistic approaches that we need to address the housing affordability crisis. The bills before the House, on the other hand, are little more than ineffective bandaids. The so-called First Home Super Saver Scheme will do nothing to tackle housing affordability. What it will do is undermine Australia's world-class superannuation scheme, in a further attack on the future of young Australians. The government's plan on this front would mean that first home savers who make voluntary contributions into the superannuation scheme for their retirement could then withdraw these contributions, up to certain limits, and an amount of associated earnings for the purpose of purchasing their first home. Concessional tax treatment would apply to amounts that are withdrawn for this purpose under the scheme. The effect of this intervention on housing affordability would just be to pour further fuel on the housing market. Anything that first home buyers will be able to pull out of this scheme for a deposit to increase their bidding potential in the auction market will quickly be factored into the price of properties for sale on the market.

The other measure in this bill is about contributing the proceeds of downsizing to superannuation. The government proposes to allow people aged 65 or over to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. These contributions would be exempt from the age test, the work test and the $1.6 million balance test for non-concessional superannuation contributions. There's nothing wrong with this in principle and, if the government were to split this measure away from the First Home Super Saver Scheme measure, we'd be open to considering this measure. Indeed, in the 2013-14 budget there was a pilot program that had the aim of doing just this, trialling a means test exemption for age pension recipients who were downsizing from a family home for their retirement, freeing up that housing stock for young families who need that space for their new young children. Up to $200,000 in proceeds would have been put into a fund in which would have been exempt from the pension's means test for up to 10 years. But of course this short-sighted government axed this pilot program. So it's back to have another crack at the same issue in the bill before the House today. This proposal would be worth taking more seriously if it tackled related issues to this downsizing question, issues like the age pension income test, asset tests and stamp duty issues taken together. But as it stands this measure will have a minor impact on addressing the housing affordability crisis in Australia.

What's needed to tackle the housing affordability crisis in Australia is leadership. We need recognition of the scale of the problem and its causes. We need a government that's willing to go in to bat for young Australians and recognise the legitimacy of their aspirations for homeownership. We need a government with the vision required to outline a policy alternative that over time will create a new structure and a new bargain for young Australians trying to break into the housing market. We need to reconceptualise the way we think about housing. For too long housing has been a topic of reality TV shows and a topic of investment speculation rather than the foundation stone of human dignity, particularly the dignity of families living in our communities. We should not countenance a tax system that privileges property investors—some of them may be property speculators—over young families trying to build some financial stability and some home life stability for their young families.

This is an intergenerational inequality issue. If we want to have equity between the generations, we need to ensure the latest generation coming up the ladder aren't being kicked off—aren't being prevented from climbing aboard the property ladder that previous generations in Australia climbed aboard. In the past, homeownership has been the great Australian dream. It has been the foundation for families to invest in the new generation, to invest in the children coming up behind them and give them that stability of home life and that financial stability they need to thrive and reach their full potential. We need to get back to that. We need to address the housing affordability crisis in a holistic, comprehensive way, and, unfortunately, the bills before the House do not do that.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

In speaking on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, can I say that I support the amendment moved by the member for McMahon in this place yesterday. This legislation is the government's shallow response to the housing affordability crisis that exists throughout Australia and has existed now for some years. It contains two measures. Firstly, the First Home Super Saver Scheme, whereby a person can downsize their home, if they're 65 years or over, and place some $300,000 into their superannuation account. The other measure is the one dealing with the super scheme whereby a person can put money from their income additionally into super and then use that money to purchase their home. As the member for McMahon has quite rightly pointed out, if the two measures were split Labor would not oppose the downsizing measure. But the measure relating to the First Home Super Saver Scheme is one that we don't support.

The great Australian dream of homeownership is rapidly fading away for most Australians. To put that into some perspective, in 1970 in Sydney the average house price was around $18,700. In Adelaide, my home city, it was $11,900. Today in Sydney the average home price is $1.1 million and in Adelaide it's $436,000. The average wage in 1970 across Australia was somewhere between $5,000 and $6,000. Today it's $78,000. So we have a situation where the average wage has gone up around 15 times since 1970, whereas housing prices have gone up some 60 times over the same period in Sydney and 36 times over that period in Adelaide. Regardless of whether it's 36 times or 60 times, housing prices have gone up many more times than the average wage increase over that period. Understandably and logically, it's becoming more and more difficult for a person to buy their own home.

That has been reflected in other statistics that are also available. We saw in a report only yesterday in The Age by Clancy Yeates that Australian house prices have risen on average 8.1 per cent a year, for a cumulative rise of 6,556 per cent over a 56-year period. The 2016 census shows that some 31 per cent of Australians own their home outright. Some 34 to 35 per cent are in the process of paying off their home—that is, they have a mortgage over it. So between 65 and 66 per cent of Australians are either owning their home or paying it off. In 1966, 50 years earlier, 71.4 per cent of Australians either owned their own home or were paying it off. We have seen a reduction of around six per cent over that period. Six per cent may not sound like much, but it's actually quite significant. It's been on the decline pretty much ever since, and it continues to fall. I suspect it will start to fall at even greater rates in the years ahead unless governments address this issue through sensible policies that will have some effect.

As I pointed out earlier, housing prices continue to rise. In the last five years alone, housing prices have increased by 35 per cent. Notably—and I found this statistic very interesting—the highest home ownership rates in the world are in China, where 90 per cent of the population own their home, and in Russia, where 87 per cent of people own their own home. I thought that was quite interesting given that neither is what we would refer to as a capitalist country. A fifth of households with a mortgage are now paying more than 30 per cent of their income on their repayments, and that in turn is causing housing stress. When we go back to the people who are currently in the process of owning their own home because they have a mortgage on it—they've taken out a loan and are repaying it—one-fifth of them are now also under financial stress and finding it difficult to continue to pay off their mortgage. That should be of real concern, because if those people cannot pay off their home they will be left even worse off, because they will probably make a loss out of the investment they've made in their home.

Not only are housing affordability and higher house prices lowering home ownership rates in Australia. Because prices are at such a high level in comparison with incomes in Australia, when people want to rent a home, because they cannot afford to buy one, they're also faced with excessively high rental charges. The rental charges have to reflect the cost of the house in the first instance, and people who invest in homes want a return on their investment that is commensurate with returns they might get if they put their money elsewhere. Higher housing prices not only mean that people cannot afford to buy a house but mean that many people are no longer able to afford the rent that is being charged for them to have a roof over their head.

I said earlier on that housing prices are continuing to rise. I understand that as at the end of June the mean housing price across Australia was $679,000. That's an enormous amount of money for an average income earner to try to raise or to pay off if they're able to put a deposit down and get a loan. Not surprisingly, because of that mean housing price we now have some 105,000 people who are homeless. They can't afford to buy a home or even to rent a home. I don't have the figures for 2016, because I believe they haven't been released as yet, but my expectation is that the figure could be even higher than 105,000. Were it not for the fact that so many young people are living with their parents because they cannot afford to buy their own home or pay rent, the figure would be much worse. We're seeing the trend where young people are not leaving home when they reach 21 or 18—in fact, many of them are staying with their parents well into their 30s—because they cannot afford to live outside of their parents' home.

There are several factors for the housing stress and the homelessness, and pricing is one. But one of the others is that there has undoubtedly also been a reduction in public housing across the country. In 1991 public housing peaked. Some seven per cent of the housing was public housing, or social housing. In 2016 the figure was 4.2 per cent—just over half of what it was in 1991. We've seen state governments selling off public housing in order to pay down debt, but as they sell off public housing, of course, the people who are in desperate need have nowhere to go. I want to refer to a report put out by the St Vincent de Paul Society only last year. I will quote a passage from their report that talks about the crisis I've been referring to. The report says:

A measure of the housing crisis is the number of people around the country on waiting lists for social housing: 217,000 families in 2014. Moreover, for those several million Australians on Centrelink benefits, only 1 per cent of private rental properties are affordable. Reflecting this, more than 157,000 households in Australia are paying over 50 per cent of their income in rent, and therefore live in severely unaffordable housing. The most recent estimate is that there are 875,000 households in Australia that are experiencing housing stress.

The report goes on to say:

As at 2011-2012, 90 per cent of government expenditure on housing policies (direct expenditure and tax concessions such as capital gains tax exemptions) was received by homeowners (about $36 billion each year) and residential property investors ($6.8 billion). This compares to federal and state/territory governments spending around $5 billion on social housing.

So, we have nearly $43 billion being rebated in the form of tax concessions to investors in residential property, compared with only $5 billion going back into social housing from the state governments.

Therein lies the real problem. There is a housing affordability crisis in Australia, and public housing is unable to even meet the crisis we're facing. And the Turnbull government's response is to do two things, as I pointed out at the beginning of this debate—that is, to use super funds to help people get into housing and to allow people to downsize once they reach the age of 65. Those measures are not adequate and will not address the real problems we face. Time will tell, but I'm reasonably confident that they will not address the serious crisis in housing affordability in this country.

This is a coalition government that comes from years of never having truly been committed to the superannuation process in this country. We saw that they opposed superannuation when it was introduced into law and into society by Labor. But more recently we saw this coalition government freeze the contributions at 9.5 per cent until, I believe, the year 2021. The people they're saying might benefit from the scheme are being asked to put money into superannuation where they will get a tax benefit so they can then take it out with perhaps some of their other contributions and put it into housing.

The truth of the matter is that people cannot afford to put extra money into super in the first place. The people we're trying to help and who need help are the very people who are at the low-income end and do not have spare money to put into their super fund. But if they are fortunate enough to do so, and they can access that fund, it will mean that they will have a lower return on their fund when they reach retirement years, because they will have had less money in it. So they will lose out at the end of the process. The truth also is that most Australians aspire to two things in their life. Yes, to own a home has been one of the great Australian dreams. But the second has been to have a reasonable retirement, some stability in retirement—something they can look forward to. What we're saying, as the member for McMahon quite rightly pointed out in his own contribution to this debate, is that the government is saying to Australians: 'You can have one or the other, but you cannot have both. Either you can have a home and no retirement, or you can have retirement but no home, but you cannot have both.' And that is on the assumption that all the rules relating to the assets test and so on that relate to home ownership and entitlement to pensions and other concessions when one reaches retirement don't change between now and the years ahead. It's very likely that, having taken the steps the government wants people to take right now, the rules will in turn be changed years down the track, which will mean that they've made their decisions to no avail, because they will lose out in other ways.

Lastly, it is true that many factors have contributed to rising house prices in this country. But undoubtedly, and as the St Vincent de Paul Society report highlights, negative gearing and capital gains tax discounts have added considerably to the price of houses in Australia. This government refuses to address that issue. Labor has put forward some sensible policies that have been supported by independent analysts demonstrating that those policies will make a difference to housing prices. Yet this government refuses to concede what is an obvious and glaring contributor to the high prices in this country by refusing to tackle the negative gearing associated with investment in housing. And it refuses to do anything about the discounts that apply to capital gains tax when people do invest in housing. There are better measures than this, and the government should have the courage to face up to them and do what it knows is right.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

I rise today to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017. Housing affordability matters in communities all across Australia and in my community surrounding Parramatta. It's raised with me by parents and by young people, perhaps more than any other subject, when I'm out in shopping centres and out doorknocking. Housing affordability matters. This government, in its fifth year now, has finally been dragged kicking and screaming to the table to do something—anything—on housing affordability. We've heard them in recent years say 'get your parents to help out', as if buying a $1.2 million median-priced property in Parramatta would be in the range of most parents in Parramatta, let alone their children.

I've heard in this debate in the last few days members opposite talking about the problem for young people getting into housing being getting a deposit. How out of touch is that? Really, homeownership is at a 60-year low. Homeownership by 25- to 34-year-olds has collapsed from 60 per cent to less than 40 per cent in 30 years. Prices have accelerated far more than wages, and that acceleration in prices has been driven largely by tax concessions that are paid for by the rest of the community. This response to what is a crisis—late as it is, in the government's fifth year—is rather pathetic.

There are two measures here on the table. The first, the First Home Super Saver Scheme, allows individuals who are saving for their first home to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under the First Home Super Saver Scheme, first home savers who make voluntary contributions to their superannuation account can withdraw those contributions up to certain limits and under certain conditions.

We on this side of the House have been staunch allies of compulsory super since it was first introduced by a Labor government decades ago. We have defended it—

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

It was opposed by them.

Julie Owens (Parramatta, Australian Labor Party, Shadow Parliamentary Secretary for Small Business) Share this | Link to this | Hansard source

It was opposed by the opposition, I am well reminded, thank you—by the opposition of the day, the current government. We have fought to protect superannuation ever since, and here we are once again defending Australia's great superannuation system against a government that really doesn't have great affection for it. They have slowed down the increase in contributions. Contributions should have been going up by 9½ or 10 per cent. They have now slowed that down, or paused that. And here the government are now suggesting that people should be able to dip into their super to buy a home. What that does is two things. It increases demand. Fighting accelerating prices with another tax concession would be risky at any time, but actually allowing people to dip into their super—which in later years will reduce their retirement savings—is foolish. It pushes the problem further down the road. We oppose it.

The second measure is one we would be willing to talk about, which is about allowing seniors to use the proceeds in relation to the sale of their main residence to make contributions of up to $300,000 to their superannuation provider, provided they're over 65 years of age. We'd be prepared to talk about that because we actually introduced a pilot scheme that allowed seniors to downsize, when we were in government just over four years ago. The government that was elected under former Prime Minister Tony Abbott scrapped that. Here they are back again with an idea that is similar—not the same. We don't believe it's as effective, but we would be prepared to talk about it if the government was prepared to separate these two measures rather than bundle them together, because we will not support allowing people to dip into their superannuation for the purchase of a property.

I know that, on the government side, they think it's a good idea, because they believe that the deposit is the problem. I want to talk through some of the figures for Parramatta, just to try to point out to them exactly how out of touch they are. In Parramatta the median price for a home has now reached $1.2 million. Parramatta is the heart of Sydney. It's the middle of the west. The median rent is now over $500 a week, and the growth has been 17.3 per cent. That means that every year the increase in the value of a property is $21,675, which means that, if you are saving for a deposit, for every year of the price increase of the house, you need an extra $4,335 on the deposit you were saving for. Not only are we talking about $240,000 for a deposit of 20 per cent for the median house in Parramatta but we're also talking about that deposit going up by nearly $4,500 every year, because of the increase in prices. Parramatta is not a particularly poor area. Only 15 per cent of the population in my electorate are in a low-socioeconomic group. Very few people in Parramatta can afford the median house price of $1.2 million, particularly those that work there. Over 80 per cent of people that work in Parramatta come in from elsewhere. They come in from an hour further out to work in Parramatta—incredible distances to travel to work.

I want to stop there and talk a little bit about why housing affordability matters. It's not just about owning a house or security in retirement. I don't want to talk about the good old days, but there were aspects in past decades which produced benefits for a community and which we're losing because of changes in the way our communities operate. Back in the days when we had full-time work, large companies that employed large numbers of people in a community, local media and local ways of meeting with each other, and people lived and worked in the same suburb that their parents lived and worked in, there was a baby in that bath. We've lost the bath in many ways, but the baby was the social cohesion. People knew their community well. They lived near their parents. They lived near their grandparents. They knew the parents of the kids that went to school with their children. They knew each other. They met after work. They built relationships which supported families through good and bad times. When a partner went back to work, people in the area assisted with looking after the kids. There was a cohesion.

Small country towns still have it. In a few suburbs of Sydney occasionally you'll find small pockets where it still exists, largely because those pockets didn't boom and are still as they were. As the boom times came through, the price of housing went up so much and people had to live further and further away from their parents and where they worked, we lost this important cohesion. When we talk about housing affordability, we're not just talking about people buying a house 1½ hours away from where they work or from their family; we're talking about having communities in which people can live and work in the same communities, close to their family support structures. If you do that, a whole range of other social issues are alleviated by the community connections that protect people in their worst of times. The neighbour that has lived beside you for 50 years is there for you when you're 85. Again, I've seen even unit blocks where the residents have been consistent over time and where, as people age in place, there are support systems for them. If we don't deal with housing affordability in a very real way, not just in the ability to buy a house but in the ability to buy a house in a community in which you live and work, then we are losing the important part of home ownership, which is that baby: the social cohesion, the connection you get when a community works very well.

It is incredibly important that we have this discussion, and it's a great shame to me that, on the other side, this government walked away from so many of Labor's policies when they first came to government. We knew that housing affordability was a problem, as this government should have on the first day they were elected. They should have known about it in opposition and should have watched the policies we had. They did watch them, but when they came in they scrapped them. We had the National Rental Affordability Scheme, which has been praised by many in the community for doing incredibly good work in Parramatta. It provided $622 million over four years from 2008-09 for the development of up to 50,000 affordable rental properties by mid-2012. It was to deliver an additional 50,000 properties onwards, but, of course, it was scrapped. We produced The road home white paper on homelessness and developed national strategies and targets to reduce homelessness. We committed to the Housing Help for Seniors pilot, which was an earlier version of the second part of this bill—scrapped, of course, by the Abbott government. We provided $6 billion to the states and territories for affordable housing. Those who live in areas like mine will have seen the building that went on in those years of new housing stock. We negotiated the National Partnership on Homelessness, which saw the Australian state and territory governments provide over $1 billion for reducing homelessness. We established the National Housing Supply Council—of course, scrapped. We appointed a dedicated minister for housing and homelessness—again, scrapped and not replaced when this government was elected over four years ago.

So the work that was being done in the housing space was undone and then we had four years of nothing and, in fact, denial that it was a problem. The government said it was a problem of a deposit and young people should borrow it from their parents. They ignored this massive—over 17 per cent—rise in housing prices in my community every year. They ignored the absurdity of a person on a median wage being able to buy a median house at $1.2 million. Who is buying them? I don't know. But certainly nobody on the median wage, which sits at $60,000 a year, is buying properties like that. No, they're not. And those who are buying properties are at great risk of interest rate rises. We've heard that recently from the Governor of the Reserve Bank also.

We've had a government that's basically cut what was happening and has done very little or nothing in the meantime and has now come up with something that is really quite ineffective at best and, to be honest, damaging. Recently the Australian Housing and Urban Research Institute published a review that found:

… there is almost no effort within high-level policy thinking at the federal level that is dedicated to constructing and articulating a systematic conceptual understanding of the links between housing policy objectives, housing policy instruments and mechanisms, and their effect on the economics of housing systems or economic productivity.

That is really a damning indictment of a government that's been in power now for four years on an issue that was absolutely obvious when we were in government, which is why we acted on it—to get into government and ignore something this basic in the community! You can't go to a shopping centre or a school or anywhere without finding a parent who will tell you how scared they are that their children will not be able to buy a home or are talking about how they dipped into their retirement savings to provide that possibility for their children, which means, by the way, that as those parents reach retirement age it's more likely the taxpayer will be subsidising their retirement than we would be if housing affordability were not such a major issue.

In the couple of minutes I have left, I want to talk about Labor's policy. Before the last election we announced that we would act on negative gearing on new stock. You only have to go to an auction and look at what's happening in areas like Parramatta, where there is so much building going on, to see that the new properties coming onto the market are almost exclusively going to investors. You can see the prices going up and up. You can see properties that are specifically built for investors. They're built for the return. They're built to be negatively geared. They're built for the tax-advantage system we have. And we're not seeing properties coming on to the market in areas like Parramatta that are designed and built for people on the median wage or even twice the median wage. We're just not seeing it.

We know that, in order to slow down the speed of the price rises in housing in areas like Sydney, we need to tackle the tax concessions that are turbocharging the housing market, that are driving the massive increases that are putting the price of housing out of the reach of average Australians week after week after week. We need to tackle negative gearing and we need to tackle the concessions on capital gains tax. If at any time in the foreseeable future we want people on the median wage or even double the median wage to be able to afford to buy houses close to where they work and close to where their parents are in our major capital cities, we have to act on those levers because they are putting housing affordability out of the reach of most Australians and every month this government delays on acting on that they make the situation worse. This bill is at best a fig leaf. Housing affordability really matters and this bill will only make the situation worse.

Rebekha Sharkie (Mayo, Nick Xenophon Team) Share this | Link to this | Hansard source

There is merit in trialling the First Home Super Saver Scheme and the downsizer super contributions provisions. However, we all know that they are not holistic solutions to the housing affordability crisis, and I and my Nick Xenophon Team colleagues call on this government to show greater leadership on the issue of housing affordability.

Before I talk more broadly about the sheer scale of the housing affordability challenge in Australia, I will briefly mention some of the concerns I have in relation to the First Home Super Saver Scheme. Firstly, most of the benefits under the scheme will accrue to those who are in higher tax brackets, as those in lower tax brackets are unable to obtain the full advantage of the differential in tax paid between their marginal tax rate and the super contributions tax. Secondly, it is a demand-side measure when we do not have a demand-side problem with first home buyers. The problem facing the housing market is a combination of too much demand by investors in existing property and not enough supply. Australia saw the effect that the first home buyer grant had on housing prices—much of the benefit from the grant was simply transferred to the sellers through inflated prices across the market. There is no guarantee that this measure will not simply create the same outcome, although by a more convoluted mechanism. But, as I say, the trial has merit, and NXT reserves its right to come to a final position in the Senate.

I would like to talk more broadly about the housing crisis facing Australia. Our homelessness levels are growing and our young adults are now delaying or avoiding having children because they cannot afford to buy a home in which to raise a family. Housing affordability is causing massive distortions, not only economically but socially as well. Having a roof over your head is recognised by social service agencies as one of the four key factors in determining how well a person will negotiate life. It has also rapidly become a factor that divides the haves from the have-nots in Australia—a divide that is growing wider generation by generation. But 'affordable housing' means different things to different people. Sadly this is not an issue just on the eastern seaboard, although I do acknowledge that Sydney and Melbourne are incredibly expensive cities. It is something that affects people right across Australia. There are fewer employment opportunities and lower wages in regional areas, and rental supply is often quite tight.

In 2011 the census found that over 105,000 Australians were homeless, a massive increase of 17 per cent since the previous census. That figure is expected to rise when homelessness figures from the 2016 census are released. The St Vincent De Paul Society's recent report The ache for home notes that housing affordability is hitting the poorer sections of our population the hardest, with women over 55 being a group that is over-represented in homelessness statistics. Domestic violence is a piece of the puzzle, with the report noting that this social ill is a factor in 36 per cent of homelessness cases. Indeed, family violence is the leading cause of homelessness in my electorate of Mayo, where we have more people without homes than the state average, at 48 persons per 10,000 compared to 38 per 10,000 across South Australia.

But you don't have to come from a violent home to find it hard to break into the housing market. Aided by our taxation and financial systems, richer families with properties are able to bequeath or otherwise help their children get a financial head start in life so they can get a foot in the housing market door. It is a head start that poorer families have no way of matching.

With each passing generation, capital continues to be concentrated in a property class, and inequality rises, and the policy measures required to bridge the gap will become more onerous upon government finances. The problem only compounds as the population ages, because, in the past, paying off your own home had been the predominant pathway to financial security, particularly in retirement. Today, too many of our young people cannot afford to buy their first home—not even a bedsit. Worse still, many have given up because the cost of housing is considered so far beyond their reach. In simple terms, the up-front cost of housing for the ordinary Australian has increased from almost three times their household income in 1980 to almost 9½ times their household income in 2016. Homeownership is declining, falling from 57 per cent of adults being homeowners in 2002 to just over 51 per cent in 2014. This decline is more marked among first home owners, with the rate of homeownership dropping from 38.7 per cent in 2002 to 29.2 per cent in 2014.

Just recently, the consumer advocate group CHOICE and its partners National Shelter and NATO released the report Unsettled: life in Australia's private rental market. This report showed that in the decade to 2013-14 the number of Australians renting rose from 25 to 31 per cent, nearly 40 per cent of renters are under 35 and half of them have personal incomes of less than $35,000. More than 80 per cent have a no-fixed-term lease or leases that are for 12 months or less, and 20 per cent are on month-to-month rolling leases. This is incredibly instable housing. CHOICE claimed that this was leading to greater insecurity among renters, with half of those surveyed admitting that they were reluctant to exercise their rights, such as asking for household repairs, because they were worried about being blacklisted and they were worried about not being given another extension on their lease.

Housing insecurity is a documented factor in entrenched poverty. Low-income private renters are more likely to move frequently, which affects their employment and their social networks. It also affects children's schooling because children are moved from school to school as families try to find an affordable place to live. Where does this all lead? Again, I say that it leads to a growing divide between the haves and the have-nots that is arresting the full development of our country. Some might argue that there have always been haves and have-nots and it is not the role of government to intervene. This view presumes an equality of opportunity that doesn't exist.

I cannot help but notice that in the generation since 1984, when negative gearing was introduced, we've seen a huge distortion in the housing market. The government intervened in Australia's financial markets then, and it needs to do so again now. What that leadership will look like and what it will take into account in the reality of today's market are yet to be decided. Certainly, there is much discussion by the public on how we can address this. The government most certainly needs to play a greater role than the limited measures before us in these two bills. An increasing number of Australian people are missing out on the social and economic benefits of homeownership, and as a country we are all suffering from their lack of prosperity. This merit has trial, but, as I've said, much more needs to be done, and I look to government to work with the entire parliament to address housing affordability.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I rise to also speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Bill 2017. As other speakers have outlined and as many of the speakers on this side of the House have mentioned, Labor will be opposing this bill. We know that the dream of owning your own home is pretty much completely out of reach for too many Australians. Working- and middle-class families are being priced out of the housing market. The evidence shows this very clearly. Ownership rates for young people aged between 25 and 34 have tumbled in recent years from 60 per cent to 48 per cent. Just as disturbing is the fact that young people are being forced to take on levels of debt unimaginable just a few decades ago.

You'd be forgiven for finding our opposition to this bill surprising, given the name of the bill—the so-called measures to reduce pressure on housing affordability. That name would lead you to believe that the government had recognised the problem and was taking the appropriate action. Why shouldn't we support that? But the devil is in the detail. While this bill purports to address the issue of housing affordability, it does nothing more than pay lip service to one of the greatest issues and challenges facing the Australian economy. We had to wait several months to see this legislation and get across the detail. What we got was nothing more than a collection of half-baked ideas and thought bubbles. Make no mistake: the measures contained in this bill are ineffective and will solve nothing. We were told that the government was going to rescue first home buyers—they were going to come in and be rescuing superheroes. The member for Deakin, Super Sukkar, was going to fly in—he's here today—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Order! The member will refer to members by their correct titles.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The member for Deakin was going to fly in and rescue first home buyers. But what did we get? We got thought bubbles and half-baked ideas.

The first schedule of this bill, particularly, is one of the most egregious parts of the proposal. It would allow first home savers who make voluntary contributions in the superannuation system to withdraw them up to a certain limit, and an amount of associated earnings, for the purpose of purchasing their first home. The concessional tax treatment would apply to amounts that are withdrawn under the scheme. I understand why this would be tempting to many. But the proposition to undermine the retirement future of Australians not only has the potential to make housing less affordable; it will also compromise the financial security and the dignity in retirement which superannuation has been designed to provide and has been such an effective part of our nation's policies.

Let me be clear about this: the Treasurer's superannuation scheme will do nothing to address housing affordability. Superannuation is supposed to be sealed—deposited to generate retirement income—not the plaything of the government of the day to give access to super savings, undermining the very important concept of mandatory accumulation and the promotion of compound earnings. This shouldn't be touched or tampered with for whatever priority they have on that particular day or to get themselves out of trouble. It was Labor who built that world-class superannuation system all those years so, against opposition from the other side. We won't stand idly by while this government tries to tear it apart. You can't trust the Liberal government to protect superannuation. They carped and criticised at its introduction under the Hawke-Keating government and they have been attacking it ever since. It's in that Liberal-National coalition DNA to attack the great initiatives that Labor has put in place over this nation's history. Indeed, those opposite loathe Medicare as much as they resent universal superannuation.

So I echo the calls of previous speakers and ask the Senate to reject this measure and send a clear message to the Turnbull government that it's time to get real on housing affordability. The failure of this government on housing affordability is being felt by so many people across my electorate, where property prices are skyrocketing. According to the CoreLogic report commissioned by the Real Estate Institute of Victoria, the median house price in the suburb of Brunswick in my electorate is $1.1 million—$1,110,000. Until last weekend I lived in that very suburb, in Brunswick.

I have to confess that I have a personal interest in this issue, as so many other millions of Australians have. My family and I were renting our home in Brunswick. Our landlord decided to put the property on the market and we were told we had 60 days to find a new place to live. Life as an MP, as we all know on all sides here, is very difficult with a young family. I thought, rather than going house hunting I will see what they want for this property. It doesn't really leave us a lot of time for house hunting when we have to fly to Canberra all the time. We tried to buy the house, or rather asked them what they wanted for it. When I was told the asking price, my jaw literally hit the floor. We make a good salary in this place; but they were asking for somewhere around $2 million for a small three-bedroom house in the suburb of Brunswick. There is no way we could afford that. We loved that home and we loved Brunswick as a suburb, but I can assure you that was far from a palatial home that we were living in, that we were renting. We are fortunate enough to earn a good salary, yet we found the prospect of buying an ordinary home in our area obscenely unaffordable. This is the experience of millions of Australians around the country in the struggle that they go through. So I understand better than most on the other side the struggle that many Australians have who are trying to achieve the dream of homeownership. Labor has led on this with its policies to reform negative gearing and the capital gains tax discount. Those policies were immensely well received by the electorate, and for good reason. They are likely to work and are likely to deliver real outcomes for people trying to enter the housing market. They say that no party has a monopoly on good ideas but, make no mistake, this policy lever is available to the government. They can do this; they can adopt the reforms.

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the member for Wills will be given an opportunity at that time to conclude his contribution.