Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

I speak often in this place and elsewhere about my mission to make Fisher the place to be for education, employment and retirement, but I don't often explain what lies behind that statement. At the heart of my mission for Fisher are the hopes and aspirations that I had when I moved to the Sunshine Coast 25 years ago. They are the hopes and aspirations that are shared today by the thousands of Australians, young and old, who are moving into my electorate as we speak. People on the Sunshine Coast want to be able to get the best education for themselves and their children, they want to be able to get a meaningful and rewarding job in a career of their choice, and they want to be able to retire in comfort and dignity with the highest quality health care. Importantly, they want to be able to do all of that without having to leave our community and move to a big city. That's why I want to help make the Sunshine Coast the place to be for education, employment and retirement. I want people to be born on the Sunshine Coast or to move here and to be able to make that long-term commitment to our region, to live on the coast, work, put their roots down, make a contribution and help us build a prosperous and healthy community. That's what the people who come to the coast want and that is what I want to help them achieve for themselves and their families.

For that to happen, the people of Fisher need to have the opportunity to fulfil one of the most important of their aspirations—that is, to own their own home. For most Australians, home ownership is a fundamental part of their financial security and, indeed, their life plan. It is the rock on which many things are built. For many years, as you are aware, Mr Deputy Speaker Howarth, I was a builder, and I have seen the effect that owning a first home can have on a young family: the sense of achievement and the feeling of security and of belonging to a community. I want that for everyone in Fisher, for those who live here now and those who will join us in the coming years.

Current projections suggest that we are likely to see more than 200,000 new residents moving to the Sunshine Coast by 2035. There is a transformative program of housing construction already underway. At Bokarina beach, Palmview, Beerwah east and at the two very large developments at Aura and Harmony, the construction of tens of thousands of new houses is under way. At Harmony, near Palmview, accommodation for as many as 17,000 new residents is being built, while at Aura, near Caloundra, 20,000 homes will house 50,000 new Sunshine Coasters over the next 30-odd years. According to the developer, Stockland, 70 per cent of those living in Aura will be owner-occupiers and 45 per cent of them will be new, or first, home buyers. Aura is a great example of how hardworking aspirational Australians can get out of the rent cycle and make a start in growing their family's prosperity for themselves and for future generations. Like Harmony and the other developments going on around the coast, Aura offers house-and-land packages targeted specifically at affordability, with prices well below the region's median house price.

Thousands of young families are taking up these opportunities and getting a foot on the housing ladder. Forty per cent of buyers to date are key workers like nurses, police officers and teachers. Some are even pest control operators, Mr Deputy Speaker.

Luke Howarth (Petrie, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

They are the hardworking mums and dads, the battlers, who want to get ahead to build a future for themselves and to give something back, who form the basis of any community's success. This sort of long-term commitment to community, this independence and determination to build one's own prosperity, is exactly what we need on the Sunshine Coast and, indeed, all over the country. Homeownership is one of the foundations of financial security. It's a starting point of from which to build and a statement of intent. I congratulate all of the new homeowners at Aura, Harmony, Beerwah East and all of the many developments around the Sunshine Coast on taking that important step on the path to prosperity. For those who are new to the coast, I want to thank them for making such a significant commitment to our community.

I want that dream to be a reality for everyone in Fisher, but I'm well aware of the challenges facing my constituents. I know how hard it can be. That's why, back in April 2017, I held a housing affordability summit in my electorate at the Dicky Beach Surf Club. The Assistant Minister to the Treasurer joined us and representatives of Sunshine Coast developers, community groups and housing associations to discuss the challenges of affordable housing and housing affordability on the coast. I'm grateful to Paul Bidwell of Master Builders Queensland; Deb Blakeney of Lions inPlace; Kelli Dendle of CHASM; Andrew Elvin and Helen Glanville of Coast2Bay; Shane Goodwin and Warwick Temby of HIA; Tony Long of Affordable Housing; John McNamara of SMS Finance; Ben Simpson and Llew Gartrell of Stockland; Shane O'Brien of Vantage Homes; and Joy Morwood of Sunshine 60 & Better for giving me their very broad feedback. This extremely useful session identified a range of factors increasing housing stress on Sunshine Coast. The summit identified the lack of availability of alternative finance approaches for home buyers, layered taxation on new homes from multiple tiers of government and the so-called NIMBYism effect.

In particular, the assembled community groups identified the importance of stable employment in avoiding housing stress and making housing more affordable to more families. The Turnbull government has already made a massive difference in that area, creating around 1,100 new jobs every day over the past 12 months. In fact, 403,103 jobs in total were created, with more than 75 per cent of them being full time. Having a second income in a household makes it considerably easier to afford housing. More than 60 per cent of those new jobs last year were taken up by women, creating the highest female participation rate in our nation's history. With the unemployment rate on the Sunshine Coast even lower than the national average—the Sunshine Coast rate being 5.1 per cent—this is already making a huge difference in making housing affordable for more local families.

The most important factor identified by the group was supply. The summit heard that some land on the Sunshine Coast had increased in value by more than 400 per cent, while the cost of building had increased by only 100 per cent. The number of land sales had more than halved in recent years. The developer Stockland pointed out that it had taken 14 years to get the Aura development set up, approved and commenced. In particular they noted the challenges of getting utilities and other infrastructure put in place for the sort of massive new developments that we need. The summit agreed that the most important way to deal with housing affordability on the coast was to get the right supply in the right place and at the right densities as quickly as possible. With more than 200,000 more people expected to move to the Sunshine Coast in the coming 20 years, we urgently need more supply. At my housing affordability summit we heard that for community groups the availability of finance and their comparatively small operations are barriers which reduce their ability to fill demand. For large developers the slow process of getting necessary infrastructure in place and the availability of land were the most important constraints.

It is these challenges of supply which the National Housing Finance and Investment Corporation Bill 2018 so efficiently addresses. The establishment of a National Housing Finance and Investment Corporation, with the real clout of $1 billion to spend, will make a real difference to unlocking housing supply in our community of Fisher and, indeed, throughout Australia. By aggregating the lending requirements of multiple community groups, the corporation will be able to reduce risk, reduce borrowing cost for community housing providers and create the scale needed for them to efficiently deliver the affordable housing that we need. With their large-scale funds and independent Commonwealth mandate, the corporation will also be able to intervene to ensure that key infrastructure is built more quickly, by addressing coordination issues and overcoming financial constraints.

There will also be a multiplier effect from this investment corporation which will work to boost the effectiveness of the government's other actions on housing affordability. The Turnbull government will unlock more Commonwealth land for development. The investment corporation will help to ensure that that land can be developed quickly and will help community groups to get involved.

The Turnbull government is creating financial incentives for first home buyers and low- to middle-income Australians through the First Home Super Saver Scheme. The investment corporation enshrined in this bill will help to ensure that the supply needed to meet that fresh demand is available as quickly as possible.

On the Sunshine Coast, the federal government has already done a great deal to help to give more people the chance to start their journey to prosperity, by putting in place the infrastructure that we need to grow. We have committed more than $1.6 billion to upgrades to the Bruce Highway in our region alone—which, Mr Deputy Speaker Howarth, you are no doubt aware of because your particular area is also the beneficiary of that expenditure of money.

The federal government has created a $10 billion National Rail Program, which could support upgrades to the North Coast rail, another initiative which would impact very favourably upon Mr Deputy Speaker's electorate of Petrie. We have improved telecommunications infrastructure with new mobile phone blackspot towers in the Sunshine Coast hinterland, while the government's reform of the NBN is ensuring that rollout is progressing throughout our region.

The first home buyers moving into Aura, Harmony, Beerwah East and in fact all of the Sunshine Coast today should feel rightly proud of their achievements and excited about what the future holds for them and their families—that is, greater recognition and importance of the concepts of independence, self-reliance and growing success. I and the Turnbull government want that for everyone in Fisher and everyone, in fact, right across our nation. This government has a plan to make that dream more accessible to more people, and this bill is at the heart of that plan. I commend the bill to the House.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

Housing affordability is a huge issue in the electorate that I represent. Over the course of the last decade in particular, we've seen massive growth in the cost of housing both for purchasers and for renters, and that growth has gone on unabated. In fact, in the suburb that I live in, I looked the other day, and the cost of housing has increased by 16 per cent over the course of the last year. That's one year alone. There is this notion that the heat is coming out of the housing market in Sydney. Well, we're not seeing it in the electorate that I represent. And, of course, it's putting a lot of cost-of-living pressure on households.

Not only are households now faced with very, very low wages growth—and wages are only growing at around two per cent a year now—but, if you look at the Wage Price Index data this week, you see data on median average incomes which suggests that they've fallen below the inflation rate, so households are actually going backwards. When you factor in electricity prices, electricity prices have risen outrageously under this government because it can't get its act together and get a policy together that provides investment certainty for renewables, so the cost of electricity has gone up dramatically. Private health insurance has increased once again. It's been ticked off by this government and premiums have increased dramatically. There have been big increases in the cost of child care and huge increases in the cost of education, and, of course, the cost of housing added to that means that families are struggling. They are struggling to make ends meet, but, at the same time, this government is proposing a tax increase with an increase in the Medicare levy and putting more and more pressure on households.

For years now, experts and the Australian citizens have been saying, 'We need a circuit breaker in our housing market. We need a fair dinkum set of policies that will take the pressure off house prices and make living in Australia, particularly in the capital cities, more affordable.' All of those experts point to the fact that Australia has the largest and most generous tax concessions around housing, particularly the deductibility of interest payments on loans, in the world. They are the most generous and the benefits of those tax deductions go predominantly to well-off Australians—those who are in the higher income brackets. I'm talking, of course, of negative gearing and capital gains tax discounts. When these were introduced by the Howard government—interestingly, by the Treasurer that those opposite like to provide accolades to, Treasurer Costello—they weren't funded in the budget, particularly the 50 per cent discount on capital gains tax. This was in a period when Australia was earning quite a bit of revenue from the mining boom and the Howard government squandered it, basically. They squandered it on tax deductions for wealthy Australians that were unfunded. In other words, there was no mechanism in the budget to fund that revenue that was lost because of these tax deductions.

If you're an investor in the housing market these days going along to an auction on a Saturday, you can go along armed with the fact that this government is going to give you a tax deduction. It's going to support you through negative gearing. If you're a first home buyer going along to buy a home that you want to live in, you get nothing from the government—no support whatsoever. That is the great shame of this government when it comes to supporting hardworking Australians. If you're a first home buyer you get no support, but, if you're an investor that may be looking to negatively gear their seventh or eighth investment property, you'll get support from the government—and that's wrong. The beneficiaries of that are those in the highest income tax brackets. For negative gearing, I think 50 per cent of the benefit of negative gearing goes to the top 10 per cent of income earners. It's even higher for the capital gains tax discount, because, when you sell the property, you get a 50 per cent discount on capital gains tax if it's an investment property.

Those measures are too generous and they're adding heat to the housing market. All of the good economists in Australia have recognised that and have been recommending reform of that for many years. It's only Labor that's listened to them and listened to the Australian public. Labor proposed reform at the last election and continues to propose it as we move forward to the next election. Not only will this generate additional revenue for the budget, estimated at about $30 billion over the course of a decade; it will also operate to take some of that heat out of the housing market. If you look at the housing market as a pot of boiling water, it's akin to turning down the heat a little bit. People's house prices aren't going to go down, as was suggested by the Prime Minister—and, let's face it, the Minister for Revenue and Financial Services actually suggested that they might go up. She was saying that they'll go up; the Prime Minister was saying they'll go down. They couldn't work out a consistent message. It was a scare campaign that wasn't based on fact, and that was the reason why they were saying those things. The reality is that it will simply take some of the heat out of the housing market and ensure that first home buyers can compete.

Labor also offered a number of other reforms that we believe will assist with housing affordability, most notably by proposing a uniform vacant properties tax for capital cities above a certain population level. Labor, working in concert with state governments, proposed a tax for properties that remain vacant as a deterrent for people to buy properties and then leave them with no-one in them. Wealthy individuals are the only ones who can afford to do that.

We've also proposed a bond aggregator, and the subject of this particular bill is the establishment of a national housing finance and investment corporation that would have responsibility for the operation of a bond aggregator scheme to ensure that housing affordability is improved and administer a facility to enable developers to look at housing affordability and developing properties that are affordable. These bills do give effect to the government's announcement in the 2017-18 budget that it would establish a national housing finance and investment corporation and operate an affordable-housing bond aggregator and administer the national housing infrastructure facility.

The bond aggregator will bring together the lending requirements of a number of community housing providers and finance those requirements by issuing bonds to institutional investors. The national housing infrastructure facility is intended to provide financial assistance of up to $1 billion in the form of occasional loans, grants and other financial instruments. The facility comprises $600 million for concessional loans, $225 million for equality and equity investment, and $175 million in grants.

Labor, as I said, announced, as part of our plan for housing affordability and jobs, in 2017, that we would establish a bond aggregator to increase investment in affordable housing. Whilst this bill doesn't exactly mirror what Labor was proposing, what we've said is that we won't oppose it in the House but we will send it to a Senate inquiry to ensure that it fulfils the obligations for which it was established. And they should be: to help community housing providers access cheap finance, to provide for new affordable rental housing. A housing bond aggregator should also directly source cumulative funds from wholesale markets on behalf of community housing providers by issuing bonds to private investors. Funds raised by those bond issues could then be loaned to providers.

The bill also provides for the appointment of a board to administer the facility, and the criteria and skills that are required for a person to be appointed to that board, noting that they would be appointed on a part-time basis. It also outlines the powers of the Treasurer regarding the board and the directions that the Treasurer can make to the board, particularly in respect of the investment mandate of the board. Importantly, it also ensures that there is an investment mandate for this particular board and that they operate within the bounds of the intent of the regulations and true to that goal of improving housing affordability.

In conclusion, can I say that, whilst this is a step in the right direction, we do have some misgivings about whether or not it will fulfil those obligations. But I go back to the point that I made earlier: unless you are tackling the outrageous tax concessions, the overly generous tax concessions, that exist around negative gearing and capital gains tax discounts in the Australian housing market, you are not fair dinkum about housing affordability, and many, many economists have pointed that out. It's a shame that this government is beholden to the development lobby and unable to make that brave decision and act in the interests of Australians, particularly first home buyers, and institute reform to negative gearing and capital gains tax.

In their absence, a future Labor government will, by restricting negative gearing to new investment properties, ensure that we grow jobs in that industry—it has been estimated, by about 25,000 a year—and ensure that there is still the possibility to negatively gear a property but only on new investments, so that first home buyers aren't competing with investors on existing housing stock, and that generally means the bottom of the market, where they go in on existing housing stock, particularly the unit market. Importantly, we will be removing and reducing that outrageous discount that exists for capital gains tax, which was unfunded when it was introduced into the budget by the Howard government. So it's Labor that's acting and listening to the Australian people when it comes to housing affordability.

Julian Leeser (Berowra, Liberal Party) Share this | Link to this | Hansard source

The National Housing Finance and Investment Corporation Bill 2018 establishes a new independent corporate Commonwealth entity which will strengthen efforts to improve housing outcomes for Australians. The National Housing Finance and Investment Corporation will be a financial intermediary with broad functions to enable it to administer an affordable housing bond aggregator and the $1 billion National Housing Infrastructure Facility. The affordable housing bond aggregator will improve the efficiency of financing for community housing providers, enabling them to strengthen housing outcomes. It works by providing cheaper and longer term finance for community housing providers by aggregating their borrowing requirements and issuing bonds into the market at a lower cost than the traditional big banks would. It will operate in a similar fashion to the British bond aggregator, The Housing Finance Corporation, which has help administer five billion pounds in loans to housing associations.

The $1 billion National Housing Infrastructure Facility will help increase the stock and accelerate the supply of housing. It will do so by recognising the importance of early investment in speeding up supply and complementing private sector and state and local government investment. The National Housing Finance and Investment Corporation will be established as a Commonwealth entity governed by an independent skills based part-time board. The board will comprise experts from a range of fields to ensure decisions are robust, responsible and rigorously assessed. The independence of the board in financing affordable housing projects will be paramount. The government will not be able to direct it to make or reject specific investments. The bill includes a government guarantee of all the corporation's liabilities to support market confidence in its housing investments. This legislative guarantee will drive the best price outcome for community housing providers and provide certainty for investors.

This bill today is the result of significant ongoing work and consultation, reflected by the supportive stakeholder feedback. I congratulate the assistant minister for his efforts. Compass Housing Services declared:

Compass strongly supports the NHIC and its potential to address infrastructure bottlenecks that impede development of additional housing.

PowerHousing Australia credits this bill as:

… a positive step to delivering greater numbers of affordable housing dwellings to low to moderate income earners.

When government consults widely as part of a comprehensive, careful and calibrated plan, the end result is legislation enjoying broader support from the sector and its stakeholders. The creation of the NHFIC is fundamentally good news for the housing market in Australia. We're speeding up the supply of new housing through the provision of loans, grants and cheaper longer term finance to registered community housing providers.

This legislation delivers on a key element of the government's comprehensive housing affordability plan to improve housing outcomes for all Australians. The Turnbull government is committed to ensuring all Australians have access to secure, stable and affordable housing. Australia is one of the great home owning democracies of the world. Purchasing your own home is at the heart of the Australian dream; we want that opportunity to continue, and we want to make it as achievable as possible. In my electorate of Berowra in the northern suburbs of Sydney the cost of housing is a source of frustration and stress for many young families trying to break into the market. It's also of great concern to older parents keen to see their children and grandchildren secure their own homes. My electorate encompasses a diverse range of suburbs, but they share a common experience of rapidly rising housing prices in the last five years or so.

For example, Pennant Hills and Hornsby are two commercial and suburban centres in the area. Both are 25 to 30 kilometres, or a 45-minute train trip, from the CBD. Traditionally both suburbs have been home to young families starting out, buying or building their first home, raising their children and getting involved in the local community. In the last six years the median house price in both suburbs has effectively doubled. In Pennant Hills the median house price currently sits at $1.57 million; properties in Hornsby attract $1.28 million on average. Galston is a quiet, semirural suburb 20 minutes from the centre of Hornsby and 40 kilometres from the CBD. By car it takes an hour in light traffic and costs $14.43 in tolls one way. The fastest journey by public transport—bus—is around one hour and 20 minutes, although there are other, slower options. Due to Sydney's transport difficulties, some days it can take hours to get into the city. Median house prices in Galston have risen nine per cent since 2011, with a median property today selling for $1.22 million. Finally, in Cherrybrook, a popular family suburb in my electorate 30 kilometres from the city, house prices there have jumped 106 per cent in just six years to an average $1.53 million.

Young families want to take advantage of the opportunities by living in these beautiful thriving areas close to where they grew up themselves, close to their families, friends and communities, close to their church groups and schools and sports clubs yet the feedback I'm given is that this dramatic price growth is putting them under considerable and unsustainable pressure. It is not uncommon for my constituents to be carrying mortgages in the high six-figures or close to $1 million simply to provide a home for their families. In Berowra, 41.7 per cent of dwellings are owned with a mortgage, well above the state and national average.

I hear all too often about the impact of mortgage stress on families. The cost of servicing these large mortgages combined with paying very high road tolls—my constituents are the most tolled people in Sydney—the cost of child care and the rising cost of living means many people are feeling the pinch. In pursuit of the great Australian dream, my constituents work hard to provide for their loved ones. Doing so requires considerable sacrifice. Nearly half of all working people in Berowra, 47.1 per cent, work more than 40 hours a week and that is three per cent above the state average and four per cent above the national average. In addition, many travel over an hour each day each way to work. It is clear my constituents are working harder and longer to save for or pay off their homes. When they come home from work and look at their children, many of them question how their kids will be able to afford property in Sydney when they grow up. It is these issues that I hear about time and again from my constituents and it is why I support this bill.

There is no one silver bullet to housing affordability; however, the government's reducing pressure on housing affordability plan helps us strive towards the goal of providing opportunity and accessibility for first home buyers, and security and stability for homeowners. We have a dual responsibility to represent the best interests of both purchasers and owners because housing is so critical to the social and economic wellbeing of Australians and the economy as a whole. Unlike Labor, who will take a tax sledgehammer to the market through the removal of negative gearing and a 50 per cent increase in capital gains tax, we recognise the sensitivities of the sector to the economy and the importance of a responsible approach.

The NHFIC bill is part of the coalition's package of measures to address housing affordability. While we rightly look forward to the benefits of the bill, the government can also take pride in the benefits delivered from the implementation of is housing affordability plan so far. In 2015, the coalition committed to cracking down on foreign investment, including fees to acquire real estate and tougher penalties for investors who break the rules. We are upholding strict standards to ensure foreigners are not allowed to buy existing homes. Since coming to government, we have enforced the sale of illegally purchased properties worth more than $100 million compared to Labor who did not sell a single illegal property while in power. We make no apologies for our tough stance. Foreign investment in housing should never be at the expense of the Australian dream.

In early 2017, the Australian Prudential Regulatory Authority introduced lending restrictions on banks to discourage riskier forms of lending to pay for what were, in some cases, overheated property prices. Led by the Treasurer, this government warned the regulators that they needed to crack down harder on high-risk loans. It required banks to limit the flow of new interest-only lending to 30 per cent of the total residential mortgages. The clampdown on interest-only lending had the desired effect, cooling overheated elements of the investor market with interest-only diving 44.8 per cent during the September quarter. This has helped take the heat out of risky investments in the housing market and suppress runaway growth in housing prices.

Whereas growth in Sydney at the start of last year was running on average at over 15 per cent, it's now down to a more accessible five per cent but that's still five per cent off a very high base. Fewer international investors participating in the market provides greater opportunities for first home buyers to get their foot in the door and this has been confirmed by the latest data from the Australian Bureau of Statistics. The number of loans to first home buyers hit a five-year high in November, making up 18 per cent of overall owner-occupier home loans. Concurrently, loans to property investors in November recorded an 8.3 per cent fall year on year. This latest data is promising. But changes to macro prudential rules are not the only measure currently making a real difference.

In December, the Turnbull government legislated the First Home Super Saver Scheme, despite rampant resistance from Labor. This scheme is giving young people a leg up in the housing market through a tax cut which will allow them to save for a deposit inside their superannuation. First home buyers can contribute up to $30,000 into their superannuation, which they can then draw upon at a generous concessional tax rate for the purchase of their first home. For a young couple this means a combined contribution of up to $60,000. This will allow most first home buyers to accelerate their savings by at least 30 per cent. The impact of this supercharged boost to their deposit saving should not be underestimated. We've empowered first home buyers to take control of their financial future through less tax and a savings scheme that rewards their ongoing strides to home ownership. Labor didn't support this approach. They refused to help first home buyers save a deposit, and they refused to recognise the benefits of supercharged savings for young Australians. Labor argued that the scheme would damage the superannuation system, refusing to put faith in the ability of individuals to know what's best for themselves. This government takes a different view. We believe in all Australians. We believe in their ability to salary sacrifice and save in a smart manner so they can achieve that Australian dream, the goal of home ownership.

The impact of these measures cannot be anywhere near as meaningful if supply isn't similarly addressed. That's why in December last year we legislated important incentives for older Australians to downsize from their family home. From 1 July this year, Australians aged 65 will be able to consider the financial rewards of downsizing. When they sell property they have owned for at least 10 years downsizers will be able to contribute up to $300,000 from the proceeds into their superannuation accounts above and over existing contribution restrictions. In the case of a couple, both can take advantage and collectively contribute $600,000 from a sale into super. This is a fantastic piece of news for older Australians looking for a way to strengthen their super savings and make the next move in their lives. Constituents have already contacted me advising that they will be taking advantage of this measure.

This government has a record of delivering solutions to the sector, but we know it's a complicated issue and the federal government alone cannot transform the market. So I'm always encouraged and pleased to advocate on behalf of the people of Berowra who are taking steps to contribute to the process, people like Peter Coyle from Mt Colah, who heads up Absolute Shipping and Modular Homes. Peter recently came to parliament to discuss his proposal to provide high-quality housing through the use of shipping container materials. Peter's company prides itself on its fast completion times, high standards and fair pricing, offering the kind of creative proposals we need in the market. Its modular homes can be ready to move into in 90 days, with a cost to government of about one-third of the current cost of public housing. Peter's company is Australian owned and run and offers innovative designs to its diverse clientele. I applaud my constituent Peter Coyle for his work.

Also actively looking at solutions to a tight housing market is Russell Garnett from Urban Revolutions, a company building 26 affordable microvillas in the Hills district. Russell's approach recognises that housing affordability is an issue that affects all corners of our community, not just families with children. From those affected by family breakdown to young people who are leaving their home for the first time, it's essential we look for ways to ensure affordable and quality housing for all Australians. Russell hopes that choosing the option of a high-quality microvilla might allow low- and middle-income workers to save for a deposit in three to four years instead of the average 11 to 12 years. Russell's efficient approach relies on creative design paired with community vision, building new developments that incorporate a range of shared community spaces along with a smaller apartment. In providing affordable but attractive housing options, Urban Revolutions offers more opportunities for aspiring homeowners to enter the market, regardless of their family size or structure.

I'm proud to be part of a government that is addressing affordability for my constituents. As the government aims to address affordability for the people of Australia, I'm determined to see the people of Berowra benefit too. My constituents work hard to bring up their families, and I want them to know I'm working hard for them here. We often discuss the problems associated with the housing market through the lens of simply providing a roof over one's head. For many in Berowra the access to and affordability of good housing is a lot more than that. Sir Robert Menzies said that a home gave people a stake in the country, and he meant this in terms of homes material, homes human and homes spiritual. We don't just want Australians to have houses, we want them to have good homes—places of family and familiarity. That's the Australian dream. It's why I'm so pleased at the outcomes already being achieved by the government. Fairfax's Domain publication just last month reported that the amount of time first home buyers spend looking for a property has dropped from between 60 and 90 days to between 30 and 40 days. ANZ research reveals that since July 2017 the number of monthly first home buyer approvals has risen more than 60 per cent in New South Wales and 50 per cent in Victoria. The coalition is ensuring the Australian dream is still achievable. I commend the bill to the House.

Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Link to this | Hansard source

In speaking on these bills, the National Housing Finance and Investment Corporation Bill 2018 and the National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018, debated jointly, can I say that it seems almost a contradiction that we live at a time of very low interest rates, yet housing has never been more unaffordable. Indeed, we see falling home ownership rates and have done so for several years. This is at a time when interest rates, certainly in my recollection, have never been lower. It is not just now that they have never been lower; we are talking about several years. The reality is that, for many of the younger generation, their dream of ever owning their own home will never be realised, unless they have a rich parent, which was the view of a previous Treasurer of the coalition government. He said that, if you wanted to own your own home, just be born into a family with rich parents. Of course, you could inherit a home from your parents once they die. Even that is becoming more risky because, as we know, many elderly people are no longer able to maintain their own home and are entering into a reverse mortgage situation to survive themselves. By the time they come to the end of their life, one wonders what they will have to pass on to their children.

Home ownership for the younger generation is, quite frankly, a matter that seriously concerns me. It concerns me because I believe that home ownership is important. Home ownership is what creates family stability. It also creates community stability. When people own their own home, they take an interest in the community in which their home exists because they are part of it. If they don't own their own home, they know full well that they may float from one residential area to another. They lose the sense of belonging to a community that in turn reaches out to provide all of the community facilities and support structures that are required in order to have a healthy community.

The reality is that today the value of a home is 10 times or more the annual salary of a person who works. Fifty years ago, it was three or four times more. We can see that there's been a huge shift with respect to how expensive owning a home is today compared to four or five decades ago. That, in my view, reflects a serious national public policy failure on the part of both federal governments and state governments, which share the responsibility for home ownership. For most people, the issue of owning their own home goes to the heart of their financial planning. A home, whether you are paying a mortgage or renting, accounts for the largest amount of weekly outlay for most people. Whether you rent or own your home, it doesn't make a lot of difference because, in both cases, it goes to your hip pocket, affordability and the cost of living. The reality is that, as housing prices go up, so do rents, so the two go hand-in-hand.

I believe there are several reasons why housing affordability is declining. Firstly, it goes to state governments and the demise of their investment in housing. Years ago, state governments invested considerably in public housing, particularly in the sixties and seventies. The rate of investment by the state governments across Australia has dropped, and perhaps it's dropped because they have received less funds from the federal government as well. But it has dropped, and so we've seen a decline in public housing.

Secondly, we have seen the closure of public banks that in years gone by were established with the prime purpose of providing low-interest loans for housing. Certainly in South Australia that was the prime objective of the State Bank of South Australia. Yes, it branched out into other areas later on, but initially that's what it was set to do, and it did indeed provide lower-interest loans specifically for housing that all of the competitive public banks in the state.

Thirdly, we have state and local governments now charging for infrastructure up front, which means that the cost of the land on which the houses are built has reached a point where it well exceeds the cost of the house itself. That's because the infrastructure is being paid for up front. That was never the case before. The houses were built and then through the rates paid local governments and state governments in turn provided the utilities and other infrastructure that was required, sometimes over many years. In some of the older parts of Adelaide there are streets that still do not have all of their footpaths, but it is an ongoing program for those councils and they will ultimately get their footpaths.

The fourth matter is the negative gearing tax laws that have been talked about time and time again and which the coalition government simply turns its back on but which are adding considerably to the cost of housing. The Grattan Institute suggests that each year about $5 billion is added to the annual cost to revenue as a result of negative gearing tax laws. We then have discounted capital gains tax laws as well, which add about another $7 billion to the cost to revenue, according to the Grattan Institute.

Lastly, we have the incursion of foreign buyers. I'm aware there is another piece of legislation that tries to address that matter, and it's a matter that I have been talking about for several years. The incursion of foreign buyers has made a difference to the price of housing in Australia and it will continue to do so.

This legislation is a rather paltry response to what is indeed a very serious issue. The legislation establishes a $1 billion fund to assist with housing in Australia. I'm not sure over what period the $1 billion is meant to last, but it establishes a $1 billion fund. The reality is that to me it looks more like a $1 billion slush fund. It's made up of $600 million as concessional loans, $225 million in equity investments and $175 million in grants.

Now let's look at who can apply for these funds. Essentially, the money is targeted towards state and local government entities. Concessional loans are of little value to state and local government entities when they already have access to low-interest loans through their own financial institutions. For example, in the state where I come from, the South Australian Local Government Finance Authority already sources low-interest loans on behalf of councils through its own means. It doesn't need the federal government to provide it with low-interest loans. And so I see little value in having a low-interest loan facility for entities that already have that access.

Secondly, with respect to the equity investments and the possibility of grants, I have a real concern that those entities—local governments and state governments—may well apply for funds to fund infrastructure and projects that they would otherwise already be responsible for and that they will simply be reaching out for money that's available to fund existing commitments that they have. And so again I have some real concern about that source of funding. I see the fund being used in a way which it was never intended for even if it is for a project which the council doesn't have on its books now or the state government doesn't have on its books right now but may well in the future. It will simply say, 'In the past we would have relied on a different source of funding stream, but now we can actually apply to the federal government and see if we can get a grant, a loan or an equity investment in order to fund works that otherwise we are responsible for.'

There are other matters that concern me with this legislation and one of them goes to this: because local and state governments have off-loaded their housing development responsibilities of past years, they have been left with little expertise in the housing market. So for them to now access funds for what I would suggest are going to be relatively small projects in comparison to what they used to do, it means they do not have the expertise to manage those projects in the most efficient way. If they were going to go back into public housing in a big way, they would establish the departments and the key personnel that they need to be able to get back to an efficient level. But they won't if they're just dealing with projects here and there. So I see that there are inefficiencies in handing money to organisations who currently do not have the expertise to be in the housing market. That certainly does concern me. Even if they can build the properties as efficiently as the free market can, where are the savings if they are no cheaper than what the free market can build? Where are the savings to the end user who is ultimately going to be the person or family who rents or buys that property? There will be none. If there are none, how is this going to help with housing affordability in Australia?

We don't know from this legislation just what conditions will apply to the loans or grants, who is going to be able to get them and how they will actually be managed, because those are decisions that are going to be made by the board. The qualifications of the board members, just looking at the list I've seen, would suggest that they are all going to be the professional class of people that we have in this country. There is no representation from perhaps real people, real families or working people; they are all white-collar professionals. Yes, we should have some of those, but I'm not convinced it should be made up entirely of that class of person. More importantly, they are going to be hand-picked by the minister. We know full well that the minister will pick the people that he or she chooses not necessarily for the reason that they are the best people for the position.

Furthermore, the board will be exempt from freedom of information provisions with respect to who they make grants to, who they provide loans to, who they invest with, et cetera. The argument there is that they're dealing with commercial-in-confidence documentation, so the freedom of information provisions shouldn't apply. Given that most of the applicants for this funding are likely to be state or federal government bodies—in fact, that's almost one of the criteria of the legislation—why shouldn't the public have the right to know what other government departments are doing with their money? I believe they should. I believe that the freedom of information denial in this legislation is inappropriate.

In closing, I have concerns about this legislation because, quite frankly, as I said from the outset, I see it as an opportunity by the government of the day for pork barrelling. I don't see enough clarity about how the funds will be used, how they will result in cheaper housing for people and how the broader Australian community is likely to benefit. I do see it as a paltry way of this government suggesting that they are doing something about affordable housing. I understand the legislation is going to be referred to the Senate Economics Legislation Committee. I welcome that because I believe some of the matters I have raised may well be addressed as part of those hearings. I certainly look forward to hearing from the committee in terms of their report back to parliament.

The last comment I make is in respect of the member for Berowra, when he talked about the government's own initiatives in this respect. The initiative about putting superannuation funds towards a person's housing simply says to the Australian people, 'You can have superannuation for your retirement or you can have housing, but you cannot have both.' Quite frankly, that is not an appropriate way to deal with this serious problem. What we are trying to do is give people a home and let them have their home and a life after they retire.

Emma Husar (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the National Housing Finance and Investment Corporation Bill 2018. The bill establishes the National Housing Finance and Investment Corporation, which is designed to operate a housing bond aggregator and administer the National Housing Infrastructure Facility. Once established, this corporation is intended to issue bonds to financial investors and then provide financial assistance to meet the lending requirements of multiple community housing providers. The financial assistance in this will be provided through concessional loans, grants and other financial instruments.

Last year in April, which is almost 12 months ago, Labor announced that we would establish a bond aggregator to increase investment in affordable housing. That was a year ago. We in Labor are focused on helping community housing providers to access cheaper finance to invest in new affordable rental housing. This was back in April last year.

The National Housing Infrastructure Facility is intended to provide financial assistance of up to $1 billion. The facility comprises $600 million for concessional loans, $25 million in equity investment and $175 million in grants. Last year we were worried that the announcement of the $1 billion infrastructure facility was simply a Liberal slush fund, because there were no details about the allocation of funds. In fact Treasury, at Senate estimates, had said that nothing had yet been set in stone.

This bill sets out the corporation's function to make loans, investments and grants to improve, directly or indirectly, housing outcomes; determine terms and conditions of these loans, investments and grants; and provide, to registered community housing providers, business advisory services and other assistance in capacity building. The bill also establishes the corporation's board, whose members must have appropriate qualifications and skills or experience in one of the following fields: banking, finance, law, housing, infrastructure planning, financing, local government or public policy. There is no diversity, though, in that board—not one person who is an end user of these houses, not one person who is an ordinary, average member of the community, not a single person on this board who represents someone who will benefit from this kind of housing.

The bill states that the Treasurer may give the board of the corporation directions about the performance of the corporation's functions, which constitute the investment mandate. The investment mandate may include, and is not limited to, the strategies and policies to be followed for the corporation to function effectively; decision-making criteria for making loans, investments and grants, granting financial assistance to the states and territories and providing services and assistance to community housing providers; and risk and return relating to the corporation's investments. We need to ensure transparency on this board. The fact is that the Treasurer or the minister directly responsible for this is in charge of everything to do with it and there is no transparency whatsoever. They have already said that they will not be subject to the Freedom of Information Act.

Labor has been leading the policy arguments and the policy debates in the areas of housing and housing affordability. If we left it up to the guy from Point Piper also known as the Prime Minister, I don't think we'd have any action at all, because you'd need to be from the real world to understand the real-life problems that people in everyday communities are facing. The Turnbull government is lacking commitment on affordable housing, and it has failed millions of Australians when it comes to adequately dealing with housing affordability. It is not doing enough, quite frankly, to understand what the future needs for affordable or community housing will be.

What we've heard over the last couple of years in the debates from those in the government has been that you can get rich parents. You can simply own a house by just having a couple of wealthy parents. Just choose your birth family when you're in utero, somewhere along the way, and get a couple of rich parents. If that doesn't work, you could always follow the former Deputy Prime Minister's advice, and you could move into the country. Well, we all know why he moved to the country—because there was free rent. Or you could just stop eating avocado on toast. That was going to be the other solution. I've not been eating avocado on toast for quite a number of weeks now, and I still can't afford to buy my own home. The Prime Minister is the richest landlord in this country, which goes to the point about him being completely out of touch on this matter.

It's not a surprise that we have the lowest rates of homeownership in this country in about 40 years. The population out in Western Sydney, which I have the very great honour and privilege to represent, continues to rise—we'll have more people living out there on the west side of Parramatta than we will on the east—but so too do house prices, and housing affordability in my community is a massive, massive problem. Working men and women are being forced to work longer and harder to scrape together a deposit, yet the goalposts keep on shifting further and further away because of the price rises that are flooding that market so very quickly. They deserve to be able to afford their own home.

The only plan that the Liberals have on this is to allow young people to draw down on their superannuation, which will only give first home buyers more money, put more heat into the market and push up house prices even further. Only Labor has a real solution to tackling this problem. We've been working hard to put together policies that will be fair and ensure that hardworking men and women in communities like Lindsay can afford a home. The Prime Minister and this out of touch government simply don't understand the problem, so they'll never be able to find or fill a solution. I mean, it is pretty hard, looking out from Point Piper, to understand that the rest of the world doesn't stop at the Harbour Bridge! There's a whole community, there's a whole world beyond that Harbour Bridge view. They're more interested in giving a leg up to wealthy property investors than in making the system fairer for first home owners.

Labor know that it is an issue of fairness, so we're putting forward comprehensive policies that make it fairer for families to own their own home. More than two years ago, Bill Shorten launched federal Labor's housing affordability policies, reforms to negative gearing and the capital gains tax discount. I'm not going to lie, when that first came out I was a little bit scared. I thought, 'Well, this is going to be problematic for us.' But as we talked through this reform and why it was important to people in my community—as I had conversations with people at railway stations, on their front doorsteps, in shopping centres and at mobile offices—people understood it. People that owned second homes and were using them as their superannuation investment or as their nest egg started to understand, too, that this was a problem. There is an appetite, I will say, amongst some responsible property owners who have investment properties, to keep their investment properties affordable. They know that they are not served by rents being so extraordinarily high that no-one will ever be able to afford to rent there.

People are starting to get on board with Labor's plans because they understand that there needs to be some change in the space. Unfortunately, though, we don't see the Prime Minister concerning himself at all with the need to reform negative gearing or capital gains tax. He's more concerned about the $65 billion he wants to give away to his big mates at the big end of town, let alone understanding that people in my electorate care about the cost of living, stagnant wages and how much the weekly budget is to put a roof over their family's heads. The roof over their heads is simply that, a roof over their heads. You cannot make a home in a property where you're determined by a landlord or where you are stuck in a rental cycle. That's a temporary solution; that does not make a home.

We heard the Liberals promise to make power bills $550 cheaper per year, but what happened? Households in Sydney have had an annual bill increase of close to $1,000 since 2013, adding massive pressure to the already stretched budgets of these families. Our reforms to negative gearing and the capital gains discounts return $39 billion to the budget bottom line, but more importantly they put first home buyers on a level playing field with property investors.

Just last week we had the International Monetary Fund release its latest article for consultation with Australia. I always come into this place and I say that I'm not an expert on all of these things. It is our responsibility, it is our duty, to defer to the experts. When it comes to the International Monetary Fund providing advice, they're expressly stating:

On the investment side, the combination of high capital gains discount rates and unlimited negative gearing can encourage leveraged real estate investment in market upswings. While similar tax incentives are also present in other countries, they tend to be more limited.

We have the most generous concessions for investment homeowners in the entire world. The International Monetary Fund goes even further, saying:

The capital gains discounts on housing should be reduced and other tax incentives limited.

Now, that's the International Monetary Fund's advice to us. It is pertinent that we listen to experts when it comes to making decisions about things that affect the rest of the country, not opinions and things that we think will make us friends. The IMF endorsed changes to negative gearing and capital gains tax. The IMF surmises that the Commonwealth's housing tax settings favour leveraged housing investments in upswings that might encourage excess demand for housing—a point that federal Labor has been making year on year while we've been in opposition. Only federal Labor has a plan to tackle the housing affordability issue for all Australians, establishing a bond aggregator, boosting homeless support and re-establishing the National Housing Supply Council and a federal minister for housing.

We need long-term commitment to a long-term problem that is not going to go away. We know that the fastest-growing group of homeless people in this country is our older women. They get into that situation for a number of reasons, but it is not acceptable that women in their 50s and 60s are becoming homeless because of this absolute travesty that is allowed to unfold because the government are so stagnant on taking any action. Where are the coalition's real plans for affordable community and public housing for our most vulnerable people, like these women, who need access to housing? They come at it with a piecemeal approach. Where is the community infrastructure in these developments? Communities don't just need a roof over their heads; they also need transport, medical service, education options and, most of all, jobs located nearby. We see the government lacking in answers, lost for real solutions to the growing issues of inequality in the housing markets and the impact on struggling families. You don't need to go any further than to listen to their comments about 'getting rich parents'. I'm surprised they've stopped short of saying, 'Get a rich husband or get a rich spouse.' I'm sure that we're not too far from hearing that from one of them, though.

When the National Housing Infrastructure Facility was first announced last year, we had concerns that it was going to be a $1 billion slush fund. While the exposure draft of the investment mandate direction suggest this is less likely to be the case, concerns remain over the extent to which the facility will actually contribute to increasing the stock of affordable housing. We do want more than greenfields portfolio developments and investments for new private market owner-occupied housing or new private market investment rental housing that line the pockets of already wealthy investors. We want real solutions to the crisis facing the affordable housing market and those people who are directly affected.

As I said before, we're not going to oppose the passage of this bill through the House, and it will go through a Senate inquiry to ensure those issues are properly dealt with. We need to do more to tackle housing affordability and meet the pressures and demands on the Australian housing market—and we need to stop stalling. We need to stop with the excuses and the inaction and actually get on with it. I come into this place, day in, day out, to listen to those in government constantly blame us for everything that goes wrong. I don't know if they've realised that they're in government or that they've been in government for the last five, going on six, years now. They've suffered through a couple of Prime Ministers and a couple of Deputy Prime Ministers. I get it—it's a thing—but they need to actually take that position of privilege and power and do something with it for people who most need it.

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

We've got a housing crisis in Australia. When you have a situation where young people look at not only owning a home as being out of reach but even renting a home in an area near where they might work or study as being, for many, far more than they can afford, then you know you have a problem. It is reflected in the historically low homeownership rates. It is harder than ever for young people to get into the housing market.

It's no surprise considering the way that we've set up our tax system in this country, which gives incentives and billions of dollars every year to people who've already got two, three or four houses. They can go and buy an extra one if they already have a home and get a big tax break from the government, but, if you're a first homeowner, you sit back and watch, auction after auction, as the bids just keep going up and up because the people who are buying the houses probably already have a house or two, and they know that, no matter how much the house costs, if they rent it out and write it off as a loss, they will get a big cheque from the government to cover some of that loss. Not only that, in a few years time they'll get to sell that house and get a tax cut on the proceeds from selling it as well.

The system is rigged against first home owners and the system is increasingly rigged against young people in general. We're talking about people who might think about having the dream of owning their own home one day, but, when you see that about one in three young people in this country either haven't got a job or don't have enough hours of work so that they've got a job but haven't got enough income, you start to understand that we are reaching crisis point in this country. A big part of the reason that we are in this situation is, as I've said, our tax system, which gives billions of dollars a year to people who've already got a home to buy their second, third or fourth home, but also, in the last few years, governments have stopped doing one of their core functions, which is to make sure that people's humans rights are being respected—and that includes the right to have a roof over your head.

Governments should look at housing the same way that they look at schools or hospitals. If we turned away hundreds of thousands of people from schools every year because there simply weren't enough schools built, or we weren't paying enough teachers, there would be an outcry—and rightly so. But governments seem to think it's okay that we've got tens of thousands of people in one state alone being homeless, and a public housing waiting list of between 30,000 and 50,000 in my state of Victoria. People seem to think that's okay.

As to my electorate, the last time I looked at the stats, my electorate had more public housing than any other electorate in the country. You see it in those big tower blocks as you head into and out of and around Melbourne, and you see it in all the low-rises as well. But most of those were built in the sixties or seventies, and there hasn't been a government, large-scale, new build of public housing since that time. Despite the fact that the population has grown, there has not been an increase in public housing stock.

And it's not just in my electorate of Melbourne—although I see it there most acutely, because I spend a lot of time in public housing, and we've got the most in the country, according to the last stats I've seen. It is happening right around the country. All state governments, whether they're Labor or Liberal, are not building enough public housing, and the federal government has taken its eye off the ball there as well.

The problem is that if you don't build enough public housing then there's not enough supply at the bottom end, of cheap rents, and it allows the rent for everything else to get pushed up. So if we wanted to put a roof over people's heads, and if we wanted to bring down the cost of renting to a level where it was affordable, and if we wanted to start taking the heat out of house prices, one simple solution would be to go back to what governments used to do and build more public housing. That's not because everyone who needs an affordable home would go and move into public housing, but if you built a lot of public housing then you'd take a lot of people out of the bottom end of the market, you'd lower rents proportionally, and then the rents everywhere else would fall as well.

So one of the first things that we need to do is to get back to basics and say that one of the things that governments should be for is making sure everyone's got a roof over their head. If we looked at housing in the same way that we look at schools, governments would be building more public housing, and we would not see the situation that we have in my home state of Victoria. There we saw the Liberals try and sell off the existing public housing. Now Labor is trying to do the same; instead of building more, they're trying to flog it off.

We need to get back to thinking about public housing as a community good. Then what we could do is to use some of those billions that are going to negative gearing and capital gains tax exemptions—tax breaks for the very wealthy—to also build another layer of affordable housing. And there are some really good ideas out there. Some people have said, 'Why not look at our super funds'—which I think have $2 trillion under their control; I stand to be corrected, but it is something like that. Why not say, 'Let's work out a way of getting all that money'—which, in fact, is guaranteed savings for them, because, by legislation, employers have to put money into there—'and find a way of giving super funds, for example, the right to build and buy properties that are just built to be rented out at below market rates.' So why don't we do that? Why don't we start actually building some infrastructure here, using some of the savings that we have in Australia, to build or rent things out at below market rates?

I hear someone from the Labor side laughing as I suggest that, and I remind them that that was actually something that was on the books, in my suburb of Kensington, under a Labor government; they were talking about building one of the new housing developments and selling off some of it for key workers who work in the city but who just can't afford to live near the city. So you might build some new housing developments and either rent them out or sell them at affordable rates, so that the people who come in and clean in the CBD offices don't have to spend all their money on petrol and car parking to get into the city but might actually be able to live near the city, or so that the essential service workers who service the city could come and live near the city as well.

So there are some good ideas out there. If we built a lot more public housing, and also encouraged a lot more affordable housing, we could do it. But it takes a bit of guts. It takes a bit of guts to stand up and say, 'We need things like rent control.' We need things like governments actually being prepared to borrow to fund the infrastructure that we need to make sure everyone has got an affordable roof over their head. And it means saying that it might be time for the federal government to reconsider its role in this area.

We went to the last election, as we have gone to elections before, saying it's time to start pooling some of the government money, taking it out of the tax breaks that we're currently giving from capital gains tax and negative gearing. Let's take that money and instead put it into a new housing trust or an affordable housing corporation that would allow for the massive expansion of public housing and affordable housing around this country. They say imitation is the sincerest form of flattery so it's no surprise that a government bereft of ideas of its own has seen the idea of an affordable housing corporation and picked it up and tried to appropriate it. But as is always the way with this government, it's more the veneer of being seen to be doing something rather than actually doing something itself because the amount of money that the government is proposing to put into this, on current reading, still isn't going to touch the sides. We are still going to see young people unable to buy their own home, we are still going to see public housing waiting lists in the tens of thousands and we're still going to see people continuing to remain homeless. When you have a situation where housing services say that they're turning away 50 per cent of the people who come to them seeking help get turned away because the services don't have the money to deal with them, you understand the scale of the problem that we are dealing with.

I look forward to this bill being scrutinised as it goes through the Senate because there are a lot of questions to be answered as to whether it's going to do anything useful or whether it has the appearance of doing something useful. The government does have form in picking up ideas that are good ideas and trying to put them into practice. But at the end of the day, the test has to be this: do we think it's right in this country that ,going back to the 1990s, a house cost on cost on average six times a young person's income but fast forward a couple of decades and it now costs 12 times an average young person's income? That's the situation we have at the moment.

I fear that this government's attempt to be seen to be doing something about housing is not going to fix the problem because the pea under the mattress in all of this is that our tax system pushes up house prices. As long as we have unfair tax breaks in the form of negative gearing and capital gains tax, then the government might be pushing very gently with one hand against house prices but, with the other hand, they're lifting up house prices by allowing negative gearing and capital gains tax exemptions to remain in the budget. The government will be wasting money if they don't tackle the big problem and the big problem is our tax system.

Another big problem is government mentality and unwillingness to build the housing that we need. We need to start saying in this country that housing isn't to be treated like another asset like shares, housing isn't something to be invested in—and I know some members of parliament on the government side have over a dozen investment properties themselves—housing isn't something to be treated like an asset class, but that housing is a human right. And until every person in this country has an affordable house, whether renting or buying, we've failed. So I'd urge the government, as this bill progresses through the parliament, to listen to the recommendations that might come from the Senate inquiry but also to stop backing in their rich mates and to finally get rid of those negative gearing and capital gains tax exemptions that are working against first home buyers and making their lives a misery.

Michael Sukkar (Deakin, Liberal Party, Assistant Minister to the Treasurer) Share this | Link to this | Hansard source

Firstly I thank all members who have contributed to this debate. The National Housing Finance and Investment Corporation Bill 2018 and the National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018 deliver an important part of the government's comprehensive housing affordability plan by establishing a new independent corporate Commonwealth entity, the National Housing Finance and Investment Corporation, to strengthen efforts to improve housing outcomes for all Australians. It's clear—and has been remarked upon by many members on both side—that housing is critical to the social and economic wellbeing of Australians and the economy as a whole. It can impact on employment, education and health outcomes, and is a significant driver of investment, productivity and participation. However, housing affordability is a complex and multifaceted issue which requires a comprehensive understanding of the different parts of the housing market and the underlying drivers impacting upon housing affordability. While land supply is primarily a state responsibility, the government recognises that housing supply has not kept up with demand, particularly in major metropolitan areas, and this has contributed to sustained increases in housing prices. For example, for first home buyers the number of years needed to save a 20 per cent deposit for a home in Sydney or Melbourne has increased by more than 60 per cent over just the past decade.

Housing affordability is also impacting upon the most vulnerable. Despite significant Commonwealth expenditure on housing, totalling $7.6 billion in 2016-17 comprising $4.4 billion in Commonwealth rental assistance and $3.2 billion in housing and homelessness funding, housing outcomes have not improved. For example, the COAG performance report dashboard shows that very little progress has been made on the benchmark in the National Affordable Housing Agreement to reduce by 10 per cent the proportion of low income households experiencing rental stress. In addition, waiting lists have increased, with around 40,000 Australians currently on waiting lists for community housing and an additional 148,000 on public housing waiting lists. The challenge of being unable to access secure and affordable housing has flow-on effects for the functioning of communities. Housing unaffordability has resulted in key workers such as police officers and teachers being unable to afford to live near police stations and schools and participate in the communities in which they serve.

While there's no simple solution to the complex problem of housing affordability, these bills are one element of the government's comprehensive package that seeks to improve housing outcomes across the housing spectrum. The plan to reduce pressure on housing affordability is focused on three key pillars: firstly, boosting the supply of housing and encouraging a more responsive housing market; secondly, creating the right financial incentives to improve housing outcomes for first home buyers and low to middle income Australians; and thirdly, improving outcomes in social housing and addressing homelessness. These bills establish the corporation and its governing independent skills based board to enable it to administer the $1 billion National Housing Infrastructure Facility and an affordable housing bond aggregator. The infrastructure facility will help finance the critical infrastructure needed to unlock and accelerate new housing supply, particularly affordable housing. The financial assistance available will encourage and complement private sector and state and local government investment and facilitate the delivery of critical housing related infrastructure that otherwise would not be built, or not for some time.

The government anticipates that the infrastructure facility could also support the development of mixed tenure projects, a combination of affordable and private housing that provide broader community benefits, including housing, that enable key workers to live near the places where they work. The infrastructure facility could assist this nascent sector to develop further and to leverage other sources of finance, such as superannuation funds. The government has committed $1 billion which may be distributed by the infrastructure facility in the form of up to $175 million in grants, with the remaining balance being used to provide loans and other investments. Eligible infrastructure projects include transport links, power and water infrastructure, and site remediation works. State, territory and local government owned corporations, utility providers and, importantly, registered community housing providers will be eligible to apply for these funds.

The corporation will also need to ensure it funds projects that satisfy the appropriate regulatory and environmental standards. It's our view that the infrastructure facility will grow over time as the corporation reinvests the capital and earnings gained through the infrastructure facility. An important feature of the facility is that it will tailor its provision of finance to best suit the needs of individual projects, with many concessions calibrated to the particular circumstances of the project and limited to the minimum amount of assistance required to enable a proposal to proceed.

In the case of the bond aggregator, this will improve the efficiency of financing for community housing providers through the provision of cheaper and longer term loans, enabling those providers to improve housing outcomes for existing clients and potentially build scale by providing services to new clients. Community housing providers offer support for our most vulnerable through the provision of housing to those on very low to moderate incomes or those with unique or additional needs. The finance offered will be tailored to the needs of those community housing providers and funded through the issue of bonds, backed, importantly and quite celebrated in the sector, by a legislative guarantee which will drive the best price outcome for providers. Institutional investors will also benefit as they've expressed a clear appetite for social impact investments, which help to deliver better outcomes to the community at large.

The details of the infrastructure facility and bond aggregator are to be contained in the investment mandate to be issued under the bill. In line with the practices of other Commonwealth corporate entities recently established, the government will outline its expectations of the corporation in the investment mandate, but it will not be able to direct the corporation in relation to particular loans, investments or grants in relation to specific projects. Providing the particulars of the corporation's activities in the investment mandate rather than the bill allows the legislative framework to be flexible and nimble to adjust to the needs of the community housing providers as and when that occurs.

A key design feature is the corporation's independence from government. All financing and investment will be made by the corporation's independent skills based board. The independent board will be comprised of experts from a range of fields, including banking and finance, social and affordable housing, and infrastructure planning and financing, to ensure that decisions are sound and commercially based. Independence of the board's decision-making will cultivate credibility, we hope, in financial markets and will provide the board with the flexibility to perform its functions effectively and efficiently and tailor finance to the needs of recipients, being mindful of the risks involved. The experience of the Housing Affordability Fund underlined the importance of the independent decision-making. Indeed, the Australian National Audit Office noted that there were serious shortcomings in the administration of the Housing Affordability Fund and that some proposals that were approved were not selected on a merit basis or in accordance with established guidelines. We don't want to make those same mistakes.

An important feature of the primary bill is that it provides a legislative guarantee for the corporation's liabilities for at least five years of the corporation's operation. This bill provides for the guarantee to be potentially withdrawn in future if it's deemed to be no longer required. This would be dependent on both the corporation achieving sufficient maturity in scale and the community housing sector taking on a larger scale and more prominent role in submarket rental housing, including, importantly, through partnerships with the private sector and, of course, institutional investors. To provide certainty to investors, it may only be withdrawn by the government on a prospective basis after 1 July 2023 and with at least 60 days notice. The availability of the guarantee will therefore strengthen market confidence and improve the corporation's ability to achieve its underlying purposes.

In the medium to long term, the corporation is intended to be financially self-sustaining, which means it won't require ongoing support through the budget. The corporation's profits and funds returned from its investments will be available for reinvestment. In time, the corporation may accumulate surplus funds and be in a position to return a dividend to the Commonwealth. Importantly, there will also be a review of the operation of the bill after three years of its commencement to assess if the corporation is delivering the intended benefits that we all hope it will.

Passage of the bills during the current sitting period will facilitate the necessary preparations to enable the corporation to undertake its infrastructure facility and bond aggregator from 1 July 2018. The associated consequential amendments and transitional provisions allow the entity to be established before it starts making investment decisions on 1 July 2018.

The associated National Housing Finance and Investment Corporation (Consequential Amendments and Transitional Provisions) Bill 2018 also amends the Administrative Decisions (Judicial Review) Act, I should note, to exempt the corporation from the requirement to provide a statement setting out the findings and reasons for any decisions relating to its activities where requested—for example, by an unsuccessful applicant. This exemption ensures the efficient administration of the corporation and is consistent with previous exemptions provided to similar bodies, most notably the Export Finance and Insurance Corporation.

Further, that bill also amends schedule 2 of the Freedom of Information Act to exempt the corporation from the requirements of that act in relation to documents pertaining to any of its commercial activities. This exemption applies to the commercial activities, again, of other similar entities, such as the NBN Co and Indigenous Business Australia, and is consistent in those terms.

I therefore thank all members who have contributed to this debate and commend these bills to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.