Matt Burnell (Spence, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak today in support of the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. This bill is another example of the Albanese Labor government putting legislation before this parliament to fulfil a commitment made to the Australian people before this year's federal election. This bill is one that many, particularly seniors lobby groups, have been crying out for for some time. This bill sensibly aims to reduce the impact and therefore a potential impediment for someone on income support payments thinking of selling one family home and buying a new one without falling foul of the assets test for an increased period of time.

Whilst not the only beneficiaries of the provisions in this bill, age pensioners will see significant benefits as a result of these changes, and it goes hand in hand with our government's commitment to support pensioners to live with dignity and ease cost-of-living pressures for them and, indeed, for all Australians, particularly those doing it tough. This bill will benefit around 6,260 age pensioners, 600 disability support pensioners, 380 carer payment recipients and 830 JobSeeker recipients each year, with roughly 60 per cent of those being women.

I'm always keen to take an interest in legislation before this place concerning amendments to social security law. My electorate office, like those of many members here in the chamber, naturally receives quite a heavy flow of inquiries relating to social security payments daily. Another possible reason for this case load could be down to the raw numbers—a big reason why this policy area is of great interest to me. My electorate of Spence, according to the latest available data, is in the top third of the 151 electorates for our number of age pension recipients. It is the sixth-highest for carer payment recipients, has the second-highest number of JobSeeker recipients and ranks first for its number of disability support pensioners.

It is worth noting from the outset that this bill does not claim or intend to force people to downsize their homes. It is merely to make the decision-making process one goes through with such an undertaking a bit easier, with less time pressure. This bill aims to minimise the barriers one faces when making important life decisions such as this, whether those decisions occur by circumstance or by design.

Even without the amendments this bill is introducing, 8,000 pensioners downsized last year. There are many and varied reasons why someone may wish to downsize their home, no matter what stage of life they are at. Many people out there might look to downsize due to all their children leaving the nest, meaning a larger house could now be made available for a larger family that would be able to utilise it. Many choose to downsize simply due to retirement. For some, it is due to an inability to maintain the home or yard, which I know is a cause of great sadness for many people who have spent many hours impeccably maintaining their gardens over several years. Another reason—and this goes to my last point—is the need for some people to literally downsize their home, where mobility issues prevent them from being able to traverse multistorey homes or continue with larger-than-necessary upkeep costs for their homes. Others have more tragic circumstances guiding their decision to downsize, such as losing a spouse, whether that be due to the death of their partner or to the breakdown of their relationship. These are all unfortunate facts of life that can occur no matter what stage of life someone is at.

I have not touched on all of them, but the fact remains that, despite one's situation in life or circumstances, this government is eager to make the transition easier and make the process more adaptable to sometimes unavoidable and unforeseen circumstances that might hamper or prolong the process of someone buying or building their new home after sale of their principal home. Despite the long list of reasons which I've mentioned, ultimately the motivations that contribute to someone's decision or need to downsize, whilst important, aren't entirely so for the purposes of the bill. What is important, however, is that, despite what has brought someone to downsize, they needn't risk losing income support payments or their pensions as a result of those circumstances, which I know is a cause of a lot of anxiety for many, especially when these life decisions are more out of necessity than choice.

This bill, concisely, has two core goals for people that sell their home from 1 January 2023: (1) to increase the time frame before the proceeds of a sale of a principal home impact an income support payment by way of the assets test; and (2) to apply a lower deeming rate to those proceeds to reduce the chance of an income support payment recipient falling foul of the income test requirements of their payments. Additionally, this bill aims to complement several other changes that this government committed to enact, such as freezing deeming rates for two years and allowing for providing for those 55 and over to make a one-off contribution of up to $300,000 of those proceeds to their superannuation funds.

Currently, as things stand, after the sale of your home, the proceeds of that sale are exempt from the income test for a period of up to 12 months. This bill doubles this to 24 months, with the potential for an additional 12 months in certain circumstances. These are some commonsense amendments to the law as it stands. They account for the known unknowns that could happen, whether it be delays on a building or renovations due to development approvals, or builders or tradies going bust or AWOL partway through, just to name a few possibilities. It's the things that you'd rather not happen but that are ultimately outside your control and not something you would want being the sole cause for your income support payments being unduly impacted.

After the assets test, the second key issue that this bill aims to address is the income test that many income support payment recipients must abide by. Currently, income above $56,400 for singles and $93,600 for couples, on the proceeds of a sale of a principle home, is deemed at the rate of 2.25 per cent per annum. During the increased exemption period provided for in the bill, the lower deeming threshold of 0.25 per cent will apply to deemed income from these proceeds instead, where it currently applies to deemed income below these thresholds. As a result, this bill will greatly assist many to swim between the flags, so to say, by way of a social security income test and not have their payments slashed or reduced to zero while they continue to make arrangements for the eventual purchase of their principal home or finalise renovations and improvement to it after that purchase.

We, of course, cannot ignore what is a clear reason for the introduction of this bill, which is the current state of our housing market. The provisions within the bill better account for significantly higher house prices. This is relevant for the application of both the assets test and the income test. As things currently stand, given the state of our housing market, most of the proceeds of a sale will have income deemed at a higher rate. Many income support payment recipient wouldn't continue to be eligible for their payments due to the assets test thresholds. Though I briefly touched on this a little earlier, whether this is a direct intention or a by-product of this legislation, it will go a long way to increasing the availability in the market of dwellings that are perhaps more suitable to younger or larger families. While this is no silver bullet solution to the problem in its entirety, I'm happy to commend it as an outcome just the same.

Lastly, though I was elected to this place recently, I have been proud to see, in action, our government fulfilling its election commitments. I am proud to be part of an Albanese Labor government that moves to support all Australians through challenging economic times in practical ways, whether it be through sweeping measures or by enacting sensible changes to our social security laws, such as this, changes many have called for over many years, which will assist many Australians out there that are about to go through the arduous process of opening an entirely new chapter of their lives.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

This initiative contained in the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 was put forward by the coalition. It was a good initiative then, and it's a good initiative now. Given the tightness of the housing market in Australia, the government should respond in this way, and it gives the lie, somewhat, to the general perception of the public that we always disagree on these matters when we get to federal parliament. While the cooperation of the coalition on this isn't necessary, it's good to see the parties working together.

As I said, the housing market in Australia is extremely tight, and any extra resource we can bring to the market at the moment should be welcomed, and assisting pensioners to downsize will assist in this. I do suspect, however, that the housing market in Australia and this crisis—and it's fair to call it a crisis that we're in at the moment—will return more to normal, given time. It was largely caused, I think, by the COVID crisis, and it's worth reflecting on the expert predictions—and I'm given to reflect that, when I was in primary school, we thought 'ex' stood for someone who was a has-been, and a 'spurt' was a drip under pressure. The expert predictions were that the housing market in Australia would crash, due to COVID. It's difficult for governments to always make exactly the right response at the time, given that expert advice. That's not what happened, of course; the housing market in Australia has surged.

It was predicted that, because the immigration programs were stalled due to COVID, there would be all this spare capacity in our construction industry and in our housing market. In effect, what happened was that half a million Australians came home because Australia looked like a far better place to live than the rest of the world. The issue was not only that they came home but that they came with cash in their pocket and wanted houses to live in. That's my assessment of what has happened to the housing market. As COVID is put behind us, I think that position will reverse itself. Those people who returned to Australia will probably not suddenly decide to sell up, pack up their bags and move overseas again, but there will be whole a new generation of Australians—we are an adventurous lot—that will seek to spend the next portion of their lives overseas. I think some of this tightness in the market will evaporate over the next few years and, as I said, things will return to normal.

We have a shortage now and, indeed, we have a crisis, and anything we can do to encourage owners to rent or lease their second homes and holiday homes may help. Neither party has come up with any initiatives in this area, but it's quite obvious to me, as a member representing a lot of seaside communities, that there is a lot of housing sitting around in Australia. I can understand why people don't rent out these properties, because they've got them for their own personal use, and sometimes the rental market can be difficult. Unfortunately, there are a lot of people who have had the experience of being landlords who wished afterwards they had never gone down that pathway.

Removing barriers to people downsizing as their peak need for accommodation has passed will encourage people to shift. The member for Spence went through the situations where some families need a larger home and others had their families leave home, so that they no longer needed all that space or wanted that size yard to look after. But shifting real estate can take time, and many cannot, or do not want to, commence the construction of a new building or even the purchase of a new building until they are sure that they can sell their current housing. Consequently, that time of uncertainty between selling a house and buying a new one—which has been limited to a 12-month period before that asset would come into consideration as affecting the pension—has become too short, so it's being extended out to 24 months and then, I think, there can be even a further exemption after that on special application.

I suspect that, in itself, this policy will not make thousands of new homes or previously occupied homes available for the general public, but anything we can do to reduce the barriers and disincentives should be welcomed. The fact that we're talking about the exemption of the family home from the assets test for the purpose of the pension means, I think, that it's not a bad time to raise the prospect of whether or not the family home should be exempt, full stop, from that assets test. I suspect that in the long-term no political party in Australia will go to the electorate saying, 'We're going to take away the exemption for the family home from the assets test.' Politics can be divisive, and having just given a good word for our cohesiveness in this place at the beginning of this speech, if one side of politics suggested to remove the exemption for the family home from the assets test, the other side of politics would dig its heels in and probably give it a good clip under the ear. Having said that, should someone who lives in a $5 million or $10 million house be able to draw a pension?

I often think these difficult decisions in life are all a matter of grey—not the electorate of Gray, I'll point out. For instance, if someone lives in a $1½ million or a $2 million house, most of us would cut them a break and say, 'Yeah, well, that house has grown in value since they've lived there; they should be given some kind of exemption.' But, if someone lives in a $20 million house, should they be able to draw a pension? They could claim to be penniless and say, 'I'm asset and income poor.' But, of course, there are any amount of financial products on the market now that would allow somebody to unlock the wealth of that house and live in it for the rest of their lives but actually draw down on the value of the asset. Sure, it might affect their children's inheritance, but it would not affect their particular outcomes in life. As I said, that's a difficult subject. I can't see anybody in politics leaping into it. But it is difficult to have sensible debates around taxation and taxation reform in Australia unless we throw all of these things into a melting pot so that they can at least be considered.

While I'm on such a theme, there are other big impediments to people downsizing or, indeed, upsizing or to businesses changing premises. They might say: 'My business has grown and I need to get into a bigger premise. I want to get into a more active area where there are more people walking past my shopfront.' Or they might say,' I want to get something smaller.' These are the entrepreneurs and movers and shakers in our society. Yet, anyone who wants to make these changes are then hit with stamp duties from state jurisdictions.

There was a time—before my time in this parliament and before your time, Mr Deputy Speaker—when it was proposed that, with the introduction of the GST, we would get rid of state stamp duties. Now, that didn't happen. In getting that legislation through, and with the agreement in those days with the Australian Democrats, the tax was narrowed so that it only covered about 50 per cent of Australian GDP, and then some of those aims were abandoned. If we are considering taxation reform, we should once again find a way for the states to replace that stamp duty collection, because it is really counterproductive. The very people who are taking risks to employ people and expand the economy are the ones who get hit with the tax.

For my brothers—once again, I'll stick my neck out here—I would rather see a flat land tax across the states that would not reflect on a particular activity at the time so that income space is borne by the whole community and not just by the people who actually want to do stuff. The most completely illogical way to raise money is to get stuck into the people who do the right thing. It's a bit like payroll tax. I don't think anyone can make a really good argument about the idea that the more people you employ who are over a certain threshold, the more money you should pay in tax. Once again, it's a nonsensical type of tax when it comes to talking about the decisions that need to be made to generate modern economies.

In the broader sense—and I'm not recommending any specific here—this parliament and the parliaments around Australia should be discussing how we can remove these artificial impediments to the efficient expansion and growth of business and employment in Australia so that, when a burden should be worn by the whole community rather than just these individuals, it is spread across that whole community. I certainly don't argue that we don't need to raise taxes in Australia. We run a very high level of service not just in our welfare economy but right across our economy. Our education system, our health system, our disability support system—all those things cost money, and are the kinds of thing that a good, civilised, wealthy country should have. Of course, you need taxation to support that, but the very idea that we tax the most productive in the economy on their entrepreneurialship seems to me to be a false economy.

Like this disincentive for pensioners to downsize their living arrangements, and like my suggestion that we should be looking at whether or not the family home should be exempt from the pension test, or whether states can find another way to raise that same amount of money that they raise out of stamp duties at the moment—which are counterproductive—all of those things are, I think, things that our parliament should be discussing in a mature and nonpolitically abrasive way, where people seek to take cheap advantage of members trying to put forward ideas and propositions that we should give consideration to. I'll leave this debate with those comments.

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

I rise to the support the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. This bill provides greater financial certainty to senior Australians looking to downsize by extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 to 24 months. This extends the time people have to use the proceeds of the sale of their family home to build or purchase their future home. It's a recognition of the realities of the current market where, almost universally, land supply is tight and new builds are impacted by supply chain issues, labour shortages and rising costs.

Older Australians have earned the right to make decisions about how they live in retirement, and this legislation ensures they can transition to a more suitable sized home while still being treated as a homeowner for means testing purposes so that they remain eligible for income support payments. The bill extends the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home. It's another example of Labor implementing coalition policy, and it doesn't stop there. The value of the home sale proceeds are subject to deeming provisions, so if the sale proceeds were placed in a savings account or in other financial investments, they would generate returns which a person could use to support themselves and be deemed as income. This bill will apply only to the lower below-threshold deeming rate for these assets-test-exempt principal home sale proceeds when calculating deemed income, and this rate will be applied to these proceeds for the duration of the assets test exemption.

The legislative framework should not act as a disincentive for older Australians to make personal choices about their retirement lifestyle. Quite rightly, we should incentivise choice and allow people who have worked their whole lives to enjoy the fruits of their labours in retirement. In my electorate of Nicholls there are 35,843 people aged 65 or over, according to the 2021 census. That is 22.5 per cent of the population who are of retirement age or approaching retirement. From the 2016 census to the 2021 census, the percentage of the population of Nicholls who are over 65 rose by one per cent. This is partly because Nicholls is an attractive and affordable place to retire. Whether it's on the shores of Lake Mulwala in Yarrawonga, or on the banks of the mighty Murray River—which is running a bit high at the moment—at Cobram or Echuca, the region has long been a retirement destination. Oasis Village in Cobram, one of the longest-established retirement villages, has 180 homes and over 300 residents. Oasis Homes, which specialises in downsizing, has operated very successfully for 40 years. There are many new entrants into the retirement and lifestyle village sector in Nicholls. Nearly 200,000 Australians call a retirement village home, and the Property Council of Australia, through the Retirement Living Council, has advocated strongly in favour of recalibrating age pension rules to allow pensioners to unlock home equity and downsize if they wish to without their pension being cut. In February 2022 a PwC/Property Council Retirement Census snapshot report presented a positive picture of an industry that has weathered the storm of COVID-19. The report noted higher average occupancy rates and favourable affordability conditions that were a testament to the resilience of the sector, despite the steep economic and social challenges due to the global pandemic. As part of his advocacy, Ben Myers, the Executive Director of the Retirement Living Council, said they were an important part of future housing needs because they support the universal desire of older Australians to stay independent and engaged in the community.

Retirement villages are not the only option for seeking a smaller, simpler lifestyle in retirement but they are significant. The 2021 Property Council Retirement Census snapshot includes 62 operators across 766 villages and approximately 77,000 units nationally. Despite an increase of four per cent in the average two-bedroom independent living unit price, from $463,000 to $484,000, between financial year 2020 and financial year 2021, they have, on average, become more affordable, with the average sale price being 55 per cent of the median house price in the same postcode, compared to 67 per cent of the median house price in that postcode in financial year 2020.

One of the critical challenges in my electorate is the supply of land and housing stock for homeowners and the rental market. The pandemic caused a shift away from capital cities to the regions, driven mainly by affordability and the availability of more flexible working arrangements. The Nationals love the regions and we welcome new residents with open arms, from all around Australia and all over the world. Regional Australia has an enormous capacity to grow and sustain populations, and we should be encouraging more opportunity for people to move to the regions for work, education or retirement. The Regional Australia Institute, a great organisation, has just released a bold plan to have 500,000 more people living in the regions by 2032 than the current forecast of 10.5 million people. I support this goal and I want to see it happen.

But, in order to support growing regional populations, there needs to be a steady and reliable pipeline of investment in regional communities. Now is not the time for this new government to back away from regional funding. Now is the time for renewed investment in regional Australia. This bill deals with a very specific set of measures to support older Australians to sell the family home, downsize and enjoy their retirement without facing financial penalties in the process. The incentive it provides for downsizing needs to be considered in the wider context. As I said earlier, in the electorate of Nicholls the pandemic has led to a shortage of available land for new housing development, a sharp uplift in prices for existing homes, and a depressed supply of rental housing. At the same time, the region is desperate for workers to fill the workforce gaps. We need everyone—we need CEOs, semiskilled workers and unskilled workers. They are needed on our farms and orchards, in our service industries, in our manufacturing industries, in health and aged care, in education and in virtually any setting you care to name.

Those workers, if they can be found, also need suitable accommodation. Based on the 2021 Property Council snapshot, the development supply pipeline planned by participating operators of lifestyle and retirement villages has doubled from the 2020 snapshot, from 5,500 dwellings to over 10,500 dwellings for the next three-year forecast period. This is a significant number of dwellings in the pipeline, and nearly all will be filled by people choosing to sell their family home and downsize. Those homes that they sell will add to the available housing stock for purchase or rent and will play a key role in alleviating the problems with supply in Nicholls and in many other parts of Australia. I've experienced this myself, buying a large family home from a family that was downsizing. There's a lot of emotion associated with that too, with an old couple selling their family home and seeing a young family move in to raise their family.

The coalition has a strong track record of helping older Australians who want to downsize, freeing up family homes in the market for young families—not only improving supply but impacting affordability. Over the last three years, the coalition government's housing policy supported more than 300,000 Australians with the purchase of a home. The coalition supported almost 60,000 first home buyers and single-parent families into homeownership through the home guarantee schemes, and the coalition provided $2.9 billion worth of low-cost loans to community housing providers to support 15,000 social and affordable dwellings, saving $470 million in interest payments that could be reinvested into more affordable housing, which is another critical need in my electorate and many other electorates as well.

The coalition also established the First Home Super Saver Scheme, helping 27,600 first home buyers accelerate their deposit savings through superannuation. In contrast, what we're getting from Labor is the Housing Australia Future Fund, a $10 billion off-budget fund to support a housing program that has no substance and lacks detailed costings and an implementation plan. The target is 30,000 affordable homes over five years, but that would require a rate of return on that investment of 20 per cent annually. I'm not sure what the secret sauce is that the Treasurer has in the cupboard, but 20 per cent returns on investments are not really a reality in the current economic climate, despite the strong economy, including my very strong economy in Nicholls, that this new government inherited from the coalition. Equally, Labor's Help to Buy Scheme is limited in its ambition, and very few Australians would qualify for it let alone want to participate in it. It brings to mind the quote from Darryl Kerrigan in the great Australian movie The Castle: 'Tell him he's dreaming.'

The coalition took a comprehensive housing policy to the 2022 election and, if re-elected, we would have established the Super Home Buyer Scheme to allow first home buyers to invest up to 40 per cent of their super, up to a maximum of $50,000, to help with the purchase of their first home. It would have been a great help. We would have given Australians over the age of 55 the ability to invest up to $300,000 per person in their superannuation fund outside of existing contribution caps from the proceeds of selling their primary residence. We would have helped more first home buyers get over that deposit hurdle by raising the number of low-deposit guarantees for first home buyers to 35,000 each financial year. We would have increased the supply of new homes in regional areas by incentivising the purchase of new build homes and providing 10,000 low-deposit guarantees each financial year for those moving to, or within, regional areas. The coalition also supported greater investment in affordable housing with an additional $2 billion in low-cost financing for social and affordable dwellings.

Let's go back to The Castle. There's another great line from that wonderful movie where Darryl Kerrigan explains the real value of his house, which is being compulsorily acquired to extend an airport. 'It's not a house; it's a home,' he says. Homeownership remains the great Australian dream, and we know that 85 per cent of renters aspire to own their own home. This bill, by removing disincentives for older Australians to downsize, will allow people to make decisions about their family home without the burden of financial uncertainty and will have positive flow-on effects for the economy, housing availability and affordability and, based on current population shifts, for communities across rural and regional Australia. It's good policy—good coalition policy—and I'm happy to add my voice in support of this bill.

Henry Pike (Bowman, Liberal National Party) Share this | Link to this | Hansard source

I acknowledge the member for Nicholls's contribution and his reference to the research undertaken by the Retirement Living Council. During my time as the communications director nationally of the Property Council, the Retirement Living Council did an incredible job in advocating for more housing choice and more opportunities for seniors to downsize and find appropriate accommodation. I acknowledge Ben Myers who is finishing up in, I think, a couple of short weeks as the executive director. He has done a fantastic job and we wish him all the best.

The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 seeks to remove a couple of key barriers that are preventing Australia's pensioners from downsizing their principal homes, by reducing the impact that selling a home has on their social security means testing.

The positive features of this bill, of course, were first devised by the former coalition government, and it was during the last election campaign that the now Prime Minister, the then opposition leader, took the coalition's lead by announcing—one day after the coalition had announced it—that Labor would adopt coalition policy to ease costs for pensioners and, in the process, free up established housing stock.

As I make my way around the Redlands, which I'm honoured to represent in this place, I encounter many people who feel they are in a logjam in relation to their housing. I encounter families who are desperate for a family home. They might be in the rental market, and my community is not unique in currently experiencing a rental crisis. There are a lot of local families who are desperate to find that right-sized rental, but it is nearly impossible for them to find that in the current market. Also, there are many families in the Redlands who are looking to buy the right home. Obviously, we've had an affordability issue over recent years. We've had a massive increase in property prices in the Redlands, and that perennial challenge of trying to save a deposit to get that dream home or even just a foot on the ladder of the property market is proving incredibly difficult for many within my electorate. That's of course been exacerbated by the inflation pressures that Australians are facing right across the country. Increased costs of living are just making it that much harder to save that deposit. Of course, rising home prices have not made that easier. And there are rising interest rates as well. Those who have been able to get into the property market are suddenly seeing their interest rates go up significantly, and we're warned that those will continue to rise over the coming months.

But, on the other hand, I often find older Redlanders rattling around in a big family home. I undertake a lot of doorknocking in my electorate. There are very big, spacious homes that were once home to multiple children who have all left the family home now, and I find an older couple there who are finding it difficult to maintain their home and want to right-size, but there are obstacles in their way. They want to do that, but they're concerned about the costs, they're concerned about the uncertainty of the market—and it is a very volatile market at the moment—and they're certainly concerned about how this transaction would impact the income support that they receive. We have this perverse situation where these Australians want to downsize, and society needs them to downsize, but they are being artificially prevented from doing so because of the structures of government income support.

This bill seeks to remove that key barrier for these pensioners. This is about giving Australians more choice in deciding how they want to live the next stage of their life, as it removes financial barriers for people wanting to downsize their home. This bill amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to double the automatic asset test exemption period on proceeds from principal home sales from 12 to 24 months. But, critically, it retains the existing option for a further 12-month extension, which may be needed in extenuating circumstances. The bill will also ensure that the lower deeming rate will apply to asset-test-exempt home sale proceeds when assessing income during this extended exemption period.

I strongly support doing all we can as a parliament to help alleviate the current housing crisis. As a clear demonstration of the pragmatic approach of the opposition in such matters, I'll put all minor concerns to one side, in deference to the greater good, and support this bill.

Firstly, let's consider the extended asset test exemption period. This is a welcome move to protect any income support recipient who is moving between homes from the significant impact that the sale proceeds could have on their payments. Selling a home and purchasing a new one can be a difficult process with many potential delays. Many of my constituents have shared horror stories with me recently about delays. Contracts of purchase on a new property can fall through. There can be market changes which shift the prices dramatically. You may sell your property at a low point and suddenly find the market takes off, and the buying power of the proceeds of the sale, which you thought you'd be able to use to purchase a new home, has been eroded. Many projects at the moment are experiencing building delays. There's a lot of concern around the supply of materials and labour. There are a lot of labour shortages at the moment, and they are taking a toll on the residential construction sector. There are a lot of building delays out there. And, of course, there are just the everyday elements of life that can lead to delays in this process. That can be health concerns. That can be changes in personal circumstances. That can be changes with where people want to live. Grandparents may find that their children and their grandchildren are moving to a different city, and they may want to change their circumstances. There are plenty of things that can delay that process of selling the home that you have lived in for a while and are looking to downsize from. It makes sense to give Australians more time to complete this downsizing transition. This element is greatly welcomed, as is the introduction of a lower deeming rate.

Given the high and rising value of most Australian homes, the bulk of the home sale proceeds are often subject to the upper deeming rate, and this significantly impacts on a seller's pension or other payment rates. The measures in this bill will substantially reduce this significant disincentive, by changing the deeming rate used to assess income on principal home sale proceeds. This will help. This will help support older Australians confronted by the challenges of rising prices and soaring costs of living. This will help the next generation to get a foot on the ladder of homeownership, and this will help Australians struggling in the current rental crisis, by providing more investor ownership of dwellings that are suitable for them to rent. It's going to help across the board, and it's going to help all those constituents that I've mentioned earlier in these remarks.

The minister noted in her remarks on this bill that there is no silver bullet to fix the housing crisis or the housing market at the moment. I made very similar remarks in my maiden speech earlier this month. Homeownership has long been an intrinsic and admirable feature of Australian society. It's been a national rite of passage. It's been the cornerstone of the Australian family unit and the opportunity for Australians to grow their wealth and achieve authority over their own future. But it's a sad reality that this dream has become less affordable over time for a growing number of Australians.

I had a look at some statistics the other day. In1971, 64 per cent of Australians in my age cohort owned their own home. Today that figure has eroded down to only 50 per cent. According to the 2016 census, those aged under 65 are 14 per cent less likely to own their own home than those over 65. This disparity has worsened in the years since 2016. There are many factors that have influenced this change and this intergenerational erosion in affordability. Of course there is no silver bullet—I'll agree with the minister on that—but I do believe that this bill will go some way to achieve a more efficient market, by removing some of the unintended disincentives to downsizing.

The Real Estate Institute of Queensland have welcomed the bill and anticipate it will have a positive impact on the current housing crisis. I know they do a lot of analysis, and they wouldn't make a comment like that unless they were absolutely sure of themselves. I think that's a very strong encouragement. This bill, if implemented appropriately, stands to safeguard the financial security of Australian pensioners when downsizing their homes and will lessen the risk of their support payments being cut. As I've mentioned, that's a significant concern for many locals in my electorate. That is one of the main obstacles to their downsizing. They don't want this to impact their payments. They do worry about that. It leads to a significant amount of hesitation. If done right, this bill has the potential to deliver better financial outcomes and peace of mind for those elderly Australians. These provisions may also help to free up established housing for younger families and improve market supply.

But I also encourage state and territory governments to consider policy initiatives that will remove further obstacles to downsizing. It's not just concerns about the impact on support payments. There are many other elements of policy across this country that impact on the efficiency of the housing market. I encourage state and territory governments to consider stamp duty incentives and planning relaxations that support smaller age-friendly homes and to support the retirement living sector—I mentioned that earlier—in delivering more product to the market. Have a chat to Ben Myers in his final few days at the Retirement Living Council. He'll have a few ideas for our state and territory colleagues. Much is made in this country of providing first-homebuyer support, and—dare I say it?—it may be time for us to consider some more focus on last-homebuyer support. By removing further barriers for Australians downsizing to residences that better suit their needs and lifestyle, we can help free up larger homes for younger families and achieve a better and more efficient balance in Australia's housing market.

This bill is in the best interests of my constituents in the Redlands, and I will support it. But this parliament must remain diligent to ensure that this Labor government will implement this bill exactly as intended. As noted previously, this bill was directly inspired by coalition policy. It was stolen or commandeered by the Labor Party the day after the former coalition government announced it, and I don't have a problem with that. There isn't a monopoly on good ideas in this place, and there certainly aren't intellectual property rights in relation to politics. I commend the government for adopting this policy and seeking to implement it through this bill. It's a policy that will benefit many Australians, including many Redlanders within my community, and I commend the bill to the House.

Garth Hamilton (Groom, Liberal National Party) Share this | Link to this | Hansard source

I think it's appropriate to say: what a fantastic contribution from the new member for Bowman! Cometh the hour, cometh the man. This is exactly the type of legislation that you get a good feel for when you undertake the sort of ground-level connection with your community that he has so clearly done. I commend him for his doorknocking campaigns. This is how we get in touch with the people of Australia and really understand their needs. I look forward to many more scintillating contributions from him.

In general terms, there are four big points that I think the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 addresses that are core tenets of why those of us on this side of the House do what we do. Firstly, I think it's unmistakable that this should be viewed within the context of the current housing crisis, which is spread across Australia. As previous speakers have alluded to, there is no silver bullet for solving that crisis, and any step taken towards it must be seen within that broader context.

One of the clear challenges that I've seen amongst the good people of Groom is that the housing market as it stands is actually quite limited in the options that it presents to them. Over a period of time, we've seen a growth in very wonderful and attractive four-bedroom, two-bathroom houses that push our suburban horizons out even further. However, unfortunately, these don't present the market with the options that people need. When we talk about downsizing—and this is clearly a need within our community—moving out to a four-bedroom, two-bathroom house further away from the city centre provides no benefit to people in their older age who want to have the support, the comforts and the services around them to be able to live their lives in confidence.

As part of that, it talks to the need for efficient markets—of course, that wonderful view that markets make their best decisions when they are presented with the most options. This bill very much plays a part in the broader solution that must be provided to the housing crisis: providing more options to the market, particularly to those who are looking to downsize and particularly to those in regional centres to whom the idea of medium-density housing simply hasn't been provided before.

I think it also must be viewed within the framework of two principles that the LNP hold dear: the right to private property and the absolute value of reward for effort. We must recognise that, when providing these solutions, we must maintain respect for the work that people seeking to downsize have done. They have invested and have built for themselves an ability to have a roof over their heads. This is to be commended in them, and they are to be supported. Whatever steps we take, we must make sure that we are not detracting from their efforts and are not, in their later years, reducing the reward that they should be seeking from a lifetime of contribution.

I think the final generalised theme is that of what the role of government is. The previous speaker brought this up. One of the great parts of this bill is that, when enacted, it will remove a barrier that currently exists. It's a barrier that makes it very hard for the decision to downsize to be taken. I think a very important role of government is, where possible, to seek and remove barriers to good decision-making. This speaks to the efficient market idea I spoke on previously.

But, within those frameworks, I very much support this bill to amend the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners and other eligible income support recipients during the sale and purchase of a new home. I do so because this builds on a body of work, begun while the coalition was in government, to give older Australians greater options and flexibility when it comes to downsizing. The sale of the family home can often be a large financial and emotional undertaking. It is often people's biggest asset, along with being the place where they have raised their kids. It's right that we give older Australians the time and the space to transition to a property of their choosing without penalising them financially.

I think it's important to acknowledge the concerns of local residents who I've spoken to during my time doorknocking, particularly in some of the inner suburbs of Toowoomba, where exactly these conditions that I've described exist. People have bought a home some 30 years ago and raised their children in it. It is not just a possession; it's part of their life story and something of emotional consequence to them. There is a fear that any step taken to persuade them to downsize may be to their detriment. I think it's important that we address that and be very clear that this bill is cognisant of those fears and is purely focused on providing more options.

I also speak in support of this bill today because it legislates a commitment that the coalition brought to the last election as part of our comprehensive housing policy. That suite of policies was created in the light of certain economic pressures that existed then, many of which continue or have changed—in some cases growing worse, sadly. It was also created in the light of the role that certain domestic policy settings across all three levels of government have played in creating the housing crisis that currently exists. I absolutely agree with the point that there is no silver bullet, but we must be able to look back and see why we are in the position we're in. There are roles that local, state and federal government have played in creating this, and I think that, by providing the option to downsize, we are addressing those on an even keel.

We are committed to extending from 12 to 24 months the existing asset test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home. A further 12-month extension will continue to be available on a case-by-case basis in extenuating circumstances. I do point out the difficulties that exist in the housing market and how quickly houses are moving off market—sometimes not even being sold on market but moving quicker than someone can find one. So there is a significant advantage in increasing that period of time, allowing people more confidence that this will take place.

This commitment was to give seniors who are selling in the current property market greater confidence to downsize into something more suitable, while providing greatest confidence and certainty in their financial planning. As the Governor of the RBA has pointed out many times, confidence is going to be a key aspect of our success in negotiating the choppy waters that are ahead.

The coalition government also committed to ensuring a fair deeming rate by announcing a freeze on deeming rates at the current rates for two years. The coalition announced that the lower deeming rate would be frozen at 0.25 per cent, with an upper deeming rate at 2.25 per cent. This measure would see around 890,000 Australian having greater certainty about their fortnightly social security payments. This would benefit 450,000 age pensioners and around the same number of payment recipients with financial assets who are affected by deeming rates.

This bill is just another example, as the previous speaker, the member for Bowman, said, of Labor adopting very sensible coalition policies. The old expression is 'There is no plagiarism in politics'. Well, this is an absolutely clear case of plagiarism, but we accepted fully as the greatest form of flattery there is.

As I mentioned, these common-sense changes built on the coalition's strong track record of helping older Australians to downsize. In the 2017-18 budget, the coalition government first announced that those aged 65 or over could make a non-concessional contribution of up to $300,000 from the proceeds of selling their home into superannuation from 1 July 2018. With the benefit of hindsight, that was a very sensible measure that we are very lucky to be able to build upon here and now. The coalition further enhanced this measure by reducing the eligibility age for making downsizer contributions into superannuation from 65 to 60 years of age. And then, at the last federal election, the coalition announced that, from 1 July 2022, eligibility would be reduced to 55 years of age, further increasing the opportunity for older Australians to downsize—another policy that is now on Labor's books.

There may be some in this chamber who are closer to that age bracket than I am, and I acknowledge their tenure and fantastic service. But it is important to see that this is a growing need. The people who need this help are a growing group within our community. This is not something that is going away. This is not a problem that is reducing in the immediate or medium term. This is a growing concern for us, hence the actions that the previous government took.

There was a fantastic uptake of this initiative, and a great boost to the super savings of older Australians. From 1 July 2018, when it started, to the end of January 2022, under the coalition, 36,800 individuals contributed $8.9 billion to their superannuation under this measure. This is a clear demonstration that, when good policy is developed and enacted, Australia responds. I think a clear sign of having good policy in place is that we get the rewards we want. This is not about numbers on a page, but rather that people who needed this support, people who needed this help, have taken up the option and now are in a better situation. They now have greater super savings in place. They are better positioned to weather the coming storms.

This support for downsizers has also unlocked a stock of family homes for younger people. Whilst the focus of many of the previous speakers' comments have been on how we help older Australians downsize, the other side of that is what it does for younger Australians. It allows them a broader property market to look into. With empty-nesters moving into smaller homes or apartments that better suit their future needs, it means that more four-bedroom, two-bathroom homes in the suburbs of Toowoomba, Oakey and Pittsworth are now available for first home buyers.

I was surprised to find advocates for this kind of housing transition in our local school principals. That's because there are a number of local state primary schools in my electorate who have had to completely ditch their catchment areas, despite having been put some 30 years ago in thriving hubs of young families. The kids have grown up and gone, and the houses still remain in the ownership of the parents. Unfortunately, these school catchment areas now have no kids in them to bring into the schools, so they're having to open enrolments across the city.

Instead of suburbs like Centenary Heights, Middle Ridge, Wilsonton or Harristown being full of school-age children, families are now more likely to be found in the newly built developments in Glenvale or Kearneys Spring. Whilst those are fantastic suburbs for people to be investing in and raising their children in—they're large spacious blocks, with beautiful crisp, clean Darling Downs air—there aren't the facilities around them that families need on hand. The schools aren't there. The pharmacies and the shops aren't there as yet. So, whilst there is great future value in these suburbs, what's important is that families are growing up without those services around them that they need. And, where those services do exist, they currently aren't supported by the population that they require.

We can't expect that everyone will want to move into an over-50s lifestyle village, of which we have an abundant and wonderful selection, or even out into the conveniently located suburbs. This is why I've been such a passionate advocate in my local area of the Railway Parklands project, the funding for which I was very proud to fight for and secure under the South East Queensland City Deal. This is a fantastic project that provides the opportunity for mixed-use—commercial and residential—medium-density housing right in the heart of Toowoomba's CBD. It's a fantastic opportunity for people who want to downsize and who want to take the opportunity of this exact bill to find for themselves a place where they can downsize, a place that they can live, right in the heart of Toowoomba's CBD. There's of course the other benefit that goes with this, which is what it will do for local shop owners, who are tremendous advocates for us opening up this housing in the CBD. This means more foot traffic for our local businesses, and—as the member for Riverina knows well—regional towns require that foot traffic. We want to keep our thriving CBDs going along. I commend the bill to the House.

Andrew Wilkie (Clark, Independent) Share this | Link to this | Hansard source

I note that the member for Groom's comments about age came perilously close to reflecting on the chair!

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I rise to make some brief comments on the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022, and I appreciate the opportunity to briefly contribute on this bill. This is another measure that the coalition announced in the election campaign, and, after we had announced this, the now government indicated that they would match it. So here we are, implementing another coalition election commitment.

This does need to be taken within the context of some other important measures which we've also had the chance to legislate recently—in particular, the reduction in the age eligibility for people to put proceeds from the sale of their home into their superannuation. As well as doing things to make it easier for future superannuants to provision for their retirement through the sale of a family home, we should equally be looking for an opportunity, which we have through this legislation, to do something for those that will be on the age pension.

As many speakers have indicated, there are two elements here. We're extending the period of time that the proceeds of the sale of a home will not impact, from an asset point of view, on eligibility for the pension. We're also applying the lower deeming rate to the value of the sale proceeds for that same period of time.

In the last parliament, I served on a parliamentary committee which looked at housing affordability. There are an enormous number of challenges regarding housing affordability, and this by no means is any form of silver bullet. Unfortunately, the most significant challenges are not within the power of the Commonwealth government. The state and local governments have got a lot of work to do there and a lot of things they need to look at, but I won't digress into that report. It's freely available for those interested to look at some of the findings there.

This is an equity measure to give pensioners more of a grace period, so there is less pressure on them around making a decision to sell a family home, probably, and then looking for something more appropriate for the stage of their lives that they are in. It means that they will be able to commit to purchasing a new property without the undue pressure caused by the fear of not being able to do so within a 12-month period, which would result in eligibility issues in regard to their pension. That is self-evident in the extension of time from 12 months to 24 months

Of course, we think it's a good outcome. It's entirely voluntary. We're in no way seeking to force people to make a decision to sell a family home. But, if a family home is not necessary for the stage of life they are in and if we can make it easier for them to voluntarily make that decision, then we of course want to do that. We want to encourage them to do that, because, hopefully, it will provide that little bit of extra supply in the market. We do know that it is particularly challenging for people who are looking for family homes to get into the property market at the moment and buy a home that's suitable for them. They are entering a completely different stage of their life. They're starting a family, and the type of home that's suitable for them could be exactly the type of home that may no longer be suitable for people who have just gone onto the age pension, or are about to go onto it. Potentially, we can marry up the supply and demand a little better through measures like this.

I made similar comments on a previous bill related to superannuation that went through, and I won't repeat myself on this bill. We want this to be voluntary and we want decision-making to still be in the hands of people who have a property that would be eligible under this legislation, as it would under the superannuation legislation. Nonetheless I think this is really sensible policy that is all about choice. It's all about taking away any concern or pressure people might feel if they were considering selling a property but have a hesitation because of the potential risk to their pension. This, I hope, in certain cases will alleviate some of that concern. It will provide ease of decision-making for people selling a property by taking away the anxiety associated with the fear of not being able to purchase another one, by providing a time frame that is more comfortable for them.

With that brief contribution, I commend the bill to the House.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) Share this | Link to this | Hansard source

The other day, Robert Gottliebsen, the respected economy writer and former Australian journalist of the year, started a sentence in his regular column in the Australian thus: 'The building industry as in crisis, with vast segments completing fixed-price contracts at huge losses.' And he's right. It is a worrying situation, and I want to make a few wide-ranging comments in relation to the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022—not just in relation to this motion, which the opposition supports, but in relation to particulars across the regional economy, the housing market and other factors which have made this particular bill so important. Again, I emphasise that the opposition supports this bill.

Recently, Metricon announced that it was in trouble, and I appreciate that parliamentarians and business leaders have held crisis meetings behind closed doors to work out a plan for the future of this major home builder. Metricon wasn't the first—and won't be the last—in this current environment to feel the effects of a downturn. COVID-19 didn't help. In fact, it created all sorts of dramas for supply chains, in terms of accessing timber, metal, joints, concrete—you name it. And what happened in that regard was that many building companies, many construction firms, had contracts in place with customers, customers like Irna Miller from Victoria, and then prices ballooned out. It was not the fault of the customer; it was not the fault of anyone, really. People expected to have their houses constructed in a timely fashion, on budget and on time, and then the price soared because of difficulties sourcing materials and labour. Ms Miller's family have been living in a rental while waiting for construction to begin on their new home in Kyneton. She's just one of a number of people caught up in this impending housing crisis. And particularly in regional Australia, it is of great difficulty for housing companies not only to source materials but also to source people who can build houses.

I regularly speak with the Regional Australia Institute's Kim Houghton, whose last advice to me said that job vacancies—and this was late August—hit a new record for regions at 86,900. He said, 'It's plateauing but refusing to go down.' The previous advice from 27 May was 86,400, so it had gone up 500 in the intervening period, and unemployment ranged from nearly eight per cent in New England to 2.7 per cent in Riverina and under 1.5 per cent in Warrnambool. He said that splitting means responses must be tailored, and better skills mean more enterprise in high regions and more workers in low regions. I understand that. What does that have to do with this particular legislation? We want to see more people in homes. We know that 85 per cent of renters aspire to own their own home.

I can remember when Catherine and I were first married in 1986. We were paying anywhere between 18 and 21 per cent on our mortgage. If they were paying that now there'd be rioting in the streets. While I appreciate that it is very hard, because rates have been very, very low—and I don't point the finger of blame anywhere near Dr Philip Lowe, who, in some sectors of the media, has been unfairly criticised for conditions that are global, worldwide—Australia can't be isolated from what happens overseas. Economic conditions that happen elsewhere affect our country. We live in a global village. We operate in trading markets that are worldwide and, if there is a problem sourcing equipment to build houses in Australia, you can probably guarantee there our problems sourcing equipment to build houses elsewhere. If the economy elsewhere is faltering and Australia follows that trend, that can hardly be the fault of the Reserve Bank Governor.

Homeownership offers security and stability for individuals and families. The coalition government had a good record with housing policies. We supported 300,000 Australians with the purchase of a home. That's a high figure. We understand that owning your own home is important to the living standards enjoyed by retired Australians, and retired Australians should have the very best of conditions. They've worked hard, paid their taxes and contributed to the economy and to society mightily over many years. When they come to the age and to the stage when they should be kicking back a bit and enjoying life in the sunshine, they don't want to have economic conditions such that they can't afford to either rent or home their own home.

The coalition supported almost 60,000 first home buyers and single-parent families into homeownership through home guarantee schemes, consisting of the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee, with a deposit of as little as five per cent or two per cent respectively. I commend the work that former minister Sukkar did in this regard. We protected the residential construction industry, with more than 137,000 HomeBuilder applications, generating $120 billion of economic activity. It was so important getting people back on the tools at a time when COVID-19 was having such a disastrous effect on the economy generally. Despite that, we then saw the supply chain difficulties that have led to Metricon and others having such difficulties.

We provided $2.9 billion of low-cost loans to community housing providers, to support 15,000 social and affordable dwellings. This saved $470 million in interest payments, to be reinvested in more affordable housing. There's a lot of criticism, often, of the federal tier of government about housing. We play our part. All too often in this day and age, too much is expected of the Commonwealth to do the heavy lift when it comes to any area of endeavour in the economy, in society. The states sometimes get a free ride in this regard. Housing is one of those things—affordable housing, community housing, social housing. All too often what once was the remit of state governments becomes a burden that we need to carry. I'm not saying 'we' as the coalition; I'm saying 'we' as a level of government. State governments can do more of the heavy lift, I feel, in regard to housing, just as local governments can certainly do more in the area of opening up new subdivisions. The trickle-out effect of subdivisions in local government areas also has a great impact on young people trying to get into their first home and on older people.

We heard the member for Groom tell us about suburbs which 30 years ago were flourishing new-family suburbs. The people have stayed and their children have grown up, become adults and left to seek out their own lives. What happens then, as he so eloquently described, is that the schools find it difficult to have the numbers in those suburbs. I know these sorts of areas in my home town. Turvey Park and Mount Austin, to the south of the central business district of Wagga, are two suburbs like the suburbs that the member for Groom described in his home city of Toowoomba. You can see it also reflected in the football results. Once upon a time these suburbs had flourishing new football clubs which did so well, and now they often find it difficult to recruit players, because the players are coming from the newer suburbs in town, where the younger people are coming through, young adolescents who are seeking sport and seeking adventure.

Whilst in government, we also unlocked 6,900 social, affordable and market dwellings through our $1 billion infrastructure facility to make housing supply more responsive and demand-driven. We established the First Home Super Saver Scheme, helping 27,600 first home buyers accelerate their deposit savings through super. We did a lot in this space.

As I say, we support this bill before the House. We support these amendments. The bill amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners or other eligible income support recipients during the sale and purchase of a new home. It does this by extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 to 24 months, as well as by applying only the lower below threshold deeming rate to these asset-test-exempt principal home sale proceeds when calculating deemed income. It's important that this will help older Australians and veterans. Anything that we can do to support pensioners and veterans in finding rental properties, in finding homes, and to incentivise them to downsize from the homes that they own has to be encouraged.

As a good and practical opposition, we support good and practical measures. When we were in government, those opposite, now in government, all too often found fault with everything we did—just to be difficult, just to be flies in the ointment, just to make it look to the Australian public as though we were terrible as a government. Yet, as I described so accurately, we took all those measures to put people into their first homes, to help pensioners, to support veterans. There was the work that we did in infrastructure, the work that we did in the regions to help the economy of the regions, where often the receipts to the Australian tax office are far in excess of the support that those regions get by way of funding. All that's about to come unstuck, I think, in the October fiscal report, the budget that the Treasurer, the member for Rankin, is about to bring down. It is a concern. But we supported all of those areas I mentioned—pensioners, veterans, regions—and we will continue to do it. If the government comes forward with practical ideas, sensible ideas, proactive ideas, productive ideas, we will support them, unlike those opposite when they were in opposition. Everything that we did, they tried to stymie. Everything that we did, they tried to provide a roadblock. Everything that we did, they put parameters up to argue the case against it.

Currently, an income support recipient's principal home is exempt from the social security assets test. This bill extends the existing assets test exemption for principal home sale proceeds, when a person intends to use those proceeds to purchase a new principal home, from a year to two years. We support this. The value of home sale proceeds is subject to deeming provisions. If proceeds were placed in a savings account or in other financial investments, they would generate returns which a person could use to support themselves. We want more people in homes. We want more people with the opportunity to be their best selves. That is why, as a constructive opposition, we do support this bill. We do support these measures. We want to see Australians get ahead. We want to see Australians with a roof over their heads. We want to see pensioners with the very best ability to use the finances that they've built up, their nest eggs that they value and that they need for the rest of their lives.

Jenny Ware (Hughes, Liberal Party) Share this | Link to this | Hansard source

I rise to give support to the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. I've spoken in this place multiple times now about the current housing crisis, and I'm passionate about increasing affordable housing opportunities for all Australians, whether they be families, single parents or young couples. Most of my professional career before entering parliament was geared towards how local and state government planning laws and policies can be used to provide housing choice, housing supply, for end users, both potential homeowners and tenants. The federal government also has an important role to play and can address affordable housing problems. This bill demonstrates one of those ways. If enacted, the bill will benefit both potential new home buyers and current home-owning pensioners and other income support recipients. This legislation will support pensioners during the sale and purchase of a new home, by extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 months to 24 months. The bill will change both the Social Security Act and the Veterans' Entitlements Act. This means that this bill will support both our pensioners and our veterans.

Home sale proceeds are currently subject to deeming provisions, with a lower deeming rate of 0.25 applied to the value of financial assets up to a deeming threshold of $56,400 for singles and $93,600 for couples, combined. However, for assets above these thresholds, a deeming rate of 2.25 per cent currently applies. The legislation, if enacted, will also begin to apply on the lower threshold deeming rate of 0.25 per cent to assets which are the proceeds from the sale of a home.

Having regard to our current housing affordability crisis, we in this parliament must do all that we can to remove barriers of entry to the housing market. This means that we must increase the supply of available homes on the market. We must increase the variety of choice for new homebuyers. We must be innovative in the ways that we approach and address the housing supply and housing affordability issues currently facing Australians. This bill, if enacted, will provide some answers and assistance to these people.

We know that 85 per cent of renters aspire to own their own home, and this has always been part of the great Australian dream. A home is not just a financial investment; it is also an investment in the family. It is an investment in the local community. Homeownership provides security. Homeownership provides a sense of place. Homeownership provides financial stability. Understandably, as a core tenet of being Australian, families want to grow in a home which they know they can call their own. Owning your own home allows families the flexibility to make renovations, to paint walls and to hang picture frames.

As a parent, in many ways I dread my children growing up and moving out of the home, although, as a parent currently of 16-year-old teenagers, some days I think that day will not come soon enough! It is, however, an unfortunate, unavoidable part of the circle of life that children must leave the nest and find their own independence. When this happens, the once-full family home becomes much larger and emptier. Although a home that you've worked your whole life to pay off is an emotional attachment, it is often no longer necessary for a retiring couple to continue living in a large home, often also with a very large outdoor garden. Indeed, it can become a burden, particularly into older age.

As families transition into a well-earned retirement and begin to rely on an age pension or other income support, it becomes a question of whether or not it is worthwhile to sell the principal home, an asset which they have spent their whole life paying off. Many of these couples might otherwise consider downsizing into a smaller, more manageable property. However, there might currently be a disincentive for these couples to downsize into a property which, although smaller, could also have a much lower value than their original property, leaving a couple with a cash surplus which will affect their ability to receive the age pension.

Currently, the existing arrangements allow an exemption on the proceeds of the sale of a home for up to 12 months, so long as the person still intends to use the proceeds to purchase, build, repair or renovate a new principal home. This bill extends, from 12 to 24 months, the assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home. That 12-month extenuating circumstance will be available on a case-by-case basis.

Whilst this is currently a government bill, this was a coalition policy promised at the last election. The coalition firmly believes in reducing the cost of living and adopted this policy to give seniors and also veterans who are selling in the current property market greater confidence to downsize into something more suitable. This then provides greater confidence and certainty for their future financial planning. The coalition estimates that, as a result of these measures, around 890,000 Australians will now have greater certainty in their fortnightly social security payments. On our estimates, this benefits 450,000 age pensioners and 440,000 recipients of other payments with financial asset tests.

The coalition has a strong track record helping older Australians who want to downsize, freeing up family homes in the market for younger families. Evidence of this track record was a major change in the budget of 2017-18, where the coalition government first announced that those aged 65 or over could use up to $300,000 from the proceeds of selling their home to make a non-concessional contribution into superannuation. Under this measure, more than 36,000 individuals have contributed a cumulative total of $8.9 billion to their superannuation. Earlier this year, the coalition further enhanced this measure by reducing the eligibility age for making downsizing contributions into superannuation from 65 to 60 years of age. This is providing far more flexibility for people as they are financially planning their future. During the recent federal election, the coalition announced that, from 1 July 2022, eligibility will be reduced to 55 years, further increasing the opportunity for older Australians to downsize. This is now a policy which the Labor government has adopted.

The coalition has also supported almost 60,000 first home buyers and single-parent families into homeownership through the First Home Loan Deposit scheme, the New Home Guarantee and the Family Home Guarantee. The New Home Guarantee allowed prospective homeowners to purchase a home with a deposit of as little as five per cent, and the Family Home Guarantee allowed prospective homeowners to purchase a home with a deposit of as little as two per cent. If re-elected, the coalition would have established the Super Home Buyer scheme, allowing first home buyers to invest up to 40 per cent of their superannuation, to a maximum of $50,000, to help with the purchase of their first home.

To conclude, I have now spoken on a number of occasions about housing affordability, housing supply issues and providing better choice for Australians. For all of the reasons mentioned, I congratulate the Labor government for adopting this excellent initiative of the coalition, and I reaffirm my support for this bill.

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

I've got a couple of problems with this bill, the Social Services and Other Legislation Amendment (Incentivising Pensions to Downsize) Bill 2022, but one is: so much to say, so little time. Mr Deputy Speaker, as you have probably heard me speak about in this place many times, I'm an ex-chippie. I am, proudly, an ex-carpenter and joiner. I still hold my builders licence, although I have to say that after the last six years I've been getting a little bit soft. The housing and construction sector is incredibly important to me and to the lives of all Australians, and we support this bill. This is a commonsense bill which will provide greater certainty to many Australians who are pensioners. It is a bill which follows on from the fantastic work that the coalition government has been doing in relation to the provision of housing over the last six years. I'll foreshadow that I am so passionate about this area that I may even ask for an extension of time for my speech.

This bill amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners and, indeed, other eligible income support recipients during the sale and purchase of a home. Basically, it will extend from 12 to 24 months the existing assets test exemption for proceeds from the sale of a principal place of residence where a person intends to use those proceeds to purchase a new principal home. It will also apply only the lower below-threshold deeming rate to these asset-test-exempt principal home sale proceeds when calculating the deemed income.

Why is that important? Well, we are going through a housing crisis in this country right now, despite the absolutely outstanding work that has been done by the former assistant Treasurer—and he has done absolutely outstanding work. He has provided a legislative opportunity for thousands of Australians, who would otherwise not have been able to buy a home, through such programs as HomeBuilder, the First Home Super Saver scheme and other schemes. We know that, particularly, single parents, who just haven't been able to save a deposit, have been able to get out of the rent race with as little as a two per cent deposit and in some cases a five per cent deposit. We know that one of the greatest impediments to homeownership in this country is people's ability to be able to save enough money for a deposit. In the heady days of not so long ago, where we saw ever-increasing house prices, people simply couldn't afford to keep up with their savings to be able to save a deposit to buy a home.

To the coalition government's credit, but particularly to the former assistant Treasurer's credit, these various schemes were devised to get people out of the rent race and into homes. That's what this coalition is all about, going back to Menzies's days. We are unashamedly pro-homeownership. Homeownership is not just an asset. It's not just something that you can buy and sell. More importantly, homeownership gives you security, it gives you comfort and it gives you a roof over your head. It's more than just one of the principle requirements or human needs of food, water and a roof over your head; it provides a home to Australians.

I'm a big believer in homeownership—that probably won't come as any great surprise, as I'm an ex-builder—because it provides that security to families. One of the best things that this bill will provide is an incentive to people whose lives have changed because the kids have left the home. I've been in that situation—we've got four daughters, three of whom have departed the nest. We once had a five-bedroom home and we no longer have a home that size. Families do decrease the size of the home as the circumstances change. But I do have a very significant problem with the explanatory memoranda of this bill, which talks about the bill being able to assist older Australians, who are said to be 55 and older. I'm not quite there yet—I'm 54.

Honourable Member:

An honourable member interjecting—

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

No, I'm not a lot older, I'm only 54. I'm a spring chicken! I say that with jest. In all seriousness, this bill—and we support it for this reason—will provide an incentive for older Australians to be able to downsize their home, move into a smaller home, perhaps, and free up those larger family homes for families.

We know that, despite the great work that the former Assistant Treasurer has done over the last six years with all of the programs and all of the incentives that we have provided, there is still a massive shortfall in housing in this country. It doesn't matter where you go or what state you're in. We're all saying the same thing. Master Builders are constantly saying we are not building enough homes, and it is very clear that that is the case, because of the number of people. In my home state of Queensland, particularly around the Sunshine Coast, we have a vacancy rate somewhere around 0.2 per cent. We have people who are working and have good jobs but simply can't rent a house. They just can't find a house. This is particularly so for families.

So this bill will not only assist and provide a greater degree of certainty to older Australians—people over age 55, apparently, so you'd be right—

Russell Broadbent (Monash, Liberal Party) Share this | Link to this | Hansard source

Just make it!

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

Just make it! But it will also provide much-needed opportunities for younger Australians. It will free up, to some extent, and help add supply of family homes to the market, which is a very good thing.

I've spoken about what's happening on the Sunshine Coast at the moment, and it is dire. That's despite the previous government having done things like providing some $2.1 billion to community housing providers. The parties now in opposition, when they were in government, not only took their obligations to homeowners very seriously but also took seriously their obligations to those people who are less well off—those people who can't afford to own their own home at this point in time and may not be able to afford a private rental. This coalition, when we were in government, provided some $2.1 billion to community housing providers to build or to refinance their existing loans and to help people get into a subsidised rental home.

I did an inquiry in relation to this in the last parliament. Community housing providers provide a sensational service to the Australian people—far better, in my view, than traditional state public housing. State public housing has a very, very long list. In Queensland, it takes years and years and years to get a home if you are on the waiting list for a public house. But, when you finally get that house in public housing, you get a roof over your head. Community housing providers provide so much more. Community housing providers effectively want to put themselves out of a job. Community housing providers like—I'll come back to it in a minute. My mind's gone blank. But community housing providers want to look not only at providing a roof over your head but at why you are in need of assistance in the first place and how they can help you get out of community housing and into private rental, for example, and maybe even into homeownership. That is far and away better than what public housing under states and territories provides. To be able to assist a family to get out of some form of community housing and into the private rental market or homeownership is a very worthy and much-needed objective, and the parties now in opposition, when we were in government, were working hand in glove with the community housing sector.

But, more than that, when we were in government, we were providing over $4 billion a year in Commonwealth rent assistance. Members opposite pilloried the coalition when we were in government about not doing enough to help people in their time of need in relation to housing. We were spending billions of dollars in helping people with their rent. The whole concept of Commonwealth Rent Assistance was that the Commonwealth would provide approximately 30 per cent of the cost of rental housing. As we've seen in the last couple of years, rents have gone through the roof, and that 30 per cent figure is probably inaccurate now. But it is absolutely false to say that, when we were in government, the coalition was not pulling its weight in relation to housing.

This bill is very important in providing greater certainty and security to pensioners and veterans, increasing the assets test exemption from 12 months to 24 months. It really does build on the great work of the previous coalition government. The measure will see around 890,000 Australians have greater certainty in their fortnightly social security payments. This will benefit 450,000 age pensioners and 440,000 other payment recipients with financial assets affected by deeming rates.

As I've indicated previously, the coalition worked assiduously in assisting people with housing. I've talked about the end user, but what I haven't talked about is the construction sector itself. The construction sector is worth about eight per cent of GDP in this country. It employs over a million Australians. In about June 2020, the construction sector faced an economic cliff, and a lot of my friends and colleagues in the building industry were saying how dire things were becoming. But the coalition government heard their pleas and acted with the various programs that I've talked about. When we were in government, we continued to work with the construction sector. We provided jobs and security to the people in need as a result of COVID, and that benefit is in addition to the work we've done in relation to homeownership. I support this bill with great gusto.

Russell Broadbent (Monash, Liberal Party) Share this | Link to this | Hansard source

This bill, the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022, greatly benefits those people who might like to downsize—mostly older Australians over 55, although that age has been introduced just in the last few months. When you're downsizing, you might be downsizing into a brand-new home, and it may take longer than 12 months to get the permits and have it built. This bill extends the time in which the proceeds from the former house may be set aside from all the other assets and considerations in regard to deeming and social security benefits and payments. This money in the home, in the principal private residence, would not affect social security benefits. But, as an amount of money in a bank, waiting to be spent, it would affect those entitlements. What the government is doing here is extending, from 12 months to 24 months, the time that money can be set aside before it is included in the process of computing a social security benefit. Also, only the lower below-threshold deeming rate will be applied to the asset-test-exempt principal home sale proceeds when calculating deemed income. So this applies not only to a person's social security benefit but also to their deemed income.

Your existing home may be a large home with a large garden. You may be older and it may be time to move out of that residence and offer it to a family. The great benefit here is that, as part of these arrangements, when you sell your existing home, you can actually take $300,000 of the money that has been accorded to you on the sale of the residence and put that directly into non-concessional super. That is a huge benefit, over and above downsizing and moving to a new premises. That measure was the 2017-18 budget. I actually know of people who have used that benefit from the sale of their home and moved $300,000 into their super, which is a great long-term benefit for them and, broadly, their family.

This bill is one of the many benefits governments have given people in relation to the family home and to benefiting themselves in later years. We in the previous government recognised that changes could be made, moving eligibility for this from 60 years of age down to 55 years of age. I hope those who are around that age don't see themselves as older people but rather see this as an opportunity. I'm sure governments would have sat down—and, Deputy Speaker Stevens, you'd know about this exactly because of your background—and said, 'How can we encourage people to open up the housing market?' You'd look at every aspect of the housing market and say, 'What can a federal government do to make some changes that may inspire people to do something they wouldn't otherwise do?'

Since the end of the Second World War, the ownership of a home was the basis of the family unit. The great dream was not to have the ute and the caravan and the boat out the back, or the holiday house down at Portsea—Portsea is not a good example; I'd better go for Lang Lang Beach or something like that. The great dream was to own your own home, to come from war-torn Europe to Australia with practically nothing in your pocket and say, 'A great achievement for us would be to own our own home.' It was taken for granted by many Australians for many years. We're faced with a totally different situation now.

So, over the last 10 or 15 years, governments have been saying: 'Housing affordability is an issue. How can we make a change to our policies that will encourage older Australians to either downsize or take the opportunity to open up their properties for younger Australians with families to buy?' That is outside of building social housing ourselves, which we do anyway. It is something that the market can do, because you're going to say, 'Here's an opportunity for us.' Your accountant may draw it to your attention. The government may draw it to your attention. You might be struggling a bit in your household. I am on a few acres, and that is becoming quite a bit of work for me. It was fine when I was 20 and created the garden. But now I'm just over 20—I'm 71—and these things play a part in how you are able to handle your household. Our baby boomers, people born just after the war, and those in the years following have created homes on beautiful blocks right across Australia—in Adelaide, Perth and Melbourne; in Wangaratta, Bendigo, Ballarat and all of our regional centres; in our beautiful Sydney and Brisbane and even up to Cairns. They are wonderful homes but not necessarily the appropriate homes now.

One of the biggest cohorts of people within the Australian community that are at risk of becoming homeless is actually women over the age of 55. That's an indictment of us. It's about the type of housing that they might need. You don't want somebody who is at risk of homelessness going into a place with four or five bedrooms and a garden. I think there's an opportunity for us to consider that very carefully. There was a report put out only very recently about the design of future housing for that cohort of women over 55 who need public accommodation.

Governments have taken responsibility for housing all along, state and federal governments—although the federal government actually gives money to the state governments to deliver the services. And I'm not of the view that state governments don't deliver on housing. I'm not of that view at all, because they do. State governments do deliver on housing. That has been their responsibility. Our responsibility has been to deliver in the area of Indigenous affairs, where we have direct involvement in supplying public housing.

So, when I consider this bill, I consider how it might have long-term benefits, and not only for the owners of a house. They have a financial benefit, in that they are being protected in two ways. Their asset does not come into the calculation of their social security arrangements. It doesn't come into their deeming arrangements, so they're protected there. But they're also offered, as I said before, the opportunity to move $300,000 from the house into their super, for their benefit in retirement. That is a terrific incentive for people to say, 'Yes, I can live in a smaller house. I can even move into one of those community housing developments for the over 55s.' There's a very good one at Phillip Island. There's a very good one at Pakenham that I know of. There's a very good one at Warrigal. There are a number of them, and they're very popular for people to go and live in. They're in between their house and permanent aged care. They are communal housing areas for people who have decided to downsize. They go into those more communal, gated communities—and people who are under 55 are taking the opportunity to move into that type of housing—because there are recreational facilities and they have people to talk to. They're not on their own, loneliness is diminished, and there are activities that they can do in that type of arrangement.

A number of people that I know have chosen that as the next step, especially women on their own who have a home as an asset and have lost their husband—or partner, as you call them these days. They choose that type of lifestyle. I haven't heard anybody complain about the places they've gone to. I did have one problem a few years ago, but that's passed now. But most of them actually enjoy that change of lifestyle. I say that, as you get older, you do take the opportunity for a different lifestyle—but including life. It's not a death sentence; it's life as we know it. There's a very good development that's just happened in the community of Pakenham. I live there, but it's no longer in my electorate. They are very highly sought after units within an over-55s development. And I think the happy hour on Friday is pretty well attended!

Having said that, this bill is a good bill. Both the former government and this government have supported this process. They understand the importance of it. It's a way of trying to open up the market, with the opportunity for people right across the country to offer their homes to the next generation of people.

Deputy Speaker Stevens, having regard to the time and the opportunity that you've given me to speak to this bill, I want to tell you that I wholeheartedly support the bill and I wholeheartedly support the process, knowing that housing has been the most important economic stabiliser for families across Australia since the Second World War, as well as for those who came here to this nation and had the opportunity to create wealth and to not only own their own home but help their children to own their own home as well.

Sitting suspended from 13:00 to 16:0 5

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

It is a great pleasure to be here. I rise to speak on the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022.

Australia is currently facing a housing shortage, with many young families unable to secure suitable homes. The supply of housing is the most significant factor in this crisis. Throughout the pandemic, house prices soared, with high demand and low housing supply pushing the dream of homeownership further down the road for many young families. In order to free up family homes in the market for young families, it is vital that older Australians are able to downsize when they no longer want to maintain that large family residence and that they are not penalised for doing so.

The coalition are supporting this bill, as the measures within it were first announced by us on this side. It does exactly what we committed to do at the last election—that is, to double the asset test exemption to two years when pensioners downsize from their family home, giving them more time to plan their future and, I might add, less lawn to mow. More importantly, we are supporting this bill because it will provide pensioners with the ability to extend from 12 to 24 months their existing asset test exemption for principal home sale proceeds from which a person intends to purchase a new principal home. As the shadow minister has stated, the best way to support older Australians in incentivising them to downsize is to remove the disincentives that exist in the system.

The measures in this bill follow a strong framework laid out by the previous coalition government. During our time in government, we announced that Australians aged 65 or over could, from the proceeds of selling their home, make a non-concessional contribution of up to $300,000 into superannuation from 1 July 2018. Earlier this year, we further enhanced this measure, reducing the eligibility age from 65 to 60. The results of these policies speak for themselves, as we saw 36,800 individuals contribute some $8.9 billion to their superannuation under this measure, from July 2018 to January 2022. Imitation, of course, is the most sincerest form of flattery, and there is no greater measure of the success of these policies than Labor adopting our commitment from the previous election to further reduce the eligibility age to 55 for non-concessional contributions. But the flattery from the Labor government does not end there. As I mentioned earlier, the very measures sought to be implemented in this bill were first announced by the coalition at the federal election. So successful and robust is the homeownership framework built by the coalition that it can not only withstand a Labor government but continue to grow in spite of it.

We have a strong track record of not only helping older Australians who are looking to downsize but also assisting young families into their first home through measures such as our home guarantee schemes. During the previous government, the coalition supported more than 300,000 Australians in the purchase of a home. We supported almost 60,000 first home buyers and single-parent families into homeownership through measures consisting of the First Home Loan Deposit Scheme and the New Home Guarantee, and the Family Home Guarantee, with a deposit of as little at five per cent and two per cent, respectively. The coalition government protected the residential construction industry, with more than 137,000 HomeBuilder applications generating $120 billion of economic activity. This action was paramount in not only keeping the construction industry afloat but ensuring that it was in a position to respond to the housing demand that the country now faces.

Responding to the strains on low-income earners, we provided $2.9 billion of low-cost loans to community housing providers to support 15,000 social and affordable houses, saving $470 million in interest payments, to be reinvested in more affordable housing. In total, we unlocked 6,900 social, affordable and market dwellings through the coalition's $1 billion infrastructure facility to make housing supply more responsive. Through this framework of tangible and measurable achievements, we then announced this very policy, working in tandem and building on a variety of measures to provide further supply and removing impositions for first home buyers.

While the coalition will be supporting these measures today, there is much more that should be done to address housing supply shortages and to foster growth in ownership across the country. Earlier this year, the coalition government was already providing additions to our framework to address these concerns. At the recent federal election, the coalition government made a commitment to establish a super homebuyer scheme to allow first home buyers to invest up to 40 per cent of their superannuation, up to a maximum of $50,000, to help with the purchase of their first home. We would have built upon our First Home Guarantee by raising the number of low-deposit guarantees for first home buyers to 35,000 each financial year, and we would have increased property price caps for the Home Guarantee Scheme to ensure that Australians continued to have a choice when purchasing their home.

We would have also continued to support our regions by incentivising the purchase of new-build homes, providing 10,000 low-deposit guarantees each financial year for those moving to or within regional areas. Opportunities for homeownership among single-parent families would have been expanded by increasing the number of low-deposit guarantees for single-parent families to buy a home, with a deposit of as little as two per cent, to 5,000 each financial year. Finally, we would have also supported greater investment into affordable housing, with an additional $2 billion in low-cost financing for social and affordable dwellings, bringing total low-cost financing to $5.5 billion, supporting around 27,500 dwellings.

In stark contrast, Labor is committing funds in an off-budget fund to support a housing program that currently has no substance and lacks detailed costings or an implementation plan. Labor's Help to Buy scheme is, at best, a niche program that very few Australians would even qualify for, let alone want to participate in. Significantly, this scheme will do nothing for housing affordability, because it does not support supply—the aspect of housing affordability which this bill directly aims to address. If there is one thing that is abundantly clear from Labor's track record in this space, it's that they are better off implementing coalition policies instead of coming to their own conclusions.

Owning your own home is still a fundamental part of the Australian dream. Eighty-five per cent of renters aspire to own their own home. Homeownership offers security and stability for both individuals and families. A home is the largest purchase most Australians will make in their lives. And, without a doubt, it will be their most important and cherished asset. That's why it is so vital that government does not stifle supply, providing the economic conditions that allow these dreams to be fulfilled. I commend this bill to the House.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 is a good bill. I have many seniors in my area of the country, the beautiful Lyne electorate. In fact, we have double the average number of Australians aged over 65. The last time I looked at the Department of Social Services figures, I saw that I have over 31,000 people receiving the age pension, let alone those on veterans pensions, single mothers on parenting payments, and other people on government assistance.

We have the phenomenon of really major housing shortages in regional Australia since COVID came along, because people in metropolitan Australia started buying up country houses which were historically long-term rentals to turn them into Airbnbs, short-term rentals, and so that they could have the ability to escape lockdowns. Subsequently, many more metropolitan people have discovered the joys of living in country Australia, so a lot of the rental market has dried up for long-term renters.

This bill amends the Social Security Act and the Veterans' Entitlements Act so that, when people sell their primary residence, their own home, to downsize to a smaller unit or a smaller house, they have two years of exemption before they purchase their next primary residence, as opposed to the current situation where they will only get that leave pass for one year. Those existing arrangements mean that, in the current housing market, you really have to be very efficient and know what house you are going to buy pretty much before you sell your own home. With the housing shortages and the rampant, runaway market over the last two to three years, that has proved problematic. With a 24-month window, there will be many more people that will take up the idea of downsizing. That means that bigger houses and bigger apartments that are available for young people will come on the market as a result, with potentially even more coming on the long-term rental market if investors buy properties to let them out—rental properties.

This bill also applies only the lower below-threshold deeming rate to these asset-test-exempt principal home sale proceeds when calculating deemed income. At the moment, with deeming-rate limits $56½ thousand for singles and $93,600 for couples combined, it will be a significant change. The 24 months mean that, while they are trying to find a house, they will get some reasonable income assistance—because they will have to rent somewhere in the meantime, with rents ridiculously expensive.

This bill receives our support because it was our policy, and I compliment the members of the new government on taking up good policy. We're never going to obstruct good policy. But it's copycatting; you've got to admit that. I think I should just give you a quick summary of all the other good things we did in the housing market to help people get into their first home. Property prices are very hard for first home buyers. Whether you're in a metropolitan or rural setting, house prices have gone up incredibly over the last three to four years, and some of them in my area have gone up 30 or 40 per cent. But there are corrections happening in the marketplace as interest rates rise.

In the 2017-18 budget, we announced that people over 65 could make a non-concessional contribution of $300,000—from the proceeds of selling their home—into superannuation. We introduced further changes this year, in the last budget, to lower this to people over 60, rather than the 65 age limit. A lot of people took that up and created a healthy buffer in their super fund to see them through their senior years. There were 36,800 people who took up that idea, and $8.9 billion has gone into super. In the last budget, we proposed that the reduction that we had made to 60 would come down to 55 to encourage what is good behaviour for freeing up housing. We hope that that will increase the number of people downsizing so that young families have more houses to choose from.

The other thing that we did on a macro scale during our time in government was to set up the National Housing Infrastructure Facility, and that has allowed cheap government loans to community and social housing providers to build many more community and social housing units. There are thousands of people who have moved out of long-term rental into community housing because it's generally available at a cheaper price than the open market. The other thing that we have done is initiated the super saver scheme. We increased the potential size of it in the last term of government so that it allowed people to put 40 per cent of their superannuation up to a maximum of $50,000 to help with either the deposit or the purchase of their first home. Australians, when they eventually sell that home, obviously have to put that money—and pro rata it—back into their super fund, but they avoid paying interest and it means they get their deposit a lot sooner. That has been a great initiative.

We also, as I said, allowed people, at the age of 55, to put $300,000 per person into their super fund on the sale of their first house. We also had the home loan deposit scheme and the new home and family home guarantees so that people could borrow to buy their first home with only five per cent of the deposit. Generally a 20 per cent deposit is required by most lenders, but this scheme allows them to get an insurance policy to guarantee the missing percentage. Thirty thousand or more people got into their first home as a result of that. They're out of the long-term rent trap. The most important thing is that this has helped many single-parent families buy their first home, and we have found that single parents are the most resilient first home buyers. Because they have finally got their own home, they are very dependable repayers of their mortgage. It also means that, in the long term, they can become much more secure, because having your own home in your senior years is a great asset.

The amount of money that was put aside for this low-cost financing of social and affordable dwellings started off at $2 billion, but, by the time we left government, it had risen to $5½ billion, and that supported 27½ thousand dwellings. So there have been a lot of initiatives introduced, but this particular bill will make it a lot easier for many seniors to make the decision to downsize, cash in the value of their home, put the money into their super and have a smaller amount of capital tied up in their primary place of residence. It will help the housing shortage. It will help people get into rentals, as some of these downsized houses will go into the rental market. It will allow young families who are upgrading to bigger homes to get into the market.

The big issue with the housing shortage is that the supply of homes and land hasn't matched the population growth. Noting that a lot of our temporary residents and overseas migrants have had the right to buy homes here, for as long as I have been involved in politics, we have had a negative balance in new homes. But we certainly had a first home building and buyers boom during the terms of the Morrison, Turnbull and Abbott governments because we on this side of the House believe that the best form of assistance is for people to be in a job and to own their own home. To not be paying off a mortgage all their life, the sooner they can get into that home the better.

I commend this bill to the House and I'm sure others will support it as well.

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak in support of the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022, which amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners or other eligible income support recipients during the sale and purchase of a new home by extending from 12 to 24 months the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home, and applying only the lower below-threshold deeming rate to these asset-test-exempt principal home sale proceeds when calculating deemed income.

Up until recently, the 12-month period was considered to be a reasonable amount of time to build a new principal home or find an existing one. As a measure brought to the last election, the coalition committed to double that period to 24 months. This commitment was to give seniors who are selling in the current property market greater confidence to downsize into something more suitable, while providing greater confidence and certainty in their financial planning. I am pleased to see a bipartisan approach to this policy, particularly as it provides more support and financial incentives for people to downsize their houses in the hope of boosting housing stock for families across the country who are struggling to find housing and break into the real estate market.

We're all aware of the rise in real estate prices all across the country, which has not left the northern Tasmanian region untouched. There have been sharp rises in my electorate that are leaving the dream of the family home increasingly out of reach, with supply and demand a core issue driving up housing costs. Earlier this year I read an article stating that almost 70 per cent of Australians believe that the great Aussie dream of owning a home is over. The Property Council of Australia's data found four out of five aspiring homeowners believe the dream of homeownership is unachievable. Property Council chief executive Ken Morrison said the findings were 'incredibly disheartening', and a Finders survey in December found that 39 per cent of Gen Z respondents felt 'extremely negative' about their ability to afford a home, with 23 per cent of respondents across the board expressing the same level of pessimism. Further research has shown that it's harder than ever for first home buyers as they battle against high prices and borrowing barriers, with saving for the standard 20 per cent deposit pushing back the time line for many hoping to break into the housing market for the first time.

In my own electorate of Bass, a number of suburbs were considered some of the fastest growing in the state in the year to May 2022. Regional Tasmanian dwelling prices grew in value by 3.9 per cent in the three months to May, which was one of the fastest rates in the country and much faster than Hobart, where dwelling value increased by just 0.3 per cent over the same period, according to the latest data released by analytics firm CoreLogic. In May, the median house price for Waverley was $432,140, an annual change of 37.9 per cent; for Beaconsfield it was $444,897, an annual change of 35.1 per cent; for St Leonards it was $571,586, a change of 33.7 per cent; and for Trevallyn it was $666,738, an annual change of 33 per cent. The value of units in Launceston and the north-east grew by 4.6 per cent in the quarter, the second-fastest rate in regional Australia, while Launceston house prices grew by 2.6 per cent in the same period. In 2016, the median Launceston house price was $269,000. This July, the median house price was over $600,000.

While this might speak to a decent return for some investors who are identifying Launceston as a hotspot—and I don't begrudge investors looking to set up their future finances—it's creating a significant issue around housing availability and affordability, particularly for family homes. We know that 85 per cent of renters aspire to own their own home due to the security and stability that homeownership offers for both individuals and families. However, even the standard three-bedroom one-bathroom so-called starter home for young couples is becoming increasingly out of reach.

After identifying the increasing challenges that Australians face in securing their first home, the coalition implemented a number of policies to address the issues, resulting in supporting almost 60,000 first home buyers and single-parent families into homeownership through the home guarantee schemes—consisting of the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee, with a deposit of as little as five per cent or two per cent respectively. Through our $1 billion infrastructure facility, we unlocked 6,900 social, affordable and market dwellings to make housing supply more responsive to demand, and we established the First Home Super Saver Scheme, helping 27,600 first home buyers accelerate their deposit savings through super.

Addressing the housing crisis will require all three levels of government—local, state and federal—to be actively involved in providing solutions. It was the First HomeBuilder's grant, offering a combined grant of $45,000 between the federal and state government, that gave young Tasmanian couple Georgina and Campbell the opportunity to build a new home in 2021. Until the grant, the couple had been saving for five years for a deposit on a house. 'During that time, we have rented for roughly two years and spent the remainder of the time either living with family or house-sitting,' Georgina said. 'We're both thrilled that we were able to receive the two grants,' Campbell continued. 'If we didn't receive the two grants, it would have taken us another two to three years of saving and living with family or house-sitting.'

I also want to take the opportunity to give credit to the Tasmanian Liberal government for providing a helping hand to enable more Tasmanians to own their own home through the new MyHome shared equity program. In partnership with Tassie's own Bank of us, the MyHome program helps people achieve homeownership by reducing the costs of buying a home, by sharing these costs with the Tasmanian government. MyHome shares the upfront costs of owning your own home, which reduces the deposit needed and mortgage repayments—requiring a deposit of just two per cent. The shared equity program also offers a new type of assistance by providing up to $150,000, or 30 per cent in equity, for the purchase price of an existing home. The program's first customer, Emma Attard, utilised the program to purchase an existing, renovated home in the suburb of Youngtown. Without the program, Ms Attard said, buying her first home would have been impossible. For people who want to build their own home, MyHome can provide up to $200,000, or 40 per cent in equity, of the purchase price of a new home or house and land package.

Though certainly not a silver bullet, this program is one way of supporting Tasmanians to achieve homeownership and making the cost of owning a home more affordable. As recognised through this bill, encouraging pensioners to downsize from a family home to something smaller, without being financially penalised, will hopefully free up more housing for those seeking to purchase their first home.

The coalition has a strong record in helping older Australians who want to downsize, freeing up family homes in the market for young families, beginning in the 2017-18 budget, when we first announced that those aged 65 or over could make non-concessional contributions of up to $300,000, from the proceeds of selling their home, into superannuation from 1 July 2018. Additionally, earlier this year, the coalition further enhanced this measure, reducing the eligibility age for making downsizer contributions into superannuation from 65 to 60 years of age. From 1 July 2018 to the end of January 2022, under the coalition, 36,800 individuals contributed $8.9 billion to their superannuation under this measure.

While I do support this bill, addressing housing supply issues and housing affordability over the long term will need long-term strategy commitment and vision from all sides and all levels of government.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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