Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

This is really a repeat of what was put to us yesterday, and I can only repeat what I said yesterday, which is that housing affordability is a function of many things. It is indeed a function of interest rates. We are proud that interest rates are much lower under us than they were when we came to office, and they have certainly been much lower on average over our period in office than they were under the previous administration’s period in office. They are also a function of the extent to which state governments are prepared to release land and the extent to which state governments impose taxes, levies and charges on the development of new housing estates. We have seen in recent weeks reports of the extent to which state governments are price gouging on this issue. They are posing enormous state levies, charges and taxes on housing developments. They are not keeping up with the pace of demand in relation to land release. They are making it more difficult for first home buyers.

There is, it must be said, increased demand for housing because we have had such a strong economy during our period in office. The economy has been remarkably strong as a result of our fiscal management, our ending of Labor’s $96 billion debt and the consistent growth that we have had. We have had record low levels of unemployment. Many thought we would never get below five per cent unemployment. That has put many more families in a position where they can afford new housing.

Obviously, we have had a period where prices for housing have been higher than the general rate of inflation. That is terrific for those with houses, and many Australians feel extraordinarily confident about their financial position because the equity in their house has increased considerably. The flipside is that, if the general pricing level rises—combined with the very inadequate policies of the state Labor governments in relation to land release, taxes and charges—then having the capacity to get into the housing market is made somewhat more difficult. That is why it is very important that we continue to have the fiscal restraint which we have displayed to ensure that we minimise the impact on inflation and, therefore, on interest rates so that we maximise the affordability of housing for young Australians.

We have had reasonably substantial increases in the price of housing because of the demands that flow from a strong economy, the immigration policy that we run and the return to higher fertility rates which is occurring under the Treasurer’s bold leadership on this issue. That does mean that there is a huge premium on governments running the sorts of economic policies which minimise upward pressure on interest rates. Whatever those opposite may say, there is an onus on state Labor governments to do their utmost to ensure that young families have access to housing at affordable prices.