Mark Bishop (WA, Australian Labor Party) Share this | Hansard source

I rise to speak to the motion to take note of answers to questions by Senator Minchin relating to housing affordability. At the outset I make the observation that falling housing affordability has become one of Australia’s most pressing economic and, in due course, social problems. For most of the last 40 years access to reasonably priced housing has been taken for granted. The demand and supply sides of the equation were often, and continued to be, in balance. Those who wanted homes could generally purchase them at the appropriate price within their particular wage bracket.

Of course there were always those for whom home ownership was going to be difficult. But for those renting and saving to buy a house the equation in the last few years has changed quite dramatically. As Labor’s summit revealed here in Canberra, the principal problem is failure on the supply side. There are simply not enough houses being built in the lower price range for first buyers or for rental supply. The question is what to do by way of public intervention.

The government’s attitude has been to reduce supply by cutting funding for public housing. They have cut billions of dollars of funding during their term of government over the last 11 or 12 years. Their alternative proposition is to support the demand side. They do that through rental assistance and other forms of low-level financial support, hoping that in time the market will respond. But, of course, as we know by the extent of the crisis right around Australia, the market has not done so as yet and does not yet give any indication that it will do so.

Consistent with this new blame game, apparently it is the fault of the states for not releasing enough land but, as we really know, it is much more than that. It is also about the cost of developing that land, fully serviced. More to the point, that developed land is paid for in full and not repaid through rates into the future. The downside of user pays can have long-term unfortunate consequences and they are now being visited upon us within this housing market debate.

Labor’s position is that, given the failure of the market, it is clear the government must intervene. Labor, if elected, will add to its earlier offer to local government in encouraging cheaper land provision. Labor will also provide support to investors and superannuation funds to encourage them to invest in low-cost housing. Investments, of course—and sensibly so—are governed only by guaranteed rates of return. So the assistance provided by a future Labor government is intended to offset the lower rate of rent charged to the renter. We believe that will need to be discounted by some 20 per cent, and we say at the outset that this is quite a radical and innovative model. It recognises that low-cost housing rental to lower income people is not naturally an attractive investment. It provides an incentive for the leverage of private sector funding that can provide far greater relief than the historic public housing model. It is estimated that this initiative will provide an extra 20,000 houses per year. When made available to those most in need, it will make a serious contribution to housing need and to housing affordability. We look forward to the government’s response in due course.

This problem, though, is just another symptom of the Howard government being asleep at the wheel. It is another sign of failure to invest in infrastructure, and there is none as important as housing for thousands and thousands of Australian parents and families who, because of current government policy, are currently unable to get into the home purchase market. In that sense, there is nothing more important than housing for the long-term welfare of Australian families and nothing more important for the long-term social cohesion of this country than proper access to adequate finance for housing for Australian families. (Time expired)