Andrew Bartlett (Queensland, Australian Democrats) Share this | Hansard source

The Democrats support the First Home Saver Accounts Bill 2008 and related bills, and that is a matter of record. As recently as a couple of days ago in speaking to a Senate committee report, I spoke on this issue of providing more support to people in the area of housing. The proposal for the first home saver accounts is a welcome one.

It has been a long-standing concern of mine and the Democrats that there has not been adequate attention paid at the national level to provide more assistance to people to help them deal with the housing affordability crisis, nor has enough attention been paid at the national level to try and reduce the problem of housing affordability as a whole. I am sure the government is not suggesting that First Home Saver Accounts on their own will be the solution to the difficulties that first home buyers face, but I do think they will provide some assistance for some people. Anything that helps move things forward should be supported, but it should not be done so uncritically. I think that is the key part of this area, and it is still one of the unanswered questions with regard to the federal government. It is indisputably a positive thing, that they now have a minister specifically responsible for, and focused on, housing issues. It is also indisputably a positive thing to have greater resources attached to the bureaucracy at the national level to support the minister—people who are specifically focused on and have responsibility for housing issues.

One of the problems that we have had in the past—in part because that has not existed—has been a lack of data and a lack of examination of the consequences of measures. That must apply to this new measure. We need to closely monitor how it operates, not just in terms of how many individual people access it and then uncritically wave a flag and say, ‘All of those people have now been helped by this account,’ without any examination of the wider issues. We also need to try and assess the consequential impacts of this account. Some of these things are hard to nail down precisely, but I think we need to make an effort.

One of the valid criticisms of the First Home Owner Grant has been that it was potentially inflationary—I think undoubtedly inflationary. In some areas all it has done is provide some extra capacity for demand to push up the price in terms of available housing. That issue was addressed in the recent report by the Senate Select Committee on Housing Affordability. I remind the Senate and those interested in this issue that it is a very worthwhile and unanimous report. I would encourage people to study and examine it. The same possible consequence can potentially be one amongst other consequences that occurs as a result of this measure.

Personally I would like to see, as I stated in this place the other day, the First Home Owner Grant scheme being wound back, targeted much more precisely, means tested and applied to lower cost housing only—rather than being open to all comers whatever their income, their resources and the cost of the house they are buying. We should be targeting these measures at people that need assistance rather than providing grants or tax breaks for people that are already doing well. That is something that I think also needs to be monitored with regard to the first home saver accounts.

Certainly there is some criticism—perhaps ‘concern’ is a better word—that this measure might end up providing more taxpayer subsidies to people who are well-off than those who are less well-off. That is not necessarily in itself a reason not to do it, but I think it depends on the extent of that disparity. Let us not forget that what we are doing through this process is dedicating some tax expenditure to assisting people to afford homes. In the past we have suffered from massive amounts of money going in and purportedly being spent on housing measures without any real assessment of whether or not they are effective in terms of value for money for the taxpayer, in terms of affordability, in terms of not making the problem worse and in terms of being targeted at those most in need.

We have not done a lot of those assessments in the past. We certainly have not done them for the First Home Owner Grant, and that has been a problem—that we have not even had the data there to make the assessment. People have had to speculate to some extent. I think the concerns as a consequence of those speculations are valid, but it has been quite unsatisfactory. We have had sizeable amounts of public money spent through that grant without a lot of effort put into gathering the data about how it is applied, what its impacts have been, whether it has gone to people most in need, whether it has had a positive or a negative net effect on housing affordability and all of those sorts of things. When we are giving tax breaks to people we need to closely assess the total cost, the net impact and the benefit for individuals and for the public.

It is on a totally different scale and in a different context, but nonetheless I think it is valid to draw the comparison with the capital gains tax exemption on the family home. That is something that, according to the report of the Senate committee inquiry into housing affordability that was tabled the other day, is estimated to cost as much as $20 billion a year. That is an estimate, and, frankly, I am still astonished that there is so little effort put in by Treasury and others to more accurately measure the extent of that tax break. Whatever it is—whether it is $20 billion or substantially less—it is a hell of a lot, and it is a lot more than the money provided for public housing, for the First Home Owner Grant and rent assistance. If you add all of those, the result is still nowhere near the cost of that single tax exemption. I know no-one from either of the major parties is going to suggest that that tax exemption be scrapped. I use it simply to point out that an exemption in itself is not necessarily a good thing and certainly not necessarily the most cost-effective thing. That exemption is clearly far more beneficial for people who are well-off. It is a regressive tax break. It may have other social good attached to it, but we should at least be clear about the pluses and minuses.

The same should apply to this legislation. On balance it is definitely a plus. One extra reason I think it is a plus is that it reinstitutes a savings culture, which has disappeared to a large extent in recent times, for a range of measures. It is now much more easy to access a housing loan without having saved a sizeable deposit. People can use the aforementioned home owners grant and just whack it straight onto a deposit or, in some cases, use it in lieu of a deposit. That is good in terms of helping people purchase a house, in terms of the immediate consequence, but if it means people taking on board more debt than they can really manage then you are probably not really doing them a favour in the long run. You also are potentially creating unhelpful consequences for the overall cost of buying a home. If you have more money available and able to be borrowed than people can really afford, that can have the effect of unhelpfully and excessively stimulating demand, and that just makes it more difficult for everybody. So I think the impact of encouraging a savings culture through this is significant on its own, regardless of all of the other impacts the legislation may have. I know it is not the only measure the federal government is putting forward with regard to housing and purchasing a home, or indeed housing more broadly.

I welcome this and the other measures that have been put forward. I still think a lot more needs to be done, I might say, and done quite urgently. Some of that involves taking decisions that are potentially politically difficult. But, when you compare that to the enormous hardship that a lot of Australians are suffering at the moment because of the high cost of housing, particularly the high cost of renting, you see that those difficult political decisions need to be confronted. It was the refusal to confront those over the years that led us to the mess we are in today. We support the legislation and we hope that its impact and effects are monitored closely.