James Paterson (Victoria, Liberal Party) Share this | Hansard source

I am very pleased to rise to speak on this issue because I am from the generation that struggles with this issue. A phrase was used before: generation rent. I am generation rent. My wife and I are currently saving our deposit to buy our first home. We know how hard it is. We know the challenges that young people in Australia are facing in the housing market, but the reality is that those opposite have absolutely no answers and no understanding of the real causes of housing unaffordability.

All of the international evidence shows that the most powerful thing that you can do to improve housing affordability is to increase the supply of land. This is not a recent issue. This is not an issue which only Australia faces. This is a widely studied issue. There are reports put out each year that look at all the different factors that affect housing affordability, and every time they conclude that jurisdictions which have an easy and open supply of land and less restrictive planning restrictions on what you can do on that land are also the jurisdictions that have the most affordable housing. It is not a coincidence that Australia, with some of the worst land release policies in the world and the most restrictive planning regulations on what you can do on that land, has some of the least affordable housing in the world.

Of course, that is not something which is in the control of the federal government. Whether senators opposite like it or not, we live in a federal system, and, unless you are proposing a referendum to change the Constitution to give the federal government control over the supply of land and abolish state governments, there is a limited amount that the federal government can do to improve that. It rests on state governments to release more land and to reduce the regulation on planning to allow people to do more on that land if you want to improve housing affordability.

I find it particularly ironic that this issue was raised today by the former Chief Minister of the ACT. The ACT is not exactly renowned for record housing affordability, good land release policies or light regulation on planning. In fact it is the opposite. Despite being one of the wealthiest and highest income jurisdictions in Australia, it faces some one of the most severe housing affordability stresses in the nation. Those opposite will do well to look in their own backyard and what they have contributed to this issue.

Those opposite do suggest, though, that we should look at negative gearing as a possible solution to this. This is a an absolute fallacy of economics. In which other market would we try and control the demand to improve the price? If we had an issue of the affordability of bread, would we put a tax on bread to make it more affordable or would we look at measures to increase the supply of bread to make it affordable? It is absolute economic lunacy to put a tax on something in an effort to make it more affordable. Of course, the negative gearing policy does not only apply to housing. It also applies to shares. This is part of the grand plan to improve housing affordability: remove the tax deductibility for shares that are making a loss. This a kind of harebrained economic thinking that is going on in the Labor Party at the moment.

Capital gains tax is highly renowned around the world as one of the least efficient forms of raising revenue. Around the world, countries are looking at abolishing and cutting capital gains tax, and yet we have the Labor Party in Australia recommending that we increase capital gains tax—again sheer economic lunacy. One of the suggestions of those opposite is that maybe this will be improved if we had a housing minister. The previous federal Labor government had a housing minister, and how did that work out? How did that improve anything for my generation? How did that make housing more affordable? This is typical of the attitudes of those who think that the federal government and governments generally can fix all the problems that we face and that, if we only appointed a minister for it, it would improve. The housing minister in the previous government did not do such a bang-up job in fixing this problem, so I have no confidence that a new housing minister would fix it either.

This is a serious issue and it is one that particularly affects my generation, but this is an issue that will be solved at the state level by state governments releasing more land and reducing the regulations on planning so that people can do more on their land. The best way to solve any affordability problem is to increase supply, and in a federal system of government, that is the responsibility of our states and local councils. The solution to this issue is not higher and increased taxes. It is not fiddling with negative gearing, which the Prime Minister has very eloquently described as 'the greatest assault on economic freedom' in his lifetime. It is certainly the greatest assault on economic freedom in my lifetime. This is a measure which is used largely by middle- and low-income people to improve their lives, to invest and to pass on wealth to their children, and I do not think that is something that should be closed off to them. I am very proud to be part of a government that is defending those who want to invest in housing and improve the wealth of their families. Thank you very much.