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

As I often do when I have the opportunity to speak in front of you, I regret to say that I have to acknowledge you as Mr Acting Deputy President Marshall, but it is good to see your years of wisdom and experience being utilised in the chair.

Colleagues, I am not a particularly religious person, but today I am convinced that miracles do happen. Miracles happen because we have discovered for the second time that the Australian Greens have a tax that they do not like. I was delighted to discover earlier this year that the Greens, during the backpacker tax, discovered a tax they did not like. They campaigned vigorously against that. I was delighted to see that. I really appreciated the logic that the Greens brought to that debate and that aspect of tax. They realised that a tax on someone's employment might discourage people from being employed, and a tax on someone coming to work in Australia might discourage them from coming to work in Australia.

It is wonderful to see that that solid economic logic from the Greens has been applied to a second area of policy. They have realised that stamp duty, a tax applied to housing, makes housing more expensive and that perhaps this tax on housing is not a good thing and we should reduce it, if not get rid of it altogether. I hope the Greens apply this logic to other areas of tax policy. They might realise that, say, a tax on employment, in the form of a payroll tax, also discourages people from being employed and puts an extra cost on employment. They might realise that the tax on investment, the company tax, might reduce the amount of investment that takes place and that we should get rid of it if we want to see more investment.

I hope this is a sign of Senator Whish-Wilson's good economic influence on the Greens. I hope it continues. I look forward to seeing it play out in other areas of economic policy. But unfortunately it has not been quite consistent, even in this motion today. The Greens rightly recognise that stamp duty does make housing unaffordable and that we should get rid of that tax on housing. But at the same time they are arguing that we should in fact increase taxes on housing for some forms of people who would buy houses—in this case, investors. I am not sure how a tax on investment in housing is ever going to make housing more affordable. I will come to that in a minute.

There was one unfortunate aspect of the contribution from the Greens earlier in this debate today. We had to endure yet another tedious conspiracy theory from Senator Rhiannon about how donors to the coalition drive our policy on this issue. If every time the Greens got up and spoke about renewable energy one of us got up and said that their policy was being driven by the fact that renewable energy companies donate to the Greens, that would be very tedious. And I honestly do not believe that is true. I believe the Greens are genuinely committed to renewable energy, whatever the cost, as they have demonstrated. And I honestly believe that renewable energy companies donate to the Greens because of the Greens policy on renewable energy and not the reverse—that is, renewable energy companies do not dictate to the Greens what their policy on renewable energy should be. I wish they would apply that logic to others in this place and accept that we are sincere in advocating the positions we hold.

I am very sincerely concerned about housing affordability because, more than most in this chamber, it affects my generation. As I have said before in these debates, my wife and I still rent at home in Melbourne. We do not yet own our own home. But no-one watching this at home need lose too much sleep over that. As I said, I am on a good salary as a senator and I will certainly be able to afford a good home when my wife and I are ready to purchase. But getting elected to the Senate is not a very good housing affordability strategy for most people in my generation—or it is certainly a very limited one. In fact, among all my peers and friends in my age group there is only one who has bought a home and is paying off a very big mortgage. So I absolutely understand the seriousness of this issue; it affects my generation more than any other. But we need to separate the issues that will address and actually fix the problems caused in this area from those that will not. Obsession over new taxes in this area is totally misplaced, totally unwise and will not solve the problem.

We will in due course see the government's plan in this area. I am really looking forward to the budget, where it has been widely flagged that there will be changes proposed to help improve housing affordability. It has been widely flagged that the emphasis will be on supply. I am pleased about that. Think about any other area of policy. If we decided that bread or milk were unaffordable, would we enact government policies to increase tax on those products or would we enact government policies to facilitate the extra supply of those products? It would certainly be the latter.

I want to refer to one very valuable study in this area, an annual study which I think is the gold standard of policy analysis in this area. It is done by Demographia, an international group. They compare cities around the world for housing affordability. They released their latest study earlier this year—and there is an excellent article about this issue, by Leith van Onselen, published in Macrobusiness on 23 January this year. It goes through the cities that are unaffordable and have unaffordable housing. Unsurprisingly, cities like Hong Kong and Singapore have relatively unaffordable housing. You can see why that might be the case. They have a natural constraint on the supply of housing, so it is obvious that there is not much that those jurisdictions can do to increase supply. But it is unusual to see listed shortly after those countries Australia, which has no actual restrictions on the availability of land—and, therefore, housing—except the artificial ones we impose on ourselves. Regrettably, most of those restrictions are made at the local council and state government level.

The study shows one of the most important facts in this debate. Yes, the construction cost of housing is one issue that increases the unaffordability of housing. But fundamentally the source of expensive and unaffordable housing in this country is the value of the land that sits underneath that housing. It is the increase in land values that has primarily driven the increase in housing unaffordability. Why in Australia, one of the least densely populated countries in the world, would we have a shortage of land and a high land price? There is only one reason, and that is an artificial restriction on the supply of land.

We know what those policies are. State governments have been loath to release sufficient quantities of land to allow people to build homes on them, and local councils have been loath to allow people to do on that land things which would allow them to supply more housing. We have these artificial constraints on housing driving up the costs of land and, as a result, housing is becoming more unaffordable.

Unfortunately, the federal government is somewhat constrained in its capacity to deal with that because of the Constitution. I do not think anyone proposes to change that. All we can do is encourage states and local councils to provide an increased supply of land and allow people to do more on their land so that more houses can be built and that supply problem addressed. I hope that they do so, and I know that we will do whatever is within our power to assist that process.

I want to conclude on one final matter that was raised by Senator McAllister about the structure of the government's housing affordability policies and responsibilities. Last week I enjoyed, as I always do, attending the references committee hearing which she chaired and for which I was the deputy chair. It concerned the administrative arrangement orders of the government. In particular, I enjoyed the questions she asked and the interest she had in housing affordability. I am surprised though that Senator McAllister said she was confused by it. I know Senator McAllister is a very smart person and a very astute observer of the workings of government, and I did not think the answers we got from the public servants who appeared were confusing at all. I think it was incredibly straightforward.

They said, as we know, that historically the Department of Social Services has had a significant area of responsibility in housing affordability, particularly the supply of housing to people in need, people who cannot afford to provide it themselves. That has always been the case. They also said that, as we know, the government has taken a wider interest in this issue and recognises that this is an issue primarily of supply. That is why my friend the member for Deakin, Michael Sukkar, was recently appointed as the Assistant Minister to the Treasurer to further assist in this area. It is a whole-of-government problem, particularly at the federal government level, because there are so many moving parts. It makes eminent good sense to me that we would appoint someone like Michael Sukkar to assist in this area.

I am not sure where Senator McAllister's confusion comes from. I think it is abundantly clear. We will see on budget night the Treasurer announcing the fruits of the work that has been done between the Department of Social Services, under Christian Porter's leadership, and the Department of the Treasury, under Michael Sukkar's leadership. We will see that this government does have a plan to address this issue and will make best endeavours to make a positive contribution on this issue, recognising the fact that primarily the constraints in this area are about supply and they are primarily controlled by state and local governments. We urge them to do everything they can in their power to provide more land to reduce the price of housing and make it more affordable for my generation and generations to come.