Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Whish-Wilson today relating to housing affordability.

Inequality is one of the biggest issues that face all of us in this parliament, in this country and, in fact, all around the world. Right up there with climate change, it is the great challenge of our time. Inequality is all-pervasive, and it is multifaceted. One of the key parts of inequality in this country is the housing affordability crisis, because housing is also part of the wealth equation. You own your own house. You save to buy a house. You save to put a deposit on a house. You work hard to pay off that house, and that forms an essential part of your wealth and your wellbeing.

It must be really depressing to be a young Australian, especially in places like Sydney, Melbourne, Perth and Brisbane where you cannot even imagine that you could save for your own deposit for a house. You cannot even imagine that these days. In fact, when I asked the Treasury secretary about this last year, he said, 'These days most young people are able to access the housing market in places like Sydney through the bank of mum and dad,' because it is just not feasible that they can earn enough money to pay for the massive deposits that are needed to get into the home market.

What are we doing about this? Who is tackling the housing affordability crisis in this country? We know there is empirical evidence that there are a number of policies we can change to help fix this problem. There is no doubt about it; it is complex and it is all-pervasive. But we can make decisions in here, in the Senate, that fix this. There are a whole range of policies that have been around for too long that are what we call perverse incentives. They provide subsidies to housing investors which are driving the prices of houses in places like Sydney and Melbourne.

I mentioned in question time that in Newtown, in Sydney, a house that was listed for auction with a reserve of $1.2 million went for $2.6 million—more than double the price. That prompted the Governor of the Reserve Bank to come out and make a statement. I know they are very careful at the Reserve Bank about using the word 'bubble'. They try to avoid that word 'bubble' because it in itself can incite further panic in the housing market. The Reserve Bank, the Treasury secretary, all the economists around this country and some of the best financial journalists are all aware of the risks to the financial system—the risks to each and every one of us—that are caused by housing bubbles. And that is separate to the equation of inequality—tackling the housing affordability crisis.

What do we do? We can move immediately on this by removing the subsidies that are mostly for wealthy Australians. We know that the top 20 per cent of Australians are the ones that benefit from the policies in place like negative gearing and capital gains tax concessions. We can remove those and phase them out over time. We can also do other important structural reforms.

The question I asked the finance minister today, who is acting on behalf of the Treasury secretary, was about a reform that everyone in this country seems to agree on, and that is swapping stamp duty for a broad based land tax. We have done it in places like the ACT. I discovered this myself when I was chairing the select inquiry into infrastructure. It has benefits in the areas of infrastructure investment because, if we invest in public transport and in infrastructure like hospitals, schools, medical centres and community centres, we know that we get an uptick in land values around that investment by governments, and that can then be captured with increased revenue for governments.

There are so many ways that this is efficient, and this could actually help tackle the housing affordability crisis. We know that, if we do this, it will be revenue neutral for the Commonwealth government, and it will help reduce house prices and help tackle the affordability crisis. But there is a whole lot more we can do and we need to do. Instead, we seem to sit on our hands in this place, close our eyes and pretend it is not happening—but it is. We especially owe it to young Australians, people like my daughter, who I know will be looking at a career and looking at saving for a house. We owe it to them to actually do what is required, fix a broken system and make sure we can reduce the risks— (Time expired)

Question agreed to.