Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I welcome the opportunity to contribute to what I do consider to be a matter of public importance—the issue of housing affordability. I welcome the opportunity for discussion about this. What is a matter of regret, though, is that One Nation has chosen to focus on a very narrow aspect of this issue when we know, from numerous inquiries into this matter, that housing affordability is a vexed issue. It is a complex matter: it is not just a supply issue and it is not just a demand issue; it is something that requires a lot of government attention to address. It is overly simplistic to focus on this one aspect of housing affordability.

I am a member of the Senate economics committee, and that committee handed down a very substantial report in 2015 on the matter of housing affordability. During the course of that committee's deliberations, there was consideration of the impact of foreign buyers on the issue of housing affordability. Although it wasn't one of the key concerns of the inquiry, it was raised by a number of witnesses during the hearings as a potential cause of recent house price inflation.

I note that the committee made reference to the House of Representatives Standing Committee on Economics, which held an inquiry into the subject and released a report in November 2014 that had four key findings: that there was a lack of accurate or timely data that tracks foreign investment in residential real estate; there had been a significant failure of leadership by the Foreign Investment Review Board, which was unable to provide basic compliance information to the committee about its investigations and enforcement activities; that there needed to be a greater willingness to enforce foreign investment rules in order to improve compliance; and that the Australian taxpayer currently foots the bill for the administration of FIRB and the Foreign Investment and Trade Policy Division of Treasury. There were 12 recommendations following from those particular findings.

The issue of foreign buyers has been looked at, but the view from the Senate economics committee was to acknowledge the complexity and urgency of housing affordability in Australia. As I said earlier, it is not really categorised as a supply-side issue or a demand-side issue but that supply is not keeping up with demand, and there is a need for policy interventions without making the matter worse. This is a complex issue. We know that there is, in fact, a crisis, and I will not reiterate some of the points that Senator Cameron has made in respect of some of the key aspects of the crisis that we are confronting.

I want to dwell on a couple of the Labor plans for addressing this issue. Of course, chief amongst those is the plan to reform negative gearing and capital gains tax concessions. It is a matter of record that Labor is the only party with the courage to come forward with a policy that is going to make some inroads into this particular issue. We admit it is not the be-all and end-all of the response, but many quite credible economists and commentators have identified that these tax distortions are causing the exacerbation of the problem. It is a matter of regret for public policy that, with Labor having held out the opportunity for a bipartisan position on this—and despite the fact that the former Treasurer and the current Treasurer have expressed their concerns about negative gearing and identified it as a particular issue—for base political reasons, the coalition has decided not to take up the lead of Labor in this area. I think it is a matter of great disappointment. I also note that One Nation has not supported the brave proposal to reform negative gearing and capital gains tax concessions.

We have also proposed a number of other measures. Increasing foreign investor fees and penalties is another one—I will turn to that in a bit more detail—and re-establishing the National Housing Supply Council, which was abolished by the Abbott government on 8 November 2013. If there is one, I suppose, indicator of the lack of commitment from those opposite on this issue and trying to address this issue, it is that, as a way of addressing what was then referred to as the budget emergency, the coalition, as one of its first major steps, abolished a number of its non-statutory bodies, including the National Housing Supply Council, which had been formed back in May of 2008.

The council comprised a number of experts of a diverse range of relevant fields, including academia, finance, economics, urban development, residential construction, urban planning and social housing sectors. The council's role was to provide estimates, projections, analysis and policy advice in relation to housing supply and demand. So, in abolishing this body, the government quite clearly demonstrated its lack of interest in this matter and, I think, stands condemned as a result of that.

Currently, the Foreign Investment Review Board rules apply a range of restrictions on foreign purchases of property in Australia, including a general restriction on the purchase of existing dwellings—although there are some exemptions to that. While foreign investment purchases account for a relatively low amount of overall purchases each year, FIRB data does show that the number of foreign investment purchases has grown by about 275 per cent over the three years to 2014-15.

As I mentioned earlier, one of the measures that Labor is proposing is to increase application fees for foreign investment in residential real estate. So we would actually double the application fees that currently apply, and what we proposed is that from 1 July 2019, for properties of a million dollars or less, the current fee of $5,000 would be doubled to $10,000; over a million dollars and up to $2 million, the current fee would be increased—as I say, doubled—to $20,200; and between $2 million and less than $3 million, the new fee would be $40,600 Those fees would then in our proposal continue to be indexed by the CPI.

We also proposed increased penalties for breaching the Foreign Investment Review Board rules. That would mean that, for foreign buyers who acquire new or existing dwellings without approval, we would increase the criminal penalty to $270,000 and $1.35 million for a company; and increase the civil penalty to be the greater of the following: the 20 per cent of the purchase price in addition to the relevant application fee or 20 per cent of the market value of the property in addition to the relevant application fee.

We would also double the maximum financial penalties for a number of other breaches including where, for example, a nonresident acquired an established property or a temporary resident acquired more than one established property; and a range of other breaches which I will mention: where a temporary resident fails to sell established property when it ceases to be their principal residence; if a temporary resident rents out an established property; failure to complete construction within four years without seeking an extension; where a developer fails to market apartments in Australia; where a property developer fails to comply with reporting conditions associated with an approval; and where a foreign person fails to comply with reporting conditions which require them to notify actual purchase and sale of established properties. So these are some of the more effective ways that we can deal with this issue. Establishing these penalties sends a very clear signal that breaches in this area will not be tolerated. These are the ways to address housing affordability. (Time expired)