Janet Rice (Victoria, Australian Greens) Share this | Hansard source

I'm very pleased to have this opportunity to rise and speak today on the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023. I specifically want to speak about schedule 4, which is to do with the intersection of tax policy and housing. That's because we're in a housing crisis.

We are in a housing crisis and a rental crisis here in Australia, so we would hope that if there were changes to legislation being made that these measures would be carefully targeted to address the housing crisis. Fundamentally, the core of our housing crisis is for people who want to buy a home to live in or for people who want to rent a home. Houses cost too much—they're too expensive. What we need to do is to reduce the cost of housing for those people.

The people who are celebrating the increase in the cost of housing and the increase in the cost of rents are property investors who are making a motsa out of housing at the moment, yet we have increasing inequality. While property investors are saying, 'Hurray' because they can see their profits going up, because they can see they are making more money out the housing they have invested in, we have people who have can't afford to buy a house, who can't afford to rent a house, who are spending a massive amount of their income on rental. These are the key problems we need to be addressing.

Schedule 4 makes administrative changes to enhance the ATO's powers to deal with applications for the first home saver scheme. They are sensible enough changes and the Greens aren't going to be opposing them. But the critical issue is they are not going to make life easier for people who are trying to buy their first home. Saul Eslake captured the problem with schemes like the first home saver scheme. He said anything that allows people to spend more on housing than they otherwise would as one effect and one effect only—people spend more money on housing than they otherwise would. Essentially, measures like this, which put more money in the hands of first homebuyers, mean that the price of those first homes goes up. It is what the market will bear.

I've just been chairing our inquiry into the worsening rental crisis. It was very illuminating to hear from the Real Estate Institute as to why they are encouraging landlords to put up the price of rent. They said, 'It is our duty to recommend to our landlords that the price of rents go up. We want our landlords to maximise the amount of money they can make out of their investment.' And that is exactly the same when you're talking about buying houses. Of course the people who are selling want to maximise the amount of money that they can get out of selling that property. If there is more money in the hands of people who are buying those houses, particularly if they are competing against investors who are cashed up, who have tax incentives to support them, it means that the price of that house is going to go up, so nobody wins. The first homebuyers, all they end up with is a much bigger mortgage and that can be a real burden. They can find great difficulties in actually meeting the costs of that mortgage. They are competing with investors who are happy to spend that money because they know that they can rent it out and can, in this current environment of very short supply, completely rack up the rents, send the rents skyrocketing stratospherically and people are going to have to pay.

I mean, it is very clear that, if we're going to be amending our tax laws, there are things that we should be doing if we're serious about actually trying to reduce the cost of housing, whether it is buying a house or whether it is renting a house. The first thing we need to do is increase the supply of social, public and affordable housing. We then need rent controls and we need to actually reduce the tax incentives for investors that just encourage them to treat housing as a commodity rather than as a human right. The fundamental difference between the Greens and the other parties who are in here is that we recognise that housing is a human right; it cannot be just treated as a commodity. We cannot have a situation where you just have rents going up, where you have the cost of housing going up and people are left homeless. It is having a massive impact on our society today.

Let me go through in some detail about what needs to happen. I mean, it is very clear the measures that could happen, that this government could introduce, that the previous government could have introduced but are not because of pressure from those property investors, the property developers. That is who is dictating our housing policy here in Australia. But if you're actually planning housing to serve the interests of ordinary Australians, to make sure that housing is affordable and remains affordable, there are those three things we need to be doing. Let me go through them in order.

Firstly, increase supply of public, social and affordable housing. When we hear about the need to increase supply, this government and the previous government just talk generally about 'Let's just build. Let's increase supply. Let's set the private property developers to build more houses. The government's getting a million houses built and now there are incentives to get 1.2 million houses built.' They don't talk about those houses needing to be affordable. It's just whatever the property developers want to build. So you then have a lot of money being put into building really high-end apartments and, if they don't get filled for a while, that doesn't matter, because you've got tax concessions so that you can write off any losses that you make. Essentially, it's a really inefficient way of building supply.

What we need to do, and where we have failed over the last two decades, is to invest in and build supply of public, social and affordable housing that is going to provide housing for people who just cannot compete in that highly overheated, overblown property market—the people who at the moment are spending 70 or even 80 per cent of their income on rent. Here in my office this week, I met with a woman who is spending 83 per cent of her disability support pension on housing, on her rent—83 per cent. Yes, that means that she hasn't got money left over for food. Food has become a discretionary item. She hasn't got money for her medical appointments or for medication.

So we need to have that investment in supply so that there is housing for people on low incomes that doesn't just rely upon the whim of the market to provide something that they can afford. We used to have that in Australia. We used to have an adequate supply of public and social housing, and we don't anymore. That's a fundamental reason why we are in a crisis at the moment: because governments of both persuasions, both state and federal, have not invested in public, social and affordable housing over the last two decades.

So we need to actually tackle the scale of the problem when it comes to that investment in public, social and affordable housing, and the half a billion dollars from the Housing Affordability Future Fund just doesn't cut the mustard. It does not go to the scale of the problem. The government's own advice is that in order to get rid of the waiting lists for public and social housing, which currently sit at 650,000 people, we should be investing $15 billion a year in public and social housing. So half a billion is just not going to touch the sides. That's the sort of scale of investment that we should be making, and we can afford to do it. At the same time that we're spending $368 billion on AUKUS nuclear powered submarines and proposing over $30 billion a year in tax cuts to the wealthiest in our society, the government is saying: 'Oh, no, no, no. We can only afford to spend half a billion dollars on public and social housing.'

So we need to get serious about investing in public and affordable housing and increasing that supply. Then you would have people who would actually have somewhere to live. That in itself would bring down rents. That in itself would mean that people who are renting would be able to save money and afford to buy their first home. But at the moment, if you're a young person in your 20s, your 30s or even your 40s on an average income, the chances of you being able to buy a home, even if you have the First Home Super Saver Scheme, is just a complete fantasy. No-one can see their way through to that. They just cannot see their way through to being able to do that. So actually dealing with supply is fundamental if we are going to reduce the cost of housing and enable more people to buy their first homes.

The second thing we need to be doing is not just saying, 'Let the market rip in terms of what they can charge for rents.' Unlimited rent increases should be illegal. We need to have rent controls, particularly whilst we have that massive shortage of supply. Just as the Real Estate Institute have told us in the rental inquiry, it is whatever the market will bear. It's unconscionable. It's obscene. It really is. It means that people are being made homeless. They are being evicted because the rents are going up. We need to have rent controls.

The evidence to the rental inquiry that I've been chairing is very clear that rent controls work and life goes on. In fact, here in the ACT, it would surprise you to know, there have been rent controls in place largely limiting the increase of rents to CPI plus a bit more for over 20 years, since the mid-1990s. The sky has not fallen in. Landlords continued to invest in property. There has continued to be rental property here. But rents have not gone up as much here as they have in other parts of the country.

The third thing we need to be doing is reducing those tax incentives that treat housing as an investment rather than as a human right. We need to get rid of the excesses of negative gearing and capital gains tax discounts, which are costing the budget bottom line billions of dollars every year that should instead be invested in public and affordable housing. The Greens policy is that negative gearing should be restricted to only one property, rather than people being able to negatively gear a whole portfolio of properties. We need to tackle the capital gains tax discounts. Again, all they end up doing is making property investors a lot of money. The cost of housing, whether to buy or to rent, absolutely skyrockets. The bill that we are talking about today, which is dealing with the intersection of our tax system and housing, in this schedule really goes to the heart of the sorts of changes that can be made in this place. We can actually change our tax settings to make housing more affordable. That's what we need to be doing.

We hear heartbreaking stories of people living with their kids in cars. A woman who gave evidence to a rental inquiry last week told us that she could no longer afford to live in the house she'd been renting for the last decade. She was a victim of family violence, and she was paying something like 70 per cent of her income in rent. She sadly decided she had to leave her family home with her two kids. There was nowhere else that she was going to be able to afford to rent. It was impossible for her to find an affordable rental property that meant she could pay the rent, put food on the table for her kids and cover all the other expenses of living, so she'd made the decision that she was going to go and live in a caravan on a relative's property in outback New South Wales.

It didn't have a bathroom. It didn't have a kitchen. It didn't even have a toilet. It was going to be 40-plus degrees in summer. It was going to be zero degrees or below in winter. She was hoping it was going to be okay for her 10-year-old and her five-year-old—her 10-year-old is autistic, as well—that they were going to be living in this caravan, but she was going to give it a go because she just couldn't afford anywhere else. These are the heartbreaking, traumatic stories that are happening across this country at the moment. It is an absolute blight on us that we have hundreds of thousands of people who are struggling, who are living with the financial stress of not being able to afford to keep a decent roof over their head, and who wake up every day and worry about how they will keep their life and their home together.

We need to make changes. We can make changes. As I said, the Greens aren't going to oppose the sorts of changes that are here now, but they are not the key things we need to be doing. We need to invest more in public and affordable housing. We need to make sure that unlimited rent increases are illegal. We need to change the tax concessions. We need to actually acknowledge that housing is a human right, rather than treating it as a commodity. These are all things this government could be doing, and they are all things the Greens are going to keep on campaigning for. We really want to see the government pay proper attention and make these changes, and that is very possible for them to do.