Matt O'Sullivan (WA, Liberal Party) Share this | Hansard source

I rise to speak on the Housing Australia Future Fund Bill 2023 and related bills. The coalition does not support these bills, and not for the reasons Senator Sheldon just outlined. We support social housing. We want to see more social housing. We want to see the federal and state governments do more to address this issue. We just don't believe that this fund is the way to deliver it. I dare say that it won't deliver the ambitious targets they are saying it will deliver.

This is deeply flawed legislation. It contains very little oversight on how the fund will be distributed and whether the funds will be allocated for their intended purpose and not for some other housing nirvana that the government dreams up. This will be funded by Commonwealth borrowing. It will cost the Commonwealth—and the taxpayer—approximately $400 million per annum in interest servicing costs on debt, based on the 10-year government bond rate of four per cent. Very simply, this is going to add to national debt.

This legislation lacks crucial details and, therefore, deserves proper scrutiny. When it comes to legislating what we've seen with this government is a lack of detail and, on scrutiny, the lack of detail is proving to be the standard operating procedure of this government. What will the impact be on inflation? That's a good question about this legislation and fund that's going to be established. What analysis has Treasury undertaken on the broader economic impacts? We know the answer to that is that this government has not done proper analysis of this. Treasury hasn't got figures on the broader economic impact on inflation. We don't know accurately, because this government hasn't done that. So we have a situation where the government wants to put the housing industry on steroids and Treasury has not done any modelling on the upward inflationary pressures that it may cause the broader economy in an economic environment where the Reserve Bank has had to raise interest rates 11 times since this government's election, to combat growing inflation, while this government wanders around setting inflation on fire with half-baked ideas, like this housing policy.

Where will the labour and materials come from to meet these aspirations? There's nothing in these bills to address those very serious issues. There's nothing that the government have even announced that they are doing to address these very serious issues.

In my state of Western Australia we've seen a recent spate of companies associated with the building and construction industry going under. Only last month another two building companies went into liquidation, joining a long list of companies that have collapsed in recent times. ASIC insolvency statistics show that more than 2,200 building companies collapsed during the 2022-23 fiscal year, and that was a 72 per cent increase on the previous 12-month period. Ironically, just today the West Australian reported that as many as 21,200 houses are under construction in WA in March 2023. They spoke to the customers of one particular builder, some who had signed contracts to build in 2020 and in 2021 and had still not received the keys to their brand-new home, such is the backlog of construction projects and the skills, labour and materials shortages. This is affecting not just Western Australia; this is happening right across the country.

One has only to look at the Western Australian government's own website, as I did, to see the difficulty anyone has in undertaking a home build. The Western Australian website for the Department of Mines, Industry Regulation and Safety says:

The current, Australia-wide shortage of building materials and skilled trades is impacting the residential construction industry in Western Australia.

Supply of building materials has been affected by the COVID-19 pandemic and increased building activity following the State and Federal stimulus grants. It has impacted everyone in the supply chain, from manufacturers and suppliers to contractors, subcontractors and home owners. There is also a genuine labour shortage.

While this can be frustrating for all involved it's important to understand the current market and be aware of likely delays, outside of builders' control.

Yet, while the industry can't even meet existing demand, the Labor-Greens alliance want to further supercharge the market with its outlandish ambitions when the current market cannot even meet the demand that's before it—the work that it already has in its pipeline. Instead those on the other side want to give false hope to people who are in desperate need of social or affordable housing. They're giving false hope.

That's what this government is trending to be. They're just all about putting up this mirage rather than actually delivering. They said they were going to increase wages. We know that real wages are going backwards. They talk about wages but don't actually mention the impact of inflation, which, of course, is the real wage figure. They're just putting up mirages all the way around. Tonight the AFR is reporting:

A dysfunctional planning system and huge labour shortage will cripple the Albanese government's target of 1.2 million new homes in the next five years …

Nigel Satterley, the prominent West Australian developer, said only half of those homes would be finished—between 600,000 and 650,000, "if we're lucky"—because of a lack of workers to build them.

We know that it's not bureaucrats or the government that's going to build houses; it's going to be workers. It's the industry that is building houses. It's not government that builds houses; it's the business sector, and the industry can only build a certain volume according to the skills, labour and materials that are on offer to them. The Housing Industry Association recently said they believe that these are the worst conditions that the construction industry has faced since the energy crisis in the mid-1970s. And what's this government doing about that? Nothing. Supercharging this issue is only going to create a bigger problem, and they're not addressing the fundamental issues of supply of labour, of supply of materials that can go into building homes. If they did that then maybe we'd actually solve some of the housing crisis situations that we have across this country.

Dimitri Burshtein in the Australian made these observations on 3 May 2023 in an article entitled 'Housing fund just another storm waiting to happen'. He said:

In pursuing its housing plan, the government has announced it intends to establish the Housing Australia Future Fund. The HAFF would borrow $10 billion to give to the Future Fund to invest on its behalf. The investment returns on this $10 billion, to an annual limit of $500 million, would then be used to support new social and affordable housing. Whether federal investment in the provision of social and affordable housing is an appropriate policy or sufficient priority is a valid debate to be had. But pretending—

this is the kicker—

that such a policy can be financed without cost or risk to the budget or taxpayers is an invitation to economic calamity. If public finance were as simple as government borrowing money to invest so that returns can be spent, why not borrow $10 trillion to invest and eliminate most taxes?

We know that that's ridiculous. He goes on to say:

The economic arithmetic behind the HAFF appears questionable from the start.

I concur with those remarks. It isn't just that the economic maths are questionable: this government is actually playing a roulette game with this fund. It's hoping it fixes the problem, while hoping it doesn't create any further inflationary pressures.

Apart from this, incredibly, this bill also prescribes—and this goes to the point about the lack of transparency of this government—a-five year time frame for review, which, given what's at stake here, is wholly unsatisfactory. There's nothing like kicking the can of accountability down the road for someone else to worry about. It will be five years before we actually see whether or not this act is going to have its impact or whether it's indeed meeting its objectives. Unsurprisingly, stakeholders requested a much shorter period for review to ensure that the proposed grants from the fund are meeting their intended purpose. A shorter review period would actually be really sensible. It isn't actually that much to ask for. It's practical, and yet this government is not doing that.

Predictably, some economists have said this bill would do little in making inroads into the very real and serious issues of housing shortages. AMP chief economist, Shane Oliver, is quoted in the media as describing the government's housing fund plan as 'a drop in the ocean' in meeting the shortfall of housing demand. According to media reports, he said:

The main problem is shortfalls of materials and particular shortages of workers. Right now, we're having trouble trying to build something like 165,000 dwellings a year. The reality is we need at least 220,000 to keep up with the underlying demand. It's all pie in the sky if we don't have the means to build them.

I concur with those comments also.

Other than blaming us for their sloppy bill and treating the Senate with disrespect, what is this government's underlying motive here with this bill? This bill provides great political insight into the progress, or lack of it, of this government. It was back in May that the Prime Minister was first threatening to use this bill as a weapon for a double dissolution election. Remember that? Having overplayed his hand at the time, the Prime Minister realised he had no political hand left to play. Now this government just needs a political win—any win is what they're after! It's evidently clear that the Prime Minister now knows that his political capital is disappearing before his eyes. His government is in trouble with the Voice referendum; they're in trouble with their radical industrial relations bill and their meddling in the aviation sector; and their competition review has been torpedoed even before it started because the Treasurer and Assistant Treasurer are at odds with each other over what's to be included. And that's beside rampant inflation and the higher cost-of-living pressures faced by everyday Australian families.

This government desperately needs a win, so they sold out and did a deal with the Greens to saddle Australia up with the utopian pie that is this bill. And they'll be held accountable for the progress, or, I would say, lack of progress, when it comes to delivering on this policy. They'll be held accountable on the number of homes that will be built next year. We'll measure it; we'll stand up here and measure how many homes you've actually built. Then the year after that, we'll also check and see how many—right up to the fifth year, when your final report comes in, we'll see how many homes you've actually built. We know that you're not going to meet your objectives, because you're not dealing with the fundamental issues; you're just putting some fairy floss out there. Guess what? It evaporates as soon as you put it in your mouth, and that's what Australians are going to find when they're looking for a home—when they're looking for somewhere to have a roof over their head. They'll see that you haven't delivered, because it's just evaporating. It's evaporating before their eyes because this government won't deliver it. You'll try to duck and weave, and to blame others. But, guess what? This is your bill, and it will be your act that you're delivering with the Greens, and you won't be able to blame anyone but yourselves when you don't deliver on this project.