Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

I do have to agree with Senator McKim: we are in a rental crisis, a housing crisis, a cost-of-living crisis and an energy crisis. That, in my view, has been brought about by a very high immigration rate that is unsustainable. In the last reported quarter, the March quarter, we had 150,000 immigrants, which translates to 600,000 immigrants throughout the year, which is, interestingly enough, 200,000 more than what Labor forecast, or rather what Treasury—because they're the guys who actually run the country; overpaid muppets, but anyway—forecast. That is obviously going to increase demand.

The problem with price controls is that you will end up capping supply of new housing. What we've got is an inflation problem, and the cost of building is going up. Because the cost of building is going up, many builders are actually going broke and out of business, which is reducing the supply of new houses into the market. What we really need is for the RBA to get in touch with the real world and to actually use the levers available to them, not just qualitative easing, which in layman's terms is manipulating the price of money on the first Tuesday of every month. The problem with paper shuffling is, if you do too much of it for too long and you keep focused on models, you take your eye off the ball. The name of the game is to actually build things. True freedom is the child of affluence, and affluence comes from productivity. What we really need to do to fix this crisis is get people back on the tools and get them building, not just in housing but in other areas of the economy as well, such as dams, power stations, roads and factories.

There are two other levers I think the RBA have to look at, and I touched on this in a speech earlier this morning. One is quantitative easing. Governments have been brainwashed into thinking the only way that they can issue new capital in the system is by issuing bonds, but there is another form of capital, and that's called equity. Publicly listed corporations do this all the time: they go out and issue new capital. As a sovereign country, we can issue new capital as a means to increase supply.

What the RBA has done is lift interest rates—I've lost count—10 to 12 times in the last 18 months. That's had a devastating impact on demand, and it's had a devastating impact on supply. This is one of the things I get very annoyed with the RBA about, because they don't realise that increasing interest rates doesn't just dampen demand on the housing side but actually dampens supply on the housing side. It dampens supply on the small-business side. Small business, whether they're builders, bricklayers, fruit sellers, butchers or whatever, also borrow money in order to run their businesses.

It's alright for the big end of town: they can tap the equity markets, particularly the superannuation funds, because there's a lazy $3 trillion in cash sitting there that doesn't require work and is just managed by white-collar spivs in the ivory palaces of Sydney and Melbourne. So much for free markets, when 12 per cent of your income is taken from you and given to someone else you don't know! Actually, that's something we could do: we could make superannuation optional so that people can actually afford to buy their own homes as well.

The other thing I want to touch on is our macroprudential controls. In 1985 Paul Keating lifted all the capital controls. I can well remember—I was in grade 10 at the time—that was seen to be a great thing. But all that did was allow the volume of credit in the system to be controlled by foreign banks. What happened was the amount of foreign debt that the four major banks had went from $8 billion to $800 billion by 2008. Nearly all of that money was lent against housing. All that did was inflate house prices from four or five times earnings to 12 to 13 times earnings. And that, of course, when house prices went to 12 to 13 times earnings, put two parents back in the workforce, and now two parents are actually working for the foreign banks, rather than focusing on raising their children and being involved up at the school, where we desperately need more volunteers helping out with fetes and things like that. So we really need to reform our monetary system. This is a broad economy issue. Thank you.