John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I inform the Senate that the President has received the following letter, dated 28 March 2007, from Senator Bartlett:

Dear Mr President,

Pursuant to standing order 75, I give notice that today I propose to move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for a national affordable housing strategy to be developed, involving all levels of government and all political parties, to address the serious and ongoing crisis in housing affordability.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:The need for a national affordable housing strategy to be developed, involving all levels of government and all political parties, to address the serious and ongoing crisis in housing affordability.

This is a very urgent and important matter. The crisis in housing affordability in Australia has gone from bad to worse over a number of years. In my view, part of the reason it has gone from bad to worse is neglect, benign or otherwise, from both state and federal governments over that prolonged period of time. There has been too much finger pointing and state and federal governments blaming each other and sitting back, leaving it to the market and hoping it will work itself out. Maybe there is a theoretical argument to say that leaving it to the market could work, but the simple fact is it has not worked. I will not give a dissertation on the distorted nature of the housing market and the issues involved there; the simple reality is that market failure has occurred.

I draw attention to an article by Tim Colebatch in the Age last month which pointed out that for the first time the average household in Australia can no longer afford the average home. That is based on figures released by the Housing Industry Association and the Commonwealth Bank last month. Housing is now more unaffordable than at any time in the 23 years they have been measuring it—going back to the early 1980s. That is an indictment on governments of all persuasions but particularly the current federal government that has been in power for a long period of time. It has allowed that situation to develop.

The situation was sufficiently bad a few years ago that the Treasurer, partly as a way of trying to get the issue off the front pages, called an inquiry, as governments do from time to time to make it look like they are doing something. He got the Productivity Commission to inquire into the cost of home ownership for first home buyers. That produced a report with 10 recommendations, some of which went to state governments and some to the federal government. The response of the federal government and the Treasurer was: ‘No, we’re not going to accept these recommendations; we’re not going to do anything. We’re not going to examine the tax mix and we’re not going to examine the impact of the various interconnected and sometimes totally unrelated and unconnected taxation and financial measures that are impacting on the housing market and housing prices. We’re just going to leave it as is and complain about the states not doing enough.’ I am quite prepared to accept that the states have not done enough in some circumstances—but that is not good enough. It is a national problem and it needs national action.

It is worth pointing out that it is not just a problem of the inability to purchase a home. Because the number of people unable to purchase a home is growing, the number of those forced to rent has swollen and that has made it harder to find properties to rent. That is now having a very dramatic impact on the private rental market, leading in some areas at least to quite rapid rises in private rentals. We have the very strange situation of a rental shortage despite enormous tax breaks for rental investors that have been supported by both major parties over the past 20 years or so.

As Tim Colebatch said, the first step we need to take in this area is to acknowledge that existing policies have failed. We need to put forward wide-ranging initiatives to build more affordable housing. Data released yesterday by a group called Australians for Affordable Housing detailed that on their figures the Commonwealth government spends $24 billion on housing. That is not just the $1 billion for the first home owners grant, which is not targeted; the less than $1 billion on public and community housing; and the $2 billion and growing on private rent assistance, which in many cases is a subsidy for landlords and investors as well. On top of those expenditures there is a great amount on negative gearing—what they estimate to be $13 billion on capital gains tax exemptions and discounts. The vast majority of that money goes to speculators, developers and investors. Only a small minority goes to people who simply want to buy or rent their own home.

I am not saying that people should not be able to invest in housing; I am saying that when you have huge amounts of money—tens of billions of dollars in expenditure or in what is called tax expenditures or forgone revenue—going in various ways to impact on the housing market without any data being collected on what impact it is having, whom it is being applied to and what their financial situation is, then you are not targeting that money most effectively. You are not getting the best value for money. If we are going to provide assistance to people for housing matters, surely we should be ensuring that the majority of it goes to people who are simply trying to get a house to live in before it goes to people who are investing and speculating.

There are a range of other measures out there and I am not going to say that any one of them is going to fix it. There is no one single fix for the problem. But what we need before we can even take that first step is a recognition that it is a national issue, that we need to adopt national affordable housing strategies and that political parties must make it a priority to work together with industry and the community to find solutions that will alleviate what is a major and growing cause of inequality in Australia.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I thank Senator Bartlett for raising this issue. It is a national issue because state Labor governments occupy every state and territory government around this country and it is an absolute disgrace what they have been doing to first home buyers and to home buyers in general in this country. I thank Senator Bartlett again for raising this issue because I raised it just a few weeks ago in the Senate. During my speech I talked about what this government has done.

The first thing people need in order to be able to afford to buy a home is a job. We have the lowest unemployment rate in 32 years in this country, provided by a strong economy. That enables people to borrow money to buy a home, and they have done that with confidence under this government. And, talking about what we have done for the first home buyers, 926,000 people have benefited by purchasing a home with the support of a first home buyers grant. It is trite to suggest we have not done anything to help people get into housing. We are helping them with jobs. We are allowing them to confidently plan with a strong economy. We are helping them to get first home buyer assistance. As to rental accommodation, Senator Bartlett said we have done nothing to assist people through the rental process. That is simply not true. The Commonwealth government has committed $4.75 billion over five years under the Commonwealth-State Housing Agreement to support rental accommodation. This includes approximately $93 million over the last financial year for the Aboriginal Rental Housing Program.

The essence of housing affordability is supported by industry groups and by this government. So it comes back to the robber barons who are running our state governments. They are out there seeing the purses of the hardworking men and women of Australia and saying: ‘Open them up because we’re going to empty them. We’re going to fleece you with stamp duty. We’re going to fleece you by withholding land.’ Instead of releasing land for the purpose of ensuring affordable housing, they are holding land and restricting the supply for the purpose of profit. What they are doing is an absolute disgrace. When someone finally manages to convince a state Labor government that they need to expand development and allow people to go and live in their own home, which is part of the great Australian ideal, what do they do? They say to the developer: ‘Hang on a second. Not only are you going to pay twice as much as we paid for this land just a few years ago; we are going to make you pay all the up-front costs as well.’

The state Labor governments across this country are absolutely remiss. They have proved that they are inept and incompetent, as is Labor generally, about managing resources and finances across this country. They have an absolute windfall of money flowing from the Commonwealth to support them with infrastructure, with the development of land and with all the great needs that exist in every state. And what do they do with it? They think the best thing they can do is employ a few more people in the public service, create a bit more bureaucracy and shuffle the papers and that is going to rebuild the economy. Australians can see through this.

This Labor Party mob over the other side who purport to be an alternative government say, ‘Trust us; we’re different.’ But we do not have to look too far—if we go around the whole country the only things we see are spendthrifts, wastefulness and ridiculous amounts of money being wasted on all sorts of silly schemes. The people hurt by this activity are the people of Australia, and they will see through it. They will say that they cannot understand why the Australian Labor Party purports to support a strong economy and yet has demonstrated something very different. ‘Do as I say, not as I do,’ is the Labor Party’s mantra on this. If you in the Labor Party are seriously going to go down the path of wanting to make housing affordable, you should get onto your state Labor comrades and say, ‘Reduce stamp duty; reduce land tax; encourage investment into private enterprise.’ Or are you going to take us back to the situation under the Keating and Hawke government when you abolished negative gearing and created a rental crisis such as this country had never seen? You want to get onto them about reducing their burdens and overrequirements for development and infrastructure if you want to make housing affordable in this country. This government, as I have said, has already made enormous inroads into that. And part of that is trying to provide relief from the $9.6 billion worth of stamp duty that was fleeced from the poor people of Australia in the last financial year. It is an absolute disgrace.

Homeownership is very important to the social fabric of this country and cannot be underestimated. The benefits are not purely economic. It is not just about people providing for their future, having a nice place to retire or something that they can call their own. It is about community building. And that is what this government has been about—building communities, providing support for families and ensuring that every Australian has a fair go. It is making sure that Australians have jobs. It is making sure they can plan for their futures and that they can look after their children appropriately.

The Labor Party have failed at every turn. They have not only failed to support the policies we have put forward over the last 11 years; they have failed to haul in their comrades at the state level. They are high taxing. They are high spending. They cannot manage a budget—they have never been able to manage a budget. They are absolutely wasteful. Their economic policy is to try and copy ours, but they have not managed to do that at any turn. They keep having internal brawls of the Left, the far Left, the extreme Left, the communist Left—whatever Left they have got going—with their extreme Right, their radical Right, their middle people, their machine factions. Someone has got to kick them into gear. Do you know what? If someone bothered to kick Kevin Rudd in the backside they would not be hurting Kevin Rudd; they would be hurting one of the union stooges who is right behind him, trying to prop him up. This is what is rotten about the Labor Party over there on the other side—they are only relevant to the union movement. They are not concerned at all about the people of Australia and the home buyers of Australia.

This government provides tax relief. We represent fiscal management. We provide help for families. What do Labor governments do at a state level? Nothing. They pass the buck. They are running down services. They are not providing appropriate land releases into development zones. They are not providing stamp duty relief. In fact in South Australia, appallingly, as house prices have gone up they have been increasing stamp duty so that there are no exemptions for people buying the average priced home. If you wanted to encourage people to go to a state where we need workers and where we have a lot of developments going on, you would think you would provide something to attract them to go there. Not the state Labor governments.

The state Labor governments are cut from the same cloth as the purported alternative government on the other side of the chamber, and it is a rotten cloth. It is moth-eaten. It is 1950s socialist dogma hiding behind the cosy smiling face of Mr Rudd. It is very dangerous. The best friend that Australian families and homebuyers have had is this government. Nine hundred and twenty-six thousand families and individuals have benefited from our support for first home buyers. We have cut taxation in order to enable them to afford the wasteful expenditure of the state Labor governments and the Labor administrations. And every single time we have taken a step forward to try to help people, who has opposed us? Has our effort been supported by the other side? No, it has not. We have had to drag them kicking and screaming to every reform that has enabled Australia and the people of Australia to benefit from one of the strongest economies that we have ever seen.

Do you think that we can afford to let the federal Labor opposition squander our prosperity? They will send this country into a near bankrupt state if they continue with the ridiculous policies espoused by the Labor parties across the country. The proof is there for the people of Australia to see. If you want a credible, viable, sustainable economy in this country and you want to see more people being able to afford their own homes, then a coalition government is the only way to go. The proof is in pudding. Look around the states and you will see how high taxing and wasteful they are. (Time expired)

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Local Government) Share this | Link to this | Hansard source

That was a very lazy contribution, I believe. What we are talking about here is a very serious social and economic problem facing this country rather than a ‘Reds under the bed’ style scare campaign from senators opposite who obviously have not even bothered to research this problem in any depth. We know that housing affordability is a national problem and it is a problem that requires leadership and a consistent response. However, over the past 11 long years under the Howard government we have seen a government that has failed to show leadership. It has failed to provide the leadership necessary to address the ongoing crisis in housing affordability and it has certainly and consistently failed to respond to the increase in this problem.

The problem is this: housing is one of our most basic needs but with rents skyrocketing in all of Australia’s capital cities and homeownership slipping out of reach of many ordinary working Australians, this basic right, this basic need for housing, is eluding many in our community. When asked about the issue of housing affordability, Mr Howard would have us believe that there is a single simple solution—the states should minimise taxes and release more land.

Of course there is no such simple solution. The New South Wales government has already abolished stamp duty for first home buyers purchasing properties for less than $500,000. While this has assisted many first home buyers get into the housing market, it has not changed the ongoing challenge of improving housing affordability generally for everybody else. Blaming the states for these issues is not good enough. There are a whole range of reasons for rental and house prices going up right around the country, and the coalition government’s response is: we will just blame the states again. This blame game is the approach of the Howard government and they make it out to be a solution. The blame game is not a solution; it is an excuse for poor leadership and poor governing of this particular portfolio.

The Australian dream of owning your own home is becoming unattainable for many. Demographia, an international housing affordability survey, found that Australians now pay on average 6.6 times their annual household income on purchasing their homes. Sydney, Perth and Hobart were among the top 20 cities around the world where houses were found to be ‘severely unaffordable’. To even get into the housing market in Sydney, Melbourne and Perth you now need a six-figure salary. In my home city of Canberra you needed an annual income of $43,250 back in 1996 to purchase a median-priced home, but with 11 years under the coalition government this has exploded in 2006 with the average Canberran now needing an annual income of some $106,596 to purchase a median-priced home.

Before you even start anything else, for most people this will mean having two incomes. The implications on child care and working people’s work/life balance are significant, especially if you add the problem of the shortage of child care, particularly in babies’ rooms when children are very young but families cannot afford to do without that dual income to pay the mortgage. Those who do manage to save a deposit while paying their rent, bills, childcare costs and other necessities are then left paying the highest percentage of their income in mortgage interest repayments—higher than ever before.

Adding to this financial pressure are the four interest rate rises since the last election. Yesterday in this place Senator Minchin said that a significant factor in housing affordability is interest rates, and yet we have seen interest rate rises under a coalition government since the last election—a broken Howard government promise. It was a promise that was never his to make but that did not stop this arrogant government or this tricky Prime Minister from making the claim. This is not lost on homeowners and mortgage payers around the country and I doubt that they will be forgiving.

Another group that are really feeling the pinch are renters. Nationally rents have been rising more than twice as fast as inflation. As rental payments chew up a greater proportion of people’s income, saving a deposit to purchase their home is becoming increasingly difficult—and that goes without saying. Low-income renters are particularly vulnerable in the current climate of low vacancy rates and spiralling rents.

Recent statistics from the Australian Bureau of Statistics show that there is an estimated 134,000 shortfall in low-cost rental properties nationally—134,000 families that are doing it tougher than they ought to be. I have heard one example of a mining town in Queensland where the people working in the services sector cannot compete for housing with the people working in the boom sector of mining, with unmet demand pushing up prices till they are out of the reach of those people who work in that services sector of the economy and do not earn the salaries they would receive if they worked in a boom sector. Another example is in Western Australia, where a company ended up buying a hotel in which workers could live because the housing shortages were so drastic. As these examples show, the problem varies between different areas. This means it is important to be able to adapt local solutions to local problems, and as such the Labor Party has committed to work when in government with all levels of government, not just state governments but local governments as well, to help solve housing issues within their jurisdiction.

Even today I read an article in the Canberra Times highlighting the very real and devastating effects that increasing rental prices are having on low-income families. Ms Hazell, an unemployed mother with two young girls, has had to move four times in the last two weeks after leaving her $700 a fortnight rental property. Ms Hazell is concerned about the effect this is having on her two young children. She told the Canberra Times:

My kids are bright, but falling behind in their school work. They’re tired. They’re suffering ...

Obviously that is a serious case of hardship. Access to secure, appropriate and affordable housing is an essential ingredient of quality family life. But this government has not been doing anything to ensure that families such as this one can access appropriate housing.

One of the most respected figures in the Canberra property industry, Mr David Dawes, is going to be heading an implementation team to drive the reforms and initiatives flowing from the soon-to-be-released affordable housing report initiated by the ACT government through the ACT Chief Minister, Mr Stanhope. Mr Stanhope said today:

“There are few more important social imperatives than ensuring that everyone in the community has access to affordable and appropriate housing ...

It is clear that there is no substance to what this government says about states and territories not doing anything. It is not good enough to say, ‘Blame them.’ We need to acknowledge that there are initiatives happening at a state and territory level and that in fact it is the Howard government that has been totally neglectful of its duty to address this growing problem. It has failed to address housing affordability. It has ripped $400 million out of the Commonwealth-State Housing Agreement over the last 10 years. In contrast, Labor is committed to making improvements in all areas of housing, including emergency accommodation, public and community housing, private rentals and homeownership.

Unlike the Howard government, Labor have a plan to make these improvements. Firstly, we will have a minister responsible for housing. The minister will be responsible for developing and implementing affordable housing policy. The housing minister will form an essential part of the government’s economic team, working closely with the Treasurer to boost housing affordability. Secondly, as cited in the motion we are currently debating, a Labor government will work with state and territory governments and with local government to address the serious and ongoing crisis in housing affordability. That is the only way; it has got to be addressed with a three-tier approach, not by this ridiculous, shallow, irresponsible blame game that the Howard government perpetuates.

Thirdly, a federal Labor government will negotiate a national affordable housing agreement with these three tiers of government which will replace the Commonwealth-State Housing Agreement. All elements of federal housing policy will come under this one agreement, including the grants to states for public housing, the first home owners grant and $2 billion in Commonwealth rent assistance. It is critically important that local government be involved in that so that we can tailor local solutions to local problems. They do vary right across the country, and we have to get down to a level of specificity that makes a real difference to families in specific areas. I would like to conclude by saying that a Rudd Labor government is committed to boosting affordable housing— (Time expired)

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I rise in support of this urgency motion. The Australian Greens have been concerned about access to affordable housing for a considerable period of time. When you look at some of the details, you see that our concern is absolutely justified, as is the concern of the community. In the past decade the median house price in Australia has increased from four times average incomes to six to seven times average incomes. The growth in the private rental market across Australia has been uneven, and there is a shortage of approximately 134,000 properties in the low-cost end of the market.

I know about this from the personal experiences of friends. Only last week one was trying to find a place to rent in Western Australia using the new service of being able to get instant emails when a property comes up. He submitted one saying, ‘Yes, I want the house.’ Not long afterwards the owners rang to say: ‘We’ve had four people apply for this house at $250 a week. How about upping it to $280 and you might have a chance of getting this home?’ He has still not been able to find a rental house in Perth. He has been trying to find one since the beginning of January. I would say his is not an isolated example.

Thirty-five per cent of Commonwealth rent assistance recipients, being families on low incomes, will spend 30 per cent or more of their incomes on housing costs. That is also of concern. It is estimated that 1.1 million people on low to middle incomes are suffering from housing stress. Obviously, this puts stress on the entire family.

I refer to the point that housing is not a Commonwealth government issue. That is a furphy, given that, according to a report released yesterday by Australians for Affordable Housing, the federal government accounts for approximately $24 billion in direct and indirect spending on housing, of which 80 per cent goes into tax breaks for speculators, developers and investors and only 20 per cent is actually directly invested in the needs of ordinary families who are trying to either rent or buy their own home.

I would now like to turn specifically to my home state of Western Australia. Last month I released a report called ‘The boom for whom?’ in which I looked at the impacts of the boom in Western Australia and the benefits for so-called ordinary Western Australians. The report showed that while the economy is being driven by the mining sector, and wages have risen dramatically in the mining sector, unfortunately that has not been reflected in other sectors. For example, average wage rates in the hospitality sector have increased by only 2.4 per cent in the last 12 months, which is less than half the growth rate in the mining and construction industries and lower than the inflation rate.

Housing affordability has become a major issue in Western Australia. Prices are rapidly increasing and they are approaching Sydney levels. The lower median house price in Perth has traditionally been lower than the median house price in other cities. In just over 15 years the median house price in Perth has risen from under $100,000 in 1991 to well over $350,000 now. With the significant increase in the price of housing in Western Australia the $7,000 first home owners grant pales into insignificance. The median house price in Perth is closer than ever to the median house price in the other capital cities. It is difficult for the people of Perth to find the resources to be able to invest in a home of their own. I think it is fair to say that house prices and rents have increased at a much more significant rate in Perth than in other places around Australia.

To address these issues, we believe we need to significantly increase our investment in public and community housing. This could be done in a cost-neutral way. I would argue that there needs to be an increase in funding for housing. But, even if the government did not do that, they could shift the emphasis to more affordable public housing in the community sector in the way they allocate the pie. They could also look at an affordable rent incentive and non-profit shared equity. (Time expired)

Michael Ronaldson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I do not know if Senator Bartlett was here when Senator Lundy was talking. If he was he would be saying, ‘What am I worried about?’ because, according to Senator Lundy, this is easily solved: you have a summit on this and you have a summit in relation to the environment. The way this is going, these people will have a bad dose of ‘summit-itis’, and I suspect that we will probably recommend that there be a summit on why the Labor Party has not actually got any policies. A summit. That is the sum total of a Labor frontbencher’s contribution—no policies, no solution, no acknowledgement.

Today’s motion should be: ‘This Senate condemns the state Labor governments for their failure to give Australian families the opportunity to access affordable housing.’ The notion that the coalition is somehow responsible for increased house prices is about as believable as saying that two per cent of the population can name more than three Labor frontbenchers. It is totally unbelievable. For Senator Lundy to come in here today and talk about a summit and have no policies and try to blame the federal coalition for increasing house prices just shows how totally devoid the Australian Labor Party is of any policy to address any situation and why its members are simply not ready for—nor do they deserve—government.

The reality of the situation is that the federal government have set a number of scenarios to assist potential homeowners, including a real increase in wages, low unemployment and industrial relations changes that have given the small business community of this country the confidence to go out and employ again. Nearly 300,000 new jobs have been created in the workforce in the last 12 months, including 118,000 new jobs for women. But that on its own does not address this issue. The Labor Party should be acutely aware of the contribution we have made to the Commonwealth-State Housing Agreement and the money that we are putting into the First Home Owners Scheme. We have now put around $6.9 billion into the scheme since we first introduced it under A New Tax System in 2000. We are giving rent assistance to low-income families and social security recipients. Billions of dollars, quite rightly, are going to where there is effective market failure.

Senator Bartlett, I hope you are not suggesting to the chamber today that you want to unilaterally withdraw negative gearing, because, if you think there is a housing crisis and a rental crisis now, you ain’t seen nothin’ yet. I am sure that is not part of the Australian Democrats’ policy, but, if it is, you stand utterly condemned for your failure to understand what is driving the present situation.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

Those who can afford houses live in them.

Michael Ronaldson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Exactly. I just want to go through the realities of the house price situation. Five years ago, $40,000 would have bought you a reasonable house in a city like Adelaide. The median price was about $135,000; that has now doubled. In just five years, the price of residential land has doubled. Land once represented 25 per cent of the cost of a new house and land package. How much is it now? Fifty per cent. In five years the residential land component of a house and land package has gone from 25 per cent to 50 per cent. In comparison, the actual building costs of a new home have not risen dramatically. The great bulk of this increase has been that land component of house and land packages.

I am taking some of this information from a lecture by Bob Day AO, the national president of the HIA, in a speech that he gave last year, I think it was. He quoted a recent housing affordability study of 88 cities around the world, including Australia, New Zealand, Canada and the United States. It confirmed that land rationing through government policy is the main cause of increased land prices—those very land prices I referred to before which have seen the land component of house and land packages increase from 25 per cent to 50 per cent.

That study was conducted by a research group called Demographia. It found that housing affordability, rather than being a worldwide problem, as some claim, is largely confined to cities in Australia and on the coast in the United States where governments restrict land supply. Of 30 cities covered in the study that were classified as having affordable housing—which is where the median house price is generally less than three times the median household income—none of those had adopted the policies of state Labor governments in Australia which have driven up land prices for new home buyers.

There has been talk about the blame game today. This situation will not be resolved overnight. The situation will be resolved by state Labor governments doing four things: (1) they must release more land; (2) they must streamline planning approvals; (3) they must cut stamp duty on property transfers; and (4) they must ease the developer and infrastructure levies they charge for developers of new homes. We have to maintain a strong economy to maintain affordability, but it is incumbent upon state Labor governments to do their part, as they have sole responsibility for addressing that 25 per cent increase in the land component of housing and land costs. (Time expired)

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I welcome this resolution before the Senate today moved by Senator Bartlett. I know he has raised it to get some genuine debate about what is a very important issue and one that is facing more and more Australians. I am sure he is disappointed, as I am, that when the government members speak to this motion the first thing they do is simply absolve themselves of any responsibility and blame the states.

We heard Senator Bernardi welcome this debate in the Senate. He told us how he has a great interest in it and that it is something he has spoken about. He then went on to blame the states and went on with a rant about the ALP, unions and everything else except the issue that we are supposed to be debating. He then had the gall to actually say it was our responsibility—the federal parliamentary Labor Party’s responsibility. I find that rather strange, given that Senator Bernardi should know as well as anyone else that we have been in opposition for 10 years and it is actually the government’s obligation to take a proactive role in this issue. They do not seem to have the capacity to even address that issue. They simply blame the states because it is convenient not to address the issue if you have someone else to constantly blame. Senator Ronaldson’s contribution, while it had a little bit more substance than Senator Bernardi’s, actually went to some of the issues, but, again, the focus was that it was everyone else’s problem but the federal government’s.

I happen to think there is no simple solution and that it requires a complex solution involving all levels of government. I think there is a more proactive role that the states could play with proper federal leadership. It goes to issues of Commonwealth-state funding and where money comes from for infrastructure development and planning issues. There are three levels of government that need to be engaged in that. I am disappointed that government senators have been so dismissive of this instead of engaging in a constructive debate about what we as a federal parliament can do and what the government should be considering to address what is a very important issue for more and more Australians every day.

The need for safe and secure housing is one of the most basic needs of humanity. It is a benchmark of how well a society is performing and looking after its citizens. I was reminded of the importance of this issue with the launch of the new campaign from the Australians for Affordable Housing coalition, a campaign which aims to tackle our current housing crisis. I applaud the work done by the Australians for Affordable Housing coalition, as housing often does not get the attention that other issues in our community do, despite the importance of it in our day-to-day lives. I guess that has been demonstrated quite clearly here today, with the government senators demonstrating the poverty of their position in respect of engaging in this very import debate.

In my own state of Victoria, housing issues are now becoming acute for people living in population centres who do not have the luxury of large incomes. When this is combined with a lack of transport, it means that some in our community are being excluded from a place to live. In Melbourne in particular there have been many community advocates who have worked long and hard to ensure that there is action on housing affordability, and of course I urge them to continue. We should not let this issue fade from the public view.

Many of these individuals and groups are now involved in the Australians for Affordable Housing coalition, and I want to reassure them that Labor welcomes and endorses their campaign. We too share the belief that housing should be affordable for all in our community. This issue is not solely a problem in Victoria; it is nationwide. Across Australia, people who are crucial to our community—students, carers, teachers, police, nurses, electricians, truck drivers, those looking for work—are all discovering that an affordable place to live is getting harder to find, and for some it is impossible. We constantly hear of how wonderful the resource boom is—that it means jobs and wealth. But we do not hear about the people such as hospitality and childcare workers in those communities who suddenly find house prices rising out of their reach. If they are renting they find they have to move out of town, and in some places like Queensland and Western Australia—the centres of the resources boom—they have to move to the next town altogether.

In our larger cities, as more people have realised, the inner city suburbs offer housing near employment and good public transport, schools, hospitals, libraries and other public assets, and housing in these areas has become unaffordable for anyone who does not have a large income or is not in a double-income family. Traditional working-class suburbs, which saw a large cross-section of ordinary workers, students, families and the elderly, are now losing their communities as people are forced out by rising rentals and house prices. Carlton, Collingwood, Fitzroy, North Melbourne; these are all suburbs where you would be lucky to find any workers on low incomes or their families. Aged-care facilities have sold up and moved out. Housing prices are often over a million dollars, and rent prices are now astronomical. Rental inspections may attract up to 100 people, and, to determine who they will rent a property to, some unscrupulous landlords and real estate agents will have an unofficial auction to see who will pay the highest rent. If it was not for public housing in these inner city suburbs, great numbers of our most essential workers, students and a large cross-section of our community would be forced to pull up stumps and look for cheaper accommodation.

The problem of housing affordability is a crisis in some local areas and is a real problem across the nation. It is not only some local communities that have borne the brunt of the lack of housing affordability; many Australians across the nation are feeling the pinch as mortgage repayments and rent chew up greater proportions of their income than ever before. The Australians for Affordable Housing coalition pointed out yesterday that rents have been rising nationally more than twice as fast as inflation. This is not just hurting families looking for a place to live; it is being felt by low-to middle-income earners, first home buyers and single people who are struggling to find and keep affordable housing. As the Australians for Affordable Housing coalition also pointed out, families buying their first home now need a six-figure income just to pay the mortgage on a medium priced home in most capital cities.

Far from delivering greater affordability and the low interest rates that they promised, federal ministers continue to duck questions about housing affordability. It is a debate that needs to be had, and it is a debate that needs to engage all levels of government. It must be remembered that eight interest rate rises on Peter Costello’s watch have added almost $130,000 over the life of a mortgage on a medium priced Melbourne home.

The one positive to come out of the acute local housing crisis has been the willingness of local and state governments to try to tackle the problem. More affordable housing has been built, redevelopments have taken place in conjunction with the private sector and innovative policy responses have been produced. This has been done by state and local governments by themselves, while the federal government continues to simply blame them for the worsening situation. If the federal government took the view to engage and cooperate more with state and local governments, more could be done—and more needs to be done.

There seems to be an ‘all blame and no responsibility’ attitude from this government when something goes wrong. Over on this side of the chamber we are all about ending the blame game, and when it comes to housing affordability that is exactly what we intend to do. There is a great responsibility for the federal government in housing affordability. It has a direct role through funding Commonwealth-state housing agreements, it has a direct role in creating fair taxation and welfare arrangements such as rental assistance and it has a crucial role in the infrastructure needs of our communities: in transport, communications and urban development. There is a greater need for Commonwealth involvement, and simply blaming the states, blaming other tiers of government—and, in fact, blaming the opposition—for the housing affordability crisis is no responsible way for a government to tackle a problem that is being felt more and more acutely by more and more Australians every day, every week and every year.

Labor have repeatedly said that, while there is no simple answer to housing stress, there are a number of things that could and should be done that would ease the crisis. We have committed to assessing all constructive ideas for tackling the lack of affordable housing, and we will start by negotiating a national affordable housing agreement amongst the three tiers of government. We have also committed to looking at shared equity models involving the federal government. We will look at protecting consumers from predatory lenders and we will actively seek ways to leverage private investment in low-income housing. In government, Labor will move to fill the current policy void with a realistic and innovative approach designed to ensure that all Australians have secure, prosperous and healthy places to live. (Time expired)

Mitch Fifield (Victoria, Liberal Party) Share this | Link to this | Hansard source

I agree with Senator Marshall that this debate should look at how to improve housing affordability, but I also think it is possible to make this issue more complex than it need be. What this debate requires is a look at the factors that influence a person’s ability to afford a home, and I will start with those areas for which the Commonwealth government is responsible. The first issue to look at is: does someone have a job? It is hard to afford a house if you do not have an income, and the best way to ensure an income is to have a job. Under this government, more Australians are in work than ever before. Unemployment has fallen from its peak of 10.9 per cent under Labor to 4.6 per cent today, and two million jobs have been created since the coalition came to office. The coalition are a friend of the worker because we have created an environment in which more Australians than ever before can have a job—they have the chance to earn an income to be used to purchase a house and to pay off a loan.

The second factor to look at is: are people earning enough to put towards a house? Under this government, real wages have grown by 19.8 per cent. Under Labor, they actually fell by 1.8 per cent. The coalition government has also introduced the first home buyers grant to assist young home buyers.

The third factor to examine when looking at the ability of Australians to afford housing is: can they afford to borrow? The price of borrowing, as we know, is the interest rate. Under Labor, interest rates peaked at 17 per cent and they averaged 12.5 per cent. Our government has run surplus budgets, we have paid off Labor’s $96 billion debt and we have established the Future Fund. All else being equal, if the government is saving, as opposed to borrowing, it puts downward pressure on interest rates; and that is what has happened. The current rate for the standard variable loan is 8.05 per cent. It is still a historically low rate.

Australians are enjoying better employment prospects, higher wages and lower interest rates because this government has taken hard decisions in the national interest. We have reformed industrial relations, cut income tax, balanced the budget and repaid every cent of Labor’s debt. At every step, Labor opposed every single measure we put in place to help create the prosperity we enjoy today. Despite Labor’s opportunistic obstructionism, the Commonwealth has done what is within its capacity to put Australians in a good position to afford a home. But there are also factors which are clearly within the control of state governments that impact directly on housing affordability.

Firstly, there is property taxation, particularly stamp duty. State governments around Australia, as we all know, are enjoying massive GST windfalls. This financial year alone, state governments will receive almost $2 billion more than they would have received under the old system. If federal Labor is serious about addressing housing affordability, they could approach their state colleagues to cut stamp duty. It is not as though state and territory Labor governments cannot afford it. Mr Rudd is very fond of impersonating a prime minister. He calls his own summits and meets state premiers on all sorts of issues, getting them around the table all the time. He should call his state colleagues together to do something about stamp duty.

Secondly, clearly within the realm of state government control is the issue of development and infrastructure charges levied on developers of new housing estates. State governments should cut these charges or fund them themselves. These charges inflate the price of housing in new developments, the very developments that are most likely to produce affordable housing. Again, state governments have the capacity, with the GST, to do something about that.

Thirdly, again clearly within the area of responsibility for state governments is the shortage of land for new housing. Housing would be more affordable if supply were increased. It is a pretty simple equation. New housing estates require land but state governments are failing to release the required land. State Labor governments are failing homebuyers. It is not the blame game to hold a tier of government accountable for something that is within their responsibility; that is called holding a government to account.

If the Labor opposition are concerned about housing affordability, there is something they can do about it. Mr Rudd can step up to the plate and demand that his state Labor colleagues release more land for housing, cut stamp duty and cut infrastructure levies. But there is one federal colleague in particular whom I think Mr Rudd needs to bring into line. An article in the Australian a while back under the heading ‘Energy guzzling McMansions in Labor’s sights’ said:

Australia’s energy guzzling McMansions are in Labor’s sights under a new housing policy designed to tackle the nation’s supersized houses.

Who was the author of this policy? Senator Kim Carr. The article went on:

The new housing agenda calls for a redesign of the popular first home owners grant scheme.

I think we all know what ‘redesign’ means. First homebuyers can kiss the scheme, in its current form, goodbye if Labor gets into government. Senator Carr went further. He wants to educate families that big houses in the suburbs are bad for the environment. Yes, Senator Carr has declared a jihad on McMansions. The article says that Senator Carr:

... who lives in a large, sprawling two-storey house in Melbourne—

and there is a very lovely picture of it in the article—

wants to generate a debate on housing,

Senator Carr told the Australian:

I am saying we cannot continue to build energy-guzzling houses without explaining to the people the cost of building a house where you need two air conditioners to make it habitable.

What an outrage for Australians to want to live in a large house; what an outrage for them to want two air conditioners! This is an incredibly patronising approach. The coalition have not pursued an approach which is patronising; we want to do something quite practical about the factors over which the Commonwealth government have control—low unemployment, low inflation, low interest rates and higher wages. We have done our bit in exactly the areas in which Labor have an appalling record. It is time for state governments to do something in the areas they are responsible for—stamp duties, infrastructure levies and supply of land for new housing estates. Young Australians wanting to buy a home will get no assistance from Labor, state or federal. Assistance will come only from the coalition government. (Time expired)

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

To conclude this debate, I remind the Senate and those listening that we are debating a matter of urgency—that a national affordable housing strategy should be developed involving all levels of government. I remind the Senate that statistics now show that households on an average Australian income can no longer afford to buy an average-priced home. Home ownership is fast moving out of reach for many in the next generation and, indeed, for many in the current generation. Private rental costs are also causing immense housing-induced income stress for many Australians, as are the very long waiting lists for public and community housing. ABS statistics show that the proportion of first home owners as a percentage of all homebuyers has dropped dramatically from 67 per cent in 1977 to 23 per cent in 2002. We are now down to a very small minority of the people purchasing a home who are first homebuyers. There is a crisis here.

I do not in any way say that there is not more the states can do. I would agree with Senator Fifield: there is more that the states can do. According to Senator Fifield, the Commonwealth government has done all it can in its capacity, through its various measures. I am afraid, if that is all it can do, then that is a very clear sign that this government is getting very tired and running out of ideas, because it needs to do something.

The first thing it should do is recognise that the things that are in its field of endeavour and capacity are not sufficient and in some cases may inadvertently be making the problem worse through market distortions. The reason you have a national cooperative strategy is to look at all these areas: to see if you can make the billion dollars of the first homebuyers’ money more targeted, more effective and noninflationary; to see if you can ensure that private rental assistance is spent in the most efficient way; to look at whether or not the totality of the enormous amounts that are provided to people who are not lower income, which is the negative gearing subsidy, can be changed—not abolished, scrapped or unilaterally withdrawn, to reassure Senator Ronaldson, but refocused so that it can be used in a way that will produce affordable housing outcomes.

There are many ideas out there. I would again mention the recently released proposal from the National Affordable Housing Summit group. They have already had their summit; they do not need another one. That group involves the Housing Industry Association that Senator Ronaldson quoted, community housing groups like National Shelter and the Tenants Union, and trade union groups like the ACTU and the CFMEU. They put up a proposal about a national affordable rental incentive scheme to boost the supply of affordable rental housing by at least 15,000 homes a year, so that the various incentives around—the billions and billions of dollars that are spent—might actually be spent in a way that provides incentives where affordable housing is part of the outcome. There was a whole range of different proposals that were released just yesterday by the Australians for Affordable Housing coalition. I am not endorsing all of them unequivocally, although I think many of them are good. But let us sit down and let us recognise that there needs to be national leadership and a national strategy—a national and consistent approach—that recognises that this is an urgent issue and a serious matter that is leading to very wide and growing inequality amongst Australians. If the federal government cannot recognise that there is a need for action in that regard, then frankly they really seriously are out of touch.

Question negatived.