Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Scullion, the Minister representing the Minister for Families, Community Services and Indigenous Affairs. Is the minister aware of a report by the Urban Development Institute which says that only 39 per cent of households can now afford to buy a house in their local area compared to 96 per cent in 2001? Doesn’t the same report find that over one-quarter of houses are considered to be unaffordable for working families? What impact will the ninth interest rate rise in a row have on housing affordability? Can the minister confirm that it will in fact make homeownership an even more distant dream for working families?

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

I thank Senator Kirk for the question. We have dealt with the issue of housing affordability on a number of occasions in this place. I think that we need to look again at the whole issue of housing affordability. I have spoken about it slowly and I have explained it in a number of ways, but perhaps we need to go back into the basics. It is all about the fundamentals of supply and demand. If we have a reduction in supply and a slowing down of land release, we will have an increase in red tape and we will also have the continued imposition that so many have commented on in this place of stamp duty and land taxes by the states and territories.

In terms of supply, the state and territory governments and local governments are essentially responsible for ensuring that we have the provision of land so developers can go ahead and develop land to provide houses. We also have processes of local government and state governments ensuring that there is a reasonable and well-planned release of land.

Of course, these are leverages that again lie with the states and territories. As we have said before in terms of housing affordability—this will be the second time today that I have referred to it—the Commonwealth government between 1996 and today provided the states and territories with sufficient funds to build 36,000 houses. Then the Labor Party, because it is the Labor Party, come into this place and say to us, ‘How are people going to afford a home?’ They should be asking themselves because the Australian taxpayer—and it is the Australian taxpayer, not us—has provided Labor, through us, with $9.6 billion and we have fewer houses today then we did in 1996. This sort of question needs to be asked of the Labor Party, who are in control of the states and territories.

Perhaps if I can just break this down. When you buy a house and pay $350,000, you take your young bride, walk through the door and put her down on the other side, and just the stamp duty means it is worth $25,000 less. Also, immediately when you walk into your new house the land tax, which is the same amount as the stamp duty, means it is worth less. So when those on the other side—

Opposition Senators:

Opposition senators interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order on my left!

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

On top of that, to add insult to injury, local infrastructure costs on a house can add another 21.5 to 34.3 per cent to the cost of the house. These are fair dinkum ways under which you can raise the cost of houses. It is totally unnecessary. We have a further and continued imposition on the cost and affordability of housing in this country. It was the state stamp duties and the state land taxes that made up $12 billion in 2004-05—$12 billion that Labor decided to take from Australian families as Labor’s housing affordability tax.

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Doesn’t the addition of another $50 a month on top of already huge mortgage repayments put working families under massive financial strain? Aren’t these families already confronting massive increases in the cost of child care, petrol and food? Does the minister really think these families have never been better off?

Nigel Scullion (NT, Country Liberal Party, Minister for Community Services) Share this | Link to this | Hansard source

I thank the senator for her supplementary question. Let us look in a fair dinkum sense and an honest sense at what this government continues to contribute to the capacity for young families to buy their own homes and pay off their mortgages. As Senator Abetz has already indicated, the reason that so many people can afford their own homes today—and in fact, as I have indicated, 50 per cent of people who are paying off their own homes are paying in advance—is that so many people have a job. Real wages have increased by 20 per cent rather than going down 1.3 per cent under Labor. They went down over the same period of time under Labor, and now we have a 20 per cent increase in wages that effectively equates to a 20 per cent increase in the capacity for people to buy a home and pay for it.

The central aspect of the question was: what about interest rates? I can tell you, Mr President: this government is quite happy with 6.5 per cent rather than 17 per cent. (Time expired)