George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister representing the Prime Minister. I refer the minister to the fact that, instead of his government taking action on the housing affordability crisis, Treasurer Costello wants a taxpayer funded house; Liberal senator Ross Lightfoot thinks that working families should be grateful for what they have; the Liberal member for Paterson, Mr Bob Baldwin, thinks that people expect too much; and Prime Minister Howard thinks working families in Australia have never been better off. At a time when working families spend $1 out of every $3 they earn on mortgage repayments, how could the government be so hopelessly out of touch? Doesn’t this demonstrate why the Prime Minister had to direct government members to stop lecturing and demeaning working families about their expectations and aspirations to own their own home?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

The government does strongly support the aspirations of all Australians to own their own home. That is one of the founding and building blocks of the great Australian Liberal Party of which we are all members. It is an aspiration shared by the National Party and a driving force behind this government’s direction in all its policy endeavours. It has been our endeavour to ensure that the Australian economy can maximise the opportunities for Australians to own their homes. That is why we have built one of the strongest economies in the Western world, that is why we have succeeded in bringing down inflation and therefore bringing down the mortgage interest rates which Australians face, and that is why we have endeavoured to and succeeded in reducing unemployment to a 30-year low. It is impossible to buy a home unless you have a job, and we now have so many more people in work and therefore able to aspire to buy their own home.

The issue Australia faces is that with such a strong economy we are finding increased demand for housing, and the Australian consumers have a very high degree of consumer confidence. Therefore, they have the confidence to go out and borrow money and, with the greater flexibility in loan markets, they have greater access to loan funds. All these forces are bringing to bear an increase in demand for housing, and we have seen an increase in the price of housing. That is terrific if you are in the housing market, and of course some 70 per cent of Australians either own outright or are paying off their own home, so they do benefit from the capital gain that they have in their own home. But that means that those who are seeking to rent a home or get into the housing market suffer as a consequence.

There is no easy lever that can fix that. The Productivity Commission in its very good report on this whole issue of housing affordability made the point that there are no levers readily available to the government of Australia to interfere in the market that produces high housing prices. Of course, the Labor Party would be the first to condemn this if anything was done to lower house prices; in fact, I think Mr Swan has been out there attacking us for suggestions, which he makes up, that we have wanted to lower house prices. But the fact is: if you have a rising demand for houses and a fixed level of supply you are going to get a rise in price, and that is the sort of point that I think Senator Campbell is trying to make. As I have said before in this place, the answer to that is obvious: Senator Campbell can pick up the phone and ring the Premier of New South Wales and say: ‘Mr Premier, you control the supply of land in this state. Will you please do something about the supply of land because the demand for housing is very strong in this state and people are facing rising house prices? Will you do something about it?’

It is not within the ambit of the federal government, whether they are controlled by Labor or Liberal, to suddenly increase the supply of housing to meet the increased demand for housing. That is not in our ambit. We have said we are doing an audit of our land supply but we only have Defence land and, as a result of our government’s activities, we have made sure that the Defence department does dispose of surplus land. But the states have a huge responsibility to re-examine their control of the supply of land and the control they have over the infrastructure costs and land taxes, and to do something about the price of land and the supply of land. That is the only way you are going to ensure that we maximise the opportunity for all Australians to own their own home.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question: what should working families who pay $200 more each month on their home loans since they were promised that interest rates would stay at record lows think of a government whose only response—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Sterle interjecting—

Alan Ferguson (President) Share this | Link to this | Hansard source

Order! Senator Sterle, your colleague is trying to ask a question, so I would appreciate it if you would listen to him in silence.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

is to lecture them for expecting too much? Isn’t the attitude of the Treasurer and the coalition backbench another example of an arrogant and out-of-touch government?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

The working families who Senator George Campbell seeks to represent would be extremely grateful that we are not experiencing 17 per cent interest rates on home loans, which of course they did experience under the former Labor government. They would be very grateful that the standard variable home loan rate has fallen from 10.5 per cent when we were elected to 8.3 per cent now. The interest rate reduction from the time we came to office to now would save around $449 per month in interest charges on an average new mortgage of $245,000. So many Australians do know what it is like to experience high mortgage interest rates under the Labor Party and they would be very grateful for the fact that we have managed through our great management of this economy to reduce home loan mortgage interest rates.