Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Citizenship) Share this | Link to this | Hansard source

I rise to address the question of housing affordability in Australia today. I want to remind senators that this is an issue which goes to the very heart of the cost of living in this country and an issue which very few Australians can avoid. Generally household rent or mortgage repayments constitute the largest single expenditure by a household and therefore are central to the question of standard of living in this country. Senators will recall that before the last federal election the then federal opposition had a great deal to say about what it saw as an unacceptable level of housing affordability across Australia. It lectured the then Howard government about how housing was becoming less affordable under that government. To quote the then shadow minister for human services and housing, Ms Plibersek:

The Howard government is putting the great Australian dream of home ownership out of reach from any ordinary families.

She said:

Australians locked out of home ownership, or spending huge portions of their salary on rent, are sick of the blame game.

Australian families want Mr Howard to roll up his sleeves and show some national leadership on the housing affordability crisis.

In another press release she went on to say:

There is no silver bullet to make homes affordable for all but there are plenty of ways the federal government could help young people and families afford a home.

The opposition leader, later to become the Prime Minister, Mr Rudd, went on to describe housing affordability as a barbecue stopper.

I think 2½ years into the life of the Rudd government is an appropriate point at which to start examining just how well this government is performing on the question of housing affordability. The record is not particularly attractive. Labor promised in 2007 that it would make housing more affordable. It said that it would deal with this barbecue-stopping issue affecting so many Australians. The truth, however, is that today house prices are rising faster than inflation, mortgage repayments are rising faster than inflation, rents are rising faster than inflation, interest rates are going up, homelessness is increasing, there is greater pressure than ever before on social housing and the Rudd government is failing to address these issues with the very extensive and very expensive programs it is rolling out on this question.

I do not accuse the Rudd government of doing nothing on this question. I do accuse it, however, of doing too much about the symptoms of home unaffordability and not enough about the causes. I will come back to that issue in a moment. In a press release in 2007 Ms Plibersek said:

Ensuring a supply of affordable housing is not brain surgery.

But it does appear to have become just that much too complicated for this government to properly address, because the question of the supply of affordable housing, as the recent Housing Supply Council report demonstrated, has become the most serious factor in ensuring that Australians get access to affordable housing and the most serious issue which has not yet been addressed comprehensively by this government.

So although, on the face of it, the government is investing heavily in housing affordability measures, for Australians seeking to purchase their own home or to maintain affordable mortgage repayments or rental payments, the question of affordable housing is getting harder and harder to deal with. They are going backwards rather than forwards. Rents have risen by some 8.9 per cent and house prices by 19.2 per cent, and interest rates have increased five or six times in the last year alone. Housing and rental affordability now run the risk of becoming a sad joke for many in the Australian community. In this area, as in so many others, the exaggerated promises made by the Rudd government before being elected now turn out to be a sick and sad joke. The fact is that Australia faces a serious crisis because the Rudd government has been unable to address those issues which have led fundamentally to higher prices for houses and diminishing affordability.

I mentioned before that there were programs to address these issues, and indeed there are. The Rudd government have announced a number of programs—the National Rental Affordability Scheme, the Housing Affordability Fund and a number of stimulus projects in cooperation with state and territory governments. I give them credit for rolling out some initiatives which have had some impact on individual households’ capacities to afford a home. But what they have not done by rolling out these programs is attack the fundamental causes of higher house prices and declining housing affordability. Those issues relate to such things as interest rate rises and the amount of land which state, territory and local governments are releasing into the market to address the supply, to address the cost of bringing new housing onto the market. They have not comprehensively dealt with the question of state and territory planning approval processes, processes which are still extraordinarily slow in many cases. The recent Housing Supply Council report documented delays of between nine and 15 years in bringing particular blocks of brownfields developments in inner city areas from the stage of identification to the sale of dwellings. They fail to deal with tortuous planning processes and public consultation processes which can add huge costs. They have also failed to deal with the mounting level of hidden developer charges inherent in so much of the housing stock which is released today in Australia.

It was estimated in a recent report that in Sydney some dwellings are attracting $100,000 in government charges built into the cost of provision of that new housing. That is $100,000 per dwelling. It is not across an estate or a development; it is per dwelling. It is not surprising that having those kinds of government costs loaded up onto their shoulders would make that land much more expensive to release into the marketplace.

The other problem which the Rudd government has failed to address which is exacerbating this problem and which again the government does not appear to have any response to or strategy to deal with is increased demand for housing. We are seeing a natural growth in the Australian population. We have also seen clear indications of a very serious rise in the overall Australian population over the next 40 or so years. A few months ago the Prime Minister rather gleefully announced that his government was projecting that Australia would have a population of 36 million people by 2050. He said he embraced a big Australia when he released that figure, although he subsequently had cause to believe that perhaps he overstated his case and over-egged his pudding and he somewhat backed away from that statement. But 36 million remains the projection that the government is working on. However, figures released in the recent round of estimates committee hearings suggest that perhaps that figure is a conservative estimate. Senator Bernardi in the course of questioning at estimates asked Treasury officials what the net migration was for 2008-09 and the calendar year 2008. For 2008-09 the net migration was 298,924 and for the 2008 calendar year it was 301,196. Senator Bernardi went on to ask: ‘If, say, 300,000 was the annual net migration figure over the next 40 years, what would our population be?’ The official from Treasury at the table said:

Our population would be about 43.9 million.

There is no indication from the government that it intends to modify that level of migration at the present time. It wants to change the mix, yes, but there is no indication that it wants to reduce that level of migration.

If you have a population in Australia in 2050 of almost 44 million people you will require on present occupancy levels of the average Australian home another 8.3 million homes in Australia—a doubling of the housing stock in this country in the next 40 years. That is an extraordinarily large amount of housing to build and Australians are entitled to cast their eyes over such a policy and ask, ‘Where is the government’s plan to deliver another 8.3 million homes across Australia?’ They would be entitled to say on careful examination that there is no policy or plan. There is no way that this government has put forward the framework for Australia to sustain building on that scale.

It is those sorts of factors—the levels of migration for which there has not been a proper planning or housing response—which have led to the declining level of housing affordability across the country. We see the evidence of that every day as cities become more congested and as pressure on public transport and infrastructure services becomes greater. We begin to understand that our cities are facing enormous pressures which the government simply is unable to respond to in a comprehensive way.

I mentioned before the suggestion from other sources that the costs of purchasing or renting homes in this country have risen. The Real Estate Institute of Australia demonstrates a 9.9 per cent rise in median house prices between December 2007 and June 2009 across the eight capital cities. Of course, in cities such as Sydney and Melbourne those house prices have experienced a much more significant increase—something like 20 per cent. When you see figures of that kind you have to ask yourself, ‘How are Australians living in those cities affording those increases?’, because average weekly earnings have not risen by anything like 9.9 per cent in the 18 months in question much less 20 per cent in Sydney and Melbourne. Of course, they are not. Those are the Australians whose incomes are being hit by higher interest rates, the sluggish release of new housing, state and territory and local government red tape holding up new constructions, tortuous planning processes and the increasing tendency of state and territory governments to build hidden development charges into the housing that they arrange to have released.

So the $20 billion or so in housing affordability initiatives in the last two years has not resulted in any appreciable improvement in housing affordability in Australia. In fact, on these measures, housing affordability in Australia has gone backwards. The question that needs seriously to be asked is: is it really in the best interests of the Australian people to spend $20 billion and see no apparent dividend for that kind of expenditure? How familiar a story has that become to Australians in the last two years? Extraordinarily large amounts of money have been spent from the public purse, the taxpayers’ pockets, for little or no apparent benefit across the board.

I accept that some individuals and some households have benefited from the direct provision of subsidies and more affordable housing in individual cases. But the question needs to be asked: if this government has said, as it did in 2007, that ensuring a supply of affordable housing is not brain surgery, if it has said that it will fix this issue which has caused such angst in the Australian community—that of affordable housing—how is it that it can spend $20 billion in a little over two years and still achieve no net improvement in housing affordability but rather a serious decline in housing affordability over that time? We are entitled to ask why that would be the case.

The Real Estate Institute of Australia reports that average household loan repayments are $337 a month higher than they were 12 months ago. The proportion of income required to meet loan repayments increased nationally from 30.7 per cent in the December quarter of last year to 32.6 per cent in the March quarter of 2010. Where is the action on housing affordability there? Where is the barbecue stopper that was making so many Australians pay attention? (Time expired)

Debate interrupted.