Dave Sharma (NSW, Liberal Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Gallagher) and the Minister for Foreign Affairs (Senator Wong) to questions without notice asked by Senators Bragg, Cash and McKenzie today relating to housing, small business and the CFMEU.

We heard, in Senator Bragg's question, about how 42 per cent of mortgage holders struggled to make their loan repayments in August—the highest level of mortgage stress we've seen in Australia since 2019—and we've seen the average owner-occupier mortgage increase to some $634,000—a nine per cent increase from 2023. It's no surprise that homeowners are struggling to make loan repayments. They've endured 12 consecutive interest rate rises. They've been enduring inflation that has stayed higher for longer in Australia than in other developed economies, and, whilst the central banks of other developed economies from the United States to the United Kingdom, Canada and Europe are reducing interest rates, in Australia the Reserve Bank keeps interest rates on hold and has continued to indicate that government spending is too high and that it will not be in a position to see inflation return to its target band and reduce rates until early next year.

This isn't the only cause of the housing crisis. Fundamentally, as well, there is a lack of supply being built, and in large part it's because of the government's own policy settings. Under the government's National Housing Accord, they committed to building 1.2 million homes over the next five years. If you translate that to New South Wales that means 377,000 new homes, or 75,000 new homes per year. But in the year to March 2024 there were only 43,000 new homes commenced in New South Wales versus the target of 75,000. If you compare that to when the coalition was in office, from 2013 to 2018 we were building 67,000 new homes per year on average—pretty close to the target. Why is that? In part it's because labour productivity in the construction sector has gone through the floor; it's declined by 18 per cent over the past decade. In particular, it has collapsed since the Australian Building and Construction Commission, the ABCC, was abolished. Since that time, we've seen construction costs grow at a much higher rate than inflation. We've seen major cost blowouts on large infrastructure projects, where Labor governments—surprise, surprise—at the state and federal level are one of the biggest consumers of construction services, and cost inflation that the CFMEU is building into those contracts is being met by the taxpayer.

Whilst that is happening, we are also seeing smaller construction businesses, predominantly involved in residential home construction, go to the wall. In her questions, Senator Cash referenced the toughest operating environment in recent memory being faced by small businesses. Indeed, insolvencies are at a record high; there were some 11,000 business insolvencies in Australia in financial year 2023-24, and almost a quarter of those—3,000 of those businesses—are in the construction sector, particularly residential construction. Why is that? They've got out-of-control inflation. They've got a sector of construction in infrastructure and public works which is paying higher wages because of the CFMEU's role in bidding up wages, which means smaller construction players predominantly involved in residential housing can no longer meet those wages. As a result, we've seen construction particularly of residential semi-detached dwellings in New South Wales and elsewhere collapse because builders cannot build to a price that will ever be commercially competitive with existing housing stock. Rather than seeing the housing target met or even approached, the rate of construction of new housing in Australia under this government is going backwards.

We heard from Senator McKenzie about these, frankly, frightening comments that Mr Joel Shackleton from the CFMEU has made—death threats against the owner of an Indigenous labour hire firm—and we've had the government's hand-picked administrator of the CFMEU, Mark Irving, say, 'There is nothing to see here'. Senator Wong said thuggery and violence have no place on Australia's work sites, but here is someone who makes it his business to embed thuggery and violence in Australia's work sites and who is being kept at the CFMEU. We've heard that this government has taken stronger action than any previous government in cleaning up the CFMEU. It's quite the reverse. This government has taken money from the CFMEU and run a protection racket for the CFMEU, abolishing the Australian Building and Construction Commission, the only body that controlled the construction industry.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Sharma is being exceedingly selective in the data he chooses to critique the government's answers on when it comes to housing commencements. I think the senator reflected on their so-called height of dwelling commencements. They had to go back as far as 2016 or 2017, I think, to find their peak of housing commencements. What we know is that in fact on the last government's watch, not due to COVID but due to their inaction and their lack of a housing agenda, between 2017 and 2022, up until the COVID stimulus started in about 2021, housing commencements absolutely collapsed in Australia relative to the previous climb and demand. They absolutely collapsed. Then, as we know, we had stimulus packages that saw, yes, a high level of housing commencements but absolutely without the prerequisite work done inside our economy to enable our economy to keep up with that elevation in demand. It is little wonder that our housing market became so tight as a result of that. It absolutely highlights why our nation needs the kind of housing agenda that we as a government have put forward.

When you look, for example, at new and other residential commencements back in June 2018, they were up at some 30,000 new houses, but then they collapsed by some 5,000 commencements. That is new houses themselves. New and other residentials collapsed from 30,000 down to 15,000 in about two years under the last government's watch. Under COVID, they started to try and rebuild that. They stimulated the economy, but they left us very, very ill prepared to do anything to actually be able to maximise the use of that stimulus. As a result, we have seen massive delays in housing construction such that we are just now beginning to see in some instances completion of houses that go right back to their COVID stimulus program.

We are doing the work in the development of our workforce, building materials, planning strategies, work with state governments and, in our Commonwealth housing procurement and stimulus programs, social housing affordability to unlock housing in our nation so that we can create more housing stock and a better future for all Australians. We see that the value of work done—seasonally adjusted chain volume measures, for example—under the last government absolutely collapsed, whereas now we are working towards growing alteration additions to residential buildings, new residential buildings, non-residential buildings and the total value of work done.

We have seen a small dip in new residential building in the last quarter, but I don't think that is any surprise when it comes to what we know has been a constrained labour supply.

Ross Cadell (NSW, National Party) Share this | Link to this | Hansard source

There is a slightly bawdy saying I've been considering, but I will clean it up a bit for this: couldn't organise a pee-up in a brewery with a fistful of dollars. We know what that means. That describes the housing policy of this government. Just a short time ago, $10 billion was allocated to the Housing Australia Future Fund, and zero houses have been built.

On another bill today, Senator Canavan was talking about how the government doesn't build houses here—that he'd have trouble building a house and I'd have trouble building a house. With $10 billion and 12 months, I think I could have managed it. I could have managed to get one going, Senator Canavan. But this government—zero houses. That's why we're talking about this housing policy. As we heard in the questions from Senator McKenzie today, if the government is real about the 1.2 million houses that have to be built, they're going to have to build a new house every 2.2 minutes. Their policy has been $10 billion for zero houses in a year, but now it has to be one built every 2.2 minutes from now to achieve that.

This government knows how to talk the talk, but they don't know how to walk the walk. They bring out these stats—and we heard the impassioned arguments just then about statistics, yours versus mine, this versus that. The facts don't lie. They haven't built a house.

You can argue about the benefit of this other policy and say, 'Who will be able to buy the house?' But it doesn't matter; we're not building enough. Population is increasing in Australia faster than we are building bedrooms to put people in, and that is the problem.

Senator McKenzie raised the point that the average Australian mortgage has now risen 9.3 per cent in one year. The problem with that is it's not just about housing. People are remortgaging their house, refinancing, to pay their bills. They're borrowing more money to try and stay afloat. The average mortgage is going up higher than the average house simply so that people can borrow money to pay it back to other people. That's what these stats on homeownership say: it is a symptom of the Australian economy that the housing market is very weak and very precipitous. If you are borrowing money to pay your bills, it is only a matter of time before it catches up to you. What we'll see in the early new year is people spending up, buying their kids Christmas presents and loading their credit cards—doing all of these things. Then we'll see this debt come back to bite people when they can't afford to pay those bills and they need to borrow more, and when we see mortgages go up again, because they're doing that.

We need to be building more homes—not choosing who buys them, but building more. We need to be getting these approvals through. We need to be doing all these things, and it needs to be done in an efficient way. It needs to be done with the private sector building homes. We've heard stuff about the CFMEU and the large developers getting them out of the way and putting their 30 per cent costs on it.

We're getting this data on housing completion that is not comparable to anything during COVID. We heard the comments from the previous senator, about how stats fell so low prior to COVID. The housing completions for 2023-24 are lower than that. They are the lowest they've been in 10 years now. If they were disastrous in 2019, before COVID, they are now super, double disastrous. That is the truth of the matter.

If we aren't building homes, prices will just go up. If people are borrowing more to pay their bills, the servicing will go there and they'll get worse. The bottom line is that this economy is in trouble. The symptoms are all there. People are refinancing. Businesses are going under. We heard about the costs that they now want to put through on small businesses—on the anti-money-laundering stuff. It's not about whether we support money laundering or not. That's another question. It's about proportionality. How do small regional businesses—small regional lawyers, small regional accountants, small regional real estate agencies—go out there and put in the $30,000 worth of costs to comply with this? Proportionality is not there, because this government doesn't support small business. Why is that? Because their super funds can't own them, and their unions can't control them. If you're out there in a small business doing it tough, it is simply because this government doesn't have a way to influence and control what you do.

If it's not their industry super funds going out there and buying up big business, getting the multinationals and getting their seats on the boards, it's the unions coming in and telling your workforce what to do. They don't want you to succeed; they want to cripple you. That's not good enough, and that's what we're seeing more and more. They're getting bigger and bigger so that there is more that the government can control. Remember, this country was built on individuals out there having a go and making this the lucky country, not the government doing so. It's the people that do it, not the government.

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to contribute to this debate. I have a fundamental disagreement with Senator Cadell, in that I believe in the power of government to do good things. I believe in the power of good public policy to change people's lives and I believe that good government intervention can make a difference when people are suffering, when people are doing it tough and when people are struggling. I believe in the legacy of Labor governments that, through public policy, intervenes to change people's lives, help people in dire and difficult situations and lead our country through troubling times.

At the moment, there are many people in our country experiencing very significant stress when it comes to their mortgage pressures and to broader cost-of-living pressures, and, because we are a Labor government, we don't put our heads in the sand over that. We act, because we believe we can do something. We believe we have levers, through the tools of public policy, to make a difference to people's lives. That's why we have rolled out a range of cost-of-living measures to bring costs down for households. It's why we're backing in wage increases for our aged-care workers and our early childhood workers. It's why we've supported wage increases for low-income earners in Australia consecutive times. It's why we're doing everything we can to bring down the costs of medicine. It's why we're expanding paid parental leave. It's why we're providing energy bill relief worth $300 for individuals and $325 for one million small businesses.

We do these things because we know the actions of government can make a difference. We know the actions of government can change people's lives. Our housing policies are all about that as well. There is absolutely nothing wrong with having a high ambition for what we can do in housing in Australia, because what is the alternative? The alternative is the approach taken by the Liberal and National parties when they were last in government of sticking their heads in the sand and saying: 'We can't do anything here. This isn't the role of government.' We don't believe that. We do believe it is the role of government to have a high ambition, and I don't want anything less than a high ambition.

That ambition is backed in by a suite of policy reforms—reforms which have either been blocked or delayed in this chamber for months and months and months. There are policies which would increase housing supply, which is the biggest block to solution of this housing crisis. We need to build more homes in Australia. We need those homes built by the private sector, but we also need more social housing, as well. Our policies go to all of these things. We want Australians to be able to buy their own homes. We've had bills in this place which would help tens of thousands of low- and middle-income earners get into their own home, and those bills have been blocked by the Greens, the Liberals and the Nationals. We saw the HAFF, a program which does all of these things which need to be done to increase supply in our country, delayed by months.

We have an ambitious plan, but we also have some bloody big handbrakes in this chamber in the form of the Liberals, the Nationals and the Greens. They want to criticise the ambition. They want to say the ambition isn't achievable; at the same time, they are doing everything they can to ensure it fails. They are doing everything they can to stop the government taking the action and providing the frameworks that it can to solve the issues in the housing crisis. This is because they don't believe that government should be trying to make a difference. They don't believe that government should be using the tools and the levers of public policymaking that we have to help people struggling to change lives. That is fundamental to who they are.

I'm afraid there's also a fair bit of political opportunism here, because they benefit in no way from our government taking action to help people and support people, and neither do the Greens, which is why we see them spend far more time focused on their social media strategy than on building social housing in this country. We have an ambition to build 1.2 million homes. We should have no lesser ambition, but we should also be seeing in this chamber a willingness to come together and do what we can to support Australians who are struggling with mortgage stress and support millennial Australians in particular, who feel let down and locked out of the housing market. They are being told by the Liberal Party that they need to choose between having superannuation—a secure retirement—and owning their own home. They want to limit the ambitions of younger Australians in a way in which their parents' generations ambitions were never limited, and we just don't believe in that.

We believe young Australians should hold those ambitions, we believe governments can act and we believe in the power of public policy to change lives and to help people who are doing it tough and who are under pressure in this country. We will continue to do that. We will not put our heads in the sand like you did over 10 years in government.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The data in Senator Bragg's question today is concerning but not shocking to Australians. It's very clear that many Australians are struggling to stay in their own homes, to pay their mortgages and to keep up with escalating rents. A big part of that, a big reason for that, is the inability, the failure, of this country to build enough homes for people to live in. We can see that ourselves on our streets as tent cities pop up all around the place. I can't believe we are now a country where many people that otherwise would not find themselves homeless have nothing but a sheet of plastic to put over their heads at night. It is disgraceful, and something should be done about it.

I'll give the government some slack here. The reduction in house-building numbers is not something the Commonwealth government can easily change overnight. A lot of the problems here are because of the planning laws at the state and local government levels. They have failed our country for many decades now and they're crucially failing us right now. But the government does have a few direct levers that it can pull to alleviate housing stress. Principally, the Commonwealth government does control our nation's borders. The previous speaker said she believed in the power of government. I'm not sure why the government has not used that power to make sure we match the number of people coming into this country with the houses that are available for Australians to live in. While we have had declining house-building approval numbers—again, not solely the responsibility of the federal government—we've had ridiculous escalating increases in the number of people coming to Australia, putting stress on the housing market.

It's important to reflect on how big these numbers are. On average, during the last coalition government, the net overseas migration number, a technical term for the difference between how many people are coming to Australia and how many people are leaving—normally more people are coming than leaving—each 12-month period had 226,000 more people coming to Australia than leaving. That was the average net overseas migration rate. In the two full years that this government has been in power, which we have data for, that average figure has been 493,000. So it was 226,000—I should say the 226,000 is pre-COVID. I took out the COVID years. That would have been an unfair comparison for the government, so I took out the COVID years. So pre-COVID, under the former government, it was 226,000. In the two years this government has been in office, it has been almost 500,000 people a year. There have been more people coming here than leaving every year.

As Senator Bragg said in his question, we're building less than 160,000 homes a year. There are 500,000 people turning up, and we're only building 160,000 homes a year. Of course, some houses every year are condemned and have to be knocked down. Okay, maybe it's two people per home or whatever—it's about that. We're building way less homes than we should be with the people coming in.

So why hasn't the government capped the numbers? Why have they allowed so many people into this country and caused this mess, where Australians do not have a home to live in? They were managing the borders and they had the job of reopening after COVID. Of course we had to take some migrants in after COVID, after we had closed our borders for a few years, but why do we need to take in the size of Canberra every year—Canberra is at around 500,000 people now—when we're not building a city anywhere close to the size of Canberra in terms of homes around the country? That is what has happened. It is the government's responsibility to fix it.

This figure is remarkable—that they have allowed this to persist for two years. The previous maximum year for net overseas migration was back in 2008, the last time a Labor Party was in government, when Kevin Rudd wanted to build a big Australia. That was 315,000 people a year. That's still 170,000—180,000, in fact—short of where the government has found themselves on average over the last two years. This is why the government should be tossed out, because they can't manage the fundamental, first requirement of any Australian government: to secure our nation's borders and make sure they use the control they have over those borders for the benefit of the people in this country first. They have failed at that task, and now it's average Australians that are paying the price of that failure.

Question agreed to.