Monday, 28 May 2007
Appropriation Bill (No. 1) 2007-2008
Labor welcomes the tax cuts and one-off payments in the 2007 budget because many Australian families, and carers in particular, have been under enormous financial pressure. It is clearly a very clever election year budget in terms of these giveaways, but it is a budget that fails the future test. The 2007 federal budget has squandered a unique opportunity to use the once in a lifetime $300 billion mining boom to secure Australia’s long-term economic future. Australian families care about their children’s future and, while these families desperately need the tax cuts and one-off payments in the budget to pay for their rising petrol prices, childcare costs, mortgage repayments, higher rent, and higher health and education costs, I believe that ultimately Australians also want the federal budget to address the long-term challenges that face the nation. Some of the biggest challenges include the need to boost productivity to make us competitive over the long term and to lock in future economic growth. Tackling the environment and economic challenges caused by climate change and the national water crisis is, of course, another long-term challenge, and keeping our workplaces fair is the third. The budget delivers little or nothing in any of these areas. The challenge of the budget was to invest some of the capital generated by the resources boom for the future and not squander it, but as I say this budget does not do that.
Housing affordability is one area that this budget does not touch at all. The budget was extremely disappointing for anyone who is interested in housing and housing affordability, particularly for the quarter of a million Australian families who are now paying over 30 per cent of their income in rent, a figure which NATSEM expects to rise to almost 400,000 households by 2010 if we continue on the current path. The budget is also extremely disappointing for the one in two adults and nearly two out of three children who are turned away from emergency accommodation in our towns and cities every night. It is also disappointing for first homebuyers, for whom average monthly repayments now stand at an all-time high of $2,300, which is more than 30 per cent of the average disposable income. It is interesting that in Sydney now a family needs an income of $100,000 to afford an average mortgage. Indeed, all families entering the housing market or who need to move to a bigger family home now need this six-figure income to keep up with the mortgage repayments for the median priced home in many Australian cities.
Austudy students were given some help by the government when it extended Commonwealth rent assistance to students receiving Austudy—of course, Labor has been arguing for this for many years now. We also cautiously welcome the $293.6 million in additional Indigenous housing funding for remote communities. But of course we have seen in recent media reports over the last week that the success of this initiative is far from guaranteed.
It is also worth saying that it seems extraordinary to me that much of the money that is currently spent on disadvantaged urban communities to providing housing for Indigenous Australians is being moved to disadvantaged remote communities. While I think there is a desperate need for greater investment in housing in remote communities, frankly it seems bizarre to take that money from some of the most disadvantaged Australians living in urban communities. We know for sure that Aboriginal communities are facing a shortage of about 18,000 homes over the next few years, and the budget announcement funds about 730 new homes in remote areas, if we are lucky. As I say, there is nothing additional for Indigenous people who live in urban areas. In fact, many will actually see funding taken away.
The recommendations of the review into the Community Housing and Infrastructure Program, CHIP, completed by PricewaterhouseCoopers in February 2007, were adopted by the government and funded in this budget. That means that the government will now abolish the Community Housing and Infrastructure Program, and that means the loss of funding for Aboriginal-specific community housing. These Indigenous community housing organisations manage about 21,758 houses across the country, according to a recent Australian Bureau of Statistics report, and the loss of CHIP funding puts these organisations at grave risk. The implications of the funding loss will also have knock-on effects over the wider social housing system. Obviously, if Aboriginal-specific organisations are closed down or have to reduce the housing stock they have available, their tenants will be looking for housing either with state public housing departments or with other community housing organisations. Those organisations are already overburdened.
Over the last three Commonwealth-state housing agreements, including the current one which is set to run out in June next year, the federal government would have ripped a total of $3.1 billion out of public and community housing; you cannot do that and not have dramatic effects. Over the last few years, the state housing authorities have therefore been faced with funding the shortfall or cannibalising their existing stock. Either way the people who are suffering, obviously, are those who need affordable housing. Without funding to compensate for the federal government’s so-called mainstreaming agenda for Indigenous housing, it is difficult to see how social housing providers will cope with the increased demands for their services. As I say, it simply does not make sense to shift funding from disadvantaged Aboriginal people living in urban areas to disadvantaged Aboriginal people living in remote areas. There are surely better ways of handling funding for those communities who desperately need it.
Beyond the lack of spending in Indigenous housing, there is no plan here in the budget to deal with the issue of housing affordability. The government’s simple answer is to say that the issue of housing affordability is something for the states, that the federal government has nothing to do with it at all and that the market will solve it all anyway. Well, that is plainly not the case. In the last 10 years the average home price has gone from three times the average annual income to seven times the average annual income. So the market is not fixing that problem. Even giants like the Housing Industry Association are calling on the federal government to tackle housing affordability. They say:
It’s time for the Federal Government to provide leadership in this area and convene a national summit to look at measures to restore affordability.
… … …
The Federal Government has the capacity to provide more assistance to state and local governments in meeting the cost of urban infrastructure, new homebuyers cannot continue to fund what are government obligations.
That comes from Dr Ron Silberberg, Managing Director of the Housing Industry Association.
Labor agrees. We know that people who are struggling to save a deposit and trying to get into the homeownership market are really tired of hearing the federal government say that it is all the fault of the states. Obviously, a problem like housing affordability needs to be dealt with by all three levels of government in cooperation, and that is what Labor’s national affordable housing strategy will do. It is plain, too, that there needs to be some government involvement in encouraging investment at the affordable end of the rental and home purchase markets. We have seen that a lot of investment in rental properties is at the higher cost end of the market, and that does not help people who are struggling to afford the rent.
The budget spends not one single additional cent to make housing more affordable, despite the fact that the proportion of first home buyers has declined dramatically from 21.8 per cent in 1996 to 17.5 per cent in February 2007. Home repossessions are soaring. In one month recently there were more than 5,000 repossessions in Sydney. That was 1,000 more than at the same time the year before. Rent is rising faster than inflation, and nearly 100,000 people each night are homeless in Australia. Nearly half of those are under the age of 24. The federal government has a role in making housing more affordable, and this budget was another squandered opportunity to help people who are struggling to pay the rent or struggling to get into the housing market. The Prime Minister admitted recently that rental prices were too high and that they were causing many households pain. The Deputy Prime Minister was so concerned by the government’s neglect of the issue of housing affordability that he reportedly raised the issue at a recent party room meeting. Likewise, there is uncommon and across-the-board agreement from groups such as the Housing Industry Association, industry groups, developers, affordable housing lobby groups and the Australian Council of Social Service that there needs to be some leadership from the federal government to stop housing becoming a luxury item. This budget demonstrates a complete unwillingness to show the leadership that is necessary.
As I say, we need all three levels of government to work together on housing affordability and, to that end, a Rudd Labor government would replace the Commonwealth-State Housing Agreement with a new national affordable housing strategy which would bring together those three levels of government to work on affordable housing. We also believe that all elements of housing policy should go under that agreement. Base grants to the states for public housing, community housing support, the first home owners grant and the Commonwealth rent assistance program would be all bundled together so that we can make sure that those programs are not working at cross-purposes with one another. We are also looking at a variety of other innovative proposals to tackle the housing affordability crisis, including examining ideas like helping low-income families into homeownership through a federal government backed shared equity scheme. We are looking at ways of encouraging private investment in the affordable rental market, increasing public housing stock. We are looking at boosting the community housing sector and improving services to the homeless. All of these need to be part of a broad strategy to address the issue of housing affordability and homelessness in Australia. To do all of that of course we need a housing minister, and currently there is no-one in the federal government who seems to take responsibility for housing as a policy area.
I want to turn my comments now to the missed opportunity in this budget when it comes to workforce measures to help parents, particularly mothers, returning to work after they have had children. This budget attempts to do something around child care. Any improvement in this area is welcome, but this budget does not contain enough support to genuinely help those women who are finding it tough to find child care or afford child care so as to get back into the workforce. Our future prosperity depends on lifting women’s participation in the workforce. As far as that goes, there is nothing in this budget that will do that.
Certainly, there is nothing here that would support a fairer industrial relations system; there is nothing here that supports parents who want to take extra time off when their babies are very young or who want to work part time when they return to work when their children are young. It does not offer, as Labor does, the right to request an extra 12 months unpaid parental leave or the right to request part-time or flexible work when returning to work. It does not do anything about the quality or availability of child care. It does do a few things about the cost, but I will return to that later. It does not invest in preschools or primary or secondary schools and it certainly does not have any plans to support the retirement incomes of women, which are still falling way behind men’s.
Australia’s future economic prosperity depends on making it easier and more rewarding for parents with childcare responsibilities to be in the workforce. We have low participation rates by international standards. We are ranked 23 out of all OECD countries, behind New Zealand, the US, the UK and Canada. The main reason is that, while many women would prefer some paid work or more paid work, a lack of child care, high costs of care and working hours that are unsuitable for family life contribute to a lot of women just throwing up their hands in despair and giving up. Of course families should not have to rush back to work when children are young just to pay the mortgage, but it should be a little easier for those people who want to go back to work to do so.
The increase in childcare benefit is welcome, although it is worth noting that childcare costs have been going up by 12 per cent per annum for four years, and the 10 per cent increase in childcare benefit is a one-off increase. So we are not even keeping pace with the CPI over recent years. It is also worth noting that, with the childcare tax rebate, we are now making parents wait one year instead of two—it simply enacts the original election campaign promise when it came to child care but it is still making people wait a year and it is still very difficult for some families. It is also worth noting that the figure that the government likes to bandy around—$4,000 per child—is quite different from the actual average payment, which is about $813. I want to contrast that with Labor’s investment of almost half a billion dollars for early childhood education, which will give every four-year-old the right to 15 hours of early childhood education a week for up to 40 weeks a year delivered by a qualified teacher, and our proposal to spend $200 million building up to 260 new childcare centres on school grounds and other community land.
I want to finish by speaking for a moment about disability support pensioners. There were a number of one-off payments for carers, for example, and for age pensioners. The payment to carers was $1,000; the payment to age pensioners is $500. Of course Labor welcomes these payments because, in an environment where people are finding it very difficult to make ends meet, any little bit of cash helps. When you think about it though, it seems a pretty unprincipled thing to collect vastly more tax than you need and then hand it out in dribs and drabs to the people who you have squeezed so mercilessly over previous years. It seems a little unfair to me as well that the many people who have phoned or emailed my office who are disability pensioners have missed out in this round of one-off payments. It is plain that this government does not believe that disability support pensioners are as worthy as other types of pensioners or other recipients of payments. It is plain that the government has prejudged these people perhaps as unworthy or perhaps, even more cynically, as unlikely to vote for the government whether they get the money or not. It is worth remembering that this is the same group that were punished so harshly in the 2005 budget when they lost $77 per fortnight. We remember the 2005 budget for the incredibly unfair tax cuts and harsh Welfare to Work measures. So those same people who were suffering in 2005 cop it again in 2007. As I said from the beginning, this budget fails the future test because it fails to invest the $300 billion mining boom windfall in measures that will enhance our productivity and enhance fairness and opportunity for Australians into the future.