Sam Birrell (Nicholls, National Party) Share this | Hansard source

I rise to the support the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. This bill provides greater financial certainty to senior Australians looking to downsize by extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 to 24 months. This extends the time people have to use the proceeds of the sale of their family home to build or purchase their future home. It's a recognition of the realities of the current market where, almost universally, land supply is tight and new builds are impacted by supply chain issues, labour shortages and rising costs.

Older Australians have earned the right to make decisions about how they live in retirement, and this legislation ensures they can transition to a more suitable sized home while still being treated as a homeowner for means testing purposes so that they remain eligible for income support payments. The bill extends the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home. It's another example of Labor implementing coalition policy, and it doesn't stop there. The value of the home sale proceeds are subject to deeming provisions, so if the sale proceeds were placed in a savings account or in other financial investments, they would generate returns which a person could use to support themselves and be deemed as income. This bill will apply only to the lower below-threshold deeming rate for these assets-test-exempt principal home sale proceeds when calculating deemed income, and this rate will be applied to these proceeds for the duration of the assets test exemption.

The legislative framework should not act as a disincentive for older Australians to make personal choices about their retirement lifestyle. Quite rightly, we should incentivise choice and allow people who have worked their whole lives to enjoy the fruits of their labours in retirement. In my electorate of Nicholls there are 35,843 people aged 65 or over, according to the 2021 census. That is 22.5 per cent of the population who are of retirement age or approaching retirement. From the 2016 census to the 2021 census, the percentage of the population of Nicholls who are over 65 rose by one per cent. This is partly because Nicholls is an attractive and affordable place to retire. Whether it's on the shores of Lake Mulwala in Yarrawonga, or on the banks of the mighty Murray River—which is running a bit high at the moment—at Cobram or Echuca, the region has long been a retirement destination. Oasis Village in Cobram, one of the longest-established retirement villages, has 180 homes and over 300 residents. Oasis Homes, which specialises in downsizing, has operated very successfully for 40 years. There are many new entrants into the retirement and lifestyle village sector in Nicholls. Nearly 200,000 Australians call a retirement village home, and the Property Council of Australia, through the Retirement Living Council, has advocated strongly in favour of recalibrating age pension rules to allow pensioners to unlock home equity and downsize if they wish to without their pension being cut. In February 2022 a PwC/Property Council Retirement Census snapshot report presented a positive picture of an industry that has weathered the storm of COVID-19. The report noted higher average occupancy rates and favourable affordability conditions that were a testament to the resilience of the sector, despite the steep economic and social challenges due to the global pandemic. As part of his advocacy, Ben Myers, the Executive Director of the Retirement Living Council, said they were an important part of future housing needs because they support the universal desire of older Australians to stay independent and engaged in the community.

Retirement villages are not the only option for seeking a smaller, simpler lifestyle in retirement but they are significant. The 2021 Property Council Retirement Census snapshot includes 62 operators across 766 villages and approximately 77,000 units nationally. Despite an increase of four per cent in the average two-bedroom independent living unit price, from $463,000 to $484,000, between financial year 2020 and financial year 2021, they have, on average, become more affordable, with the average sale price being 55 per cent of the median house price in the same postcode, compared to 67 per cent of the median house price in that postcode in financial year 2020.

One of the critical challenges in my electorate is the supply of land and housing stock for homeowners and the rental market. The pandemic caused a shift away from capital cities to the regions, driven mainly by affordability and the availability of more flexible working arrangements. The Nationals love the regions and we welcome new residents with open arms, from all around Australia and all over the world. Regional Australia has an enormous capacity to grow and sustain populations, and we should be encouraging more opportunity for people to move to the regions for work, education or retirement. The Regional Australia Institute, a great organisation, has just released a bold plan to have 500,000 more people living in the regions by 2032 than the current forecast of 10.5 million people. I support this goal and I want to see it happen.

But, in order to support growing regional populations, there needs to be a steady and reliable pipeline of investment in regional communities. Now is not the time for this new government to back away from regional funding. Now is the time for renewed investment in regional Australia. This bill deals with a very specific set of measures to support older Australians to sell the family home, downsize and enjoy their retirement without facing financial penalties in the process. The incentive it provides for downsizing needs to be considered in the wider context. As I said earlier, in the electorate of Nicholls the pandemic has led to a shortage of available land for new housing development, a sharp uplift in prices for existing homes, and a depressed supply of rental housing. At the same time, the region is desperate for workers to fill the workforce gaps. We need everyone—we need CEOs, semiskilled workers and unskilled workers. They are needed on our farms and orchards, in our service industries, in our manufacturing industries, in health and aged care, in education and in virtually any setting you care to name.

Those workers, if they can be found, also need suitable accommodation. Based on the 2021 Property Council snapshot, the development supply pipeline planned by participating operators of lifestyle and retirement villages has doubled from the 2020 snapshot, from 5,500 dwellings to over 10,500 dwellings for the next three-year forecast period. This is a significant number of dwellings in the pipeline, and nearly all will be filled by people choosing to sell their family home and downsize. Those homes that they sell will add to the available housing stock for purchase or rent and will play a key role in alleviating the problems with supply in Nicholls and in many other parts of Australia. I've experienced this myself, buying a large family home from a family that was downsizing. There's a lot of emotion associated with that too, with an old couple selling their family home and seeing a young family move in to raise their family.

The coalition has a strong track record of helping older Australians who want to downsize, freeing up family homes in the market for young families—not only improving supply but impacting affordability. Over the last three years, the coalition government's housing policy supported more than 300,000 Australians with the purchase of a home. The coalition supported almost 60,000 first home buyers and single-parent families into homeownership through the home guarantee schemes, and the coalition provided $2.9 billion worth of low-cost loans to community housing providers to support 15,000 social and affordable dwellings, saving $470 million in interest payments that could be reinvested into more affordable housing, which is another critical need in my electorate and many other electorates as well.

The coalition also established the First Home Super Saver Scheme, helping 27,600 first home buyers accelerate their deposit savings through superannuation. In contrast, what we're getting from Labor is the Housing Australia Future Fund, a $10 billion off-budget fund to support a housing program that has no substance and lacks detailed costings and an implementation plan. The target is 30,000 affordable homes over five years, but that would require a rate of return on that investment of 20 per cent annually. I'm not sure what the secret sauce is that the Treasurer has in the cupboard, but 20 per cent returns on investments are not really a reality in the current economic climate, despite the strong economy, including my very strong economy in Nicholls, that this new government inherited from the coalition. Equally, Labor's Help to Buy Scheme is limited in its ambition, and very few Australians would qualify for it let alone want to participate in it. It brings to mind the quote from Darryl Kerrigan in the great Australian movie The Castle: 'Tell him he's dreaming.'

The coalition took a comprehensive housing policy to the 2022 election and, if re-elected, we would have established the Super Home Buyer Scheme to allow first home buyers to invest up to 40 per cent of their super, up to a maximum of $50,000, to help with the purchase of their first home. It would have been a great help. We would have given Australians over the age of 55 the ability to invest up to $300,000 per person in their superannuation fund outside of existing contribution caps from the proceeds of selling their primary residence. We would have helped more first home buyers get over that deposit hurdle by raising the number of low-deposit guarantees for first home buyers to 35,000 each financial year. We would have increased the supply of new homes in regional areas by incentivising the purchase of new build homes and providing 10,000 low-deposit guarantees each financial year for those moving to, or within, regional areas. The coalition also supported greater investment in affordable housing with an additional $2 billion in low-cost financing for social and affordable dwellings.

Let's go back to The Castle. There's another great line from that wonderful movie where Darryl Kerrigan explains the real value of his house, which is being compulsorily acquired to extend an airport. 'It's not a house; it's a home,' he says. Homeownership remains the great Australian dream, and we know that 85 per cent of renters aspire to own their own home. This bill, by removing disincentives for older Australians to downsize, will allow people to make decisions about their family home without the burden of financial uncertainty and will have positive flow-on effects for the economy, housing availability and affordability and, based on current population shifts, for communities across rural and regional Australia. It's good policy—good coalition policy—and I'm happy to add my voice in support of this bill.

See this speech in context