Henry Pike (Bowman, Liberal National Party) Share this | Hansard source

I acknowledge the member for Nicholls's contribution and his reference to the research undertaken by the Retirement Living Council. During my time as the communications director nationally of the Property Council, the Retirement Living Council did an incredible job in advocating for more housing choice and more opportunities for seniors to downsize and find appropriate accommodation. I acknowledge Ben Myers who is finishing up in, I think, a couple of short weeks as the executive director. He has done a fantastic job and we wish him all the best.

The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 seeks to remove a couple of key barriers that are preventing Australia's pensioners from downsizing their principal homes, by reducing the impact that selling a home has on their social security means testing.

The positive features of this bill, of course, were first devised by the former coalition government, and it was during the last election campaign that the now Prime Minister, the then opposition leader, took the coalition's lead by announcing—one day after the coalition had announced it—that Labor would adopt coalition policy to ease costs for pensioners and, in the process, free up established housing stock.

As I make my way around the Redlands, which I'm honoured to represent in this place, I encounter many people who feel they are in a logjam in relation to their housing. I encounter families who are desperate for a family home. They might be in the rental market, and my community is not unique in currently experiencing a rental crisis. There are a lot of local families who are desperate to find that right-sized rental, but it is nearly impossible for them to find that in the current market. Also, there are many families in the Redlands who are looking to buy the right home. Obviously, we've had an affordability issue over recent years. We've had a massive increase in property prices in the Redlands, and that perennial challenge of trying to save a deposit to get that dream home or even just a foot on the ladder of the property market is proving incredibly difficult for many within my electorate. That's of course been exacerbated by the inflation pressures that Australians are facing right across the country. Increased costs of living are just making it that much harder to save that deposit. Of course, rising home prices have not made that easier. And there are rising interest rates as well. Those who have been able to get into the property market are suddenly seeing their interest rates go up significantly, and we're warned that those will continue to rise over the coming months.

But, on the other hand, I often find older Redlanders rattling around in a big family home. I undertake a lot of doorknocking in my electorate. There are very big, spacious homes that were once home to multiple children who have all left the family home now, and I find an older couple there who are finding it difficult to maintain their home and want to right-size, but there are obstacles in their way. They want to do that, but they're concerned about the costs, they're concerned about the uncertainty of the market—and it is a very volatile market at the moment—and they're certainly concerned about how this transaction would impact the income support that they receive. We have this perverse situation where these Australians want to downsize, and society needs them to downsize, but they are being artificially prevented from doing so because of the structures of government income support.

This bill seeks to remove that key barrier for these pensioners. This is about giving Australians more choice in deciding how they want to live the next stage of their life, as it removes financial barriers for people wanting to downsize their home. This bill amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to double the automatic asset test exemption period on proceeds from principal home sales from 12 to 24 months. But, critically, it retains the existing option for a further 12-month extension, which may be needed in extenuating circumstances. The bill will also ensure that the lower deeming rate will apply to asset-test-exempt home sale proceeds when assessing income during this extended exemption period.

I strongly support doing all we can as a parliament to help alleviate the current housing crisis. As a clear demonstration of the pragmatic approach of the opposition in such matters, I'll put all minor concerns to one side, in deference to the greater good, and support this bill.

Firstly, let's consider the extended asset test exemption period. This is a welcome move to protect any income support recipient who is moving between homes from the significant impact that the sale proceeds could have on their payments. Selling a home and purchasing a new one can be a difficult process with many potential delays. Many of my constituents have shared horror stories with me recently about delays. Contracts of purchase on a new property can fall through. There can be market changes which shift the prices dramatically. You may sell your property at a low point and suddenly find the market takes off, and the buying power of the proceeds of the sale, which you thought you'd be able to use to purchase a new home, has been eroded. Many projects at the moment are experiencing building delays. There's a lot of concern around the supply of materials and labour. There are a lot of labour shortages at the moment, and they are taking a toll on the residential construction sector. There are a lot of building delays out there. And, of course, there are just the everyday elements of life that can lead to delays in this process. That can be health concerns. That can be changes in personal circumstances. That can be changes with where people want to live. Grandparents may find that their children and their grandchildren are moving to a different city, and they may want to change their circumstances. There are plenty of things that can delay that process of selling the home that you have lived in for a while and are looking to downsize from. It makes sense to give Australians more time to complete this downsizing transition. This element is greatly welcomed, as is the introduction of a lower deeming rate.

Given the high and rising value of most Australian homes, the bulk of the home sale proceeds are often subject to the upper deeming rate, and this significantly impacts on a seller's pension or other payment rates. The measures in this bill will substantially reduce this significant disincentive, by changing the deeming rate used to assess income on principal home sale proceeds. This will help. This will help support older Australians confronted by the challenges of rising prices and soaring costs of living. This will help the next generation to get a foot on the ladder of homeownership, and this will help Australians struggling in the current rental crisis, by providing more investor ownership of dwellings that are suitable for them to rent. It's going to help across the board, and it's going to help all those constituents that I've mentioned earlier in these remarks.

The minister noted in her remarks on this bill that there is no silver bullet to fix the housing crisis or the housing market at the moment. I made very similar remarks in my maiden speech earlier this month. Homeownership has long been an intrinsic and admirable feature of Australian society. It's been a national rite of passage. It's been the cornerstone of the Australian family unit and the opportunity for Australians to grow their wealth and achieve authority over their own future. But it's a sad reality that this dream has become less affordable over time for a growing number of Australians.

I had a look at some statistics the other day. In1971, 64 per cent of Australians in my age cohort owned their own home. Today that figure has eroded down to only 50 per cent. According to the 2016 census, those aged under 65 are 14 per cent less likely to own their own home than those over 65. This disparity has worsened in the years since 2016. There are many factors that have influenced this change and this intergenerational erosion in affordability. Of course there is no silver bullet—I'll agree with the minister on that—but I do believe that this bill will go some way to achieve a more efficient market, by removing some of the unintended disincentives to downsizing.

The Real Estate Institute of Queensland have welcomed the bill and anticipate it will have a positive impact on the current housing crisis. I know they do a lot of analysis, and they wouldn't make a comment like that unless they were absolutely sure of themselves. I think that's a very strong encouragement. This bill, if implemented appropriately, stands to safeguard the financial security of Australian pensioners when downsizing their homes and will lessen the risk of their support payments being cut. As I've mentioned, that's a significant concern for many locals in my electorate. That is one of the main obstacles to their downsizing. They don't want this to impact their payments. They do worry about that. It leads to a significant amount of hesitation. If done right, this bill has the potential to deliver better financial outcomes and peace of mind for those elderly Australians. These provisions may also help to free up established housing for younger families and improve market supply.

But I also encourage state and territory governments to consider policy initiatives that will remove further obstacles to downsizing. It's not just concerns about the impact on support payments. There are many other elements of policy across this country that impact on the efficiency of the housing market. I encourage state and territory governments to consider stamp duty incentives and planning relaxations that support smaller age-friendly homes and to support the retirement living sector—I mentioned that earlier—in delivering more product to the market. Have a chat to Ben Myers in his final few days at the Retirement Living Council. He'll have a few ideas for our state and territory colleagues. Much is made in this country of providing first-homebuyer support, and—dare I say it?—it may be time for us to consider some more focus on last-homebuyer support. By removing further barriers for Australians downsizing to residences that better suit their needs and lifestyle, we can help free up larger homes for younger families and achieve a better and more efficient balance in Australia's housing market.

This bill is in the best interests of my constituents in the Redlands, and I will support it. But this parliament must remain diligent to ensure that this Labor government will implement this bill exactly as intended. As noted previously, this bill was directly inspired by coalition policy. It was stolen or commandeered by the Labor Party the day after the former coalition government announced it, and I don't have a problem with that. There isn't a monopoly on good ideas in this place, and there certainly aren't intellectual property rights in relation to politics. I commend the government for adopting this policy and seeking to implement it through this bill. It's a policy that will benefit many Australians, including many Redlanders within my community, and I commend the bill to the House.

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