Keith Wolahan (Menzies, Liberal Party) Share this | Hansard source

I've listened with interest to the debates on the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, and you can understand why Australians will despair. We've heard the government speakers, speaker after speaker, stand up and give a long list of the great gift they are giving Australians in a tax cut, and then they'll single out aspects of the community that are getting more with the changes. Of course Australians are doing it tough. Of course there is a cost-of-living crisis. And of course if there is an opportunity to put more money in the pockets of Australians then we will take it. But let's not forget the circumstances of how this happened, because the motive and the timing of the change matters. It doesn't just matter in the day-to-day Punch and Judy show of politics. It matters to whether we can address serious challenges that this country faces.

When a debate comes before the parliament I usually pull out the Intergenerational report and see if that has something to say on the particular issue we're talking about. And when you look at one aspect that we can control in this place more than any other, it's government spending, because all the effort is being put on two places. First, the Reserve Bank addresses inflation by lifting interest rates—the only blunt instrument it has, and it punishes a particular cohort of Australians more than any other: those paying off a mortgage. And we seek to punish those who are trying to aspire to a better life, to earn more income and to produce more, to lift this country up. On page 144 of the Intergenerational report there's a chapter on government spending, and it's quite alarming. Using 2022-23 prices, at the turn of the century government spending per person was about $15,000. So, in real terms, the projections for that, on the same prices—so, this isn't inflation; this is in on those prices—is projected to be $40,000 per person by 2062.

We know that productivity has fallen off a cliff, so we know that that difference is not going to be made up by this country lifting the tide. We've heard the JFK quote, 'A rising tide lifts all boats.' That's not just a cute line; that is an important expression of where the growth in this country comes from. Australia is a prosperous, free country in spite of this place, not because of it. It is a prosperous and free country because of the hard work and free enterprise of Australians who have taken risks, worked hard and studied hard. And this place has said to them, 'If you do that, there is not only a place here for you; you will be rewarded for it.'

This isn't a new debate—the debate about democratising power and prosperity to your country or centralising it in a place like this. That debate has been had. It has been won. It's one sided. To the credit of the Labor Party, there have been times when many Labor Party senior figures have understood that and fought for that. They certainly did in the 1980s under Bob Hawke and Paul Keating. They did that with the support of the Liberal opposition. Our history—our DNA—is that, whenever there is a chance to lean into giving more to and supporting Australians, we will take it, and we will support you. The idea that our decision is driven by politics is ridiculous. It's nonsense. The timing and the motive of this change show that this is entirely driven by politics on the government's side. For 20 months, we have been telling you in speech after speech that Australians are hurting. Food bank queues are through the roof. People are wondering whether they can keep their homes, and businesses don't know whether they will survive. And the government was focused on other things.

But something happened over summer, and it wasn't that in the summer break the government members accepted our claim that Australians are doing it tough. There was a concern about an upcoming by-election, and it's in my home state of Victoria in the seat of Dunkley on 2 March—weeks away. We know that timing and motive matter, because the Treasurer told us so. The Treasurer went on ABC. The government has liked to quote ABC throughout the last week, but, on 7.30, the Treasurer said that the timing was about Dunkley. That's why we've rushed this along here. Australians have been hurting for 20 months, but there's a by-election, so let's hurry up and get it done.

Many speakers have also spoken about how, if we isolate just the money that you will get back compared to one proposal for another, we're missing the reality of how people live their lives. There are multiple sides to this ledger. Of course more money at home is needed. But let's not forget what's going out. The average house is going to get about $1,000 more for this change, and we welcome that. But the average house on the average income has seen a real loss in real wages of $8,000. You're giving 10 per cent with one hand, and you're taking 10 times that with the other. For those who are paying off a mortgage, the average mortgage of $750,000—and, in seats like mine, that is a fraction of what's needed to buy a modest house or a unit—has seen a $24,000 per year increase. Many young Australians who aspire to owning their own home, particularly those in metropolitan Melbourne, Sydney, Brisbane and Adelaide, where house prices are at record levels, are giving up. What are we saying to them? This was the pathway back. 'If you study hard, you work hard and you aspire to earn more, you too can own your own bit of Australia.'

Last Friday, I spoke to the Governor of the Reserve Bank. We noted how the average income earner on $93,000 can only afford a median house in three of Melbourne's suburbs. Some correctly observed that most people purchase a house as a couple or a household. Others noted that the median salary is more relevant than the average salary. So let me outline each. For those watching, I ask you to imagine a table full of M&Ms. If you focus on metropolitan Melbourne, where I am from, there are only 354 suburbs. You can expand the definition and make it more or less, but let's focus on metropolitan Melbourne—354 suburbs, 354 M&Ms on a table. Let's start with the assumption that everyone has managed to save a deposit of 20 per cent. That's a big assumption. The median property value in Melbourne is $900,000. It's $1.2 million in Sydney. That assumes a deposit of $180,000 in Melbourne and $240,000 in Sydney. Then add stamp duty for both—$42,000 for each. So, if you're looking for a median house, you require a total of $222,000 in Melbourne and $282,000 in Sydney.

Assuming that has been saved, a couple who both earn the average Victorian wage of about $95,000 can afford to buy a home in just 49 out of 354 suburbs—out of all of those M&Ms, 49. But not every partnership is made up of full-time workers. Some are part time. Some are on parental leave. So the average household is often a more useful measure. And the average household can only afford 26 out of 354. If we are to use the more accurate and relevant measure of average wage being median wage—because average wage is skewed by those who are earning significant incomes, the billionaires of Australia—a couple earning the median wage in Australia can afford a total, out of 354 suburbs, of zero. Zero houses are affordable for a couple on the median wage in Australia—out of a table of 354 M&Ms, not one. You might say: 'Well, temper your aspirations. What about a unit?' Well, out of 354 suburbs, they can afford 15 suburbs for a unit.

But let's go back to the assumption I made at the start about deposits. It gets significantly worse if we remove that assumption, which is the reality for most Australians, given after-tax income is required to save that, unless you are in the fortunate position of a family being able to help you. So how long would it take to save 20 per cent of the price of a median house in Melbourne? How long would it take you to save $222,000? For a couple on an average wage, it would take them nine years. For the average household, it would take 13 years. For the median couple—with two people earning, and, if you take 10 Australians, they are both halfway—as a couple, it would take them 17 years to save the median deposit and stamp duty for a house in Melbourne. And all of those figures are much longer for Sydney. It's similar in Brisbane and similar in Adelaide.

And all of this assumes there's no relationship breakdown, illness or loss of income—and we know those statistics are too high for so many families. This is for people who do everything right—they study and work hard; they stay together; they're healthy. And yet still this Australian dream is out of reach. It is no wonder the bank of mum and dad is now the ninth-largest lender. It is no wonder those who are not in landowning families are losing faith.

Migrants move heaven and earth to come to this nation, as my family did, for a dream of a better life. The Australian dream puts a premium on study and hard work over the lottery of birth. It's what distinguishes us from any other country on earth. People speak of the American dream, but the Australian dream is far more powerful and leans towards aspiration and opportunity more than the talking points of US presidential candidates. But the Australian dream is now under threat. Solving a problem starts with recognising that you have one. So when we see speakers stand up and read out the talking points about the great gifts that people are getting from this place while their real incomes are 10 times worse, at the same time government spending is out of control. You're asking people to save money in their households, but we won't save money in our household here.

When people despair that the one legislated bit of tax reform we've had in recent memory has been torn up, they can also despair at the capacity of this place to move beyond the Punch and Judy show that is the political cycle. It's not good enough when Australians, particularly young Australians, have given up on the idea of owning their own home, and that's what's happened. And I'm not pretending that that is the cause of this particular government; that's been building for a while. But you can do something about it. This government can do something about it. We can all do something about it. That is so much more important than the talking points of this particular debate.

When we change the 37 per cent bracket, when we increase the comparative income that's paid at the top end, we're saying to those young Australians who didn't have parents who could help them, who did everything right—they studied hard, they worked hard, they aren't in those brackets now, but they want to be and we know they're talented enough to get there. They're not just thinking about their pay packet today; they're thinking about what they can aspire to. And let's not forget the true inequity here: there are those who can afford to create structures and trusts that minimise their tax anyway, and the people who will be impacted by this can't afford those arrangements. How this happened matters. The timing matters. We should all do better in turning our minds to proper tax reform and helping young Australians buy their own homes.

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