House debates

Thursday, 15 February 2024


Help to Buy Bill 2023, Help to Buy (Consequential Provisions) Bill 2023; Second Reading

11:49 am

Photo of Elizabeth Watson-BrownElizabeth Watson-Brown (Ryan, Australian Greens) Share this | Hansard source

I rise today to speak to the Help to Buy Bill 2023. It's called 'help to buy', but this bill won't help many. It'll help only about 0.2 per cent of renters while leaving behind the other 99.8 per cent. This just does not address the enormity of the housing crisis.

Labor and the LNP have made it easier to buy your second home or your fifth home than your first. Investors do well. Everyday people get done over. Basically, how it works is this: Labor and the LNP have given huge tax breaks, incentives and concessions to investment property buyers, ensuring more people want to buy houses, massively driving up the price of housing for everyone and driving homeownership and affordable rentals further and further out of reach for all but the wealthy. Everyday people trying to buy their first home have to compete with increasingly wealthy investors, but they don't have the existing capital or the tax concessions to compete with them.

What are these tax cuts that Labor and the LNP are handing out like candy to investors? The first is negative gearing. That means an investor can claim all of the expenses associated with an investment property—and that includes interest payments, maintenance, insurance, body corporate fees and council rates—as tax deductions from their income. Particularly for those in the top tax bracket, paying 45 per cent tax on income over $180,000, this is a huge saving. Of course, first-home buyers have to cop all of those expenses themselves. They don't get to claim them off their tax. This dramatically affects how much they can actually afford to borrow.

But the rort doesn't stop there. There's a thing called capital gains tax, CGT. It's what you pay when you make a profit from buying and then selling an asset. Normally, you'd have to pay tax on this profit, just like any other income. But most investors can claim the capital gains tax discount, which reduces CGT by a whopping 50 per cent. That means that you pay less tax on asset inflation than you do on wages. That's absurd. First-home buyers, of course, don't benefit from this. They haven't sold a home before. As house prices rise because of these government tax breaks, buying houses just to sell to other investors with substantially discounted tax becomes a reason to buy in the first place. It directly incentivises overheating the property market, so, instead of a particular property becoming someone's family home, it becomes a speculative commodity for a wealthy investor. Here's an idea: instead of subsidising property investors and making it easy for them to outcompete first-home buyers, put that money into affordable and public homes for people who actually need a place to live. It seems like a no brainer to me.

Even the Productivity Commission thinks the Help to Buy Scheme is a bad idea, and this makes sense when you think about it. Of course, if you make it easy for some through, essentially, a lottery, it makes it harder for everyone else. If you're standing at an auction and the person next to you has access to this scheme and you don't, there is simply no way you're going to be able to outbid them—unless you're a property investor and have access to a whole range of tax concessions, of course, as I've already mentioned.

Here's a radical idea: what if we took the money we put into tax concessions for property investors and actually built some public housing? Actually, clearly, that's not radical. It's just common sense. Building public housing is something that even Australian governments used to do on a mass scale. Even under conservatives like Menzies, the federal government was building tens of thousands of dwellings a year. That's been whittled away over decades. Now the government barely builds any new public housing at all, and in many states numbers are going backwards as older housing units are privatised or demolished.

Of course, there's a reason for all of this. The money is there. Just with savings from scrapping tax concessions for property investors, we could build half a million homes over the next decade, for instance. But Labor and LNP governments just don't want to build public housing. They prefer to leave that job to the private market. Could this be because they are completely beholden to their donors the big banks and the property developers, who, of course, support endless exponential growth in house prices? It keeps earning them enormous profits.

I'll take that interjection. The Greens are actually supporting legislation that might be against their own personal interests and in the interests of real Australian people. The big banks and property developers support endless exponential growth in house prices. It keeps earning them enormous profits. Building public housing to actually house the Australians who desperately need it would eat into bank profits. Apparently, we can't have that, can we! Let's talk about those big banks and property developers.

All of Australia's big banks donate to both political parties—over $5 million to Labor and $6 million to LNP in the last decade. Labor and the LNP seem to be on a unity ticket to protect the interests of bankers—which, as I said, actually ensures house prices keep going up and up—by refusing to tax their enormous profits. They even protect some bankers who rip off customers from the appropriate legal consequences, like fines and prison times. Particularly for Labor, there are some familiar faces. I would use the word 'culprits'. Former Queensland Labor Premier Anna Bligh is the head of the banking lobby. I'm not sure if there's a more stark illustration of the way power actually works in this country.

What do the banks get for their donations and connections? Absolutely mind-blowingly enormous profits earnt off the backs of ordinary Australians. We've just heard this morning Matt Comyn, Managing Director of the Commonwealth Bank, boasting about their half-yearly profit of $5 billion. That's a half year, not even a full year. Nobody disputes that these massive profits are, in large part, due to rising interest rates. Mortgage holders and renters are struggling with their bills, struggling to put food on the table and struggling to afford the dentist because of high interest rates. Those ridiculous bank profits are directly proportional to the suffering caused by rising interest rates and the cost-of-living crisis, and they go completely unchallenged by this government and the political establishment.

The government is essentially pulling a bait and switch on everyday people. They're giving peanuts to potential first home buyers, who've been shut out of the housing market due to skyrocketing interest rates, the soaring cost of living and wealthy investors artificially driving up property prices. But this government congratulates itself and pats itself on the back for this unconscionably bad policy that will ultimately make an already desperate housing crisis actually worse. Wealthy property investors flourish under this protection racket of negative gearing and capital gains tax breaks, while regular people bear the brunt of rising interest rates. In Queensland, nearly 40 per cent of property lending goes to investors, while first home buyers struggle to secure a measly 16 per cent. It's a similar story in New South Wales and Victoria. Investors get the lion's share of loans, larger amounts and tax breaks to offset their costs. And what do first home buyers get? They're left grappling with 13 consecutive interest rate hikes, soaring rates and no relief from the escalating cost of living.

We are witnessing the lowest rates of homeownership in 70 years, and, instead of looking after people trying to purchase a home for their family, the government is doling out favours to wealthy investors, fuelling the housing crisis.


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