Matt Gregg (Deakin, Australian Labor Party) Share this | Hansard source

I think we've just had a confirmation of the coalition's long-distance relationship with reality. If they are seriously pretending that the old settings were producing broadly fair and sustainable outcomes for the young people of Australia, they're living in la-la land and, once again, proving themselves to be the group serving nothing and serving no-one as a coalition. It's no wonder their political future is increasingly in the abyss, when their only vision for tomorrow is tax distortions that have, for 25 years, made it harder for the next generation to get a home of their own. It plainly ignores the fact that, for my generation and those who are younger, getting into a house has been a whole lot harder than it was for our parents' and grandparents' generations.

It's not that the investors have done anything wrong. This was by bad design. In 1999, the Howard government came in and said, 'Let's introduce new CGT settings. That'll help increase the number of shareholders.' Well, it didn't. What it did was create, with negative gearing settings, a magic combination that made investing capital in existing housing simply irresistible. So, of course, people made the rational decision to invest in equal housing. But what we saw was a huge injection of capital into the existing housing market, producing no productivity whatsoever, increasing debt and making the dream of a home to live in all but impossible for working Australians everywhere across the country. Now we've got Sydney as the second-least affordable city in the world—second only to Hong Kong. We've got housing in Adelaide approaching levels of affordability that are greater than those of Paris, London and New York. That's where we're at. These are distortionary; we know they're distortionary.

The member for Goldstein's motion talks about bad faith. That is when you hold one position but secretly believe another. Of course, the member for Goldstein's not-so-best-selling book reveals he understands the reality that those systems have been screwing the next generation and have been distorting the tax system to make it harder and harder for people to actually achieve the aspiration of a home to live in.

When I go out to Deakin and I speak to young people about their aspirations, they don't talk about discretionary trusts, they don't talk about getting into their fourth investment property, they don't talk about the niche issues they're trying to use as an excuse for the preservation of a distorted tax system they know not to be working for young Australians. To suggest that young Australians have been the big winners out of the current tax system is beyond absurd. If they're so out of touch as to actually believe that, they should consider early retirement as soon as possible. While the Nationals have been calling for an immediate election as a referendum, I suspect their Liberal colleagues would not be calling for the same, otherwise it would be 'so long, farewell' to the Liberal Party, because their identity crisis is yet to culminate in any sense of who they are or what they stand for.

This Labor government is about making the aspiration of homeownership actually achievable for the next generation—people who have done everything right. They went to university, got a good job, got on a good wicket, but still, despite doing everything right, they have no chance of successfully bidding in an auction because they're competing against investors who are effectively subsidised by their own tax dollars. They've got the taxpayer behind them because they know that, if interest rates go up, half of that's going to be deductible. So we even see monetary policy blunted by the fact that a whole lot of interest on mortgages charged to investors is not creating the same amount of pressure as interest charged to those who are owner-occupiers, who cop the full whack of every single interest rate increase—not true, because of the current settings of negative gearing for investors.

We've seen the distortion of our entire tax system over a number of years, and what is the Liberal Party's plan? They say, 'I know what we'll do. We'll go back. We'll ignore every reality of this tax system and decide that it was good enough for young people. They're happy.' They'll find a couple of examples of some angry people. It's the idea that, if some people don't benefit from the removal of a tax concession, the whole tax concession must be preserved at all times and that all tax reform is impossible. What utter nonsense! We have got a generational opportunity to actually make the dream of homeownership possible again for the next generation, and we are committed to achieving just that. Things have to change. It is not the young people of Australia who have been benefiting from these negative gearing and CGT settings, and the frankly absurd sideshow that we're seeing from the coalition shows that they simply don't get it.

But, of course, in a lot of these speeches, they haven't even been talking about housing. They were outraged about it for the first couple of days after the budget. Then they realised young people weren't falling for it. They could send all the AI messages in the world, but young people know they have been screwed. We have spent most of our adolescence, our 20s and our early 30s knowing that we were being screwed. We went to auctions with our friends and saw them outbid time and time again by investors. The system simply isn't fair. We're privileging some forms of income over others.

This is a simple budget. It says: a buck is a buck is a buck and we're going to have closer-to-equal taxation, whether you make your income from owning things or from working. It is entirely fair. We're maintaining an adaptation of CGT to ensure that it reflects inflation so that, essentially, you are tax based on actual profit, not on any distortions from inflation.

See this speech in context