Phillip Barresi (Deakin, Liberal Party) Share this | Link to this | Hansard source

Today I grieve for the many Australians who, despite the great efforts of the Howard government to keep interest rates low and provide a first home owners grant, are still struggling to afford the great Australian dream of owning their own home. It is a struggle that is made difficult because of the inept planning policies of various state governments around Australia and the tax burden on purchasers. In my own state of Victoria, in just five years the price of residential land in Melbourne has doubled.

According to the international research group Demographia, Melbourne has one of the world’s least affordable housing markets with median house prices at a multiple of 6½ times median household income. Historically, a median of three is considered affordable. With annual income currently at $56,000, it means that average house prices are $360,000. After almost eight years under the Bracks Labor government, Melbourne now ranks as the world’s 19th most expensive place to live. This figure comes from the 2006 study by the esteemed Economist Intelligence Unit.

Melbourne is expected to grow by one million residents by 2030, or 800 people a week, yet the state government, in its typical ‘do nothing’ way, has completely failed to address Melbourne’s pressing planning needs. It has failed to tackle sky-high property prices and failed to deliver the infrastructure needed to meet the demands of growing population density. The failure of the Bracks government—and state governments throughout Australia—on these fronts has clearly demonstrated that the planning strategies that they employ really are a road to nowhere.

The Bracks government’s objective is to confine some 40 per cent of the 600,000 projected growth in households to high-density activity centres, with only limited growth tolerated in corridors located at Wyndham, Melton, Hume, Whittlesea and Casey. The availability of new land for housing has been severely curtailed by the imposition of urban growth boundaries that override the wishes of landowners and local councils. This is creating an artificial land shortage impacting severely on housing affordability. Where land once represented 25 per cent of the cost of a new house and land package, it is now 50 per cent. It is not the price of construction that has increased but the price of the land. There does not need to be a land scarcity. Our cities and regional centres are surrounded by abundant land suitable for housing, and all that is required is a release of more land by the various state authorities. Commensurate with an increase in land stock is a need for greater community consultation regarding planning decisions. Local communities must be given an opportunity to have a say in the decisions on when, where and how much land they wish to subdivide for housing.

These state governments are failing local communities and home buyers. Their planning blueprint has been a dismal failure on three key fronts: firstly, a massive decline in house affordability; secondly, the loss of leafy, spacious suburban character, along with declining biodiversity and increased congestion; and, thirdly, inadequate infrastructure, particularly public transport and road upgrades. With respect to the decline in house affordability, the median price of established houses sold in Melbourne has soared from $227,000 in 1999, when the ALP came to office, to $359,500 today. Those figures are from the Parliamentary Library.

A reasonable person might think that the state government would respond by trying to reduce the financial burden on home buyers, but its response has been the opposite. In Victoria, the Bracks state government has imposed a new tax of $8,000 for each housing lot on new residential land. This is a blatant cash grab that will put the dream of owning a home further out of reach for young families. The Master Builders Association, in response to the introduction of this new tax, stated in the Age on 17 November last year that it was ‘a kick in the guts’ to home owners, and that is exactly what it is. It is making it that much more difficult for people who are trying to enter into the housing market.

It is easy to understand why organisations such as the Master Builders Association are so upset. Home buyers in Victoria already have to cope with one of the nation’s highest taxing regimes. Based on the average purchase price of an established home in Melbourne of $359,500, combined with an average mortgage of $214,000, total taxes in Victoria on purchasing a home are $18,254—the highest in the country. If combined with the new $8,000 tax for subdivisions, Victorians will be paying a phenomenal $26,254 in taxes. To support that contention, I seek leave to incorporate in Hansard a comparison of state charges on home purchases across Australia.

Leave granted.

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