Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House condemns the New South Wales Government for presiding over the highest amount of State and local government taxes and charges levied on the cost of a new home and for having the largest shortfall of broad hectare land provision of any State or Territory—putting the dream of home ownership out of the reach of New South Wales families.

This motion relates to the cost of housing and the damage that state governments are doing to the aspirations of young Australians. The incredible cost in taxes is wiping out the dream of homeownership for thousands of young Australians. The most important and cherished purchase that anybody will make is their home. After years of saving to get a deposit of five or 10 per cent, struggling young Australians, particularly in New South Wales, are finding that the task is beyond them and is getting further and further out of their reach. It is a deplorable situation. It is punishing young home buyers, limiting family size and, I believe, destroying their aspirations. All of this is imposed by a callous and greedy government.

For instance, in Sydney from 1990 until now land has risen from about 40 per cent of the total cost of the house-land package to well over 60 per cent. More than half the cost of a new home can be attributed to the land cost and more than half the cost of that land is state taxes, taxes imposed by the avaricious New South Wales government that are destroying the dreams and aspirations of the youngsters of New South Wales. The Australian house-land package is more expensive than in Las Vegas and Sacramento, the capital of California, but in Sydney it is more expensive than in Honolulu, San Francisco, Miami and even New York. Who would believe that the state of New South Wales could create a situation where house and land in our state is more expensive than in New York?

Home owners are seeking to establish a life for themselves, but let us analyse the taxes on a block of land: stamp duty to purchase the block for development is about $2,000 per block; stamp duty on the sale to the home buyer is about $17,000; water board section 73 tax is $12,000; council section 94 ranges from about $48,000 to $65,000—let’s say an average of $40,000; let’s be generous to local government—state infrastructure levy on north-western and south-western Sydney is $33,000; and GST is $35,000—all of which goes to the state government. There is a total cost on a block of land in taxes alone of $142,000 for every block sold in these new development areas.

It is an incredible charge, an incredible cost. Young people are being asked to borrow money to pay taxes to the New South Wales government. They are borrowing money not just over all of the state but in these new development areas. These taxes are being set aside to pay for schools, pay for railway lines and buy health services and hospitals in these new areas. Never before has a current generation been required to pay for current requirements. In a total period of 10 years, the additional money paid out in interest by young people will amount to $45,000 just to cover the costs of state taxes.

Interest alone works out at around an additional $96 per week, purely attributable to borrowing enough money to pay for those taxes. It is about $376 extra per month to pay for state taxes on every mortgage for every young person in New South Wales who is buying a block of land. It is a criminal activity. Australians want to marry. They want security and they need to own their own homes because it provides better health, greater security for bringing up their kids and greater self-confidence, and they move less frequently. It is a better lifestyle, a more confident and happier lifestyle, being destroyed by the current government of New South Wales.

David Hawker (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Louise Markus (Greenway, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Once again we see members opposite reducing this House to a talkfest about state governments. People in Australia expect this parliament to be a chamber of the great contest of ideas between this side and the other side to debate federal matters, matters which we were elected to discuss, and policies which we were elected to implement. Yet this government has reduced this debating chamber to a talkfest about state governments.

State issues are important. Local issues are important. That is why the Australian people pay for eight state and territory parliaments to debate state issues. If members opposite feel so strongly about state issues they are entitled at any point to run for preselection for the Liberal Party for their relevant state seats, but they do not. They do not get that the Australian people are sick of the blame game. They do not get that the Australian people are sick of this parliament being used for political pointscoring. We have a state election in New South Wales in a few weeks time and conveniently this motion came onto the books. They do not get that the Australian people are sick of this type of point-scoring.

The Australian people expect federal governments and state governments to work with each other. It is about time members opposite respected and understood the fact that there are eight state and territory Labor governments in this nation, and the Australian people do not expect the time of this parliament to be used to constantly shift blame and blame the states for every problem facing this nation. It is about time members opposite came into this House and took a bit of responsibility. If they feel that the opposition in New South Wales is doing such an appalling job at holding the New South Wales government to account then they should do something about it and not abuse the time of this parliament.

But I am happy to talk about the housing prices in Western Sydney and in Sydney generally. I am happy to talk about the relative impact of state and federal policies. I am happy to talk about people in Western Sydney losing their homes in record numbers because of the four interest rate increases since the last election. I am more than happy to talk about it. Ninety per cent of the 77 suburbs in south-western Sydney experienced falls in housing prices in the last financial year and 83 per cent of the 93 suburbs of greater Western Sydney represented by the member for Mitchell, the member for Greenway, me and many others have experienced the same. What are the impacts of this?

People who borrowed huge amounts of money and took John Howard at his word that interest rates would remain at record lows have seen the value of the houses they paid for fall. They now have negative equity. The impact of the last four interest rate increases is not just eating up more mortgage repayments but driving housing prices down across swathes of Western Sydney. Of course, we see people spending less because they now owe more on a house that is worth less, which is seeing higher unemployment.

We hear the member for Mitchell talk about state taxes. Stamp duty represents three per cent of the median dwelling price but interest rate increases have added nine per cent to mortgage repayments. In New South Wales, increased interest rates added $6,000 a year extra in mortgage repayments—and not a word from the member for Greenway, not a word from the member for Mitchell. Instead we see this talkfest attacking state governments. No wonder the Australian people are saying they have had enough of the blame game.

The member for Mitchell opines about the alleged lack of housing land releases in New South Wales. He would have some credibility if the federal government were engaged in urban affairs. He would have some credibility if the federal government had not abolished the department of housing and urban affairs on its election in 1996. The government would have had a right to talk about these things if they had become involved, but they vacated the field and now blame the state government.

Apparently not enough land has been released in New South Wales for the member for Mitchell. Apparently the 66,000 new homes in the north-west growth sector and the 115,000 homes in the south-west growth sector are not enough. They are completely out of touch with the Australian people, who expect governments to work with each other and not to blame each other. They are completely out of touch with the reduction in housing prices in Western Sydney, which do not benefit people trying to get into the housing market because they are also dealing with higher interest rates. They are completely out of touch when they come in here and use words such as ‘avaricious’, ‘callous’ and ‘criminal activity’ about the elected government in New South Wales. If the member for Mitchell feels that way, he should run for preselection for one of the state seats. He refuses to do so because it is easy to criticise but hard to contribute. (Time expired)

Louise Markus (Greenway, Liberal Party) Share this | Link to this | Hansard source

Today I rise to address an issue of great importance to the people of New South Wales and indeed to my electorate of Greenway. The New South Wales state Labor government presides over the highest amount of taxes and charges levied on the cost of a new home and the largest shortfall of broad hectare land release provision of any state or territory.

Let me remind the members opposite, and particularly the member for Prospect, how the fall in house prices actually came about in New South Wales. Let me remind him about the introduction of vendor tax, the increase in land tax and the policy decisions of the state Labor government that have impacted on the price of housing in New South Wales and particularly Western Sydney. Let me remind the member for Prospect that investors are fleeing the state of New South Wales for other states because they know there is a better tax environment in those states.

These two issues which I will talk about today, and which this motion addresses, are paramount in placing the Australian dream of homeownership out of the reach of New South Wales families and individuals. The number of new lots released in New South Wales 15 years ago was 7,931. Last year it was only 2,780, which is a 65 per cent decrease. The member for Prospect wants to debate ideas, but has he checked his facts? Is he talking about solutions? The average lot size in New South Wales 15 years agounder Liberal Premier Nick Greiner, may I add—was 600 square metres. Last year it was 450 square metres, a 25 per cent decrease. The average price for a lot in New South Wales 15 years ago was $75,000; last year it was $310,000—a 400 per cent increase. The New South Wales state taxes and charges and the large shortfall in the release of broad hectare land are instrumental factors in that unnerving statistical picture.

I will first address the burdening taxation and regulation placed on new home buyers by the state Labor  government. At their core, New South Wales land and property taxes are restrictive and inequitable. It has become more difficult to enter the property market in New South Wales and families and individuals have been driven out of the state to more tax-friendly environments. In New South Wales, state government related taxes, fees, levies and compliance costs have increased over $100,000 in the last five years—unequivocally the highest increase of all states. These costs are often more than the cost of the land on which the house sits.

Local infrastructure levies applied to new home buyers are now levied at a rate far in excess of the actual cost of essential housing infrastructure, such as water and sewerage. In Sydney, total levies now amount to $68,233, where the actual cost of the infrastructure is estimated at only $1,752. Environmental compliance costs have also added to the costs of new housing for little measurable ecological benefits. New housing accounts for only two per cent of the total housing stock, but it is bearing close to 100 per cent of the compliance burden. As I have mentioned in this chamber previously, vendor tax is purely a structural tax, and it is a tax of paradoxes. When it was introduced to New South Wales, it was estimated to raise $690 million a year as well as to act as a disincentive to buy and sell property. This was supposed to help ease the pressure on the property market, but, in the following financial year, the tax was estimated to have raised only $367 million.

I will share an example of the state Labor government’s mismanagement of land provision. In 1998, the New South Wales Department of Planning identified over 29,000 home sites that could be developed adjacent to the Richmond railway line, but the state Labor government has not yet taken any action towards developing them. Many hundreds of families could walk to an existing railway station. This region has been sidelined for 10 years so far in favour of other developments where there is no such existing infrastructure—in fact, a railway has to be built at great cost to service the north-west sector. When will this happen? Ten years? Twenty years? I suspect never.

Housing Industry Australia’s Executive Director, Chris Lamont, last week said in one of our local community newspapers:

It is simply too easy to blame interest rates and heightened consumer demand for the housing affordability crisis. The cause of the problem lies in an undersupply of ready-to-develop land, the multiple planning hoops developers must jump through in order to get a building completed, and the fact that State and Local Governments—

particularly the state Labor government in New South Wales—

regard housing as a cash cow to be milked to underwrite their budgets.”

Due to this overtaxing by the state and the mismanagement of broad hectare land release, the federal government has stepped in to give a significant helping hand to those Australians trying to purchase their first home. The federal government’s First Home Owners Scheme has provided over 926,000 grants to families and individuals to assist them to purchase their own homes. The federal government has committed $4.75 billion over five years to the Commonwealth-State Housing Agreement to provide funding to assist those whose needs for appropriate housing cannot be met by the private market. (Time expired)

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | Link to this | Hansard source

I welcome the opportunity to address the very important issue of housing affordability. In doing so, I also want to say that this debate is not about housing affordability; it is about the New South Wales state election. It is about the Howard government seeking to shift its responsibilities onto someone else. It is not about defending the Australian government or state and territory governments. It is about having a real debate about ending the blame game.

Let us go to the issue of housing affordability because it is about time we all accepted that there is a national crisis. The reality is that the average household cannot afford to buy the average home. A report released today by the Residential Development Council offers a bleak picture for Australia’s youth, with only one property expert in 14 believing that members of generation Y will be able to buy their own home. A survey by the council showed that only seven per cent of industry insiders believe that generation Y—those born between 1978 and 1998—would be able to overcome surging house prices and land shortages to buy their own family home. The survey stated:

More than 40 per cent believed members of Generation Y would be forced to continue living with their parents before being forced to rent or live in share accommodation.

The truth is that Australia now has the least affordable housing of six developed countries surveyed by US consultants Demographia. This reality does not just spell economic problems in a cornerstone of our national economy. It also drives a spear into a long-held Australian dream: homeownership, which is entrenched in our national culture—and so it ought to be. We are now experiencing the worst housing affordability in at least a quarter of a century. This is coupled with low vacancy rates and soaring rents which, combined, lead to a crisis that could undermine society’s foundations. If people cannot afford to buy a home and there is nowhere for them to rent, where are they going to go and what are they going to do? The issue of homelessness becomes an even bigger crisis—something that was debated in the last week that parliament met.

The Howard government should be told that there are no quick fixes. It is no longer acceptable to blame state and territory governments. The Howard government’s theory is that wholesale land releases would increase supply to a point that would pull down demand. If only it were so easy. Such ill-thought out solutions ignore the fact that housing affordability, particularly in New South Wales, is a complex combination of costs, supply and demand, inflation pressure and infrastructure services. It is also related to a change in expectations. What the previous generation thought was appropriate when purchasing a home has changed dramatically. People expect all the available services from the day they move into a particular subdivision, and this considerably increases the cost of providing homes at an affordable price. More often than not, because of the failure of the Australian government to invest in infrastructure, the responsibility for providing the infrastructure which is expected by householders falls to state, territory and local governments.

Where is the Howard government in the debate about urbanisation? Where is the Howard government in the debate about providing infrastructure as the cities sprawl to the outer suburbs of capital cities such as Brisbane, Sydney and Melbourne? As usual, it is missing in action. It just says, ‘That’s not our responsibility; it is the responsibility of state governments.’ It is about time we said to the Australian government: end the blame game; show some leadership; sit down and try to work out how to work with state and territory governments on this complex issue. There is no quick fix. It is about all of us pulling our weight. It is about us working with the private sector and public developers to increase housing affordability in Australia. Urban development has been ignored by the Howard government for far too long. It is now time to act. The Labor Party is going to act with practical policies in the lead-up to the next election. We are about ending the blame game. The Howard government is about continuing to do nothing while saying that it is someone else’s responsibility. Front up to your responsibilities, Mr Prime Minister. Don’t continue to make speeches while doing nothing for ordinary people. (Time expired)

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I am incredulous at the hypocrisy of the Australian Labor Party in this debate. I know that some people would say it takes a degree of naivety to be incredulous at the hypocrisy of the Australian Labor Party, but I am. The reason that I am dumbstruck is that the member for Prospect and the member for Batman have said: ‘Let’s end the blame game. It’s about the time the Howard government put its money on the table and did something to correct infrastructure needs in regional and metropolitan centres.’ That is the exact line we have heard from members of the Australian Labor Party.

Newsflash to the Australian Labor Party: it was this very government that introduced the GST—not because it was politically popular but because it provides growth revenue to the state Labor governments. The fact is that state Labor governments are awash with cash from the GST. In Queensland alone, I know that the Beattie Labor government has a windfall gain of about $750 million to do something to ease housing affordability. And that is before we even get onto the issue of stamp duty. The reality is that the Australian Labor Party are not concerned in the slightest about this issue.

If Labor really cared about housing affordability, if Labor were genuinely concerned about making it easier for Middle Australians to buy their own homes, if Labor really had it as part of their policy, then maybe they would do something about their horrendous and obnoxious stamp duty charges at state government level. What we know is that state Labor governments—I am talking about the Beattie Labor government in Queensland and the Iemma Labor government in New South Wales—are gouging more stamp duty from ordinary working-class Australians than ever in our nation’s history. That is the legacy of the Australian Labor Party. That is the record of the Australian Labor Party. They are big on talk but they are slow on action. The Australian Labor Party are now gouging $9.6 billion in stamp duty out of the hands of ordinary, hardworking Australians who are scrimping for every dollar they can to own a home. The Australian Labor Party, the Iemma government, the Beattie government, the Bracks government—all these Labor governments—are happy to take every last dollar in stamp duty, plus GST. They are happy to take every last dollar. In fact, under state Labor governments, stamp duty has increased from $5.3 billion in 2000-01 to $9.6 billion now.

So let me put on the table what the Labor Party’s record is. Let us cut through the rhetoric and look at performance. The performance of state Labor governments is shameful. The opposition know it, and that is why they are too embarrassed to stand up in this place and defend the near doubling of stamp duty and the record haul of GST. That is what the opposition have to do if they are really serious about housing affordability.

But don’t just take my word for it; I am happy to go to the experts. Let us look at what the Property Council of Australia say in their national housing infrastructure cost study. The Property Council of Australia undertook a study, and the findings of that study are very illuminating. The findings of that study show that the second most significant component of new housing costs after construction is, in fact, government related taxes, levies, fees and compliance costs—and those are not federal government charges; they are charges that are levied at a state government level and at a local council level.

The Property Council of Australia found that charges in Sydney were up 466 per cent, charges in Brisbane were up 279 per cent and charges in Melbourne were up 40 per cent. So, thanks to state Labor governments, we see charges increasing by over 450 per cent. The Iemma government and the Beattie government are ripping every last dollar out of the hands of ordinary Australians with their horrendous stamp duty costs and they are also pocketing every last cent of GST. Shame on the Labor Party for the hypocrisy to come in here and pretend that they have any policy solution whatsoever for solving this crisis.

John Murphy (Lowe, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Shame on all the government members. The Howard government is opportunistically and cynically using parliament’s time to breathe a gasp of oxygen into the debilitating campaign of Peter Debnam. There can be no doubt that the dream of homeownership is slowly falling out of reach of many middle and lower income families, particularly young families. First home buyers in Australia now spend more than 30 per cent of their disposable income on a mortgage. The average monthly repayment for a first home buyer of $2,300 is an all-time high.

My electorate of Lowe, in the inner west of Sydney, has one of the highest proportions of households in Australia suffering from mortgage stress. If things are so good, and if the economy is so good, as the Treasurer keeps telling us, why are so many families in my electorate of Lowe sinking one-third of their disposable income straight into their mortgages? I can assure the member for Mitchell that the release of land in Greater Western Sydney and the abolition of infrastructure levies will not solve the housing affordability problems faced by families in my electorate.

The motion put to us today is disingenuous and reveals that the Howard government seek to completely abrogate their responsibility and blame someone else. That is the truth. The government say that it has nothing to do with them—but it does. Four interest rate rises since the last election mean that Australians are paying a higher proportion of their income on mortgage interest repayments than ever before. If the government are serious about putting the dream of homeownership back in reach of ordinary New South Wales families, they can start by addressing the skills crisis—not blaming the price of bananas or pointing the finger at each of the states.

If we are to seriously discuss the dream of homeownership, why are we not discussing matters that the Howard government can control? Why are we not discussing the Howard government’s failure to address Australia’s skills crisis—a crisis which has increased the cost of building a home and has put upward pressure on interest rates? Why are we not discussing the implementation of a national settlement strategy, so that all levels of government can plan for changes in population, housing demand and demographics? If this debate is to amount to something more than an exercise in cynical political opportunism, we should discuss innovative ideas, such as shared equity arrangements, better targeting the first home owner grant and investing in Australia’s infrastructure. It takes strength and leadership to pursue these ideas. Perhaps it should come as no surprise that the Howard government has chosen to take the easy option of passing the buck and then playing the blame game.

Despite a serious imbalance between the state’s revenue-raising powers and expenditure responsibilities, the New South Wales government has shown far more interest in this critical issue than a cashed-up federal government which is raking in record levels of tax. New South Wales has the most generous package of first home buyer concessions and grants in Australia. It has provided $651 million worth of grants and concessions to 57,862 first home buyers. It has abolished the vendor duty and zoned 33,000 greenfield lots since 2003. The land is there but it is not being released because of the increases, and threats of further increases, in interest rates—as the member for Mitchell and other government speakers know. That there has been a drop in the value of land in Western Sydney proves that mass land releases on the city’s fringes are not the issue.

If the member for Mitchell has his way, many battlers could be left with a mortgage debt that is higher than their property value. The member for Mitchell also condemns the state government for raising funds to invest directly in infrastructure and essential services. History has shown—and the member for Mitchell should know this only too well—that the quick fix solution of releasing vast tracts of land without infrastructure and essential services does not work. Land releases must go hand in hand with infrastructure planning and funding.

To move a motion in this House which is solely critical of the New South Wales government, while ignoring the failures of the federal government on a wide variety of matters, is breathtaking hypocrisy and double standards. True to form, the Howard government is all too willing to bag the New South Wales government for the housing affordability crisis while it ignores its own negligence and failure to address the underlying issues causing this crisis.

The dysfunctional nature of state-federal funding arrangements is putting New South Wales under enormous financial stress, yet the New South Wales government has still used its limited means to promote the interests of homebuyers. Rather than sitting on money that belongs to the people of New South Wales, the Howard government should be investing in skills, infrastructure and other measures that will alleviate pressure on homebuyers. It is hypocritical for a cashed-up federal government—which is doing little—to condemn a state government which is being squeezed financially but doing a lot more for homebuyers.

I condemn this motion. Parliament’s time would be far better spent debating the merits of a shared equity scheme and targeted first home owners grants—not opportunistic, flawed criticisms of the New South Wales government. It is time the Howard government stopped playing politics and started acting as an agent for aspiring homebuyers. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.