House debates

Thursday, 20 September 2007

Questions without Notice

Housing Affordability

2:16 pm

Photo of Kevin RuddKevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | | Hansard source

My question is to the Prime Minister. Has the Prime Minister now familiarised himself with the Treasurer’s comments made on 30 July regarding the housing affordability crisis and about which I asked the Prime Minister on Tuesday:

Journalist: Do you concede that there is a housing crisis, affordability crisis in Australia at the moment?

Treasurer: House prices are higher than they have been and they are higher than they have been because more people are in work and more people are able to afford to borrow to purchase more expensive housing.

Journalist: So is there a crisis, Treasurer?

Treasurer: Well, no.

Does the Prime Minister agree with his Treasurer that there is no housing affordability crisis in Australia?

Photo of John HowardJohn Howard (Bennelong, Liberal Party, Prime Minister) Share this | | Hansard source

The answer to the Leader of the Opposition is that I have familiarised myself with the Treasurer’s statement. I thought it was a very accurate statement that the Treasurer made. What the Treasurer said was that you have a crisis when house prices fall.

Opposition Members:

Opposition members interjecting

Photo of David HawkerDavid Hawker (Speaker) Share this | | Hansard source

Order! The Prime Minister has the call.

Photo of John HowardJohn Howard (Bennelong, Liberal Party, Prime Minister) Share this | | Hansard source

We are witnessing the beginnings of a housing crisis in sections of the United States. Those who sit opposite would be well to treat this issue more seriously than they are, because what is occurring in the United States does have the potential to cast a long shadow around the world. It does have the potential to have unintended consequences on credit levels in this country, and I think that at a time like this it behoves everybody to choose their language very carefully. It behoves those who sit opposite not to wish for a crisis that does not exist. I think that a lot of Australians who are wanting to buy their first home are finding it very difficult to do so. The reason they are finding it difficult to do so is that the cost of buying a first home has risen out of proportion to the increase in their wages. That is the fundamental reason why we have got a problem at the present time. Whereas with most other things that people buy the cost of them has not risen out of proportion to the rise in incomes, in the case of housing the cost of buying the first home has risen out of proportion to the increase in incomes. Therefore, in addressing this matter, it is important that we do not aggravate that gap, it is important that we do not widen that gap, and some of the remedies that are simply going to further push up the price of housing are not adequate responses. We need to tackle the supply side, and that is why the Treasurer is focused on having an audit of land.

Photo of Simon CreanSimon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | | Hansard source

Mr Crean interjecting

Photo of David HawkerDavid Hawker (Speaker) Share this | | Hansard source

Order! The member for Hotham!

Photo of Simon CreanSimon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | | Hansard source

Mr Crean interjecting

Photo of David HawkerDavid Hawker (Speaker) Share this | | Hansard source

The member for Hotham is warned!

Photo of John HowardJohn Howard (Bennelong, Liberal Party, Prime Minister) Share this | | Hansard source

We need to look at local government development charges, we need to look at state government taxes, but the last thing we need is to resort to cheap language which is designed to scare people and to create a situation that is worse than the situation that is facing some young Australians. I would say to the Leader of the Opposition that a true housing crisis in this country is when there is a sustained fall in the value of our homes and in house prices. For the Leader of the Opposition to use careless language is only aggravating rather than helping the situation.