House debates

Tuesday, 13 February 2024


Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024, Treasury Laws Amendment (Foreign Investment) Bill 2024; Second Reading

12:53 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Shadow Minister for Social Services) Share this | | Hansard source

I'm rising to signal our support for the Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2024 and the Treasury Laws Amendment (Foreign Investment) Bill 2024. The FATA bill, in particular, is a two-schedule bill to triple the fees for acquiring established residential dwellings and to double vacancy fees in the foreign investment framework. The increase in fees is self-evidently designed to target vacant housing supply and to support housing in this country.

Schedule 1 of the bill amends the act to increase the fee cap, the maximum fee that can be imposed by the regulations, to $7 million. The schedule also amends the indexation provisions that apply to the fee cap to ensure a more consistent and coherent indexation process for that fee cap and for all amounts in the foreign investment framework.

Schedule 2 of the bill amends the regulations to triple foreign investment application fees for the purchase of established dwellings and double the vacancy fees for all foreign-owned dwellings purchased on or after 9 May 2017. This results in a sixfold increase in vacancy fees, with the tripling of the foreign investment application fees for the purchase of established dwellings, the doubling of vacancy fees for established dwellings and the doubling of vacancy fees for new dwellings purchased, as I said, on or after 9 May 2017.

The Treasury Laws Amendment (Foreign Investment) Bill 2024 is a single-schedule bill that seeks to clarify the legal status of FIRB fees and levies as they relate to double taxation agreements. We understand that this bill follows media reports that FIRB fees have been questioned as to whether they contravene certain double taxation agreements. This specific concern has, we understand, been prompted by analysis that, in particular, eight double taxation agreements that contain non-discrimination articles may create enforceable rights within the Australian domestic law, which is against the conventions of the interrelation between treaties and domestic law. Therefore, we understand, this amendment clarifies that, where a provision of a tax treaty that is given the force of law under the agreements act is inconsistent with a Commonwealth, state or territory law that imposes tax other than Australian tax, that provision of the tax treaty will not operate to the extent of that inconsistency, therefore ensuring that the Commonwealth, state or territory tax—here, the FIRB fees or vacancy tax—continues to apply as intended.

Whilst the coalition will be supporting this quite limited bill, we know that these measures don't even come close to addressing so many of the issues that we are seeing in the housing market and, in particular, the impact on Australian housing that has emanated from the mismanaged immigration program of this government. We have seen, sadly, over the last 18 months a complete abrogation of responsibility, particularly from the Minister for Housing, who has been missing in action when necessary. Last year we saw migration ratcheted up to more than half a million people. More than half a million people were invited to this country last year, with absolutely no understanding from the government, absolutely no plan from the government, about where on earth those people would live.

In an environment where we've got record low vacancy rates, housing approvals down, builds down, first home buyers down and rents up, you'd think that would almost be the worst possible time to ratchet up migration to record levels. You'd think that, around the cabinet table, the housing minister would assert some authority and say: 'Hold on a minute. In an environment where we've got record low vacancy rates, fewer homes being built, fewer homes being approved, rents going up, record low levels of first home buyers, now is not the time to ratchet up migration.' Clearly the housing minister, who has been missing for a very long time, did not make that intervention, because what do we see? We continue to see a migration program completely out of step with the housing challenges of this country. We see, instead, the Minister for Housing proposing to have more meetings with state and territory colleagues. We saw the Treasurer in his first budget make grandiose commitments to build a million homes, and then he made it 1.2 million homes. We see in the paper today that, when you analyse the approvals data—the record low number of homes being built—the government are going to miss their targets by 400,000. Four hundred thousand fewer homes will be built in the next five years than were built in the five years preceding this government, even with a record level of migration.

This bill, while we'll support it, is the absolute definition of fiddling while Rome burns. This is trying to be seen to be doing something when you have absolutely no idea—when you are bereft of ideas—of what to do. We know that the government cannot meet their 1.2 million homes commitment. The question is just how far they'll miss it by. Is it 200,000? Is it 300,000? Is it 400,000? Are they going to miss it by half a million? That's really the only question now: how many houses short will they be? In that environment we continue to have a migration program that's completely disconnected from the building of new homes. Sadly, for Australians it means: if you thought we had a housing crisis in 2023, you ain't seen nothing yet for 2024, thanks to this government. While that's happening, with this bill that is going to increase fees for a very tiny number of homes, we fiddle as Rome burns.

Let's also remember that when seeking to implement vacancy charges—and this is not addressed in the bill, but I would highly recommend the housing minister do some work on it—you have to actually ensure that the vacancy fees are enforced. It's all very well to have a process whereby foreign buyers of Australian residential property must declare that a property is vacant and pay the fee, but, as most Australians would know, you have to actually enforce the rules. Government and agencies need to enforce the rules themselves, because not everybody who has a vacant property is going to put their hand up and voluntarily hand over the extra tax. There doesn't seem to be anything in this bill or anything from the government on how on earth this will be enforced. How on earth will you determine whether a property that's been bought by a nonresident of Australia is being kept vacant or not? What coordination is there between the federal government and state governments to ensure that happens? When state governments investigate whether a property is vacant it's typically through utilities. Examining water and electricity consumption is how you determine whether a property is vacant. What is being done to enforce these rules? Does this bill just require very honest, well-intentioned foreign owners to put their hand up and say: 'Sorry; I kept the property vacant this year. Let me send a cheque over to the tax office'? Is that really what this bill is relying on—the honesty and good grace of foreign owners of vacant properties in admitting the property is vacant? Clearly, the minister has not given any thought to these things.

We have severe concerns about the limitations on this. It's all very well to put in place a rule, but if you have no mechanism to enforce the rule—if you have not mechanism for determining whether a property is vacant or not—it is, as I said, fiddling while Rome burns. It's trying to be seen to be doing something when the place is falling down around you. At the moment, the number of first home buyers is down at a level we haven't seen since the Gillard years. Building approvals are down. The number of new homes being built is down. Rents are up and vacancy rates at record lows. You'd think that with all those concerns occurring in the community now we would be debating a bill in this House that does something fair dinkum. Instead, we increase taxes on foreign owners of property—provided that they voluntarily declare that the property is vacant and that they voluntarily send the cheque through to the tax office. You've got to be kidding me!

As the former housing minister, I must say that it's a compliment that the only thing this minister can talk about is coalition policies—coalition policies that we worked hard to think up, deliver and implement in our last term of government and that they, to their credit, haven't wound back. But shouldn't the housing minister, in 18 months, have done something herself?

The only policy, or two policies, helping Australians get into a first home at the moment from the federal government include our highly successful Home Guarantee Scheme that provides first-home buyers with the opportunity to buy a home with a deposit of as little as five per cent. That was a policy we took to the 2019 election. I implemented it within six months as housing minister. It commenced on 1 January 2020. It's now helping one in three first-home buyers. Prior to that we established the First Home Super Saver Scheme, which the Labor Party said they would abolish, but—good on them—they haven't abolished it. But they're the only two schemes that are helping first-home buyers now, and in 18 months the housing minister has talked about her kumbaya meetings with state and territory ministers around the country that have delivered nothing.

The one thing they did take to the election supposedly for first-home buyers was their shared equity scheme, their Help to Buy Scheme. We saw that bill being introduced very recently. By the way, the scheme was supposed to have started on 1 January last year, 2023. It's already more than 12 months late. So, again, what on Earth is the housing minister doing? What is the housing minister doing, at a time when there is literally a housing crisis and the focus is on trying to encourage foreign owners of property to voluntarily send a cheque into the ATO, with no mechanism or ability to enforce the rules in front of us?

It's an absolute scandal, what we see from the government. The sooner they move the housing minister on, the better. The sooner they bring in somebody who's got some energy and ability to do something, the better, because on every single metric it's a big fail from this minister and this government—a huge fail. And who pays the price? Well, Australians are paying the price. Whether you're somebody who is struggling with rent increases or whether you're try to save for that first home, it's a fail from the government. Sure, there's some help, with the coalition's highly successful Home Guarantee Scheme, but there's no help from this government.

If you are working in the residential construction industry you're seeing a massive slowdown. We saw the former opposition criticising the HomeBuilder program, a hugely successful program that kept the half a million Australians who work in the residential construction industry busy. Well, those homes have now come through the system. So, under that coalition program that ensured that homes were being built, those homes have come through the pipeline, and we've seen nothing from this government in the past 18 months. So, now we see the number of new homes down every single month.

In about a week and a half, the HIA and the MBA will outline their building activity assessments for the year ahead. I hate to say it to the Minister for Housing, but my understanding of those projections is that the numbers look even worse; the numbers are even worse for the year ahead. Again, sadly, it's confirming that if 2023 was a housing crisis, 2024 is just going to get worse. And while that's happening, the minister sits on her hands, bereft of any ideas. She has no idea of what to do, no idea of what to stand up for.

The first thing she should do is head into the next cabinet meeting and tell the government to finally get their migration program under some control, because you cannot keep bringing hundreds of thousands of migrants to this country with absolutely no idea of where they're going to live! Whether it's students, whether it's workers, whether it's other visa classes: you have to know where those people are going to live because we do have an obligation to the young Australians in this country who want a home of their own, whether it's a home that they're renting or a home that they're buying themselves.

At the moment, if you're in a major capital city, whether you're in Sydney or Melbourne or Brisbane, it is tough. What we have not seen, really in my living memory, is how difficult it is in rural and regional Australia as well. The inability to get a house in regional Australia is not only choking economic growth, choking the ability of so many of our industries to expand, but, pleasingly, there's an increasing number of Australians who are choosing, when they graduate school, to stay in the rural or regional area that they grew up in because there were more economic opportunities created by the former coalition government for those people. But if there's nowhere for them to live, it causes huge social dislocation in those communities.

So what is the plan of the government? The plan is to put a media release out there saying, 'We're going to build 1.2 million homes,' with absolutely no idea of how that's going to happen. And then what happens? A few months later, as we now see, independent experts—whether it's the HIA, the NBA or others—say, 'You're going to fall hundreds of thousands of homes short.' That commitment is not worth the media release it was written on. You have to actually have a plan to do something. And if the centrepiece of that plan is asking foreign owners of property to voluntarily pay a vacancy charge, good luck. Good luck!

We will support the bill, even though we see no prospect of this having any impact. I hope that the minister heeds our advice, that you can't increase a tax without any mechanism of enforcing it. You can't increase a tax, or indeed impose a tax, without any mechanism of actually determining whether a property is vacant or not, that doesn't necessarily rely on the good-heartedness of the owner voluntarily admitting that their property is vacant. You have to enforce it.

There is an opportunity for the minister to move amendments to her own bill, to try to fix it, to try to make this work. And if the minister does come in and try to amend this shell of a bill, to try and actually give the tax office, or any other agency, an ability to actually enforce these taxes, we will support it wholeheartedly. But at the moment, I can see no way in which this makes any impact whatsoever. It certainly won't make any impact when we have an out-of-control migration program that is in no way linked to the number of houses being built in this country. You cannot run record migration when you have record low numbers of houses being built. You don't need to be a Rhodes scholar or a genius—even our Prime Minister can work that out. You can't have record migration when you are building record low numbers of homes.

In conclusion, this minister is fiddling while Rome burns. We encourage her to come up with some ideas. Don't just rely on the coalition, who put in place a number of wonderful programs, do something. Do something! You have the great honour of being a minister. Do something! Come up with some ideas, or, if you don't have any ideas yourself, go and speak to some people who you might be able to steal some ideas from. Thus far, Mr Deputy Speaker, we've seen nothing from this minister, and the sooner she's moved on, the better.

Debate adjourned.