Gary Humphries (ACT, Liberal Party) Share this | Hansard source

I do not know why you are so sensitive about this issue, Senator Wong. I think, having put it on the table, Senator Carr needs to know a few things about this matter. First of all, housing policy in this country is not determined exclusively by the federal government. The federal government makes a significant contribution to issues like housing affordability. The federal government makes some important contributions to the financial capacity of Australians directly and indirectly through funding for state and territory governments which in turn influences the affordability of housing in this country. Those are undoubtedly very important matters.

But Senator Carr and Senator Wong would surely be aware that state and territory governments also play a very significant role in questions of housing affordability. To condemn the Howard government without acknowledging the tremendously adverse contribution which many state and territory government decisions are making to housing affordability in this country is myopia of the most extreme kind. I note, to his credit, that Senator Bartlett has introduced an amendment to this motion which at least reflects that housing affordability is a matter determined in part by state and territory governments and which seeks to share the condemnation around. Obviously, I will not support it, because of the condemnation it makes, but I am interested to see whether, when that motion is put, Senator Wong accepts the amendment or not.

The government, as in so many other areas of public life in Australia, has made an enormous contribution, through increased funding, to the affordability of housing in this country. The government has made a number of important decisions which reflect on the capacity of Australians to own their own homes. Of course, most fundamental to the question of housing affordability is the decision of the Australian government to pursue a policy which actively keeps interest rates in this country low. That is what makes housing affordable for countless thousands—hundreds of thousands; indeed, millions—of Australians. If we went back to the 17 per cent, 18 per cent and 19 per cent interest rate policy that was pursued by the Hawke and Keating governments, we would have plenty to complain about on the housing affordability front in this country. But the nature of the complaint today is a lot less dramatic in light of the successful policy to keep rates at a much lower level than that. I do not think many Australians have lost sight of that fact, as the last federal election pretty clearly demonstrated.

But, more directly, with respect to the role of government in providing low-cost housing to people on low incomes, the role of the federal government has been very significant indeed. For the 2003 Commonwealth-State Housing Agreement—the last time that agreement was renewed—the Australian government committed the very substantial amount of $4.75 billion over the five years to 2007-08. It is a significant contribution to assist Australian states and territories to maintain a core stock of public and community housing and to maintain crisis accommodation and housing related assistance, including things like bond loans and home purchase assistance. As of 30 June 2005, over 335,000 Australian households were living in public and community housing. You cannot look at that contribution from the Commonwealth and not conclude that the Australian government has made a powerful contribution to the affordability of housing for those 335,000 households.

The funding allows five years of fiscal certainty for states and territories to provide housing assistance. It is also significant that for the first time it includes indexation so that that amount grows with the cost of living. The Commonwealth-State Housing Agreement bilateral agreements outlining individual state and territory housing priorities are in place as a result of that agreement. The federal government closely monitors not just the inputs in terms of its expenditure under those agreements but also what the state and territory governments are able to achieve using that money to provide for affordable housing across their respective jurisdictions. The government has, very significantly, included in those agreements a performance measure which represents five per cent of annual core funding to ensure Australians are getting value for their taxpayer dollar.

I mentioned that there has been an increase. Combined Australian government rental assistance and CSHA outlays have increased in real terms by $204 million—from $2.822 billion in 1997-98 to $3.026 billion in 2004-05. That increase in assistance for housing should be coupled with the other economic factors which influence the level of poverty and the capacity to afford housing in this country, such as creating more jobs, reducing the rate of unemployment, and growing real wages so that those with earnings have a greater capacity to dispose of their income for the purposes of acquiring housing or maintaining rental accommodation. Factors like that contribute to housing affordability being more and more within the grasp of Australians.

I will concede that one factor working against them is the growth in house prices in this country. Needless to say, house prices very rarely experience strong growth when the economy is not buoyant and when people’s capacity to afford to pay higher prices is not in evidence; rather, it is as more jobs are created in the marketplace, as personal wealth grows and so forth. In a sense, the growth in house prices in this country is a symptom of the enormously strong economy which Australia has experienced in the last decade. Governments can only go so far to offset that phenomenon. We do not—and should not, obviously—regulate the cost of housing. We should not attempt to control prices in that or, arguably, any other area of our economy.

That remains a matter of concern to the government but, to offset the effects of that kind of consideration, we provide for low interest rates for strong employment growth and a buoyant economy with expanding opportunities, we keep government spending at reasonable levels and we provide for confidence in the marketplace. Those things have been delivered handsomely by the Howard government over the last 10 years.

I mentioned before that the picture is not painted exclusively by the federal government, and indeed it is not. Housing affordability—particularly for people on lower incomes—is very much within the purview of state and territory governments. I am sure that other senators can reflect on their experiences of what state governments in their own states are doing, but I wanted to make some comments on what the Australian Capital Territory government is doing with respect to housing affordability.

First of all it is very clear that, as part of the process to acquire greater control over the rollout of infrastructure around housing, the ACT government has pursued a policy of restricting the supply of new land for housing in a way which has dramatically affected both availability and affordability of housing in this territory. You would be hard pressed to find a developer or a real estate agent in this territory who would not tell you that house prices have risen dramatically because the government has quite deliberately decided to turn that tap much more towards off. Indeed, there has been an explosion of housing opportunities in surrounding New South Wales because the supply there is much less limited than it is in the ACT.

Compounding that problem are the ACT government’s other myriad budgetary problems, which have led to a budget delivered earlier this year which could best be described as a ‘scorched earth’ budget, one which has seen dramatic rises in charges to the community and a serious increase in rates, and which also manifests itself in the proposed closure of 39 public schools in the territory—approximately one-third of the total territory public school stock in one fell swoop.

This is a government that clearly has all sorts of budgetary problems, and it is even more remarkable that this is occurring at a time when the ACT economy is absolutely booming. Unemployment has dipped to 2.8 per cent and Commonwealth spending in the ACT is at unprecedented levels. Incidentally, this is a Commonwealth government which is supposed to hate Canberra. It is apparently hating it by showering it with largesse so that the territory economy is going absolutely gang busters. In fact, there is a serious problem finding the manpower to fill the positions which have been created in the city. In the face of all of that, the territory government manages to record a massive deficit and to be unable to keep its dollars in balance.

I mentioned that, as part of the various measures that the ACT government has taken to try to claw back some measure of control over what is happening with the territory budget, it has dramatically increased rates. Rates notices now have been received by territory householders under the 2006-07 budget, and there are significant increases for many suburbs. Some suburbs are experiencing increases in charges of more than 45 per cent. Places such as Oaks Estate, Charnwood, Banks and Harrison are experiencing increases to their combined government property charges ranging between 45 per cent and 64 per cent. The suburbs that I just mentioned are not necessarily silvertail suburbs of Canberra. Some of them are areas where people on low incomes live. Those members of the Senate who have not been out to Oaks Estate recently should go and have a look out there and see what you think about the economic status of the people who live there. When they are receiving rates increases of up to 64 per cent, housing affordability for them is not getting any easier—quite the contrary; it is getting much harder.

On top of that, there is now an objection charge of $64 for ACT ratepayers to contest their rates assessment—unless it relates to a land valuation, in which case there is a $20 fee. That is just typical of the vast range of increased taxes and charges that members of the ACT community are having to face—which of course have to come out of people’s bottom line—and it affects their capacity as citizens to meet other costs, including the cost of housing.

I suspect that that sort of story is being replicated—perhaps not quite as dramatically—across other parts of Australia. When you look at that kind of mismanagement of budgets, it is not hard to realise why some people are feeling the squeeze. In fact, I dare say that what is occurring for many Australians is that the Commonwealth is handing out benefits on one hand—things like baby bonuses, opportunities for employment, tax cuts and other benefits—and state governments are gobbling up those advantages with increased taxes and charges of their own. I have no doubt that there are some Australians who are going backwards in these circumstances.

In the area of the Commonwealth-State Housing Agreement, you cannot look at the figures and not conclude that it is a significant step towards improving the financial capacity of state and territory governments to provide services to those on low incomes. I am proud that the Australian government is assisting people with relief from the cost of housing with measures such as those.

Senator Carr also made reference to the issue of homelessness. He needs to be aware that the Australian government spent approximately $220 million in the 2004-05 financial year on programs for homeless people. The SAAP, the HOME Advice Program, the National Homelessness Strategy, Reconnect and other related programs are covered by that increased allocation. The government has also committed $10 million to the National Homelessness Strategy over the next four years. That commitment reflects a desire to ensure that all Australians are able to take advantage, where possible, of the good economic times which clearly prevail in this country at the moment.

The SAAP 5 agreement between the Australian government and the states and territories was agreed in September of last year. Bilateral agreements with the governments concerned were concluded up until January of this year. Under the agreement, the total resources available to the program will increase by almost $350 million to an estimated $1.82 billion over the life of the SAAP 5 agreement. The Australian government’s financial commitment to SAAP 5 will be $932 million over five years. There is nothing paltry about that commitment to provide accommodation to those most in need. And measures such as the HOME Advice Program and Reconnect have played a seriously important role in easing homelessness in this country.

Before we become too caught up in the shrill condemnation that Senator Carr has brought to the chamber with this motion, we need to be well aware that, firstly, the evidence is pretty clear that Commonwealth government decisions in the last 10 years have brought homeownership and housing affordability within the reach of many more Australians than was the case before this government came to office and, secondly, this motion fails to take into account the very serious problem of state and territory governments clawing back their overruns in costs by hitting homeowners—among others—with higher charges. Their contribution to the lack of affordability of housing in this country is an issue that needs to be much more carefully explored by people such as Senator Carr.

I oppose this motion. This is pure politics. Most people who observe this debate will realise that the Labor Party do not have a record on the question of housing affordability—and I am looking back 20 years ago in particular to what interest rates were like then—that would warrant them moving a motion such as this in the Senate today.