Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Webber for her question. The Rudd Labor government is acutely aware of the cost of living pressures being applied to working families, and this is never more so than with housing affordability. The new report released today by the AMP and the National Centre for Economic and Social Modelling, NATSEM, highlights the seriousness of the affordability challenge in housing that Australian families now face. According to the report, which is entitled Wherever I lay my debt, that’s my home, Australia has one of the least affordable housing markets in the developed world. International statistics quoted by the report show that only a handful of American cities, including San Francisco and LA, are more unaffordable than markets in Australia.

The report details the sharp deterioration in housing affordability over time, and describes the 1995-96 to 2005-06 period as a ‘decade of dwindling hope’. In 1995-96, purchasing a house cost less than five times annual income. In 2005-06, that had increased to 7.5 times annual income. It had increased by 50 per cent. More households are in housing stress, defined in this report as spending more than 30 per cent of disposable income, after tax, on housing costs. Twenty-three per cent of households spent more than 30 per cent of their income on housing in 2005-06. That is up from 19 per cent a decade earlier—a huge increase in housing stress for ordinary families. Over a quarter of families with children are in housing stress. Around one-third of people under the age of 45 are in housing stress. Thirty-eight per cent of the total of those with mortgages are in housing stress, and over 60 per cent of those who bought their first home in the last three years are in housing stress—huge numbers and huge pressures on ordinary working Australians. In the decade up to 2005-06, there was a sharp decline in the proportion of households owning their own home outright: down from 43 per cent in 1995-96 to 34 per cent in 2005-06—almost a 10 per cent drop in the number of households owning their home outright. It was a huge decrease in the decade under the former Liberal government, described by this report as the ‘decade of dwindling hope’. This is part of the legacy of the previous Howard government.

Not only do we have very strong underlying inflation that is out of control but we have an affordability crisis in housing which has seen opportunities for young Australians greatly restricted. There are no simple answers, but what we do know is that the Rudd Labor government is absolutely committed to trying to assist young Australians to own their own home. It is a key aspiration of Australian society. It is something that the Labor Party are very committed to, and we are doing what we can to take the pressure off families in order to allow them to access the dream of owning their own home. The Labor government has set out a number of measures in the housing area to try to increase housing affordability and opportunity. The key one will happen after 1 July 2008, when we open up our new First Home Saver Accounts. These will allow young people to boost their savings and will support them so that couples on average incomes can get an extra $12,000 towards a deposit on their first home. (Time expired)