Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

The coalition and the Greens obviously have to agree to disagree. The First Home Saver Account scheme having been in place for seven years has proven to be unsuccessful. The evidence is in. It has not had a material beneficial effect on housing affordability. The take-up has been extremely low. The level of savings is extremely low. To the extent that it has had any impact at all and further boost demand, the demand is for housing. But first home buyers are not the problem when it comes to housing affordability. The government very clearly understands that in those markets where there is upward pressure on housing prices that is as a result of supply not meeting the demand in the market. So if we want to improve housing affordability we have to boost supply.

When you have increasing prices, there is, to a degree, a response in the market. We see that now in our national accounts. You would have seen that there is increased investment in dwelling construction, which on the face of it appears to be a direct response to the increasing prices in some markets across Australia. But, beyond that, if we want to boost affordability and improve housing affordability on a sustainable basis we have to increase the supply of land and we have to bring down the cost of building a home in Australia. Building a home in Australia is significantly more expensive than in other comparable jurisdictions around the world. These are the sorts of areas we should focus on, because we need to improve the supply of housing in the context of very strong demand.

In relation to the other measures that Senator Ludlam raised—and he asked me a question about this in question time the other day—let me confirm for him again that the government has absolutely no plans to revisit negative gearing. I remind him there is actually no such thing as 'negative gearing' as a term or methodology within our tax laws. What is reflected in our tax laws is the concept that tax applies to net income. When you incur relevant costs in generating an assessable income, there are allowable deductions against that assessable income to determine the taxable income. That is a general principle in our tax laws which we believe is appropriate. We understand that the Greens have a different view. We let the Greens argue for higher taxes, and we will continue to argue that the current arrangements remain appropriate.

Just to close on this, Senator Ludlam seemed to indicate that the Labor Party had a position to pursue changes to negative gearing. I am very pleased that he has been able to ascertain and discern what Labor's position on negative gearing actually is, because I have struggled to do so. I know there are some people who are trying to increase their profiles who jump up at various times and express some views, but whenever the Labor leader, Mr Shorten, is asked a question on negative gearing I have struggled to understand his position. I know I am just a humble immigrant of non-English-speaking background and perhaps I do not understand the English language all that well, but I have listened very carefully to what Mr Shorten has had to say and, quite frankly, I cannot figure out what Mr Shorten's position on negative gearing is. Is he in favour of the status quo or is he in favour of change? He gave a press conference last week. I sat in my office in Perth and genuinely listened very carefully. I have an interest in this topic. He was giving a press conference and he was asked a question about negative gearing. I thought I would listen very carefully to see whether I could find out the position of the Labor opposition under the leadership of Bill Shorten on negative gearing. I was none the wiser at the end of his answer. If somebody in this chamber on the Labor side wants to clarify Labor's position on negative gearing I would be all ears. I would be really interested.

Senator Ludlam, this is where we come back together. I am sure that both of us would be very interested in Labor's position on negative gearing. But obviously that is not the subject of this bill, so you have invited me here to stride beyond the measures that are in front of us. It was probably remiss of me to have been taken that way by you but, as always, I was trying to be helpful.