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

I thank Senator Day for that question and I also acknowledge his genuine interest in housing affordability for Australian families. In terms of the numbers he mentioned in relation to government expenditure on child care, Senator Day is broadly right. We expect to spend about $7.3 billion on government support for access to child care, in 2015-16. That is expected to rise to about $11 billion over the forward estimates. That is assuming, of course, that the Senate supports some of the spending reductions required out of the budget in order to pay for the additional investment into child care, because this government is committed to improving affordable access to child care and making access to child care simpler and more flexible, because we understand that is an important part of a strategy to help families get into work, stay in work and be in work. It is an important part of our strategy to strengthen growth and create more jobs.

When it comes to housing affordability more broadly, affordability is a function of both price and capacity to pay. Price is a function of supply and demand. In markets where you have demand exceeding supply, prices will go up. In markets where you have supply exceeding demand, prices will go down.

Senator Day is quite right. The housing affordability issue in Australia is principally an issue of land supply not meeting demand in the market. The principal lever to address that is at the state level, and the federal government is working, through the Treasurer, with state and territory governments to try and address that. I do not agree with Senator Day that housing building costs have not increased in real terms in Australia by international standards. Housing construction in Australia is significantly more expensive— (Time expired)