Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Hansard source

I rise, too, to speak on the bills that we have before us and to say that Labor will not be opposing the passage of these bills through this chamber. However, we should be under no illusion about the government's measures in these bill, despite the rhetoric that we've heard from those opposite. They will do nothing to make housing more affordable. Sadly, that action has not been forthcoming from the Turnbull government. We have two bills that do nothing to address the housing crisis, and we need a comprehensive response to the crisis.

The first of the bills before us, the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017, seeks to ensure that travel expenditure incurred in gaining or producing assessable income from residential premises is not deductible and not recognised in the cost base of the property for CGT purposes. This is an integrity measure that is meant to address concerns that some taxpayers have been claiming travel deductions without correctly apportioning costs or have claimed travel costs that were for private purposes. The second bill, the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017, imposes the vacancy fee and establishes the amount payable. Broadly, the fee, which will be payable when a dwelling is left vacant, is the fee that was payable at the time of the foreign investment application.

I must be clear: Labor is all for ensuring that tax concessions are targeted, but we are the party which has been leading the debate on this. As previous speakers have noted on the Labor side—and on the Greens side—this is not a housing affordability measure. As we know, housing is a powerful determinant of social and economic participation. Australia is in a housing crisis—a crisis of supply and a crisis of affordability. This housing crisis has far-reaching consequences: people experiencing homelessness, people in rental stress, first home buyers and people relocating or downsizing. Recently, at the ACT Housing and Homelessness Summit, Labor's shadow minister for housing, Senator Doug Cameron, outlined the challenge for us:

The government's Affordable Housing Working Group has estimated that an additional 6,000 social housing dwellings will be required each year just to keep pace with future population growth, without addressing the backlog of need.

A more comprehensive estimate prepared by Dr Judith Yates for the Council for Economic Development of Australia is that Australia needs 20,000 extra affordable housing dwellings each year for at least a decade to address the backlog of need among those on low to moderate incomes.

Using the most recent estimates for the number of households in rental stress, of which there are 527,500, even if half of all the 220,000 new dwellings built each year were made affordable and available to low-moderate income households, it would take over 5 years of new supply to address rental stress amongst Australia’s poorest households.

…   …   …

In April this year, Labor announced a package of measures that included $88 million over two years to improve transitional housing options for women and children escaping family and domestic violence, young people exiting out-of-home care and older women under financial stress who are at risk of homelessness.

A Labor government will develop and implement a national plan to reduce homelessness through the Council of Australian Governments. There is a massive gap in housing policy, and we need national leadership to address it. Labor's response to the housing and homelessness challenge requires a concerted, cooperative effort across all levels of government and society. Labor's current policies to address housing affordability include reform of negative gearing and capital gains tax and support for the creation of a bond aggregator to facilitate investment in social and affordable housing. They are important steps, but we are not stopping there. Labor is providing the national leadership that is necessary to drive a concerted national plan to address the housing crisis.

Australia is in the midst of a housing affordability and homelessness crisis. House prices in many major cities have skyrocketed. Home ownership rates have plummeted, and many vulnerable Australians have limited or no access to housing. The housing crisis is only getting worse. Since the government came to office in September 2013, capital city house prices have soared by 30 per cent, with increases of nearly 50 per cent in Sydney and over 30 per cent in Melbourne. Home ownership is at a 60-year low, and home ownership rates for 25- to 35-year-olds have collapsed from around 60 per cent to less than 40 per cent in the past 30 years.

Skyrocketing house prices have long been an issue in cities such as Melbourne and Sydney, but they are now becoming a major issue in my home state of Tasmania, with house prices in Hobart now the second highest in the nation in terms of growth, according to a recent report commissioned by the insurer QBE. The report that was put out and reported on by ABC News on 25 October 2017 notes that the median house price in Hobart is forecast to rise by 11 per cent to $470,000 by 2020, while the median price for units is expected to rise by nine per cent, reaching $360,000. These sorts of prices mean that the Australian dream is very fast getting out of reach for so many Tasmanians. It has also resulted in a further tightening of the rental market, putting further stress on those already doing it tough.

We cannot afford to ignore the human face of this. There are currently 3,000 Tasmanians on waiting lists for public and social housing. If you're on one of the lowest income support payments like youth allowance or Newstart, the possibility of just renting is getting out of reach. Something needs to change. According to the Committee for Economic Development of Australia, if current policy settings remain in place, Australia's housing affordability crisis is likely to continue for another 40 years. In Labor's view that is completely unacceptable. This is a situation that requires action. According to the recently released Rental Affordability Index, relative to wages Hobart is the second most unaffordable Australian city after Sydney in which to rent. It is more expensive to rent a house in Hobart than it is in Melbourne or Brisbane. This disproportionately impacts on young people, who are also being priced out of the home ownership market. While Hobart's annual nine per cent growth in house prices might be appealing to people lucky enough to own their own homes, it means the door to home ownership for many young people is being slammed shut. Cashed-up speculators, many from interstate, outbid young Tasmanian first home buyers for the limited housing stock.

The Liberals, this government, do not have a good story to tell us on housing affordability. Under their watch, home ownership rates have fallen lower than at any other point in the last 60 years. First home buyers now make up only around 17 per cent of all home purchases. This is well below the historic average of 20 per cent. The coalition government appear to have no clue on how to go about fixing this problem or, if I was being unkind, I would say they didn't care, and in government the Liberals have made things worse. Since coming to government, first under Mr Abbott and now Mr Turnbull, they have refused to address unfair and distorting tax breaks for investors. They closed the National Rental Affordability Scheme, which was essential for a number of complexes and projects in Tasmania that have been now completed. Without that National Rental Affordability Scheme those projects that now house hundreds of people would not have been able to go ahead.

The coalition government defunded homelessness and community housing peak bodies. They failed to appoint a housing minister, so there is no-one leading the charge within the government. They abolished the National Housing Supply Council. This list is not the complete story on the government's failures. Unlike the Liberals, Labor has a plan for making more Australians have access to the housing market. Labor's policies will see the construction of over 55,000 new homes in Australia over three years and boost employment by 25,000 new jobs per year. Labor plans to improve housing affordability, increase financial stability, reduce homelessness and boost jobs.

As my colleague Senator Gallagher noted in her contribution yesterday, Labor will reform negative gearing and capital gains tax concessions. We will limit direct borrowing by self-managed superannuation funds. Labor will facilitate a COAG process to introduce uniform vacant property tax across all major cities, and Labor will re-establish the National Housing Supply Council and reinstate a leader on housing—a minister for housing. We will implement those measures, along with others, because, unlike this government, Labor believe that the current affordable housing crisis in Australia is completely unacceptable. It requires the federal government to step in and fix it. We cannot sit on the sidelines and just hope the market will sort it out, because it won't.

Every Saturday in Australia, first home buyers are outbid at auctions by wealthy investors and property speculators who are taking advantage of some of the most generous tax concessions in the world. The current arrangements provide a bigger tax concession to an investor buying their fifth home than a young couple buying their first. How is it fair that an investor buying their fifth home receives a bigger tax concession than a young couple buying their first? Demand for housing is being turbocharged by unsustainable and distortionary tax concessions for investors. More than 90 per cent of lending for investment properties is for existing housing stock.

Labor will take action where the Liberals are unwilling to. We will limit future negative gearing concessions to new housing and reduce the capital gains tax discount from 50 per cent to 25 per cent. These changes will moderate the growth of house prices and redirect generous tax concessions to where we most need investment—in new housing. Redirecting investment in new housing will increase housing supply and in the process will create jobs in the construction and building sector. The McKell Institute has estimated a 10 per cent increase in construction as a result of these changes, creating up to 18,500 new homes and, as I previously mentioned, as many as 25,000 new jobs per year.

Labor does not believe in retrospective tax changes. No current investments will be impacted by this change. The independent Parliamentary Budget Office has recosted the fiscal impact of this policy. This would improve the budget by $37.8 billion over the medium term. Labor's housing policy will create jobs, it will assist in budget repair and it will begin to fix the current housing affordability crisis. Housing prices in many major cities, as many of the senators that have contributed have indicated, have skyrocketed. Homeownership rates have plummeted, and many vulnerable Australians have limited or no access to housing—all while the government continue to sit on their hands. The current situation cannot go on. What do we have from the Turnbull government? It is a government that continues to defend existing negative gearing arrangements and capital gains tax discounts, the vast bulk of which go to those in the top 10 per cent of the income distribution. The government knows that. I'm sure Senator Smith knows that. The vast bulk of those discounts go to those in the top 10 per cent of income distribution. Change is needed and it is needed now.

As I said earlier, Labor will not oppose these bills, but make no mistake: these measures have nothing to do with housing affordability. In fact, as I said, two of these are very clearly described as integrity measures. Any housing affordability package that does not deal with negative gearing and capital gains tax discount is a sham. The government needs to deal with both negative gearing and the capital gains tax discount, otherwise it will stand condemned. Labor has been leading the way on housing affordability through Senator Cameron, as the shadow minister for housing, and only Labor will properly deal with a system that advantages investors over first home buyers.

I want to once again put on record what is happening in my home town. As we know, in Tasmania, there have been reports produced about the housing property market squeezing out those who are most disadvantaged. Meg Webb of Anglicare's Social Action and Research Centre said that the rising prices—and I'm paraphrasing here—may be good for the market, but the same cannot be said for the 3,000 Tasmanians on waiting lists for public and social housing. When Senator Duniam came in here yesterday to make his contribution on this legislation, he also talked about Hobart and the fact that house prices are rising. But, as far as I can recall from his contribution, he made no mention of the fact that 3,000 Tasmanians are currently on waiting lists for public and social housing.

As I said when I started my contribution, Labor won't be opposing these bills, but these bills do not make a policy on housing affordability. (Time expired)