Monday, 4 December 2017
Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, First Home Super Saver Tax Bill 2017; Second Reading
First of all, let me make it clear that Labor does not support these bills. In the typically Orwellian way this government likes to operate, the title of one of the bills has 'reducing pressure on housing affordability' in it. It's obvious that the measures in here won't do anything to reduce pressure on housing affordability. It's only Labor that has any comprehensive plan to deal with pressure on housing affordability, with reforming negative gearing and the capital gains tax discount being at the forefront of this. Any housing affordability package that does not deal with these concessions where the majority of the benefits go to high-income earners is a sham. Fifty per cent of the benefit of negative gearing goes to the top 10 per cent of income earners and 70 per cent of the capital gains tax concession goes to the top 10 per cent of income earners. Action needs to be taken here.
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017 seek to introduce two measures that the government introduced in this year's budget: the First Home Super Saver Scheme; and contributing the proceeds of downsizing to superannuation. This so-called First Home Super Saver Scheme will do nothing to address housing affordability. Instead, it will undermine Australia's world-class superannuation system that Labor is proud to have created and continues to defend while the other side continually seeks to tear it down.
Superannuation accounts are supposed to be locked boxes to generate retirement income, not to be used at the whim of government to give access to whatever they wish. It sets a dangerous precedent. The government's plan would mean that first home savers who make voluntary contributions into the superannuation system can withdraw these contributions up to certain limits and an amount of associated earnings for the purpose of purchasing their first home. Concessional tax treatment applies to amounts that are withdrawn under the scheme.
It's ironic that this government has put forward this measure that goes against their own superannuation objective bill which has stalled in this parliament. That bill has sat in the Senate since late November of last year, and it's been nearly a year without debate. That bill stated the government's primary objective for superannuation to be:
To provide income in retirement to substitute or supplement the age pension.
We disagree with this, and it's unfortunate that the government has tried to push this through without general support—not to mention the fact that we had the Treasurer spruiking this scheme on social media in July, well before any legislation was drafted, let alone introduced. That only led to further confusion. But what could you expect from a confused government, from a rabble of a government?
We should also note that the ATO, which is the agency responsible for administering this scheme, says on its website:
It is emphasised that this measure is yet to be legislated, and under the current law it is not possible to withdraw superannuation contributions to buy a house. Therefore, if the law does not get enacted, any voluntary contributions made for the purpose of withdrawing them under this scheme, will remain in superannuation until such time that they would ordinarily be able to be released.
The other measure in this bill is about contributing the proceeds of downsizing to superannuation. The government proposes to allow people aged 65 or over to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. These contributions would be exempt from the age test, work test, and $1.6 million balance test for non-concessional superannuation contributions. Of course, we don't have any objections to the principle of helping people to downsize. If the government were to split the measure away from the First Home Super Saver Scheme measure, we would be open to considering the measure. However, in terms of actually reducing pressure on housing affordability, the measure is not the best. In the 2013-14 budget we had a pilot program that had the aim to do that, by trialling a means-test exemption for age pension recipients who were downsizing from their family home. Up to $200,000 in proceeds would have been put in a fund and would have been exempt from the pension means test for up to ten years. Of course, this government, in its short-sighted nature, got rid of it.
Some important factors, such as the age pension income or assets test and stamp duty issues, are not addressed. Treasury's answers to questions on notice about this measure were enlightening. Treasury did not have an estimate of how many households were expected to downsize as a result of the measure, or the assumed increase in the effective supply of housing that the measure was expected to generate. So much for reducing pressure on housing affordability! Industry Super Australia has said that this measure will be used by self-funded retirees rather than age or veteran pensioners. That's because there's no change to the pension income or asset test. As I mentioned before, were the government to split this measure from the First Home Super Saver Scheme, we'd be open to considering it; however, as it's packaged up, we will oppose the bill as a whole.
I want to take the Senate through how the Turnbull government has arrived at its housing policy shambles. It's almost impossible to tell what the Liberal Party stand for these days. They're certainly not liberal. Given their recent history of attacks on the institutions of civil society and the rule of law, it is doubtful they are even conservatives. It's increasingly obvious that they are a party of social reactionaries who are obsessed with creating some kind of half-remembered hallucination of the past in Australia—a fantasy golden age that never existed. What's worse is that it isn't even an authentically Australian hallucination. They have never had an original idea in their lives. Their entire political philosophy is on loan from the country club conservatives and evangelical reactionaries of the American Midwest. We all know them. They are men—they're almost always men—who, over the past 30 years, have set out to prove that the 1960s marked the beginning of a terrible, civilisation-threatening decline in moral values and that only a return to the values of a golden age that existed, presumably before the 1960s, will prevent complete moral destitution and a lapse of common sense. Their targets are single mothers, divorce, the decline of Western civilisation, teenage pregnancy, tax, abortion, family values, social security recipients, marriage equality, left-wing media bias, teenage promiscuity, safe schools, political correctness, nanny statism, creeping socialism and scientists.
That the Liberal Party has assembled this random sample of culture war targets in one party and still manages to call itself liberal is a considerable achievement. While the cultural warriors and reactionaries of the Liberal Party obsess about Judaeo-Christian values, young people worry about astronomical property values, student debt, penalty rate cuts and diminishing job opportunities. This is what the party of Menzies has become. Menzies championed thrift, self-reliance, private enterprise, individual responsibility and freedom, and the family as the best institutions through which the nation would express its best instincts. He warned of the danger of an all-powerful state, but he pitched his appeal to the middle class, excluding the rich and powerful, who did not need his help, and what he called the unskilled people, who he believed were protected by their unions and whose wages were safeguarded by the conciliation and arbitration system. Yet Menzies insisted:
… there is no room in Australia for a party of reaction. There is no useful place for a policy of negation.
Well, wouldn't Menzies be rolling in his grave now at this rabble across the Senate? He never claimed that his was a conservative party. On the contrary. He said:
We took the name Liberal because we were determined to be a progressive party, willing to make experiments, in no sense reactionary, but believing in the individual, his rights, and his enterprise, and rejecting the Socialist panacea.
He identified the state's obligations to address unemployment, provide economic security and material wellbeing through social legislation, and the difficulties of those who fell through the cracks were to be ameliorated. He said:
… we have nothing but the warmest human compassion—towards those … compelled to live upon the bounty of the State …
Well, look at their social security legislation now. Look at what they're doing to those people who have fallen through the cracks. It is certainly not Menzian. It is reactionary.
A few months ago the Liberal Party gave us all a glimpse of how far it has unravelled when it celebrated the 75th anniversary of Menzies's 'The Forgotten People' speech. When Menzies delivered this centrepiece of Liberal Party mythology, he positioned home ownership as the basis of a stable society. He said:
The home is the foundation of sanity and sobriety; it is the indispensable condition of continuity; its health determines the health of society as a whole.
He certainly didn't think the rich and powerful needed a leg-up. He said of them:
… in most material difficulties, the rich can look after themselves.
It's not my intention to eulogise Bob Menzies but to merely point to the fact that in the Liberal Party of 2017 there is no sign of the Liberal Party of Menzies. The broad church is gone. They've burnt it to the ground. Progressive Liberals have given up. The reactionary hard Right has somehow managed to claim Menzies's legacy and threaten retribution if the Prime Minister offends against the much diminished and increasingly deranged base. He is besieged on both sides: an uprising if he confronts the culture warriors who claim to speak for the party, and a loss of electoral support as he compromises on the more progressive liberalism he had promised the public for so long.
Rather than mythologising the 'Forgotten people' speech, today's Liberal Party—the party of Work Choices and penalty rate cuts, the party of the 2014-15 budget, the party of vindictive policies targeting social security recipients—would do well to read Menzies's speeches and other writings a bit more carefully. They would make sobering reading.
The record of the Abbott-Turnbull government on housing policy has been abysmal. The coalition's four-and-a-bit years in government have been wasted years. Since 2013, the Abbott and Turnbull governments have: refused to countenance reform of negative gearing and capital gains tax; closed the National Rental Affordability Scheme that had provided 37,000 new affordable housing units and was on track to achieve its target of 50,000; scrapped the First Home Saver Accounts scheme, which was helping people save for their first home; closed their ears and eyes to mounting evidence of housing system failure by abolishing the National Housing Supply Council and the Prime Minister's Council on Homelessness; failed to provide funding certainty under the National Partnership Agreement on Homelessness; defunded Homelessness Australia, National Shelter and the Community Housing Federation of Australia—the organisations that were out there helping the people who had fallen through the cracks of society; failed to appoint a dedicated minister for housing and homelessness; scrapped the Housing Help for Seniors trial that was announced in Labor's 2013-14 budget; and cut $44 million a year in capital funding from homelessness services under the National Partnership Agreement on Homelessness, which has meant that older women in Australia have got nowhere to go for support and help, and young people coming out of out-of-home care are on the streets and, I'm advised by some of the NGOs, are being groomed by some of the hard-heads out on the streets. This is unacceptable. This is not a Liberal Party. This is a party of reactionary, basically male Australians, who base themselves on the right wing of the Republican Party in America.
In Labor's last budget, the 2013-14 budget, the Commonwealth's matched contribution to the National Partnership Agreement on Homelessness was $159 million. In the Abbott government's first budget, the 2014-15 budget, the National Partnership Agreement on Homelessness was extended for two years, but the Commonwealth's annual contribution was cut to $115 million. These cuts were directed at capital funding, which would have contributed to increasing the supply of short-term and emergency accommodation for women and children escaping family and domestic violence. What an outrageous position for this government to have adopted. To add insult to injury, the government has consistently claimed that its contribution to homelessness funding represented an increase in funding. This was based on the ludicrous proposition that, because the National Partnership Agreement on Homeless was to expire on 30 June 2015, we must assume that the funding base from 1 July was zero; therefore their reduced funding was new money. What an absolutely obnoxious proposition to be putting forward to justify cuts for the poorest people in this country. What an obnoxious proposition from a coalition that is basing itself on the right wing of the American Republican Party. It has nothing to do with the Menzian proposition of liberalism. In the hallucinatory world of the Liberal Party, down is up and the old is new. The Liberal Party these days is less Alfred Deakin and more Jefferson Airplane.
In the 2017-18 budget, the government announced a grab bag of unrelated housing measures about which John Daley of the Grattan Institute said: 'You would need a scanning electron microscope to see any effect on housing prices'. These bills represent two measures from that grab bag.
There's a huge housing affordability challenge. Australian cities and many regional areas are now some of the least affordable in the world. Comparatively high housing costs by international standards make Australia an expensive place to live and an expensive place to do business. Cities are the engines of growth; they are also the places where housing stress is greatest. The impact of this on renters and aspiring home purchasers is well documented. The maximum affordable rent for a couple on the minimum wage with two children is $416 a week, far short of the medium Sydney rent of $743 per week for a three-bedroom house. Yet today, when they had an opportunity to actually restore the penalty rates that many working families depend on, they rejected that. This is not a government of Menzies; this is not a party of Menzies; this is a reactionary party that needs to go—and the sooner the better.