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
The First Home Super Saver Tax Bill should be opposed. The Greens will certainly be opposing it and speaking against it very strongly. Here again we see the Turnbull government delivering for their constituency. If you're wealthy, you'll do well out of this. We heard the previous speaker, Senator Polley, talk about all the problems the government might have—that they're wide of the mark et cetera—but they totally know what they're doing here. Remember where this bill comes from—it comes because there's a housing crisis, which has dominated the headlines for well over a year. People are doing it tough, and it's not just working-class families; it's middle-class families—so many disadvantaged people. And it's not just young people; a big cohort is women in their 50s, particularly those who become separated or whose children have left, who all of a sudden find they don't have anywhere to live. The crisis is extreme. The government won't deal with what needs to be done, because that would rob their constituency—the housing speculators, the developers, the real estate agents—of their income and their profits. They're nibbling around the edges. That's all that this is.
However, it's even worse than that, because it will make the system worse. It delivers for the wealthy. As I said, it's a Christmas present for the wealthy—the more they earn, the more they benefit from the scheme. That is clearly wrong; it will drive more inequality. If you are rich, you are going to do well. If you are rich, this is the scheme for you. The super saver scheme, as I said, only works for the rich. It will drive inequality, which is already expanding. Inequality within the housing system is a big driver of inequality overall. If you don't have certainty in your housing arrangements, it's bad for your health, it's bad for your kids' education, it's bad for your employment prospects. Housing is central to a fair and decent society. This so-called super saver scheme sounds like something out of a TV program, where they sit around a desk and wonder what can they do that sounds really fantastic—though it's not going to be fantastic for most people—and they call it the super saver scheme. But what does it do? It pushes up prices, erasing any gains people may have made in their savings. It just robs people. It robs people of their rights, and the right we're talking about here is the right to housing. Housing is a human right, and homes for all should be the policy of any decent government.
This, in the end, is a distraction from winding back the unfair tax breaks that continue to dominate the housing market and drive such unfairness and inequality. The phasing out of negative gearing and capital gains tax discounts is long overdue. I'm very proud that it's a policy the Greens have been working on for a long time. Labor's largely come on board with it, and there are more people in the general community who recognise this as a con job. How rotten is it that you have a government that pushes a system where, if you've already got four properties, it's easier to get your fifth but, if you don't have a property, well, you are probably going to be locked out of the market for the rest of time? Again, I emphasise that housing is driving and cementing inequality. That is so dangerous and so wrong for any society.
The super saver scheme is going to make things worse. It's really, really wrong. I used the term 'nibbling around the edges' before but I think I was off the mark there, because the more you think about it the more you know that we're going into dangerous territory here. The point of this Liberal Party government is this: they won't fess up to the fact that they've got to respond to the housing crisis because it's dominating the headlines so much. People are complaining to their backbenchers, their lower house members and senators all of over the place. It's a topic of conversation, quite informally, in here. They know that they have to do something, and this is the best they can come up with. Again, I emphasise: why is that? It's because they can't go against the interests of their main constituency: the big developers and those who make heaps of money out of the property industry.
It's worth bringing political donations in here. In the last 10years, the property industry has given $21 million to political parties in this country. That's significant. It's very significant. I'm not saying that bags of money are handed over and that, if you give a bag of money to some Liberal MP, that MP in turn does something for you. It's corrupting the culture of how politics works in this country. There is a matter that I have spoken about many times—and it's highly relevant to this debate—and that is the High Court case of McCloy, the former mayor of Newcastle, who took the New South Wales government to court. I'd really urge members to read that High Court decision. It's beautifully written, it's very clear and it identifies the type of corruption that is expanding in Australia because of how we're operating with political donations. It becomes a quid pro quo relationship where the MPs, those elected, may not be paid off with bags of money but they know how to vote. You see that very clearly with the planning laws around the country. The planning laws around this country have been weakened time and time again. The laws with regard to housing at a federal level—negative gearing and capital gains discount—are brought forward to benefit those who make money out of housing, to the point where housing, now, rather than being a human right, a homes-for-all-policy, is like another form of money in this country. If you're already in the game, you'll do pretty well, and you'll do pretty well out of what this government is bringing forward tonight.
Many economists are starting to recognise that we've got a problem. I want to share with you some of the comments from Saul Eslake, an economist who has really spelled out the problem we've got. He has said:
It's hard to think of any government policy that has been pursued for so long, in the face of such incontrovertible evidence that it doesn't work, than the policy of giving cash to first home buyers in the belief that doing so will promote home ownership.
You couldn't get it spelt out much clearer from an economist than that, could you? The super saver scheme will have that effect. That's what it will do if we pass this legislation tonight, because it will increase demand for housing. What does an increase in demand for housing do? It will have the effect of further inflating prices. It's a disaster. Who benefits if you inflate prices? Those already in the game. If you're locked out of it, you're sleeping in your car, you're on the waiting list for public housing or you're trying to get into a social housing scheme, this isn't going to help you. It's going to make the situation worse and lock you out for longer. Mr Eslake has also said that diverting more money into the demand side of the equation achieves two things: it pumps more heat into an already very steamy market while potentially undermining future retirement incomes.
Former Prime Minister Paul Keating has also weighed in on this. While you may not agree with him all the time, it's certainly entertaining—and sometimes he nails it. As an economic idea, he described this policy as scandalous. That's his word, 'scandalous', and it is. This needs strong language. He went on to say:
And to make matters worse, the proposed diversion of these savings into housing would simply push up the price of the current stock of properties. It would add to demand while doing nothing to supply.
Again, the people who know how the system works are revealing that what this government is up to is a con job that delivers for a few and robs the majority.
It's often interesting to look at overseas experiences, and some recent examples in Canada are very informative. There was a similar scheme introduced in Canada called the Home Buyers' Plan. The results were terrible. One of the architects of the Home Buyers' Plan now admits it was a massive mistake. This is their comment:
To date the HBP—
the Home Buyers' Plan—
has been used about 2.5 million times, with roughly $30 billion removed from savings and investments and ploughed into real estate. When combined with dirt-cheap mortgage rates … it's helped push home prices into the clouds.
They go on:
In other words, if you think letting people steal money from their financial futures in order to buy houses today which they really can't afford is going to make real estate more affordable, you've been spending too many evenings with the goat. The opposite is probable. In Canada, it's fact.
Do we want those facts in Australia? Because that's where we are heading. Those comments are also a reminder of what's going on here. We're not only driving the prices up and putting secure housing further out of the reach of so many people but also robbing the financial futures of people by misusing the superannuation scheme in this way. This is a disaster. It is a disaster that needs to be condemned in strong language.
There is no worse market failure in Australia today than the housing market. It's cruel and it's ruthless. You don't have to be that progressive or that left to know what's going on here. If you just want a society to work, even if you're not really into building an egalitarian society, what's going on here has ramifications for the type of society we should be—ramifications in terms of social service costs, health costs and education costs. What I mean by that is that, if people don't have secure housing, so many other things fall apart. I think many people would know these figures, but they're worth repeating in the context of this debate: tonight, more than 100,000 people will be homeless. They will be sleeping in cars, on the streets, on the concrete or in parks. Maybe, if they're lucky, they might have found a couch at somebody's place, but they're all part of the homeless number. That number is set to increase, and it's not just men. It used to be dominated by men once upon a time, but not now. Many women and many children, even, make up those homeless figures. Then what we see is that the government adopts measures that make no difference. At the same time as those homeless numbers, the public housing estates have been liquidated. We need major changes here.
European examples are very informative of the direction we should be going—not down these ridiculous super saver schemes that are biased in how they work but actually addressing how we bring change. We need something like a federal housing trust that would lend money according to people's requirements, and they then pay it back according to their needs. That might sound pie in the sky under the Australian system at the moment, because everything's dominated by the marketplace, but so many European countries have such a system. They don't have the crazy situation we have where only five per cent of our housing stock is social housing. In Germany, for example, it's about 30 per cent. Why is that? They have something similar to a federal housing trust where the money is lent to people. We're not talking about wiping out the private housing market; it exists alongside a strong public housing system, a strong social housing system. That is what is incredibly important. So, at the moment, the super saver scheme before us tonight needs to be defeated. We need to get it off the books, defeat it outright and get down to ensuring that Australia stands up for human rights when it comes to housing. That means homes for all. Thank you.