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
I follow my colleague and leader in highlighting some of the significant problems with the approach that is put forward in this legislation: the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017. Naturally—I certainly hope it is natural—everybody in this chamber, from all sides, would like to see genuine measures that would improve housing affordability for average Australians. The real problem is that the measures contained in this legislation are not going to achieve that and in many respects will, by ignoring the real drivers that are making housing so unaffordable for so many Australians, actually make things worse. By pointing to something that is actually not going to work and saying, 'We've now dealt with this issue'—as this government, no doubt, will try to do—it will take the heat and the political pressure off the very strong and building frustration amongst more and more people in the community, particularly younger people, about the lack of affordable and secure housing.
A key area that this legislation completely ignores and potentially makes worse is the very large number of Australians who rent their home. I spoke about this issue just last week in regard to the latest affordability index for rental housing in Australia. Focusing on my own state of Queensland, the data is very stark. It is almost literally unaffordable for people on income support, in particular, to keep a roof over their head. None of these measures are going to help, for example, a single pensioner who does not own their own home. These measures will assist those who have more wealth and capital to get a further hold on buying a house and will make it harder for those who are simply trying to rent.
As I mentioned in one or possibly two of my contributions in recent weeks, when I was in this chamber last, over 10 years ago, this was a topic I focused a lot on. I very much recall standing in this part of the chamber and asking question after question of the then government. I asked Senator Minchin, who was the Leader of the Government in the Senate and I think the Minister for Finance, repeatedly what that Liberal government was going to do about housing affordability. It was at crisis levels then and it is at even worse levels now. The answer then was basically, 'Nothing.' In fact, most of the time the answer was, 'That's a state issue and we don't see that as a role for the federal government.' That in itself was damning. The only other thing they could come up with is, 'We keep interest rates low.' That was a farcical answer then, but it has been shown to be ludicrous to the point of economic illiteracy. That was seriously put forward as a housing affordability measure by the Howard government.
I suppose at least I can say that this government is thinking that it does have a lever or two in the housing area. At least it is saying it is not vacating the field. The trouble is, as with a number of measures of Liberal governments in the past, their measures, particularly when it comes to fiddling with the tax system, have made things worse. People talk about negative gearing, in particular, as something that both parties of the establishment have failed to address in the past. It is something that people talk about when they are in opposition but seem to not act on when they are in government, except for the Hawke government. To their credit, the Hawke government did act on that for a very brief period of time in their early days. I might be wrong here—my memory gets a bit fuzzy when I am going back to the 1980s—but I'm pretty sure Paul Keating at one stage called it a rort. That was a reasonable assessment of how it operated. That doesn't mean that people making valid use of a legal tax measure are doing something wrong, but in terms of the way it operated and operates today it is a measure that clearly operates to the benefit predominantly of those who are wealthier, so it's a regressive tax measure. That's probably a better and less emotive description to use.
It is unfortunate that the Hawke government lost the political courage in regard to negative gearing and wound it back. It is doubly unfortunate that the negative impacts of negative gearing in regard to housing affordability and distorting wealth distribution upwards were magnified by the Howard government with the changes to the capital gains tax regime. That really turbocharged the growth in wealth inequality that has continued till this day. It is very unfortunate that at that time the Labor opposition enabled that to happen by giving it the necessary support for it to pass through the Senate. Those measures on their own, if you look at the tax expenditure reports that are tabled each year in this place, have meant billions and billions of dollars of foregone revenue. It's a perfect thing to point to, frankly, whenever we hear talk from financial commentators and the dwindling number of people who try to defend the failed fundamentalist free market economic model that's been pursued for so long in this country. They always come up with, 'Oh well, where's the money to pay for investing directly in public housing, for example?'
Look at the billions and billions of dollars that are forgone each year because of these regressive tax breaks. That's where the money is and that's been a key driver in the creation of the significant and untenable growth in wealth inequality that's been built around private home ownership and investment in private housing. That has been a key driver of the massive increase in private debt that is creating a problem in terms of the underpinnings of our economy. It's a significant problem in regard to the business model of our major banks. But of course it works well for them.
When you look at the disclosure records that the Electoral Commission puts out, it is no surprise just how much money the banks and the finance industry put into the two parties of the establishment, particularly the current government. It is commented on regularly and just in the last couple of days, quite appropriately, but it can never be said often enough: it's no surprise this government resisted a meaningful inquiry into the banking industry when the banking industry, as we've all seen, basically tells this government what to do. The banking industry would certainly tell this government, 'Don't bring in tax measures that will hit our profit base,' even if it would help to create more affordable housing for the majority of Australians. Unfortunately, instead, what we get are the sorts of measures like this First Home Super Saver Tax Bill 2017.
Income inequality is something that more and more people recognise as a major problem around the world and in this country. Certainly in my own state of Queensland, income inequality and, more importantly, wealth inequality continues to steadily rise. One of the key drivers of wealth inequality is inequality when it comes to access to housing and the cost of housing. Linked to that is the steady decline in the proportion of people who own their own home. Over 40 per cent of Queenslanders 20-odd years ago owned their home outright with no mortgage. Just a year or so back that number had dropped to only a little over a quarter of Queenslanders.
The proportion of people's income that is spent on housing has increased significantly over the last 20 years, while wages growth in Queensland and elsewhere has flatlined—and that is for people who have a permanent steady, reliable and secure job. As we know, jobs are more and more insecure, and people are relying more and more on piecemeal work, casual work and part-time work. All of those people are even less able to afford a home. It is certainly out of the question for them to think about the prospect of purchasing a home, even at a sizeable debt. So all of those people are excluded from the potential alleged positive impact of this legislation. That's why we now have an entire generation of young Queenslanders and other Australians facing a lifetime of renting. Many of those people willingly adopt that approach. I rent my home, but I'm not portraying that at all in any way as a second-class option. Where it is a second-class option, though, is in regard to the security that people have in being able to continue to live in their own home.
If we really wanted to address stability of housing and the security of having a home, we would see this government adopt recommendations that have been made time and again in Senate committee reports over the years. I can remember at least a couple from more than 10 years ago when I was in this chamber previously about moving towards a consistent set of national standards for the rights of renters. I remember former Greens senator Scott Ludlam did a lot of work promoting the need for a national approach to a basic set of standards for renters' rights. These are the sorts of things that governments that have an actual commitment to addressing disadvantage and inequality across the community would take a leadership role on.
It's the classic cop-out for a national government to say, 'Well, that's up to the states.' Of course, tenancy law is a state measure, but, as we've seen time and time again, if a national government has the courage and the desire to take the lead on an issue, then they can drive it a very, very long way. Instead, we've had the opposite of that. There has certainly been no interest, no courage in wanting to do that; indeed, there has been a desire to stymie any attempts to get strong changes to the rights of renters around the country. We have, nonetheless, seen some small movements forward in some states in recent times. But this is an area where change is needed urgently, and that's the sort of thing we should be considering in this chamber, in this parliament, at a national level.
There is a growing proportion of people who are renting their homes and will rent their homes for the foreseeable future, who need to have more rights and more stability and security with regard to their homes. What we need, if we are talking about housing affordability measures, is not only to ensure that those who rent their homes have greater rights, because they certainly do not have a level playing field at the moment; in addition to that, we need measures from government that will ensure that there is a greater investment back into public, social and community housing.
What we've basically done—as one would expect under the free-market fundamentalism that we've seen from both the parties of the establishment over the last few decades—is, in effect, privatise housing. The amount of housing that used to be provided through publicly funded public housing, social housing and community housing has declined. We've just said, 'Let the market handle it.' What we've seen is a classic case of market failure. More and more people are being priced out of the market, there is more and more inequality happening, the wealthier are doing better and better, and those who are not are being put in more and more tenuous circumstances.
I encourage all senators, and anyone interested in this issue, to look again at the report from last week that looked at the enormous level of housing stress and financial stress for people on income support, whether they be pensioners, carers, sole parents, people who are unemployed, or people moving in and out of paid work. For all of those people, the proportion of their income that they're already having to pay just to keep a roof over their heads—and that's even before they deal with all the other issues that people have to deal with to get by—is simply scandalous. They are being completely left out of the debate that's before us tonight. They're being completely left out of the measures that are proposed in this legislation.
We've just had, the weekend before last, the state election in Queensland. It is not just a matter of simple partisan boasting to talk about the strong result the Greens achieved in that election; it is a matter of pointing to the fact that the public supports and is looking for parties to put forward measures that will deal with fundamental issues relating to people's cost of living and to their material needs. It is worth pointing out that, in those seats where the Greens particularly focused on and gained significant swings—seven, eight,10 per cent swings—and in the seat we're most likely to pick up, which is a leafy Liberal seat, the Greens campaigned very hard on housing affordability and on investing in public housing.
There was a laughable, ludicrous, front-page beat-up from The Courier Maileven more laughable and ludicrous than their usual front-page beat-ups—because the Greens had this crazy idea to invest significantly in large amounts of public housing. It was literally described as a Cold War, East Germany-type policy because we actually want to invest in good-quality, affordable housing for the community. That's dismissed as some crazy communist idea. Whatever the Murdoch media's distortions might want to suggest, the fact is that the public support ideas like that, particularly when they recognise that they can be paid for and the revenue can be raised when the massive tax breaks for the wealthiest are removed and when property developers pay their fair share rather than get the windfall gains they continually get. Whatever the Murdoch media's distortions want to suggest, the fact is that the public support ideas like that, particularly when they recognise that it can be paid for; that the revenue can be raised when the massive tax breaks for the wealthiest are removed and when property developers pay their fair share rather than get the windfall gains they continually get.
There's a very good reason that, out of all the groups that are recognised as needing to have their ability to donate to political parties curtailed, it's property developers that are top of the list. It's already illegal for property developers to donate to political parties in New South Wales. We've seen a wide range of examples—as my colleague Senator Rhiannon would be able tell me in great detail—of attempts by various state Liberal MPs to get around that, because they are so addicted to developer donations.
Senator Cameron interjecting—
Whether it's the back seat of a Bentley or the back seat of a Nissan, the point is that significant donations have continued, even after it was made illegal, to a whole range of New South Wales Liberal MPs or campaign workers. It's no coincidence that the Queensland Crime and Corruption Commission inquiry into political donations and distortions in the local government elections in Queensland last year singled out donations from property developers—to the exclusion of everyone else. The Greens would like to see caps on all political donations and caps on all electoral expenditure. We'd like to see a curtailment of donations from all for-profit corporations. But it's no coincidence that the one group that the Crime and Corruption Commission identified as being the most distorting, the most literally corrupting of our political process, is property developers. If you want to look at a group that is making windfall profits and windfall gains, and is behind completely inappropriate overdevelopments in our communities and in our urban spaces, and taking all of those windfall gains that could otherwise be provided to make housing affordable, it's property developers.
In the new state parliament, the Greens will very much be supporting and driving the push to ban not only political donations from property developers but also expand that—along the lines, I might say, of the Crime and Corruption Commission—to putting a cap on all political donations. They only talked about it at a local government level, because that is all their terms of reference focused on or enabled them to do—but that's what we need to do. This is a classic area. If you want real political action that's really going to deal with housing affordability, let's focus on those that are making the windfall gains now—that is, the banks, the property developers, and all those who are making the most of the massive tax breaks that are costing billions and billions of dollars that would otherwise be provided back to the coffers for public investment in all sorts of positive infrastructure, including housing.
Those figures are provided in reports to this place every year. That's not just a wild statement; that is a simple fiscal fact—billions of dollars in tax breaks that can be wound back and can provide actual relief for housing affordability. We need to couple that with proper investment in public and community housing, and to level the playing fields so that people who rent their home actually have a fair go and have basic rights. That's what we need to get housing affordability properly addressed in this country, not the sorts of measures that are put forward in this bill.