David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018. There are few needs more fundamental than the need for shelter and housing, and we're all aware that it is becoming increasingly difficult for people in Australia to afford a new home. According to the 2018 Demographia survey, my home city of Sydney has been the second least affordable city in the world to buy a home for two years running. The median price for housing is 6.6 times the median wage, up from less than three times the median wage in the late 1980s. Even the most affordable region, Gladstone in Queensland, has housing 3.2 times the median wage.

A generation of first-time homebuyers is virtually locked out of the Sydney market, with an average time to save for a deposit on an entry-level apartment now eight years, up from five years in 2007. Despite initiatives announced by the state government, such as accelerating land release to try and increase housing supply, and despite the record supply of 38,759 dwellings in 2017, Sydney's median house price rose 15 per cent in the last year to $1.17 million. With strong immigration levels and with property seen as a secure investment, increasing supply is the best way to tackle high house prices. To reach the long-term targets set by the Greater Sydney Commission, and with a backlog of up to 100,000 potential purchases in Sydney, there needs to be 41,250 new houses built every year for the next 20 years, according to the Urban Development Institute of Australia. This has never been done before. Those in regional areas do not escape the pricing pressure as the cost reverberates out from Sydney and the other capital cities to increase house prices nationwide. According to the Demographia report in 2017, the Illawarra is the third most expensive region in which to buy a house.

It's therefore imperative that we minimise the discouraging effect of housing market taxation and regulation on consumers and suppliers. Yet taxation currently accounts for up to one-third of the price of a new home. This is staggering, making a new home one of the most highly taxed commodities in Australia. For example, a new home in New South Wales costing $800,000 would attract the following fees: GST of $80,000; state stamp duty of $31,768; a state biodiversity contribution of $30,000; and a special infrastructure contribution of $7,236. This sums to $179,004 in total taxation. The taxation on an existing home costing $800,000 is $31,768 worth of stamp duty. The difference in tax between a new home and an existing home is a staggering $147,236, and this is without accounting for other costs that might apply, such as land tax or local government rates paid whilst developing the site.

On top of all that comes schedule 5 of this bill, which is an attempt to eliminate phoenixing in the building industry. Under current law, consumers seeking a new home obtain the price from a developer before approaching their bank to secure a loan. The money is paid to the developer or builder, and the builder or developer is responsible for passing on the GST to the ATO. This occurs every three months, like for every other business under the BAS system. Phoenixing is the practice of a small minority of builders to liquidate their companies in the final three months of the building contract. In doing so, they pocket the last three months of GST before resurrecting themselves as another company. This means that tax money is ultimately not paid to the tax office.