Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

As a servant to the people of Queensland and Australia, I want to make comments on the National Housing Finance and Investment Corporation Amendment Bill 2019. Let me first say that in support of Senator Hanson's decision to not vote on legislation other than critical legislation until the government has addressed the plight of dairy farmers, I will not be voting on this bill. Firstly, though, some background comments. Let's get to the basics. Housing affordability is deteriorating because of the exorbitantly high prices of housing. We are experiencing the world's greatest-ever resources boom, yet young Australians cannot afford homes.

Under Liberal-Labor governments, electricity prices have gone from the world's lowest to the world's highest. That is due entirely to UN policies that the Greens drive, Labor adopts and the Liberals follow. Under Liberal-Labor governments, tax has become a convoluted mess that is crippling and drives counterproductive behaviours across society. According to a New South Wales housing industry body, tax accounts for almost half the cost of a new house. Let me quote from housing and other industry bodies that were cited in a Sunday Telegraph article of 19 February 2014. That might seem like some time ago, but the article foreshadows the current mess. It was all so predictable. The article is titled 'Nearly half the cost of a new house is gobbled up by a range of "hidden" taxes and can add up to 250k per property'. It was written by Tim McIntyre, the real estate reporter for the Sunday Telegraph, and says:

The taxes make up 44 per cent of the price of a property, with the extra costs being blamed on a shortfall of new housing in Sydney.

"Most people are aware of things like stamp duty, but not the hidden taxes in housing," said Stephen Kirchner, research fellow at the Centre for Independent Studies.

"The added tax can make the price unaffordable."

Mr Kirchner said the tax burden was contributing to a dwelling supply shortfall in NSW, tipped to reach a deficit of 55,000 houses in 2014, according to QBE Insurance Group's report Australian Housing Outlook 2013-2016.

A Centre for International Economics report found that taxes accounted for $267,879 of the average total dwelling cost of $639,533.

"Government taxes are forcing developers out of the market," said Peter Icklow, CEO of developer Monarch Investments. "I’m selling house-and-land packages for $500,000 each and then paying the government $50,000 for each settlement.

"That's after paying taxes all the way through the development process."

Mr Icklow said the introduction of the GST on settlements had all but crippled many developers. In addition to the GST, the hidden taxes severely affected the viability of developments.

Glenn and Pai Ferguson recently bought in the Ingleburn Gardens Estate at Bardia, in Sydney's southwest.

The affordability of a house and land there compared with their former suburb of Sutherland convinced them to move, but they were unaware that 44 per cent of the price was taxes.

"I had absolutely no idea," Mr Ferguson said. "It's definitely something that needs to be addressed. We need more affordable properties."

Personal taxes are also high, and that leaves little room for saving. And then governments waste our money. This is so infuriating for taxpayers. Last May—five months ago—I was in Mount Isa and I bought something at Woolies, and a middle-aged lady who was supervising the Woolies automatic checkout said that she works two jobs, sometimes three. She was staggered with the level of tax in this country. Worse, she was disappointed with Canberra's politicians wasting money. It just alarmed her, frustrated her and angered her.

Thirdly, we have unbridled and excessive immigration, driving house prices through the roof. So we have an increase in house prices and a decrease in people's ability to afford houses, through energy and tax and many other factors.

And let me dwell on a few other things that gouge people and hurt people and suppress people. We have the UN's Lima Declaration, which Gough Whitlam's Labor government signed in 1975 and Malcolm Fraser's Liberal-Nationals government ratified the following year, in 1976. That destroyed manufacturing and incomes. A friend of mine gave me three plastic bags. They were not the sort of plastic bag that the Labor Party uses to collect cash. But one was, in fact, an Aldi bag, which had been made in Germany, and there was a Woolies bag that had been made in Thailand and a Coles bag that had been made in Malaysia. We don't make cars here anymore. Value-adding industries are being exported. Jobs are being exported.

Then in 1992 we had the UN's Rio de Janeiro declaration for 21st century global governance, which Paul Keating's Labor government signed and which the Liberals have since implemented. We had the UN's 1996 Kyoto protocol, which John Howard's Liberal-National government committed to fulfil. They said they would fulfil the commitments under the Kyoto protocol for the UN. Subsequently, the Labor government, under Kevin Rudd, signed it. Then we had the UN's infamous 2015 Paris Agreement. In my office I have a copy of some 7,000 bilateral and multilateral treaties to which our Liberal and Labor governments had signed us as of the 1990s. Heaven knows how many have been signed since then. Does anyone know? UN policies, agreements, protocols, declarations and treaties are killing our country's productive capacity and making housing unaffordable.

Then we have the housing land stock, which is under state and federal government control. They withhold land and that drives up the price of land. Added to that is the high regulation in this country, which adds tens of thousands of dollars to the price of a home. Liberal and Labor governments are failing the young, failing farmers and rural communities and failing the middle class.

Liberal and Labor have been reluctant to manage and constrain the banks, as the royal commission recently showed so clearly. We need competition in banking. We need a people's bank, such as the one that worked so successfully from 1912 to 1923, until it started to be dismantled by successive Liberal and Labor governments. That was the Commonwealth Bank—a people's bank. It was killed because it was effective in providing competition to the private banks, just as is the case now with the state owned Bank of North Dakota, which provides loans to farmers, small businesses and individuals. It is one of the only banks—I think it might be the only bank—in North America that has made a profit in every year of its existence.

The basics for housing were in a mess. So what happened then? The government didn't address the mess or the basics. The government, as part of its 2017-18 budget, established the National Housing Finance and Investment Corporation. This was recognition, supposedly, that greater private and institutional investment was needed to expand the community housing sector and provide more Australians with access to affordable rental housing. Let's put a bandaid on it or put it on life support without addressing the basics!

The National Housing Finance and Investment Corporation operates the Affordable Housing Bond Aggregator to provide lower-cost and longer-term finance for community housing providers by aggregating their borrowing requirements and issuing bonds into the wholesale market at a lower cost and longer term than traditional bank finance. Because the government is doing it, there is less perceived risk to the investment, so the government enables lower interest rates. But, in doing this, it transfers risks from purchasers of bonds to the government—or rather, more accurately, to the taxpayer. The government says that the benefits of accessing finance more efficiently will allow community housing providers to reinvest into expanding the supply of affordable housing. This will, they say, help to improve outcomes for social housing and homelessness.

The National Housing Finance and Investment Corporation also administers the $1 billion National Housing Infrastructure Facility. The National Housing Infrastructure Facility will provide the $1 billion to support local governments through a range of options to finance critical infrastructure designed to expand housing supply through, for example, special purpose grants for spending on transport links, power and water infrastructure and site remediation works.

This pair of initiatives has only been underway since March, when the corporations executives were appointed. Now we have a third part of the package: guarantees to improve homeownership. The guarantees provided by the National Housing Finance and Investment Corporation on eligible loans will be equal to the difference between the deposit, which is at least five per cent, and 20 per cent of the property purchase price. Firstly, because this will drive up housing prices so high, those who did the right thing—young people who saved and parents who went as guarantors for their children—will pay more for housing. Secondly, there will be an annual cap of 10,000 guarantees issued, leading to 50,000 houses being guaranteed over the five-year forward estimates. Thirdly, eligibility requirements for applicants include that the applicant must be a first home buyer and an Australian citizen purchasing property in Australia, and they must satisfy an income test—that is, taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples earned in the previous year. Fourthly, there will be eligibility requirements for loans. A loan is eligible if the residential property will be owner occupied and the purchase price of the property is less than the price cap that applies in the area where the property is located. These regional price caps will be set with the view to ensuring, so the government says, equitable access to the scheme across Australia. This is an unknown future regulation at this time.

Let's look at what the bills committee had to say about this. The bills committee objects to this legislation on the basis that all the rules around the actual operation of the guarantee scheme will be non-disallowable legislative instruments. As such, there is no parliamentary security on this scheme. How can we accept that? We can't. Further, those rules are not provided with the bill, so we are voting to set up a scheme that we do not know how it will operate and over which we have no supervision. What could possibly go wrong!

Let's have a look at the big-ticket policy. Let's calculate a simple understanding of the cost of guaranteeing the purchase of homes. Remember, there are 10,000 homes a year, so over the five-year forward estimates that's 50,000 homes. The average price of a house is, say, $600,000. The difference between five per cent and 20 per cent, which is what the government is guaranteeing, is 15 per cent of $600,000, which is $90,000. When you times that by 50,000 owners, that's $4.5 billion of taxpayers' money at risk. I'll say it again: that's $4.5 billion of Australian taxpayers' money at risk. The Australian housing bond aggregator issues bonds backed by mortgages and then lends that money to builders to build more low-cost housing. As such, the Australian housing bond aggregator is on the hook for a reduction in the performance of those mortgages, which is also tied to housing valuations. By 2021, the Australian housing bond aggregator expects to be holding $1.25 billion in housing finance bonds. Is there a limit to how far the government will go to keep the housing bubble going?

What about the administration cost? The administration cost is $25 million over the five-year forward estimates. This distorts the market. This whole bill distorts the market. The federal Liberal government's liability is just going to keep going up and up under this system both in guarantees and construction bonds through the Australian housing bond aggregator. By tying the federal government up with direct financial exposure to the housing market, it is building in a failsafe so that, no matter what happens, the federal government cannot allow or afford the market to crash. This feels like the government is putting a safety net in place for a potential looming property crash. Homes that fall below mortgage value can be moved over to this scheme so that the federal government can give banks a 15 per cent buffer and prevent foreclosure. If values fall even further in a wider or deeper crash, then the effect of this will be for the federal government to wear 15 per cent of the original valuation of each property as a straight up financial loss so the banks don't have to. Nice if you're a bank! The actual effect will be to sustain irresponsible lending by banks, as they will know that they are not wearing the risk. The federal government is wearing the risk; the taxpayer is wearing the risk. In turn, that holds up values in an environment where the direction should be downward, driven by falling affordability and falling demand. Perhaps this bill should be called 'keep the housing bubble going a bit longer bill' and 'make the federal government and the taxpayer pay for the crash bill 2019'.

I trust nothing about this bill. People can either afford a house or not afford a house. Government intervention just makes housing more unaffordable, not less; it'll drive the price up. Let's get back to basics, where I started with this speech. Let's stop the lazy and dishonest Liberal Labor government. Let's get back to basics: Let's restore affordable energy to increase take-home pay, useable pay, discretionary pay. Let's restore access to water. Let's comprehensively reform tax so that it is once again fairer and efficient. Let's cut immigration to put downward pressure on house prices. Let's restore our country's productive capacity—lower house prices will follow and will be sustained.