David Pocock (ACT, Independent) Share this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for more government action to tackle the root causes of housing unaffordability, including capital gains tax discounts and unlimited negative gearing on investment properties, planning and net migration.

We rightly hear much talk in this place about cost of living, with Australians across the country feeling the pinch. Heading into Christmas, they're worried about paying the rent or paying the mortgage, let alone what they're going to do with their loved ones over the Christmas and New Year festive season. The thing that we don't hear enough about, in my opinion, is the link between housing and cost of living.

We've got to start having a more frank and open conversation about housing in this country. I think we need to go back to the big picture: what is housing for? Is housing a human right that everyone in our community should be able to afford? Everyone should be able to have a safe roof over their head, which then enables other things, like being able to have a stable job and family life, attend school and all those things. Or is housing primarily an investment vehicle? Yes, some people can afford to buy a home, but we've set our tax system up to incentivise investment in housing to build wealth. Clearly, if you look at the system now, it's not working for Australians, but it's working as designed. It is working exactly as designed—to incentivise investment in property, above treating housing as something that everyone in our communities should be able to afford.

What I'm hearing from people, even people who've made very good money out of the housing market, is that they have grave concerns about the direction that we're heading in. They may have made money, but they're now looking at their kids or grandkids: what are the prospects for them? I think we're facing a generation of young people who are rightly angry about the situation and who are demanding that people in this place, who can change this, do something now. We look at house prices now that are seven to eight times household incomes. From the fifties to the eighties, they were closer to three or four times. Monthly repayments on a $750,000 mortgage have now increased by over $1,800 since interest rates began to rise. We see that, as housing prices have gone up and up, more and more people are renting, and for longer—almost one-third of the population. This is by design. We need to have the discussion around tax in this country when it comes to investment properties.

The capital gains tax discount cost the budget around $4.7 billion last financial year. The PBO forecasts that in a decade's time that will increase to $7.7 billion. Negative gearing modelling from the PBO shows that, at a cash rate of 2.85 per cent, negative gearing will cost the budget $12.7 billion in forgone revenue between 2023 and 2033. To add insult to injury, the PBO estimates that 39 per cent of negative gearing benefits go to people earning the top 10 per cent of income.

This is having real consequences in our communities. We talk about social cohesion. We talk about income and wealth inequality. We need to do something about housing in this country, and we're not going to do it unless the major parties are actually willing to listen to people and engage in this and get away from the outrageous politics that we've seen around things like negative gearing. There are sensible ways to start turning this around, including by capping the number of properties that can be negatively geared. All the solutions are out there, and there are millions of Australians urging us, willing us, to engage in this and deliver for people. Deliver a fairer system that will create the Australia we want.