Gerard Rennick (Queensland, Independent) Share this | Hansard source

This bill, the Help to Buy Bill 2023, epitomises everything that's been wrong with government policy over the last 40 years, and that is, effectively, governments have privatised all the public assets and now they want to nationalise all the private assets. The whole point of government is to build infrastructure that provides essential services and have that infrastructure generating recurring revenue to pay for the recurring costs of schools and hospitals. But we are now going to risk $10 billion of taxpayers' money to build 30,000 houses over five years, or 6,000 houses a year. When you have an immigration rate of over half a million people a year, how hard would it have been to just lower the immigration rate by 10,000 or 15,000 people? There's your problem solved; you don't even need to look at putting $10 billion on the line.

But I do want to talk on a couple of other things when it comes to the cost of housing. In particular—and it is going to be one of the policies that I put forward—we need to abolish the CGT discount of 50 per cent on shares and houses. That costs the budget $20 billion a year, and it would fund, for 10 million workers, a tax cut from 30 cents to 20 cents between $45,000 and $65,000. I don't agree with abolishing negative gearing, because people do lose money in the genuine remit of trying to generate income, and you've got to have that nexus between incurring an expense and trying to produce assessable income.

One of the things that I won't have in this debate—and I disagree with One Nation on this—is that somehow we need to encourage more property investment in this country. We have way too much money invested in passive property and rental property. I'm not against owning a second rental home as a bit of a security. By all means, own your own home and one other rental property. But we have some people here who own numerous rental properties. If you've got a couple of million dollars laying around, or $4 million or $5 million, go and build a factory and create some jobs. We need to develop our secondary industries in this country. Our economy is basically houses and holes. We can't continue to rely just on the mining sector, and we can't continue to rely just on the housing sector. It is a Ponzi scheme.

It basically started in 1985 when Paul Keating introduced CGT into the economy and left houses out. Apart from destroying our live pub sector—Sydney used to be the source of many great rock bands, and it has now turned into a housing conglomerate; all people ever talk about is housing—it inflated the price of houses. In 1985, the four major banks had $8 billion in foreign debt; by 2008, they had $800 billion in foreign debt. Most of that money was lent against housing, and it pushed the price of houses up from four to five times earnings to 12 to 13 times earnings. That in itself then pushed two parents back to work. It meant that we needed child care. It meant we had both parents running around picking kids up, dropping them off et cetera. We had no-one manning the tuckshops at schools.

The second part of that was in 1996, in the late nineties. Howard, on the back of the Ralph review—I think it was that, or the Wallace review; I get confused between those two—basically introduced the 50 per cent CGT discount on assets. He didn't abolish indexation; it's still there, but, of course, most people now use the 50 per cent CGT discount. That again inflated houses way above the rate of wage growth in this country. It's one of the reasons why people struggle to get into the housing market: the tax on active income on a wage is so much higher than it is if you make a capital gain on property. We need to level the playing field here. If you earn $100,000, you should pay the same rate of tax or the same amount of tax, no matter how you earn it. But we have a distortion in this country where people who actually get out of bed, put their nose to the grindstone and actively engage in being productive pay twice the rate of tax as passive investors, and that is completely unsustainable. That is something that I'm looking forward to looking at when we have this review of the tax system in the Economic References Committee. We'll look at this because this is something that has to be dealt with.

The other thing that is leading to housing unaffordability is the fact that 12 per cent of people's income is taken from them and given to someone they've never met. When I say '12 per cent of someone's income', that's 12 per cent of their gross income. For many low-income earners, it's 100 per cent of their savings if not more. For many people who earn less than the cost of living or just on the edge of the cost of living, that 12 per cent of their gross wage is the difference between them earning take-home pay above the cost of living and earning that below the cost of living. That is another reason for the People First policy—we're going to actually lift the tax-free threshold from $18,000 to $40,000 because I think it's completely wrong in this country that people pay income tax below the cost of living. We want to encourage people to get out of bed and put their nose to the grindstone. If these people are getting out of bed and putting their nose to the grindstone rather than sitting at home smoking dope all day, then that's a good thing. The last thing we want to do is to see these people struggle. The best way to encourage them is to give them hope, give them incentive, and there is no better incentive than to own your own home. If you think you can afford a home—I feel sorry for people in the major capitals today, especially Sydney and Melbourne, where the average house price or the median house price is about $1 million. Young children today have just totally lost all hope in ever owning their own home.

It's interesting—I'll tell a personal story. I didn't buy my own house until I was in my mid-30s. Ironically, I met my wife there. That's where I first met my wife, at my housewarming. People often say, 'What comes first, the chicken or the egg?' I say, 'It's neither; it's the nest.' If you've got a good house over your head, you will settle down and start to work hard. Suddenly, you won't go out at five o'clock anymore as you do when you're single in your 20s. If you do have a girlfriend, you don't want to go around and sit on the couch with your two mates with empty pizza boxes strewn all over the floor. It is much better to own your own house. I can tell you from personal experience.

Senator Hanson-Young, you know that's true. So we have to look at making superannuation accessible.