Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Climate Change and Energy Efficiency. Is the minister aware that according to the Housing Industry Association building approvals are down by 15.5 per cent compared with one year ago? Given this and the fact that global economic conditions are increasingly fragile, can the minister advise the Senate why the government is introducing the carbon tax, which will add an average of $5,000 to the cost of building a new home?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I understand Minister Combet has previously indicated the government's expectation in relation to the cost impact of the carbon price on housing supplies and house prices is expected to be less than 1 per cent. Information provided by the CSIRO shows that most of the products used in building a house, such as steel, cement and aluminium, will receive maximum rates of assistance under the carbon price Jobs and Competitiveness Program. The government has also, as Senator Payne would know, taken a range of policy initiatives to address housing affordability, with a package of measures to improve competition in the mortgage market, the National Rental Affordability Scheme—which is assisting with the construction of new affordable rental properties—and the Better Cities Regional Program.

There are a lot of claims being made about the impact of pricing carbon. Many of those claims do not stack up in terms of the Treasury economic modelling which was released, which was done by the same people who provided modelling to Mr Costello and Mr Howard and presumably who advised the Howard cabinet when it also adopted a policy of pricing carbon.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Mr Abbott.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Of course Mr Abbott was a member of that cabinet. I believe Senator Payne was one of those who used to believe we ought to act on climate change. It is regrettable that she, too, has chosen to engage in a scare campaign which is all about trying to divert this debate. The government understands that this is a difficult policy reform. It is not an easy reform. It is certainly an easy reform to campaign against but it is the right reform. (Time expired)

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Is the minister further aware that the most recent figures estimate the housing shortage in Australia at over 202,000 dwellings and that is expected to increase to over 300,000 dwellings by 2014? Can the minister advise the Senate of the extent to which the carbon tax will further increase the shortage of housing in Australia?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I think I have answered the question, and that answer refutes the proposition in relation to price and tries to set out the advice the government has rec­eived. One wonders whether or not housing programs would be amongst the $70 billion worth of programs that the opposition would have to cut. Perhaps Senator Payne, who has a good relationship with the shadow Treas­urer, is saying to us that the reduction in investment in housing under this government will not occur under Mr Hockey's $70 billion black hole expenditure reduction program. That is the reality. There are a lot of claims being made about what will occur as a result of the carbon price. Many of them do not stack up against the economic evidence. I have laid out for the chamber the government's advice in relation to the housing price issue. (Time expired)

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given that the costs of building materials, tools and fuel will all be substantially higher under the carbon tax of your government, can the minister confirm whether or not the government plans to provide compensation to the residential building sector?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I previously explained the likely impact of a carbon price on housing. I have explained that many of the inputs such as cement, steel, aluminium, et cetera, will be provided with the highest level of assistance under the Jobs and Competitiveness Program—94.5 per cent assistance. I would also say this: when the opposition were in government they had no housing minister and they cut funding to social housing by $3.1 billion resulting in a loss of 33,000 properties. What I suggest to you, Senator, is you might want to make sure that Mr Hockey, in his desperate attempt to claw back some economic credibility and to beat off Mr Andrew Robb for his job, does not come after your portfolio of housing when he is looking for $70 billion.