Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

My comments will dovetail quite neatly with those of Senator Singh, because the issues that I would like to speak of go very strongly to issues of equality as well—not just income or gender equality but asset equality. Of course, I am speaking about housing and housing affordability, because it is one of the things that many of us take for granted in Australia, and this has come from our history: we believe housing is a human right. Having a roof over your head and having sustainable and affordable tenure is something that we in Australia think of as a right. In the minds of many, housing has become just another asset class, just another property to be bought and sold in the great game of Monopoly. A number of trends have pushed it in this direction, and those two agendas are completely at odds. If you are an investor and you are looking for capital appreciation at a rate that is as high as possible, eight or 10 per cent a year, that is quite clearly going to completely contradict the aspirations of many people for affordable housing and for some stability in the housing market.

I welcomed the launch of the Australians for Affordable Housing campaign in this building on Monday. This is a coalition of over 60 national housing, welfare and community sector organisations who are calling on all levels of government to make the changes necessary to ensure that all Australians can find an affordable home. This is a group that is saying, loud and clear, that the problem of housing affordability has gone on for too long. Plenty of people have noticed it. The Australian government has noticed it. The opposition has noticed it. But it seems intractable. It is time to fix our housing system.

What is needed is a clear national plan to deliver affordable housing to all Australians, and the Australians for Affordable Housing alliance offer a six-point plan that goes directly to the heart of what is wrong with our housing system right now. The first thing that they ask for is investment in more low-cost rental housing, because the housing debate in Australia is skewed towards homeownership. Obviously, homeownership is something that we in the Australian Greens support, and it is great for the people who can get into the market, but what about those who cannot? What about the entire generation of people who have simply been priced out of homeownership? We also tend to forget the fact that so many people rent. Between 1996 and 2007, the number of affordable public housing properties shrank by 32,000, while the population grew by 2.8 million people. This is despite the record one-off $5.6 billion spend on social housing as part of the stimulus package which will deliver around 20,000 new social housing dwellings. We supported that initiative. I think it was one of the better parts of the stimulus package that the government, with the concurrence of the Greens, sought to make investments in public housing. It solved an issue in the building sector and got people back to work, but it also started to fill this enormous gap in unmet need.

The minister for social housing, Mark Arbib, said earlier this year in a speech that there was underinvestment of $3.1 billion by the previous government in social housing. He noted that the current housing shortfall was 90,000 homes, with 60,000 households in greatest need. That gap will rise to 150,000 by 2020, and the cost to meet that shortfall is $24 billion. But the Minister for Social Housing and Homelessness, who presides over 105,000 homeless people, says that the government does not have the money. There is no plan, there is no proposal, to plug that shortfall of $24 billion. He says it is up to the affordable housing sector to build it, it is up to the community housing sector, it is up to investors. He wants to leave it to the market to fix a market failure and chronic underinvestment by successive governments. The problem with this thinking—and the fear of government intervention that it seems to embody—is that the housing market is broken. It is not operating efficiently at the moment—unless you have six investment properties; then you would be doing reasonably well out of the increases in the housing market that have occurred over a decade or so. This is why we need long-term planning, funding and targets for social housing as a proportion of all stock based on housing need. The stimulus spend was absolutely welcome, but even the government and the minister concerned have acknowledged that it does not go nearly far enough because our private rental sector is partly what is out of control. The current gap is around 493,000 affordable and available rental dwellings for low-income earners. In the past five years, rents have risen at twice the rate of inflation. They have almost tripled in capital cities around Australia in the last decade. At the last census, 65 per cent of renters were experiencing housing stress and the next census will no doubt see this figure rise dramatically. We cannot just sit back while this happens.

We know that in our mining regions the boom has amounted to an unbelievable boom in rental prices. We think things are out of control in Canberra, Sydney and central Perth, but the median rent in Karratha and Port Hedland in Western Australia is now $1,500 to $1,700 a week. The rent in Gladstone in Queensland jumped 15 per cent in a year, and the situation is worsening as well in the so-called 'muscle towns' of Mackay and Townsville in Queensland and Whyalla in South Australia. So the people on the front line who are meant to be benefiting from the mining boom are actually doing the worst. Boom times come with a desperate shortage of housing to buy and rent. The only people who can afford to live in some of these communities now are people who are being subsidised by their employers. That is pricing key workers out of the market and it is making homelessness vastly worse. In the boom towns of the north-west—and I presume it is exactly the same in Queensland—Aboriginal people and long-term residents of those communities can no longer afford to live there. They are flying in and flying out people to clean schools in Karratha and Dampier.

The second ask of the housing coalition that was launched this week is for financial assistance for low-income renters. This is probably the simplest and most obvious case to make. The current rates of Commonwealth rent assistance are simply nowhere near enough. In the last ten years, rent assistance has risen by about nine per cent, or $35, while rents across all major cities have increased by at least five per cent per year. So we are falling behind rapidly. In the last three years in Perth, rent for a two-bedroom unit rose by $100 a week, a lift of 40 per cent, at the same time as CRA is crawling upwards very slowly.

A single student who earns $377 a fortnight on Austudy gets an extra $119 a week in rent assistance. That is an income of $248 a week, yet median rents in capital cities are now $380. That leaves $58 for everything else. National Shelter and ACOSS have called for a 30 per cent increase across the board and for assistance to be pegged to regional rent variations. The Henry tax review calls for maximum rates of rent assistance for income support recipients to be substantially increased and linked to movements in market rents. It is essential that Commonwealth rent assistance pays some regard to what is happening in the rental market. Addressing the inequity and the gravity of the problem with our rent assistance is well overdue.

The third and fourth asks by the housing coalition are for more opportunities for low-income households and first homeowners to access home ownership. Particularly for people trying to get in as first home buyers, generational inequity has emerged in that the housing market has become warped beyond all recognition just in time for people of my age and younger to find themselves completely locked out of the market. The income simply is not there. Hearing all these demands by big business for labour market flexibility makes it very difficult to contemplate taking out a 20- or 30-year loan.

In the past decade, house prices have risen dramatically and have torn away from modest gains in income. The average house now costs seven times the average worker's wage. This is not how the situation was when people of my parents' generation were getting into the housing market for the first time. Even ten years ago it only cost four times the average worker's wage. In my home state, the median house price in the capital, Perth, was $535,617 in the June quarter. Prices are down two to three per cent recently, but that needs to be seen against the backdrop of a 222 per cent increase in Perth in the last decade. It is completely unrealistic for investors to think that that kind of capital appreciation can continue without warping the market beyond recognition. It is unsustainable, it cannot continue and it is strongly disadvantaging younger people.

The 2011 Bankwest Key Worker Housing Affordability survey showed 78 per cent of capital city local council areas were too expensive for key workers to buy a house in 2010. While we are used to having to deal with the idea of people in the lowest income quintiles not being able to afford houses anywhere near the areas where they work, this is affecting key workers and people on what we would consider to be medium incomes. The same report showed that not one of Perth's 291 suburbs is affordable to key workers, including people like teachers and nurses. Something is clearly and devastatingly wrong when key workers cannot afford to live anywhere in the city. Something is also wrong when only the very wealthy or people who are prepared to live further and further over the horizon at the edge of cities can even contemplate buying their own home.

The government response has been a demand stimulus, a handout to inflate the price of housing in the form of the $7,000 first home owners grant that has cost the country $13 billion to date. It is inflationary, regressive and despised by countless economists, except unfortunately those in Treasury, who refuse to do any modelling on the impact of just handing over money which then passes straight through to an increase in house prices. What could have been done with $13 billion in genuine housing affordability initiatives or in help for people to get into their first home? For the same amount, we could have seen 43,000 actual houses built or 1.3 million National Rental Affordability Scheme incentives to increase supply rather than inflate prices as people bid up house prices without doing anything to increase supply.

Other incentives like the First Home Savers scheme and shared equity schemes are much more responsible and effective. WA is leading the way in some of these things—in a tentative way, but they are there with a shared equity scheme. Cooperative housing and community land trust models must also be given their time to shine. Maybe the era of fewer and fewer people living in larger and larger houses on the fringes of our great cities is coming to an end.

The housing coalition also have called for a change in the housing investment tax arrangements that drive up house prices. We are seeing investors crowding into the market, bidding up house prices against people trying to purchase their first home, and it is putting enormous distortions into the rental market as well. The Australian tax system provides the largest source of subsidy for housing consumption. Anyone interested in these impacts should read chapter 4 of A good house is hard to find: housing affordability in Australia, the report of the Senate Select Committee on Housing Affordability in Australia, which my colleague Senator Rachel Siewert made a huge contribution towards. Alternatively, they should read the sections on housing in the Henry tax review.

The Senate select committee investigated factors influencing the demand for housing and reported that the combined total of capital gains tax arrangements, land tax exemptions, negative gearing arrangements and so on is of the order of $50 billion per year. That is spread across the Commonwealth and state systems—$50 billion a year in concessions while we are spending something of the order of $2 billion or $3 billion a year on genuine housing affordability initiatives across the country. The Greens have recognised this for many years. It is not a secret—the housing affordability peak bodies have been pointing this out for literally a decade or two.

We are an outlier in terms of how generous our taxation system is towards housing owners, investors and even speculators. There are many more people who would stand to benefit from improving the fairness of our tax system and moving our investment towards affordable rental supply than there are people who would potentially lose out.

My final ask is about a subject that is a real bugbear for me and it is something that I have consistently raised since the last election because I find the government's reasoning absolutely incomprehensible. One of the lesser discussed impacts of the last election was the loss of a dedicated housing minister. We now have a machinery of government, for housing, that is just a scrambled egg—it is just a bowl of spaghetti—if you are trying to work out who is responsible for which parts of the housing portfolio. I do not understand why the environment minister is now responsible for housing affordability. I have asked many times why the portfolio was demolished and nobody is able to give me a sensible answer.

Former Minister for Housing, Tanya Plibersek, was the first dedicated housing minister in Australia—certainly in recent political history. That was a key demand of the Greens in the run-up to the 2007 election. The Australian government responded to that and we got a housing minister who was competent, effective and compassionate. Australians deserve to have one person and one ministry responsible for providing safe, secure and affordable housing. This is not a comment on any of the ministers, like Senator Arbib, who suddenly found that housing was part of their portfolio. He is doing his very best with the resources that he has, but I do not think it is clearly understood, even in government, who is responsible for which bits of the portfolio. This is a key request of ours and I believe it is shared by the coalition. Certainly Senator Marise Payne has done an enormous amount of work on these issues. Just bring it back into a single portfolio so that we know where responsibility lies. Without a dedicated minister, I think there is very little hope for a housing strategy.

The launch of the Australians for Affordable Housing campaign on Monday was, I think, the beginning of a very important conversation that we need to have in Australia to make sure that Commonwealth and state housing spending, and the way our tax system is structured, is not regressive—that it genuinely helps people to get into homes. Whether it is getting renters stable and secure tenure, getting first homeowners into homes or allowing people to move from one home to another without being beaten to death with stamp duty, there are so many issues that we need to take on. Let us get on with it.