Tuesday, 5 December 2017
Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, First Home Super Saver Tax Bill 2017; Second Reading
The idea from the movie Groundhog Day is something that I think is a modern trope that everybody understands—where you have to keep going over the same thing, and eventually, sometimes, the lesson gets learnt. So, it's an act of hope, I suppose, that I come into the chamber this afternoon to say, 'We need to talk about superannuation.' We need to keep talking about superannuation to this government because, when it started, they didn't understand it, and through the progress of the years, they've tried to impede its growth and development over and over.
Yesterday, we saw them really trying to have a go at Industry Super, which is delivering a two per cent to three per cent better result for its members than the banks are doing with the superannuation that they look after in the retail sector. We saw them wanting to attack that. And here we are again, and I'm going to have to do it all over again because this government—the Liberal-National coalition—do not understand what the people in the gallery and across this nation understand, which is that superannuation is a very important investment for Australians. We understand it. We know how important it is. They shouldn't be treating it like a little piggy bank that they can raid whenever they get the opportunity. As soon as they get into government, they go after superannuation. The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 is another attack on superannuation, and it reveals, once again, that this is a government that just doesn't get it.
Back to the history—superannuation is a Labor idea, implemented by a Labor government all that time ago under Paul Keating. Let me tell you, I grew up in the western suburbs, in the working-class suburbs. My father was an Irish immigrant. He ran a small business. He employed lots of people. There was not much talk about superannuation in our house. I didn't know what a public servant was. Superannuation wasn't something that we knew. But Paul Keating did. And as a leader in the Labor Party, he put a marker in the line of the history of this country and said, 'We are going to build a superannuation system that will support Australians, who will be able to retire with dignity.' Australians who didn't have great wealth already, Australians who were just going to work hard all their life, look after their families, contribute to their community, pay their tax—those Australians. The real ones. The ones on whose back this country has been built. They're the ones that Paul Keating was standing up for with his visionary view of what could happen if we actually did invest in superannuation.
The government from the beginning completely opposed this. They had all sorts of claims: the economy would collapse, small business would never survive and we'd ruin jobs and the future of the nation if we instituted superannuation. But here it is, down the track, and every Australian today—even young people who are starting on their first jobs, hopefully in a retail situation where they join the union, the SDA, and start to contribute to their superannuation—with a $2 trillion set of funds in superannuation are in a vastly different position than they were when this government decried superannuation in the first instance.
We started off with a small amount. Incrementally, we got up a little higher. Labor wanted to get to 12 per cent. As soon as Tony Abbott came in, that whole incremental increase stopped. When you change the government and you put this lot in, it changes your economic future in a very bad way if you're an ordinary working Australian. And they'll come up with all these little distracters, gifts and cute arguments, and they'll pretend that they're great economic managers. But I'll tell you who they're great economic managers for: people who've already got a hell of a lot of money. They're great economic managers for the banks. They've stood and waited for the banks to tell them, 'Okay, we're ready for a royal commission, and this is what we'd like it to look like.' That's the sort of government this Liberal-Nationals government is. Instead of doing the right thing by Australians, they pull a con job as often as they can.
That is why Labor of course does not support these bills that are before the house right now. I know that people across this country are concerned about the affordability of housing. Well, let me tell you, in the last period when Labor was in government we built over 20,000 houses. We still haven't caught up on what John Howard had taken away. The minute they get in, they cut investment in housing. And we've got this same attrition of housing access and housing affordability under a government that continues to claim economic credentials that it simply doesn't have. These bills that we are debating today will do absolutely nothing to reduce pressure on housing affordability—unlike what the government is signalling in the bizarre title of this bill. This is what it's called: the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill. Well, that's the first deception. With this legislation they're not doing what the title suggests. And that's what you get: you get this sort of front. But you've got to be a bit smarter than that. Don't accept what they say, because behind that front is always an attack on the life of ordinary hardworking Australians—the people the Labor Party stands up for.
Alongside not addressing housing affordability, with this piece of legislation they're looking to ruin another bit of our world-class superannuation system. These bills show that the government doesn't understand the purpose of the superannuation system, as I said in my opening remarks. This bill will do one thing. It'll undermine Australia's superannuation system, and Labor cannot and will not support it, because it's only the Labor Party that will always fight to protect your superannuation. For men and women, Labor is the party of universal compulsory superannuation. We decided that it was an important thing. We invested in it, we made it happen, we legislated for it, we've protected it, we've grown it and we've nurtured it, until we were in the position that we are, with a sound and solid superannuation system. There's more work to do to make it better. But every time this government gets in, they try to whittle it away, and this is another example of an attempt to whittle it away.
We know that Australia's housing affordability issue is something that wrests the mind of every Australian, whether you're a young person who says, 'I wonder if I'm actually going to be able to afford a house like my parents,' or whether you're a parent who says: 'I'm so proud to be an Australian, I love this country, I'm so glad I grew up here and I'm really happy that I was able to afford a house, but what about my kids? Will they have a chance? Will their children have a chance?'
Grandparents are saying, 'This is not the kind of situation that I thought I'd see in my country.' Instead of really addressing the fundamental problems we have around housing with carefully considered strategy, we have this government of dysfunction, disunity and chaos cobbling up misnamed bills and pretending to do something good for the Australian people.
The Labor Party has led the genuine debate about affordable housing. We've committed, in opposition, to important negative gearing and capital gains tax reforms—critical to keeping the pressure down on prices and making sure that people can afford a home, and ensuring that the taxation system shouldn't support people who have multiple opportunities to grow their wealth through many, many houses while young people in our country can't get their foot on the ladder to buy their very first house. The Labor Party is committed to making the taxation system fairer and to helping ensure ordinary Australian men and women can afford to buy a house and can have financial security for their families not just at the time they purchase a house but at the time that they grow their wealth over the course of their life and by the time they retire. That's what superannuation is about. It's about making sure that every Australian is in a position to retire with dignity. Before Keating made that happen, that was not the case in this country.
Instead of addressing the housing affordability issue, the government is exploiting the taxation structure of the superannuation system through this bill, and its exploitation goes against the purpose of superannuation. We all know that the superannuation tax structure is quite generous. It offers incentives through the tax system as an important way to encourage Australians to save for their retirement, and that is particularly important in a system where contributions are compulsory. There's a flat and generous taxation structure on the superannuation system, and it's meant to create an incentive so that people save for their retirement understanding that the dollars that they put in are taxed at a lower rate than they might be paying on their actual wages. The government argues that the purpose of super is to provide income in retirement to substitute or supplement the age pension—that's in the government's objective statement on the bill. But we, in Labor, see this superannuation system as much more important—much more than just that one goal. Older Australians who've worked all their lives should retire not in poverty; they should retire with financial security and, above all, with the dignity of savings that they've accumulated over time that have been invested wisely, that have grown their wealth, so they can make the choices they want to make, they deserve to make, in their retirement.
The taxation structure facilities that will allow that are ones that Labor supports—but not this bill. We know that most of those people in the top tax brackets gain the most benefit from taxation structures around superannuation. With that background, how is opening up the super system to people to put more money in it going to help those who cannot afford a home? The title 'the first home super bill' is a complete misrepresentation. It will not help young people on low to middle incomes in Australia purchase a home. In fact, researchers who look at the impacts of government decisions on superannuation have argued that it could lead to exactly what we don't want to occur—an increase in house prices, putting more pressure on families and also putting more pressure on the age pension. Instead of focusing on the structural issues that are facing our superannuation system, we can see through this bill that the government remains focused on repurposing or redesigning the system, ignoring its ultimate purpose for the Australian people. The current superannuation system is facing some challenges. It needs work to make it fit for purpose for our time.
One of the big problems we face—I want to put this on the record today when I know many of my colleagues are wearing white ribbons as we talk about women, about equity for women and opposing domestic violence—is that there's a huge gender gap. We have to make sure that women in retirement are safe, that if they need to they can make choices to leave unsafe relationships. That is a real issue that the government should be dealing with, and I wish I were in here talking on a bill addressing that problem. But we're not going to see it from this government. We're going to see something dressed up as something else and we're going to see an erosion of good policy for ordinary, hardworking Australians.
The facts demand reporting here. We know that women, on average, retire with around half the superannuation of men. That's just not acceptable. They do a lot more than half the work in many, many situations—certainly around the house. That remains the evidence we see: full-time working women doing many more hours of housework at home than their partners. Of course, those opposite will say, 'Well, they can just rely on their partner.' But that is a comment from another time. That is not the Australia that I've brought my daughters up to be a part of, as equal participants in creating the knowledge, the community and the wealth of this nation. Women are entitled. There are 50 per cent of us; it should be fifty-fifty. That's not the case in superannuation. In fact, older single women are one of the fastest-growing cohorts of people living in poverty. The Labor Party believes that financial independence is a critical goal that we must strive towards for this group of Australians.
The gender pay gap is a factor of interrupted work patterns and insecure work for women. Those are the things that cause the gap. It has been caused in part by cultural norms around what a woman's 'proper place' is. It cannot be into the future, but it's something that we're dealing with at this point in time—the legacy of that attitude. Until we have a proper change in cultural attitudes towards women and men in the workplace and with regard to superannuation, we should focus on ensuring the superannuation system works for all Australians—not just those working full-time, who are predominantly men; not just those in high-paying jobs, who are predominantly men; and not just those in continuous employment, who, sadly, are predominantly men. Things can change. Things will change. Paul Keating instituted superannuation. What a change that turned out to be! But we've got to set our sights on the right goals, not the sorts of goals that this bill seeks to achieve.
One union that is so often maligned by those opposite but is standing up and fighting for ordinary Australians is the SDA. Time and time again it's spoken about the need to ensure the gender gap in retirement is eradicated. With around 60 per cent of its members being women working in the retail sector, it is very well placed to fight for the rights and equity of those women. One of the things that unions do—unlike the ridiculous caricature of unions that we constantly hear from the other side—is invest in the intellectual work of putting together submissions to the important work that this parliament does. They put on the record what's happening to working people. The SDA did this work. It got together a submission to the Standing Committee on Economics in which it recommended that superannuation actually be paid on paid and unpaid parental leave. They said:
Women's participation in both paid employment and unpaid caring responsibilities must be genuinely acknowledged and reflected in meaningful policy outcomes to ensure that women are not relegated to a life of poverty and distress in their retirement years.
I don't know how anyone in this chamber—whether they are a clerk working here; the Deputy President; one of the staff in the advisers' boxes, who are here supporting us; the person doing the Hansard; or a person in the gallery—could disagree with that. We actually believe in egalitarianism in this country. But, instead of doing something about that, the government are sitting here trying to take away the capacity of superannuation to deliver a decent, dignified retirement for all Australians. They're not dealing with the gender equity gap; they're just turning a blind eye to it. Mind you, it's pretty easy to turn a blind eye to it when you've got hardly any women in your party. That's another difference between the government and the Labor Party. Unlike this government, the Labor Party believes in pursuing proactive policy settings in superannuation that equitably maximise retirement incomes and seek to address the structural labour market disadvantages that women face. When you're in part-time employment, when you're not guaranteed employment, when you take leave to have children, that pulls you back. We need to do something about that, we need a vision for that, and we're not going to see it from those opposite.
Labor also believes in the necessity of superannuation to fund decent retirements for people who are challenged by the changes of automation and technology. We need to embrace the advantages of innovation when it grows our economy. We need to make sure that the technological changes that are part of our time create new roles and great jobs for the men and women of Australia. We know that, to make that happen, we have to invest in education. That's not what we're seeing from those opposite. They're not saying, 'Let's skill up, let's increase the wealth of the nation.' These guys are saying: 'Let's raid the piggy bank of superannuation, because the people are too dumb to figure out that, if they put the money away now, it'll affect them in retirement. We'll get away with this. We'll look like we're doing something about housing.' That's how cynical this bill is. They're attempting a little swiftie: 'Don't worry, the Australian people won't notice.'
I'm sure the Australian people are beginning to wake up to the fact that they cannot trust this government. This government lacks unity. It's eating itself alive. The Nats are fighting against the Liberals. This government has no vision for superannuation and has never had a vision for superannuation for the people from Curran Road, Blacktown, where I grew up, where no-one talked about superannuation. People are talking about superannuation now, because Labor put it on the agenda, and I reckon they're smart enough to figure out that this government doesn't give a toss for ordinary working people and their superannuation needs. This bill is another example of the fact that this Liberal Party, under Malcolm Turnbull, just doesn't get it.
Thank you, Senator O'Neill, for that very enthusiastic discussion of the benefits of superannuation in our country. I'd be the first one to join with you in acknowledging what former Prime Minister Keating did when he was Treasurer. I think superannuation has a very strong and sound place not just in our financial system, where it provides future investment opportunities in important projects, but in the benefit it has given ordinary Australians like my parents. I was born and bred in a working-class part of Perth, in Perth's northern suburbs, and am proud to say that my parents still live in their home of the last 40-odd years, with a very modest extension that allowed their two elder sons to not have to share a room anymore. These are the lived experiences of Australians. We know that providing Australians with affordable housing choices is a critical work program of any Australian government, and I'm pleased that this coalition government, led by Malcolm Turnbull, is doing exactly that. Giving Australians affordable housing choices and addressing other housing issues has been front and centre in the work of this coalition government and of Treasurer Scott Morrison, supported by the assistant minister, Michael Sukkar.
In the brief time available to me this afternoon I will share with the chamber what the government is seeking to do with these pieces of legislation and how the government proposes to do that. While the contributions of other senators with regard to the historical policy development in this area and broader economic areas provide interesting content for senators like myself to listen to, I think it is important that we focus on the current situation and how that informs our future policymaking. I'll speak briefly about that, drawing on some of the comments that the Assistant Minister to the Treasurer made in the last fortnight to the Australian Property Investors conference and also focus a little on the important issue of supply. I'm one of those people that believes discussions around housing access necessarily involve a discussion about the supply of land available for future housing stock. In addition to that I will talk about some commentary that has been made by the Reserve Bank of Australia in a submission to the House of Representatives inquiry into homeownership.
It doesn't matter what particular economic debate it is that we have to face in this chamber; it necessarily requires us to make decisions or choices about what sort of information we are going to rely upon in order to inform our decisions. We heard from Senator O'Neill that she puts a lot of faith in the informed or researched views of some elements of the trade union movement. I'm not saying whether that's right or wrong. I'm just reminding people that when we come to debate particular issues in this chamber we bring our own world view.
For my own part, I prefer to trust the judgements and historical evidence that have been accumulated by organisations like the Reserve Bank of Australia. I rely on the information that's brought forward in public debates and discourse from the Reserve Bank for a number of reasons. I do think that they have a corporate knowledge around these issues that is built on access to very substantial evidence that other stakeholders don't necessarily have.
I regard the Reserve Bank as genuinely independent. It would be very hard for anyone in our country to argue that it is not independent. Perhaps more importantly, when we think about who the custodians of the future economic management of our country are, some people will say, 'That's definitely Malcolm Turnbull, because he's the Prime Minister,' and some people will say, 'That's definitely the Senate chamber, because they're parliamentarians and they're interested in the economic future, and they want to win elections and get the support of constituents.' I argue that it's trusted institutions like the Reserve Bank of Australia, which will be there when Senator Smith moves on, when Senator Duniam moves on and, indeed, when Malcolm Turnbull is no longer the Prime Minister. Trust in the corporate knowledge, trust in the judgement—the very informed and, I'd say, considered and cautious judgement—of institutions like the Reserve Bank of Australia is certainly something that guides my views on these issues.
I'd like to share with the chamber and put on the public record a number of comments that the Reserve Bank of Australia made in a recent submission to the House of Representatives inquiry on homeownership. Its submission starts by saying:
The Bank recognises the importance of housing to the people of Australia.
There'll be little or no argument in regard to that. It says:
Shelter is a fundamental human need, and purchasing the home one lives in is usually the largest financial investment a household will make. The affordability of suitable housing is, appropriately, a central concern of government policy …
So what we're dealing with here today is not just any bill, any piece of legislation. It goes to the heart of what is a core concern for every Australian—a core responsibility of every Australian government—and that is to make housing choices available to Australians.
I want to share with you three points that were made in this particular Reserve Bank submission. The first point is what is happening to aggregate homeownership in our country. The second is to provide some context to the commentary we heard last night when we were debating this bill, and when Senator O'Neill did this afternoon, about the appropriateness of the taxation arrangements regarding housing and how they compare internationally. The third put this in the most important context: what is the demographic change that's been happening in our country not just for the last few years but over the last decades? How does that inform government decision-making and whether or not government decisions are properly accommodating the demographic change and, as best they can, trying to understand what that demographic change might look like in the future?
If I turn briefly to the first point, the aggregate homeownership issue in Australia, the submission says:
The aggregate home ownership rate in Australia has been broadly steady since the 1960s. Prior to that date, the rate was much lower. The home ownership rate for typical first home buyer age groups has drifted down over several decades. The pace of decline has not increased noticeably recently, but the underlying drivers of the decline might have changed. These trends have been roughly offset by the ageing of the population, so that the overall home ownership rate has been stable.
That's interesting, because if you listen to some of the commentary in this place, but also the commentary more broadly, you would think that the homeownership rate in our country has been declining, or significantly declining. The RBA makes the very important point that aggregate homeownership in our country has actually remained stable. I put that point on the public record because I think it is important. If you listened to some contributions, you would think issues around housing and affordable access to housing are in a dramatic state of change. That's not true, and I use the aggregate homeownership point to demonstrate that there is a tremendous amount of underlying stability in our housing arrangements in Australia. But that's not to excuse the fact that demographic change—the ageing of the population, for example—is not an important issue and is not having a bearing on how we consider these issues into the future, and that is not to diminish the very, very important issue of homelessness in our country.
Secondly, could I make a point in regard to the taxation arrangements in Australia and how they compare internationally. The Reserve Bank of Australia's submission makes this point:
Housing, particularly owner-occupied housing, receives preferential taxation treatment in many countries, and Australia is no exception.
That's a true statement, and over the course of last night and this morning we've had people reflect on the appropriateness or otherwise of that taxation treatment. The submission further states:
Australia’s taxation system is also relatively generous—
but, before people get too excited, let me finish the quote—
to small investors in buy-to-let property compared with some other countries, because investors can deduct losses from their investments against wage income as well as other property income, and because capital gains are taxed at concessional rates. However, there are some other countries where the tax preference for investor property is even stronger than in Australia.
I make that point to remind people—and I will be the first to admit, perhaps a little dangerously: I do think taxation arrangements regarding homeownership in Australia are worthy of more detailed discussion. I'm going to put that right out there. Let's hope no-one's listening! I do think that—that's my honest opinion. But, more broadly, I make that point because I think it's important that we understand that, while on the surface of it, if you listened to some of the contributions last night, you would have thought that Australia had an overly generous taxation arrangement in regard to homeownership, that's not true. Yes, Australia does have a generous arrangement, but there are arrangements in other countries and other jurisdictions that are even stronger than Australia's.
The third point I would like to reference is the comment the Reserve Bank of Australia made in regard to demographic change, and I think this is the most important one. I think of my parents' experience, marrying in the late 1960s and raising three children in the early 1970s, my father being a policeman for 35 years and my mother having the choice to stay home and raise three very young children in Perth's northern suburbs. In respect of their homeownership, as young parents they bought a very, very modest home in Perth's northern suburbs—a state housing commission home. It had two bedrooms; now it's got three. It was in what was then the urban sprawl in Western Australia. I remember very fondly, having come down from Port Hedland before I started primary school at the local school, driving up a deserted street, and there was our house—I think it was the second or third one in the street. I think about that experience compared to my sister's experience as a young parent raising two children in Perth's far northern suburbs and the choices they made—they are both working—about the sort of home they moved into. If you listen to my parents, my sister and my brother-in-law decided to opt for a much larger house on a much bigger block. I say that just to demonstrate that community attitudes change, and we know they change; we only have to look at our own family's experience. But I digress.
I will share further comments made by the Reserve Bank of Australia in its submission to the House of Representatives inquiry on homeownership. It said:
Demographic change has been an especially important driver—
when considering homeownership issues in Australia. It continues:
In particular, the pronounced trend towards later marriage and family formation over the past 40 years or so would be expected to have reduced ownership rates. For example, the median age at first marriage for women rose from 20.9 years in 1974 to 27.9 years in 2010.
It goes on to some other commentary and reflection with regards to the immediate postwar experience. Then it goes on to say:
Whatever the cause, a trend to later marriage is likely to have resulted in deferred home purchase among younger people. Over recent decades there has also been an increase in the prevalence of single-adult households, particularly single-parent households, in part driven by significantly higher divorce rates since the 1970s. This trend is also likely to have weighed on the home ownership rate, as single adult households have a much lower tendency to own their own home.
In prefacing my contribution this afternoon, what I sought to do was reinforce the fact that, for my own consideration, I trust institutions like the Reserve Bank of Australia to give us the most impartial, nonpartisan view of the current dynamic with housing and this issue so that Australian governments can set policy direction; highlight the fact that demographic change is very, very important when considering what sort of legislative response we should have; add the arguments of the Reserve Bank to make the aggregate homeownership situation in Australia clear—we know from the evidence that it is stable and it is not in a state of serious decline, as some have tried to suggest; and put the taxation arrangements in their proper context, including how they fare compared to other international jurisdictions.
I know my colleague Senator Duniam wants to make some brief remarks on this legislation as well, so I might just—
Thank you very much, Senator Whish-Wilson. I'm happy to wake you up now! To put the legislation in context, I think it is important to think clearly about what the government is seeking to do and how it is seeking to do it. From the outset—and this won't be new news to senators in this place—the government is trying to create the right incentives around ownership of homes and housing choices for our country, and, importantly, to improve housing outcomes across the whole housing sector. This includes improving housing outcomes for first home buyers; improving housing choices and outcomes for those who choose to rent or are forced to rent; improving housing choices for older Australians who are looking to downsize—I think this is probably the one area where a better understanding of demographic change and the rate of that demographic change will inform government policy settings quite critically; and providing affordable and community housing to ameliorate the suffering that is caused by homelessness. Of course, we know that homelessness has many causes. Certainly, lack of access to home and shelter is important, but we know that there are mental health considerations and other sorts of things. Senator Whish-Wilson, I'm happy to share with you my own family's experience with homelessness, but that is for another time.
We know that Australians deserve accommodation and housing choices, but at all times this reflects the changing lifestyle decisions that Australians make for themselves—the demographic change. In our own life cycles, as we move from being a young person to having a young family to having an established family and then to ageing, we know that those accommodation and housing choices necessarily change. Senator O'Neill talked about our superannuation system. It is a system that I am big enough to agree is a significant and important addition to our financial security, both as individuals and as a nation. I absolutely endorse that. These decisions the government has taken are informed and carefully constructed. Some would say they are modest, but I would say they are well designed and fine-tuned to make sure government is staying abreast of the housing needs of Australians, but also mindful of the fact that demographic change is driving a reconsideration of our attitudes around housing, and that is very, very important. So, with those few remarks, I will take my seat.
The question is that the bills be read a second time.
Senator Gallagher did not vote, to compensate for the vacancy caused by the resignation of Senator Parry.
Senator Carr did not vote, to compensate for the vacancy caused by the resignation of Senator Nash.
Senator Sterle did not vote, to compensate for the vacancy caused by the resignation of Senator Kakoschke-Moore.