Matt O'Sullivan (WA, Liberal Party, Shadow Minister for Choice in Childcare and Early Learning) | Link to this | Hansard source

My question is to the Minister representing the Prime Minister, Senator Wong. Morgan Stanley's chief economist has forecast property prices to decline by up to 10 per cent due to tax changes and rate hikes. On Wednesday morning, the Minister for Housing, Clare O'Neil, said Australia's falling house prices are due to a 'correction' in the housing market. That's confronting news for the two-thirds of Australian households who own their own home or are paying a mortgage, many of whom will now have negative equity. Was it a deliberate effect of your housing policy to reduce the value of a family home?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Thank you to the senator for the question, and, as I've said previously, as the Prime Minister, the Treasurer, the Minister for Finance and others have said, our changes are about backing first home buyers and levelling the playing field. The reality is we all know that house prices have increased. I think it's in the order of 400 per cent since 2000. We know from our engagement with so many Australians that it is so much harder for young Australians to get into the housing market. We don't believe that status quo is acceptable. That is why we passed the reforms that we have.

In relation to house prices, what I'd refer you to is that the forecasts that were referenced in the budget papers indicated house prices will continue to grow, and that the changes in the budget would mean that house prices would be two per cent lower than they otherwise would have been. Obviously, that is the Treasury's modelling, and the modelling is the basis on which the government considers these policy matters.

Sue Lines (President) | Link to this | Hansard source

Senator O'Sullivan, first supplementary?

Matt O'Sullivan (WA, Liberal Party, Shadow Minister for Choice in Childcare and Early Learning) | Link to this | Hansard source

According to Roy Morgan, 1.19 million Australians are in mortgage stress and 830,000 are in extreme stress, after interest rates have risen 15 times under Labor. Many Australians have been forced to sell their homes, while auction clearance rates have fallen to their lowest level since the early days of the pandemic. Was this uncertainty a deliberate effect of your new taxes?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

I think there are two points on that. The first is, obviously, we know the challenge inflation presents. We inherited very high inflation. We continue to work and to do what we can to deal with the inflation challenges in our economy.

The second point I would make is that one of the ways in which you can deal with this and the cost-of-living pressure that people are under is to ensure that you provide tax cuts where you can. And so I would remind you that you and your colleagues voted against tax cuts for working Australians, the very working Australians that you purport to be representing by way of that question.

Sue Lines (President) | Link to this | Hansard source

Senator O'Sullivan, second supplementary?

Matt O'Sullivan (WA, Liberal Party, Shadow Minister for Choice in Childcare and Early Learning) | Link to this | Hansard source

Rents have increased 24 per cent since 2022. Your own budget papers admitted that, because of your tax hikes, rents will increase. Former Treasury economist Peter Downes has warned the changes will increase rents by up to $2,000, significantly higher than the $2 a week increase claimed in the budget. Were higher rents for Australians a deliberate effect of your new taxes?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

The policy objective is about making sure that we can help more Australians enter the housing market and that we have 75,000 more Australians able to own their own home, because we on this side understand that the opportunities that most of us have had—we should ensure we do what is required to enable those opportunities for the next generation of Australians. It's as simple as that. We don't think the status quo, where so many young Australians are locked out of the housing market, is appropriate. We don't think it's right. We don't think that is about having a fair go in this country.

This legislation—the objective of the tax changes in relation to housing was about making sure that more Australians, more renters, have an opportunity to be homeowners. Again, I come back to this: if you were worried about cost of living, why did you vote against tax cuts?