Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Hansard source

I thank the Minister for Housing for providing me with a copy of her statement to enable me to prepare a response. I welcome the government’s initiative in yesterday launching the Housing Affordability Fund—for, I think, the third time—and making some statements in connection with housing affordability. I noticed on the Labor Party’s website that the joint media release has the Prime Minister and Mr Peter Garrett, the Minister for the Environment, Heritage and the Arts, whose face is looking at me instead of that of the Minister for Housing. So that might be something that needs to be corrected. I wondered if it was appropriate that the member for Kingsford Smith had a song called A Drop in the Ocean. Really, that is the theme that I want to pursue in connection with the initiatives that we have before us today. They are well-intentioned, but they are effectively a drop in the ocean.

The government likes to say that 10 interest rate rises in a row have meant that housing affordability has worsened. Of course, if you are a mortgage holder, 10 interest rate rises certainly have not helped. It is true that it is getting harder to meet the commitments on a home loan. In 2000, the monthly repayment on a loan for a median house was $1,330 a month. In 2007, that figure increased by 117 per cent to $2,892 a month. But that increase is not all due to interest rate rises; they are only part of the story. There has been a massive increase in the price of housing in our capital cities. Since 2000, the Australia-wide average for the price of a house has increased from $204,000 to nearly $400,000. That is a 95 per cent increase in the cost of a home. I disagree with many of the minister’s statements. Low interest rates—and I agree they have been raised in recent times—have nevertheless given many Australians the chance to own the type of home that they never dreamed of owning. They have had the income, lifestyle and security that their parents, aunts, uncles and probably grandchildren will ever dream of.

The most important thing for a person paying a mortgage is that they have a job and have confidence in their future. We hear that development applications are down. That suggests to me that there is a loss of confidence in the economy and in the management by the Prime Minister. Statements that are made in connection with the Housing Affordability Fund, quite frankly, confuse me. The Minister for Housing says people will save $10,000 on the price of a new home. The Prime Minister says people will save $20,000 as a homeowner. When you look at something called the Housing Affordability Fund, perhaps you imagine that it is accessible to ordinary people or first home owners. In fact, that is not the case. That is not necessarily a bad thing, but I must emphasise that the Housing Affordability Fund is only open to applications by local and state governments. I want to know whether a failed state, such as New South Wales, is going to be applying to the Housing Affordability Fund to build infrastructure such as roads, sewerage, parklands or even public transport infrastructure—infrastructure that it should, by rights, be providing to its own citizens but clearly has not been for some time now.

I have spoken many times about the strong population growth and the demands for new housing that have placed increased pressure on the delivery of this infrastructure. In a number of instances, many in New South Wales—which, of course, is my home state and that of the minister—this critical infrastructure has fallen to local government and state governments, but over time they have received less funding for the implementation. So I am not surprised that the minister quotes local government as being pleased that this initiative is in place. Of course they are. Their own state, which is bankrupt, is not able to provide the infrastructure that they as local governments feel obliged to provide for their citizens.

The minister quoted the executive director of the Residential Development Council, who said, of the Housing Affordability Fund:

… the guidelines encourage best practice in local government in respect of residential development assessments and planning processes.

But I say that there should already be best practice in local government in respect of residential development assessments and planning processes. I do not see why the federal government has to provide what is effectively a slush fund for state governments to dip into to do the things that they should be doing anyway.

If you are out there as a developer, a local council or someone concerned in this industry, you get sick of the federal-state argy-bargy and you say, ‘I don’t care which level of government should provide it, but we need the resources, we need the money and we need the infrastructure because we need to increase the supply of housing.’ Local governments are looking towards their own communities to raise the necessary funding to pay for infrastructure for future generations—infrastructure that should be provided by their own state governments. This is shocking. It is the case that state and local governments have relied on residential property for taxation revenue for far too long and, to a degree, that is distorting the market and distorting the situation. Those in state government may say, ‘We have a narrow base from which to raise our revenue. We have got payroll tax and we have got residential property. We have not got much choice but to use residential property.’ But please remember the GST. It was introduced in 2000. In that year New South Wales received $7 billion approximately in GST revenue. A mere eight years later it is receiving $13 billion in GST revenue. Rather than saying that states do not have enough money to do these things, there has to be some rigour in the system and some demand from the federal government through COAG and the housing group to say to state governments, ‘No, we are not going to provide you with what is effectively a very small fry slush fund for you to do the things you should be doing anyway and for you to revamp your planning and development processes, which are shocking.’ As the minister says, the holding costs are excessive, things are not being done quickly enough and people are waiting. That costs money. The time it takes to develop new land is unnecessarily slow, while people are waiting for houses. Some rigour needs to be applied here and the state governments need to be asked to do what they have constitutional responsibility for.

There are a couple of other things about the Housing Affordability Fund. There is nothing to prevent millionaires benefiting from the Housing Affordability Fund. There does not seem to be anything in the guidelines that require houses to be sold to people with a mortgage, let alone owner-occupiers. Presumably, landlords could buy these houses and rent them out at market rates, potentially pocketing a windfall gain in rental income. If this is not going to reduce the house price generally, what would stop the owners who have received subsidised housing under the Housing Affordability Fund from receiving a windfall capital gain when the house is sold? It is a big ask to expect any price reduction from this slush fund to have a trickle-down effect to other new houses, let alone to established houses, which comprise the vast bulk of transactions. It is tinkering around the edges—a drop in the ocean—but it is well intentioned.

I will have more to say on the National Rental Affordability Scheme when the legislation is introduced this week or next week. There is confusion on that scheme, and the confusion we have to address here is that it is not possible for the private sector to provide a public good. This is the confusion the government has around this issue, which is why it has had to change the guidelines and raise the earning level for people who could move into subsidised houses under the National Rental Affordability Scheme. I completely agree that governments should provide public and social goods, and do so properly, but the private sector will not receive the signals, and nor should it, so we cannot expect developers to build houses that are heavily subsidised without due recompense. The recompense that they would receive under the National Rental Affordability Scheme is insufficient for a lot of them to approach it. However, I know there have been applications and I look forward to reviewing those. I remind the House that a family can apply for subsidised rental housing under this scheme when their income is as high as $87,000 a year. The community housing sector has welcomed it, but it may not realise that those who seek to apply under it will be building houses that are possibly more readily available to those on incomes of $87,000, as I said. (Time expired)

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