Hill, Julian, MP

Mr HILL (Bruce) (11:49): I would say at the outset, as a little disclaimer, that this is the first time I have risen in the House with a terrible cold. It is ironic that today, in Men's Health Week, I am brought to you by cold and flu tablets and that I have discovered Lemsip is in fact a food group. So we will see how we go. With regard to the bill, the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017, Labor has said we will support these changes. They are sensible. They will not have a noticeable impact on the market. But it is a complete nonsense to describe this as a housing affordability measure. In fact, only this morning the Senate committee looking at this legislation handed down its report. It was made very clear that this is an integrity measure. That is fine as far as it goes: make it easier and more likely that people will pay the capital gains tax they owe. There is no problem with that. But it does not change the tax level. It has nothing to do with housing affordability. To say that it does is a scam, a sham, and it is clutching at straws. I will focus my remarks on Labor's second reading amendment: '…the House notes the government’s failure to deliver any meaningful measures to deal with housing affordability.' This is not the first and not the last time I will talk on housing affordability, because Australia is in the middle of a housing affordability crisis for people wanting to buy houses and people wanting to rent houses. It affects all parts of society, but especially, I believe, young people have every right to be angry at how they are being treated by this government. It is getting to the point where waffle words and weasel words from the government are not enough. We need effective action. The government has clearly failed. They have no minister for housing, not in cabinet, no assistant minister—nothing. You do not see 'housing' in the title of anyone on the front bench in this government. They have no housing strategy. We heard the previous speaker say 'The states should do something about that' as if there is no national responsibility in a federation to bring the states and territories together with the Commonwealth and come up with a strategy. All three levels of government have a role to play and have different levers. That is the point in being a national government: you bring the other levels of government together and develop a strategy to work together. They have no solutions; but even worse, they defend to the death policies that make housing affordability worse and advantage the wealthiest in our society. There is a trifecta of problems, or rather a trilemma. Let me paint the trilemma. House prices to buy or rent in major cities have skyrocketed. The second leg of the trilemma is that home ownership rates have plummeted. The third leg of the trilemma is that many vulnerable Australians have limited or no access to housing. On any given night in this country—we will wait and see what the census figures says soon—there are over 100,000 people with nowhere to sleep—not a roof over their head. Home ownership rates are at 60-year lows. Rates for 25- to 34-year-olds have collapsed from around 60 per cent to under 40 per cent in the last 30 years. In the last 10 years, the median house price in Australia has risen by 60 per cent; in Melbourne it has risen by 90 per cent; and in my electorate of Bruce in the south-east of Melbourne it has risen by 150 per cent in 10 years. It now costs 10 times the Australian median income to buy a house in the middle of Melbourne's suburbs. Rental stress is on the rise, with the proportion of low-income households in rental stress now at more than 40 per cent. Of course, this alone does not define housing affordability. As I said, at the sharpest end of the spectrum there are those who have no housing. What is the government's response? Nothing. Big talk from the Treasurer—he says, 'I'm very interested and understanding of the frustration of young Australians trying to buy their first home.' That is great, isn't it? He is very interested and understanding. Here is an idea: do something! Have a look at the policy propositions we have heard from the government. You can guess who this one is. This is the get rich parents policy proposition. I quote: 'You should shell out for them; you should support them—a wealthy man like you.' Who said that? That was the Prime Minister. Then we have the get-a-rich-job policy. I quote: 'We are also enabling young people to get highly paid jobs in the first step to buying a house.' That was the member for Deakin, the Assistant Treasurer. Then of course the previous Treasurer, Joe Hockey, probably with cigar in his mouth, said: 'The starting point for a first home buyer is to get a good job that pays good money.' Or the Deputy Prime Minister's policy: 'Move to where there are no jobs. If you have the gumption in you and you decide to move to Charleville, you can have very affordable house.' The 2017 budget, of course, as we heard in the lead-up, was going to solve the problem. Remember those headlines? Housing was going to be the centrepiece of the budget. We were going to see radical policies that were going to transform the ability of people to buy a house and were going to deal with the problem. There was profound disappointment: absolutely nothing effective and, worse, some of the measures that are billed as housing affordability measures are actually damaging—they are not just a smokescreen like this bill, which has nothing to do with affordability, but they are actually damaging. Take the rubbish super savings scheme. It is the centrepiece, you know? It is a truly ridiculous scheme to give people a tax break to save up to $30,000 for a house. It is complex. It mucks around with the fundamental purpose of superannuation, which is to allow people to save for their retirement. It is a camel by committee. It is regressive, as you would expect from this government and those opposite. Those who benefit most from this rubbish scheme are high income earners, because it is a regressive tax concession. You get a bit of a tax break on your savings, but if you earn a lot more, you get a bigger tax break; if you do not earn much, you do not get much. It is expensive and ineffective. This is the fundamental problem with it. If anything, it would just add to demand and put more fuel on a hot housing fire. It does not put the fire out. It will have negligible impact on affordability. At best you would need a microscope to see the impact. We are still waiting for the modelling. We have not seen any modelling as to what you think that will do for house prices. On top of this, the scheme proposes to allow for the release of all funds, I am told, on 1 July every year, which floods the market with people all at the same time. But fundamentally my biggest problem with this is it is offensive to young people. The government's answer to the housing crisis is to blame young people for not saving enough. At the same time they are trying to lower the HECS repayment threshold from 56 grand to $42,000. If you are a young person in your late 20s who has finished university, somehow you are supposed to repay your uni debt when you earn 42 grand, save to buy a house while house prices are going up faster than the savings, and save to start a family. Meanwhile they want to maintain tax breaks on superannuation, capital gains tax and negative gearing, which go to those who have most. We are high income earners in this place. We are all getting a tax cut on 1 July, thanks to the Prime Minister. No-one else in Australia does but the top tax bracket. We get a tax cut. If you are a high income earner, have done well in life and are lucky enough to have a bit of spare cash in your pocket, the current tax system says the most rational thing to do is to walk down the street one Saturday morning and bid up the cost of an existing house at an auction, because you get all these tax breaks for it. That is perverse. Aren't there more productive uses we would want to encourage for spare capital in our economy, like—I don't know—building a business that employs someone? You would reckon. Maybe adding to housing supply by putting negative gearing on new housing—oh, that's Labor's policy, isn't it. But no: apparently the priority is to protect tax breaks which go to the wealthy and push up the cost of housing. This saver account will save you $30,000 over two years if you are lucky enough to be able to save $30,000 despite all the other stuff. The median increase in Melbourne's housing market in one quarter, in three months, was $30,000. It does not even keep up with the increase in prices. The government has not introduced its legislation, so who knows how it will really work? I will make a brief comment in passing on perhaps the silliest idea in the budget. The government is going to release Defence land to add supply. That is fine in theory, but the centrepiece of this is the Maribyrnong Defence Site in Melbourne, which is going to be the sites for 6,000 new houses. Okay, that is good—except it was released 10 years ago. The master plans for this site were done 10 years ago while I was working for the Victorian government. It has not been developed not because no-one had released it or the government had not put it in the budget but because it is full of explosives, it is contaminated and they have only just started decontamination. It is a scam and a sham. There is nothing wrong with more supply, but to say that this is somehow an answer to housing affordability is a joke. If we want to talk about supply, one of the government's first actions when they were elected was to abolish the National Housing Supply Council, which brought states and territories together and had a coordinated national look at the supply problem. Here is an idea: you could put that back in. Housing markets have two fundamental elements, on which the member for Fenner would be much better versed than most people on this chamber, but it boils down to supply and demand. You have to look at both, but this government, pig-headed and obstinate, idiotically refuses to look at the demand side. It flies in the face of all reason and all evidence. I will now turn to the tax policies which I have touched on that advantage investors and fuel demand. Negative gearing and the capital gains tax arrangements in the budget now push up the cost of housing. They add to demand. They are regressive. The benefits overwhelming go to the top income earners. About 70 per cent of the benefits of capital gains tax go to the top 10 per cent of income earners, so the government comes in here with policy by anecdote and says, 'Oh, but there was a nurse who negatively geared something.' Mr Howarth: There are thousands of them. Mr HILL: Sure; there are thousands, but look where the dollar value goes. It is a regressive tax concession. This is not a leftie socialist plot from us opposite. It is economics. It is advice from the Reserve Bank, from the IMF, from economists, from academics and from all the sensible parts of the property industry. There is the untruth perpetuated that Labor proposes to abolish negative gearing. That is not the case. Our policy is sensible, it is simple, it is costed, it is clear and it is responsible in saying we need to refocus negative gearing. So, for anyone in Australia who has a negatively geared property now, nothing changes. There is no shock to the housing market. Your tax arrangements do not change. Rents do not go up. At best, the independent modelling I saw said property prices might go down by two per cent. Our view is they will moderate the rate of increase due to the other fundamentals in the market. But housing markets do go up and down by a bit. I know a lot of young people who think that, if house prices went down by five or 10 per cent, that would be a great thing for people, given they have gone up by 30 per cent in the last year. But to refocus negative gearing and put it to work properly—so after the date it was introduced—you could still negatively gear a property. You just have to make it a new property that someone has just built, which adds to supply and has a downward impact on housing prices. I thought that was what the government was saying was important—adding to supply. This is the party of Menzies. We heard about the 'forgotten people' a few weeks ago. It is 75 years since Menzies' seminal 'forgotten people' speech—ironically given when he was in the wilderness trying not to be forgotten before his second coming. Back then, one of the aspirations of the Liberal Party was home ownership for the masses. This was a central policy goal of those opposite; it was a reason for being. Under this mob, the emphasis is on helping people buy their fifth house, their sixth house, their seventh house or their 10th house. If my daughter, who is 21, went to an auction in the next few years and said, 'I want to buy a house', how much help would she get from those opposite, not being in the housing market, to buy a house to live in? Absolutely none. Yet if I or anyone in this chamber went to an auction, we would get a great big set of tax concessions. You hear that when old people retire they need about $50,000 a year to live with dignity, if they own their own house. Fair enough—that sounds reasonable. Yet young people have to start repaying their HECS debt at $42,000. We have to be real about this stuff. We have a government that gives itself a tax cut, that is giving big business a tax cut, that is not having the gumption to make huge multinationals pay their fair share, and the only advice for young people is to be ripped off by 'Captain Obvious' over there, who said, 'Get rich parents and get a better job.' So I dare those opposite to try going to a university campus or a TAFE campus and use their so-called pub test and ask young people what they really think of the current system which is stacked against them. Then they should be shocked, but not surprised, if they get what is coming to them at the next election.