ADDRESS TO 2017 PROPERTY LEADERS SUMMIT
TUESDAY, 30 MAY 2017
I've spoken at least half a dozen times to various Property Council events and very much value the conversation. Labor’s policies on housing affordability have been shaped through ongoing conversations and engagement with the sector. You may not agree with everything that we have to say, but I trust you won’t ever fault our degree of engagement with the business community. We understand the importance of the work that you do and the importance of continuing to have those conversations, when we agree and when we disagree.
We’re meeting at a challenging time for the housing sector. We’ve now got the home ownership rate lower than it’s been in 60 years. We’ve got housing debt to household income at a historic high, more than 180 per cent. At a time when the growth rate of living standards has halved, we’ve seen some of the most rapid house price appreciation in Australian history. That’s left a degree of fragility in the system. According to Reserve Bank Governor Philip Lowe, the share of households with debt more than three times their income was 12 per cent in 2002. Now it’s 20 per cent.
In that environment, we’ve had a significant conversation around foreign investment, which I know is the main focus of your lunch today. Labor supports openness. We recognise the benefits that flow from migration, trade and foreign investment. But we do recognise that particularly in the property sector it’s incumbent upon policymakers to ensure the debate is grounded in evidence and in reasoned arguments. I haven’t always felt that we’ve gotten the data that’s necessary to support good evidence-based policy making. A promise of a full public register of Australian agricultural land wasn't fulfilled by this government. We’ve seen a range of foreign investment screening thresholds, dozens of different thresholds according to what you want to buy and which country you’re from.
We'd like to see a more evidence-based debate because we recognise that properly managed foreign investment can bring benefits. And indeed the philosophy that we take towards foreign investment in real estate is the same philosophy that Labor's taken towards our negative gearing policy. There's bipartisan support for the notion that foreign investors should only be able to buy new built homes. Labor is saying with our negative gearing policy that we believe negative gearing should be restricted to new built homes for exactly the same reason. We want to boost supply and boost the benefits to the community.
Finally, I do want to say that I hope we can get the Property Council's support for a range of measures that we've been announcing on making sure that we have the highest standards for directors in Australia. Dodgy phoenix activity affects the construction sector as much as any sector. We've been calling for a Director Identification Number, supported by the Australian Institute of Company Directors, the Australian Council of Trade Unions and a range of other experts. I hope we can count also on the support of the Property Council of Australia.
We think measures like this can make a difference because dodgy phoenix activity is hurting the great majority of honest businesses, particularly in the construction sector.
I'll leave it there and look forward very much to your questions.
TUESDAY, 30 MAY 2017.