TACKLING THE HOUSING AFFORDABILITY CRISIS
MASTER BUILDERS NATIONAL LEADERS SUMMIT
PARLIAMENT HOUSE, CANBERRA
WEDNESDAY, 20 JUNE 2018
I acknowledge the Ngunnawal people, the traditional owners of the land on which we meet today and thank Hedley Davis and Denita Wawn, as well as my ACT colleague Zed Seselja.
As you know, Australia is facing a housing affordability crisis. We now have the lowest home ownership rate that we've had in 60 years. There are over 500,000 Australians in rental stress and almost no housing that is affordable for low-income Australians. In the early 1980s the ratio of house prices to incomes was 2:1. Now, it's over 5:1. We're a nation that is increasingly struggling to house our young people.
Now I do agree with the previous speaker that supply is an important part of the response to this challenge. Labor, when we were last in office, put in place the National Rental Affordability Scheme which was responsible for the construction of more than 30,000 new affordable renting housing units before the program was prematurely terminated by the incoming Liberal Government. We established the National Housing Supply Council, a dedicated Minister for housing and homelessness, and invested in a social housing initiative which was responsible for the creation of 20,000 new homes and supported around 90,000 jobs through the Global Financial Crisis.
We want to build on those initiatives under a Shorten Labor Government through a national housing strategy that brings about together government, business, the finance sector and the superannuation industry in making sure that we've got more affordable roofs over more Australian families. We need to have all of the options on the table including inclusionary rezoning, build-to-rent, shared ownership, and increased rights for tenants.
We are concerned that excluding build-to-rent from management investment trusts reduces the capacity to add to the housing stock across the nation. We would boost homelessness support for vulnerable Australians, we were an early champion of the bond aggregator and we’d re-establish the national housing supply council and appoint a Minister for housing and homelessness. We would also put in place an Australian Investment Guarantee, a form of accelerated depreciation encouraging investment right across the economy.
But as many experts have pointed out, you can't be serious about tackling housing affordability unless you tackle the combination of negative gearing and the capital gains tax discount. Indeed in response to a budget which had a grab-bag of unrelated housing measures in 2017, John Daley of the Grattan Institute said "you would need an electron scanning microscope to see any effect on house prices."
What the IMF has said of our current tax concessions is that ‘the combination of high Capital Gains Tax discount rates and unlimited Negative Gearing can encourage leveraged real estate investments and market upswings. While similar tax incentives are present in other countries, they tend to be more limited.’ The IMF went specifically to the claim that the Assistant Minister made, asking whether macroprudential measures are sufficient. They concluded that ‘Housing related policies have begun to address housing related imbalances and should be complemented by tax reform.’
The IMF is not the only international body calling on us to reform the tax breaks. The OECD, the Financial System Inquiry, the Grattan Institute, ACOSS, CEDA, the Australian Institute of Company Directors, Glenn Steven and Saul Eslake are among those who've called on Australia to reform negative gearing and the capital gains tax discount.
Now, with the bells ringing for a division in the House of Representatives, I will stop there, and wish you all the best for your conversations.
Thanks very much.
Authorised by Noah Carroll, ALP, Canberra