MPI - Housing Affordability
Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:25): It is a pleasure to rise today to talk about housing affordability. It is the case in Australia today that we do have an issue with housing affordability. It has risen over a period of time to a point where it is greater than at any point in many years. It is also the case that housing affordability is a complex issue related to supply and demand in the market. What we heard for the first eight minutes of the shadow Treasurer's presentation was not an explanation of quality policy that would improve the situation of housing supply in Australia because he knows, as we know, that supply is a function of state planning policy and state governments.
I have some experience and understanding of this as I am a New South Wales member from north-west Sydney, Sydney's main growth corridor for property over the last decade. It is good that the shadow Treasurer comes from another growth corridor in Sydney, the south-west of Sydney. The state Labor government and the federal Labor government have been in place for most of the time we are talking about in the creation of unaffordable housing. We in this place do not have short memories, economists do not have short memories, people in the housing market do not have short memories and people who have been to rental auctions all over Sydney and bid to get a rental property do not have short memories either. They remember when the Carr Labor government declared in 2000 that Sydney was full. They remember when the state Labor government deliberately slowed to a trickle the release of new land. They will not forget the impact of Labor deliberately slowing to a trickle the release of land in a major market like Sydney and the impact that that had. That meant a decade of an increasing housing prices, increasing rents and in Sydney having to lodge a bid to get a rental property. This was the result of a previous Labor intervention in the housing market.
Every time Labor turns up with a 'plan' or, as the Leader of the Opposition said last week, a 'positive plan'—there is no reason why it is positive; it is just a 'positive plan'—to intervene in the market you know it is part of the famous lingo that came from Ronald Reagan that the shadow Treasurer it is fond of espousing: 'I'm here from the government and I'm here to help.' When you hear that from the shadow Treasurer it is time to run the other way. If you own a house in Sydney or you own an investment property and you are negatively geared and you hear the shadow Treasurer say, 'I'm here from the government and I've got a plan for you; I am here to help you with your investments,' it is time to pack your bags and run.
What happened in Sydney that was one of the biggest contributors to GDP? We saw a big fall over the decade while the Carr government restricted the principal part of the economy—housing. We saw a drop in Sydney's contribution to GDP. I am sorry to say as a proud New South Welshman that we saw tens of thousands of people leave for Brisbane and tens of thousands of people leave for Melbourne. What could you possibly do to make people flee one of the best cities in the world, the city I grew up in? What could you possibly do to make people leave a beautiful city like Sydney for the likes of Brisbane or Melbourne? You could be a state Labor government, intervene in that market and make housing affordable.
So Labor have form. They have history in intervening in the property market. They know exactly what they are doing with their new policy on negative gearing. I want to talk a little bit about that, because the shadow Treasurer then turned to his magic way of increasing supply, which is his changes to capital gains tax and negative gearing. He believes that that will somehow make housing affordable in Australia. That is your proposition: that your changes will make housing more affordable. That is in the face of all of the contradictory evidence that we have been presented with by the Labor Party. They will not acknowledge to us that prices will fall from their policy. They are hiding from that implication. Will they come out and say how much existing property prices will fall when their policy is implemented? No, they will not. In fact, they refuse to release any of their modelling that they have used to construct their policy in relation to negative gearing.
Why are they hiding their modelling? By what percentage does it show that existing property prices will fall if you make the changes that they are suggesting—if you remove one-third of the investors from the existing market and you stream them only into new properties? What impact will that have on existing prices? We do not know. Nobody knows, except that, if you take one-third of the investors out of the existing property market and you put them into new properties only, you are going to have a downward pressure on price for existing properties. Everybody knows that. By how much? Only the shadow Treasurer knows. Only he has modelled it.
In fact, Bill Shorten, one week ago in a doorstep here at Parliament House, on 24 February, when he was asked about negative gearing, said, 'Our proposals have been modelled to death.' Well, I say to the shadow Treasurer: if you have modelled them to death—which is an interesting phrase; is it the death of the property market or the death of the opposition?—you can release your modelling for the comfort of the investment market and the property market here in Australia. You have modelled them to death. That means you have modelled them, presumably, so many times that they have died. Then release your modelling. Show the public. Give them some confidence in your policies.
I do not suspect that you have modelled them to death, because, as the Treasurer said in question time today, just 12 months ago the Leader of the Opposition, in answer to the question, 'Will you be grandfathering or winding back negative gearing?' said, 'That policy's not on our radar.' Again as the Treasurer outlined, just nine months ago the Leader of the Opposition said, 'Negative gearing changes are not the focus of the Labor Party.' So just nine months ago the Leader of the Opposition did not even know that you were already modelling to death your policies, but now he has discovered, one week ago, that the shadow Treasurer has modelled to death the Labor Party's policies. So where is that modelling? Who have you relied on? Please do not tell us the McKell Institute, shadow Treasurer, because I am not sure that is going to fly.
The fact is that the Commonwealth spends a lot of money on housing every year. Every single year, the Commonwealth spends significant funds: $1.3 billion in the National Affordable Housing Agreement, and $4.4 billion and climbing in Commonwealth rent assistance. It is only right that the Commonwealth continue to work with the states to work out how we can get the best bang for our buck when we are spending $1.3 billion per annum, and $4.4 billion in Commonwealth rent assistance. How can we unlock, critically, more supply in combination with the states? It is the focus of this government, the Prime Minister and the Minister for Social Services—who the opposition do not understand has responsibility for housing and working with the states on housing. They should look it up in the order of government, because it is there. They want to make some cheap point in question time.
But they also should look up a little bit of their own record. They should look up the report of the ANAO and the Auditor-General on the National Rental Affordability Scheme, which was their only contribution to affordable housing when they were in government. We know that when they were in government, between 2007-08 and 2013-14—and this is an important statistic for everyone to listen to—the proportion of low-income households in rental stress increased from 35.4 per cent to 42.5 per cent. That is during the period of the last Labor government. That goes to show the effect of their affordable housing polices. The Auditor-General and the ANAO found that the NRAS, the National Rental Affordability Scheme, Labor's policy, has been slow in delivering. What that means is that you are not bringing on supply. It is slow. But wait; there is more. That is not all they said. They said it had failed to meet its delivery targets, despite ongoing government funding.
Mr Bowen interjecting—
Mr HAWKE: The point is this, shadow Treasurer: if the Australian National Audit Office says that, in spite of ongoing government funding, you are slow in delivery and you are not meeting your targets, it is time to get a more effective program. It is time to use taxpayers' money more wisely. It is time to use that money, in combination with the states, to unlock supply.
What you will see with the Baird Liberal government, for example, is $1 billion on the table to unlock institutional investment in social housing and affordable housing. If you bother to talk to the social housing sector and the affordable housing sector in New South Wales, what you will find is that they are over the moon about the Baird government's policies. You will find that this new approach that the Baird government is taking is going to unlock more social housing and affordable housing, which is a component of affordable housing in Australia—something you have ignored in your presentation.
The fact is that Labor do not have a plan to ease the housing affordability crisis in Australia today. There is no reputable economist who will put their name to the view that Labor's negative gearing changes will reduce affordable housing stress in Australia today. The evidence is not there, and they will not release modelling to show that it is. This government is working on this issue and will continue to develop good policy to ensure we have more affordable housing in Australia.