The government, as we know, continues to dance around the issue of housing affordability while, sadly, a generation of young Australians face the prospect, the real prospect, of being locked out of the housing market. I want to spend some time today, whilst speaking about the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018, to put on the record very clearly and very importantly the concerns on the issue of housing affordability as it pertains to the electorate that I represent in this place, one of the fastest growing places in Australia, the south-west corridor of Brisbane.
The bill we are dealing with today claims to address affordable housing in this country. But, as we know, it does very little to address affordable housing across Australia. Listening to the member for Kingsford Smith, I agree with his sentiments that he just delivered along with the member for McMahon, the Shadow Treasurer, in saying that any housing affordability measure that does not deal with negative gearing or capital gains tax is a sham. These are the facts: overall home ownership in Australia today is at a 60-year low; home ownership rates for people aged between 25 and 34 have collapsed from 52 per cent in 1995 down to 38 per cent a few short years ago; rates of property investments have been at record highs, whilst rates of first home ownership are at record lows. So investment into property is at an all-time high, but actually the rate of first-time home ownership is not the same but—it is going backwards. The great Australian dream of saving up for a deposit, making sure you have found the right block of land and building the home of your dreams is not happening. It is simply not happening.
The number of investors with at least five properties is growing at three times the rate of the group with just one property. Let me say that again. The number of people who own at least five properties is growing at three times the rate of the group with just one property. Over the last 25 years, young people have gone from having to pay just five times to now having to pay up to 15 times their annual income to purchase a new home. But, sadly, we see very little from this government because listening to the ministers responsible, listening to the backbench, listening to members of the government across the board, we just hear the same thing over and over again. They deny that there is anything wrong with the housing market.
The bill does not go to the heart of what is wrong with the property market here in Australia—that being overgenerous tax concessions to people owning their third, fourth and fifth homes, whilst those struggling to simply get into the property market are left the fend for themselves. Sadly, I can say that the government just do not get this. They don't see a problem with house prices continuing to rise and locking out not only young Australians but families and singles who want nothing more than to own their own home. They don't see a problem with homeowners taking on huge amounts of debt just to get into the property market. Indeed, we are now hearing warnings that many young Australians are destined to be so-called 'permanent renters' and forever locked out of the property market. Once a upon a time young people would go along to purchase a house. But now they are not only competing with far more established homeowners but also investors who also enjoy some of the most generous tax concessions in the world. Listening to the debate on this bill, we now know that Australia has the most generous tax concession in the world when it comes to dealing with home ownership and investment properties. But, put simply, as I have said, young people are being forced to fight with one hand tied behind their back when it comes to home ownership.
We know that, if we don't force this government into action, the situation is just simply going to get worse. In the meantime, we're seeing young people take on higher and higher levels of debt that, quite frankly, I think most people in this place and most Australians would understand were unimaginable two decades ago. For those who have been able to buy a home, mortgage debt among 18- to 39-year-olds doubled between 2002 and 2014, jumping from $169,201 to $336,586. This is simply unsustainable and cannot continue, which makes the government's 'raid your own super' scheme all the more crazy. I spoke on that when it came to the House. I said at the time that the government wants more young Australians to take on more debt and more risk to get into the housing market.
Indeed, listening to the reports of the time, the scheme would only see demand for housing increase, pushing prices higher and higher. I have met with and heard from people from the property sector who have agreed with me on that. They think it's a fantastic idea. They think it's good that, overall, the market will be flooded with new people who have raided their super and are trying to get into the housing market. Maybe they've taken $30,000 or $40,000 out of their superannuation, which will have a negative effect when they go to retire. That is going to push house prices up. It's great for the property barons and great for the property industry, but not great for first home owners. A recent report from the Grattan Institute highlighted the following:
Negative gearing has many undesirable consequences. It reduces rates of home ownership. It reduces the availability of long-term rentals. It increases the volatility of housing markets, increasing the risks to the Australian financial system.
The Grattan Institute summed it up best when they said:
The most obvious thing the Commonwealth Government could do is reduce the capital gains discount and abolish negative gearing. It wouldn't solve the problem but it would help.
Everybody seems to get this other than the government.
Once again, I place on record in the parliament a very direct question for the government: what will it take for the Prime Minister and Treasurer to realise that they must follow Labor's lead and act on negative gearing and housing affordability? Who can remember the smoke-and-mirrors trick that they did, saying that if Labor's policy was in it would smash the housing market, that it would destroy the housing market? They knew that that was not true. They knew that that was false. When the government's own advice was released, they had to scurry around and try to pretend that it was something else. Who can remember the Assistant Treasurer at the time, Minister O'Dwyer, saying that it was going to push prices up, and then the Treasurer saying that it was going to push prices down? All along, they were sitting on Treasury advice saying that this was a measure that would help people. They were caught out, absolutely caught out, like with everything in the chaos and dysfunction of this government. They can't seem to get through a week without blowing up internally. They can't seem to get through a week without any policy inconsistency. Over and over again, they chop and change messages all the time—chopping here and chopping there. My issue is that when it comes to the impacts of the indecision and, I guess, chaotic nature of the Turnbull-McCormack government, we're now seeing young home owners paying the price.
I once again say to the government, we on this side of the House represent middle- and working-class Australians. I represent working- and middle-class Australians in the south-west of Brisbane, who are crying out for leadership on this issue. They want to see action, and they don't believe the spin and nonsense that comes from the government with bills such as these that we're debating here today and crazy plans to raid superannuation. Tinkering at the edges with bills like that which we're debating today, looking like you're doing something when it comes to housing affordability, raiding the superannuation accounts of young Australians to increase demand and push up property prices—it's a classic example of the government looking after a tiny section of the community right at the top of the tree.
We've have heard from previous speakers that the Treasurer, when on the topic of housing affordability, said—and who can forget this classic—'You should just get a better job.' Then the Prime Minister of this country, when asked on radio about how to get into the housing market, floated the idea of getting rich parents. I wish this wasn't true. I wish our leaders, who are setting the economic agenda and are controlling the levers, didn't say, 'You know what, the answer to your woes is to get rich parents or maybe get a good job. It's all I can think of.' We're coming up to the budget season. Who could forget those great images of the then Treasurer of Australia chomping down on a cigar, kicking back and having a big laugh. It's a bit like the first budget that came in, with nothing on housing affordability. The then Treasurer cranked up on the night of the budget and said, 'It's the best night of my life,' but delivered the most savage cuts across this country. He was dancing in his office. He thought it was terrific. But we know that, once again, it's another sorry chapter of this government, which seems to be falling apart at the seams.
When I speak to local families and parents in particular, they are really worried about their kids getting into the housing market. I talk to people in suburbs like Springfield, Springfield Lakes, Collingwood Park and Bellbird Park, where terrific new housing is being developed and great infrastructure is being delivered by the Palaszczuk government to service this growing region. I am privileged, as I said in my opening remarks, to represent one of the fastest-growing communities in this nation. Parents genuinely come to me and say, 'Will our daughter or son ever be able to enter the housing market? Will they ever be able to see a clear path to having the great Australian dream, which my parents fought for and worked so hard for, of owning their own home?' I don't know where members of the government are. They're not going to the same shopping centres, post offices or coffee shops that I'm going to where people are simply saying, 'This is getting beyond a joke. This is getting way, way beyond it.' Time and time again, they must be hearing the same message. They're ignoring it. They're choosing not to listen to what the majority of Australians are telling them.
It's been over three years since the government received its financial system inquiry from David Murray. We know that the government established the Murray inquiry with a lot of fanfare and rhetoric. I want to place on record today some of the important findings in the Murray report. They're just collecting dust and remain silent. David Murray put up in big, red flashing lights that negative gearing and capital gains tax concessions are major tax distortions which 'tend to encourage leveraged and speculative investment' in housing and is 'a potential source of systemic risk for the financial system and the economy'. He recommended restoring the prohibition on direct borrowing in superannuation funds because 'further growth in superannuation funds’ direct borrowing would, over time, increase risk in the financial system'. David Murray made it very clear that tax settings for housing encourage leverage and speculative activity because of the asymmetry of housing expenses and the capital gains on housing.
So the government knows that it has been delivered warnings. In response to the report, the Treasurer said:
The biggest decisions Australians make in life—buying a home, providing for our retirement, or starting a business—are all supported by our financial system.
The government has accepted the overwhelming majority of the inquiry's recommendations, but there is no mention of housing, even though the report made direct mention of it and the associated risk that it carries with the current negative gearing settings that this government employs. Quite frankly, it is another classic case of the government just burying its head in the sand.
When you see experts like David Murray, the IMF, the Grattan Institute and the RBA warn the government that there are issues with our tax system and other areas of our financial system that could, over time, generate systematic risks, the government should listen and act. We know that a strong government that delivers in this area with real reform will see an impact that will help young people get into the housing market. That's a conversation that is going on outside of this place. It's a conversation that is happening across the suburbs of this country. I simply say, with respect to the government: start being part of that conversation, listen to what the community says and take real action on housing affordability.
