Senator BARTLETT (2.41 p.m.)—My question is to the Leader of the Government in the Senate. Earlier in question time the Minister for Finance and Administration outlined some of the recent economic indicators that had come out since the Senate last sat. I noted that the minister neglected to mention the housing affordability index. Is the minister aware that this economic indicator shows housing affordability is at its worst level in decades? Is the minister aware that the Housing Industry Association has said that, if no action is taken, housing affordability in Australia cannot be restored until 2022 at the earliest? Can the minister inform the Senate what the government is doing about the housing affordability crisis in Australia?
Senator MINCHIN—Can I say that, on behalf of the government, of course we are concerned to ensure that Australians who aspire to home ownership are able to do so. We certainly have sympathy for those who wish to own their own home who may be having difficulty doing so. As I have previously said in this place and in other places—and as many members of government have noted—there are a whole range of factors that go to housing affordability. One of those is interest rates. Of course, the capacity to borrow money is critically important to the capacity to purchase a home. The deregulation of the financial system supported by us and introduced by the former Labor government—one of the few things which they did that was supported by us and which was very sensible—has meant much more capacity for ordinary Australians to finance themselves into new homes.
It is critical that economic policy settings are such that we do prevent upward pressure on interest rates. Home loan mortgage rates themselves are lower today than they were at any time in the 13 years of the previous Labor government. In terms of the levers available to us, what can we do? We can ensure optimal growth in real wages, and real wages are up some 14 per cent since 1996. We can ensure that policy settings are such that we keep downward pressure on interest rates. As I said, I think we are doing that. We can ensure that there is maximum jobs growth and that there is the lowest possible level of unemployment so that we have as many people in the workforce as possible able to afford homes, and we are doing that.
Among the other factors that go to housing affordability is the available supply of land. Land is one of the critical factors in the cost of purchasing a home. I do not have the figures directly in front of me but, as the HIA said, the actual cost of constructing a home in this country has been kept at a level with very little increase in real terms. What has risen dramatically is the cost of land itself. It is true that, with a growing economy, a growing population, an immigration program of the sort that we are running, there is going to be increasing pressure on land supply. I do not want to be accused of passing the buck here, but the reality is that the federal government—whether it is Liberal or Labor—has no control over the supply of land. That is a matter wholly within the realm of state and local governments. They are responsible for what land is set aside and zoned for residential development. The fact is that the state governments can be fairly accused of dropping the ball when it comes to ensuring that there is appropriate availability of land in our major cities supplied to the market to ensure that you do not get upward pressure on the cost of land and the availability of land.
The state governments can also do a great deal with respect to the taxation of both building houses and purchasing houses. We, for our part, think that they have failed to take advantage of the significant revenue gains they have made with the GST to eliminate or reduce such things as stamp duty on both land purchases and housing purchases.
We are very conscious of this issue. We are concerned about it. From the point of view of the levers which we have control of, we are doing what we can. We are also doing our utmost to urge the states to do what they can to ensure that young Australians can seriously aspire to own their own home. That is a very significant aspiration that all Australians should have.
Senator BARTLETT—Mr President, I ask a supplementary question. Is the minister seriously telling the Senate and the Australian people that there is nothing extra that can be done at federal level to address the housing affordability crisis? Given the minister’s own statement that there are a whole range of factors that go to housing affordability, are there no other actions the government can take at the federal level to act on any of those factors? Does the minister agree with the Housing Industry Association and others that only a targeted whole-of-government national housing strategy will be able to address the housing affordability crisis? Why will the federal government not adopt a national strategy on this most crucial of issues?
Senator MINCHIN—What is important is that the government address the matters that are within its realm. As I said, they go to overall economic policy, unemployment, real wages and interest rates, which we have been addressing. There are responsibilities that state and local governments need to address. We have brought in things like the first home owners scheme, and that is important. But you have to be very careful not to unduly stimulate demand for housing if there is not a capable, automatic and ready supply side response. It is no good artificially inflating demand for housing through various subsidies if you do not have the capacity for the supply of land and housing to respond to that. The supply of land and housing is totally within the realm of the state and federal governments. Various federal government ministers are working closely with their state counterparts and exhorting them to respond to ensure that the supply side of the housing market does work, because that is where the fundamental failing is. We will continue to exhort our state ministers to do so.
Senator BARTLETT (Queensland) (3.31 p.m.)—I move:
That the Senate take note of the answer given by the Minister for Finance and Administration, Senator Minchin to a question without notice asked by Senator Bartlett today relating to housing affordability.
We saw, in question time today, the government, including Senator Minchin, making a lot of noise about and showing a lot of pride in the economic indicators that have come out in recent times—the low unemployment rate, the low inflation rate and the high GDP growth. I can understand and do not begrudge the government doing that and attempting to take responsibility for those good economic indicators. But when the minister was questioned about another economic indicator, Australia’s housing affordability index, which shows that housing affordability in Australia is at record lows, suddenly it was nothing to do with the federal government; suddenly it was all the fault of the states.
This is a key economic indicator and, frankly, if we cannot fix it up, it will override all of the gains we get through lower unemployment and through keeping inflation under control. It is not keeping the cost of housing under control, whatever your inflation rate says. And that is not just for people wanting to buy housing, as the minister suggested in his answer; it is also for those in the private rental market as well.
This housing affordability crisis has occurred, has developed and got to the worst stage on record in Australia under the watch of the federal coalition government. And it is simply not good enough to say: ‘Oh well, we are doing everything we can, and everything that is going wrong is all the states’ fault.’ It is just not good enough. I must have asked Senator Minchin this question at least four times now over the years. That is how long this crisis has been going, and it has got worse over that time. Yet, every time, that is all he has had to say in response—that everything that is wrong is in the lap of the states. There are things that the states should do about it and, indeed, some of them are doing them, as are local councils. But this crisis has to have a national response.
Yet, once again, we had the Leader of the Government in the Senate refusing to consider the simple approach of tackling this national crisis in housing affordability with a national strategy. There is no national housing strategy or agenda or policy from this federal government, at a time when we have the worst housing affordability crisis on record. That, to me, is a disgrace, and it is just not good enough for the minister to say that he has sympathy for people. I am sure he has sympathy for people who are struggling with the housing affordability crisis. But that is not good enough.
You cannot wrap yourself in glory and self-praise for the good economic indicators and then refuse to take responsibility for one of the worst and one of the most serious economic indicators in the country. As I said, low unemployment is great; low inflation is great; wages growth is great. But if none of that keeps pace with something as fundamental as housing affordability, then all of those gains are being outweighed by the losses in the housing affordability area.
And it simply beggars belief that there is a refusal to act at national level on this issue. It is bad enough to just keep shifting the blame. That is what governments do all the time; I appreciate that. But to refuse to act, to refuse to adopt a national strategy, is simply ridiculous. And it is beyond belief that the minister could suggest that there is nothing extra the federal government can do about housing affordability issues. Yet that is basically the substance of the reply that Senator Minchin gave today—as it has been all the other times I have raised this issue and asked him pretty much the same question, year after year after year. The response has been the same.
The Housing Industry Association is responsible for putting together the housing affordability index, and it has called for a national summit on housing affordability to work together with all the industry, social, community housing and union groups, as well as state and local governments, and they have called for a national approach and national leadership on this issue, as have many other groups across the political spectrum. The Housing Industry Association is hardly a radical left-wing body; it is an industry association that has a lot of knowledge and expertise in this area. It is simply ridiculous that we are not getting action. The Democrats repeat our call for this to be made a national priority and for there to be action at a national level. It is something we would support and cooperate with. It does mean looking at all of the issues; it does mean a holistic response; it does mean showing some vision—(Time expired)
Question agreed to.