Bucket Full of Holes

29 February, 2024

Thank you for the opportunity to speak on the Help to Buy Bill 2023. The housing issue is not an issue new to this parliament or previous parliaments before it. In fact, it was there in the time of Sir Robert Menzies, who was PM for more than 18 years in this nation and was made Lord Warden of the Cinque Ports by Her Majesty the Queen after his retirement. In the 1961 election campaign, at a public meeting, a gentleman called out to Sir Robert Menzies, 'What are you going to do about 'ousing?' And he said, 'I'm going to put an H in front of it, before I start.' And there lined up the 1961 election, which was won by one seat, I believe.

In the housing policies that emanated from there, from Menzies to prior to the election of this government, the coalition, as the member from Mallee has told us, has had a direct eye on getting people into homes. In fact, the nation's wealth from the Menzies years and his direction of bringing everybody into the housing market made the big difference in this country in getting us to the point where nearly 70 per cent of homes were owned by people who were workers, who were small-business people, who were managers. It was a direction of the egalitarian nature of Menzies to say: 'No, we are not going to have a class society where we've got the rich and the middle class and the poor. We're going to have the middle class getting all the strength that we can give them so we can look after the poor and so that the middle class can earn money, pay tax and own their own home.' That was the trust and that was the world that I grew up in.

Now, when people my age talk about paying up to 18 per cent interest rates, it means we always have an eye on the market and can say that interest rates, as you've seen them prior to the pandemic and post the pandemic, are not real. Of course, I've been wrong for a long time; they have remained low for a long time. Small businesses back in the nineties were paying 22 per cent interest, but, remember, at that time, my loan was $30,000. I was stunned a few years later, when Priscilla Ruffolo—who was a great help to me in the 2004 election campaign and worked with me and Senator Judith Troeth at that time—and her husband, I believe, went out and got a $400,000 loan. I nearly fainted! I didn't realise until then that that was the normal loan for people to go out and get.

I recently learnt of a couple that borrowed $1 million—well, it was probably five or six years ago—to buy their home and pay it off. Now, the problem with that is that one Reserve Bank governor said, 'We're not going to increase rates until 2024.' But 2024 came very quickly. Small interest rate rises, when you're on four and you go to six per cent—that's a 50 per cent increase in your outlays that you need to find out of your household budget. They say, 'It's only four to six.' No, it's a lot of money if you've borrowed a lot of money. Every intervention that I know of that governments have done since I've been around this place—in and out of it since 1990—has increased the price of the home by the value of the intervention.

I believe this policy from this government, the Help to Buy Bill—and it was stated by the member for Mallee, by the way, that programs like this already exist in each state. So why would you say, 'We're going to do that federally,' unless all you wanted out of a policy was something to talk about at a public meeting—so the Prime Minister can turn around and say in a public meeting, 'But we've got our Help to Buy Bill, which is going to help people to get into the housing market.'

What you've got to do to get people into the housing market, in my view, is get out of their lives as much as you can and get out of taxing them the way that you do. And don't forget state governments. The federal government can say, 'We'll give you a helping hand. We'll give you a first home buyer's grant. We'll find ways to get you into housing because it's very important for your wellbeing over your life span. We'll help you, and we're the best government to do it for you.' But then the state government comes along, and I think I've added up between five and nine new property taxes or interventions.

When I talk about interventions in the housing market, I'm talking about rentals as well, because a lot of people rent, and they choose to rent. They choose to rent. People that rent out those homes to those renters, the landlords—so condemned in this country so many times—have had restrictions put on them by state governments that mean their house has to meet a certain standard before they can rent it out. Some of those standards are onerous for an old home. The cost of renovating that house to bring it up to that standard may be too great—to conform with the new paradigm put in by the Victorian state government. Therefore the landlord has a dilemma, and so has the estate agent, because they can't break the law by renting out that house that hasn't got the facilities required.

The renter can't make a decision and say, 'No, that house will do me, it's fine, because the rent's cheaper and I can get into that house. I'll supply my own secondary heating source; I'll supply my own solar power or whatever is required by the Victorian state government. I'll do that and I'll have that house.' The problem is the estate agent is in trouble and the landowner is in trouble if they rent the house to the renter.

So what happens? The house sits vacant or is sold to someone who's going to live in that house, so it goes off the rental market. In fact, in one agent's area—a fairly large agent—150 homes have gone off his rent roll. A hundred and fifty homes disappeared off the rent roll for two reasons. One is that the owners of those homes were people investing in the property market. I've never been a big share investor. My family are not share investors; they're property investors. We always bought property. That was our focus. So these mums and dads, like me, would buy a property. They'd borrow to do it. But the recent increase in interest rates means that their costs have gone through the roof and they've got to hand that on to renters, so you're getting a higher cost of rental. I heard in the Federation Chamber today from the member for Groom that in his electorate, in the town of Toowoomba particularly, the rental opportunity is only 0.9 per cent. That means there are practically no houses at all in Toowoomba to rent. Therefore, when there is a home to rent, what happens? You actually have a line-up of people bidding higher to gain opportunity to have that home as a rental. So they're paying more out of their income for their rentals because of the failings of governments previously, state and federal and local, that have held up property development, slowed down the opening-up of new land and slowed down planning permits. So people are struggling to get into the market.

There are a whole lot of pressures outside of what government's trying to do. It's like having a bucket full of holes. The federal government, with Help to Buy, wants to stand there with a hose and pour water into a bucket with a whole lot of holes in it. The holes are everywhere. That intervention by government at a local, state and federal level means costs and charges put on for every inspection of a new home. A friend of mine building his own home in the city said he couldn't believe the number of charges he had to face up to for every inspection on the home. Every time there was a stage completed in the home, the inspector came in and it was another $400, another $700 or another $1,000 for an intervention that, in the past, we wouldn't have had. My generation didn't face the property taxes we face today and a generation of developers didn't face the taxes they face today. So there are all sorts of barriers being put in place by government in the interests of the government's income.

I believe—I'm not sure, as I haven't checked with the Parliamentary Library ; I'd like to check with the library—that 60 per cent of Victoria's state government income is now coming from property taxes. Our generation didn't pay those property taxes. They didn't pay the land taxes. They didn't pay the increases in land taxes. There has been dramatic land tax increases in Victoria over the last three years, the last three budgets, and they're putting them up again. I've even had a member of parliament in this place who inherited a property from her parents complaining about the Victorian land tax bill that she has to pay and how it's risen. She has terrific tenants in there that have been there for years. She can't put up the price on those people. They're family to her.

So this bill, I believe, will not be a help-to-buy bill. I have a fundamental problem with government intervention. I hope I have made this point in this address—that is, when the government encourages a couple or an individual—

Dr Webster interjecting—

Mr BROADBENT: I hear from the member for Mallee that it's 52 per cent women. That's great. That never happened in my day. It's great women have the opportunity. But every time there's an intervention it puts another increase on the price that the individual pays either as a renter or as a builder. You can be encouraged to be in an arrangement that the Australian government is involved in where increases in interest rates or costs will leave you out of pocket and out of a house. The house will go back to the bank. For any of you who have never been here at a time when banks have gone to people and said, 'You can no longer afford to live in that house because we own more of it than you do and you're out and we've going to sell it off,' they have the right to do that. Anybody my age and a little bit younger would remember those days of people losing their homes. They'd remember the mortgagee auctions. You know who benefits out of that—only the wealthy. I pray that this bill does not lead people into an arrangement that will cost them dearly in the long run. A house and a home is very important to every family, from all the way back to Sir Robert Menzies. Put an 'h' in front of housing—that's what we have to do to concentrate our efforts on our next generation. Thank you for the opportunity to address the House.

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