E&OE TRANSCRIPT
DOORSTOP
SYDNEY
FRIDAY, 21 APRIL 2017
SUBJECT/S: Labor’s plans for housing affordability and jobs; citizenship; Abbott v Turnbull
MIKE FREELANDER, MEMBER FOR MACARTHUR: I'm Mike Freelander, the Member for Macarthur. It's a really great pleasure to welcome here today, Bill Shorten, Leader of the Parliamentary Labor Party and the next Prime Minister of Australia. Chris Bowen, Australia's next and I'm sure great Treasurer, and Senator Doug Cameron, our Shadow Minister for Housing. It's a great pleasure to welcome them here today, I'm very grateful for them coming to the beautiful electorate of Macarthur, and I'll hand over to Bill to make some opening remarks about housing affordability, which is really important to me and is really important to the families and the kids that I’ve looked after here for the last 33 years. Thank you.
BILL SHORTEN, LEADER OF THE OPPOSITION: Thanks very much Mike and good morning everybody. Tomorrow in auctions across the big cities of Australia, first home buyers will face a rigged playing field, a rigged competition. At the moment in Australia we have taxation and superannuation laws which favour property speculators over first home buyers. There is a crisis in housing affordability in Australia. Now, we are 45 or so kilometres from the centre of Sydney, and these well-made houses behind us, house and land packages, are going for $700,000 and $800,000 each.
The great Australian dream of owning your first home is rapidly becoming the great Australian nightmare. So I and Chris and Doug are very pleased today to be announcing Labor's second round of policies which will actually put the great Australian dream of owning your first home back within reach of working and middle class Australians.
Chris in a moment will talk about our plans and our commitment to negative gearing reform, and capital gains tax concession reform, and we will also be talking about our new ideas to deal with a vacant property tax, to look at how we increase some of the charges around foreign buyers of local homes. And, of course, how we can help stabilise our superannuation sector and the role of self-managed super funds.
Doug Cameron will then talk about our commitment to social housing, because when we talk about a housing affordability crisis in Australia, I don't just refer to first home buyers, I refer to those Australians who are renting, who live in public housing or indeed, even worse, have insecure or no proper housing at all. Labor is committed to not only restoring the dream of first home ownership, but we're also committed to making sure that all Australians, whatever their personal circumstances, have secure housing. I will hand over to Chris now and then to Doug.
CHRIS BOWEN, SHADOW TREASURER: Thanks very much, Bill. As Bill said, there is a housing affordability crisis in Australia. There is a housing affordability crisis on Malcolm Turnbull's watch, and not only have the Liberals been asleep at the wheel, they've made the problem worse. Since the Liberals came to office, house prices in Australia are up 30 per cent, 50 per cent here in Sydney. Young people in particular, wondering how they will ever afford to get into the housing market. Parents and grandparents, wondering how their children will ever afford to get into the housing market.
Now the Liberals have been like kangaroos stuck in the headlights, not knowing what to do about this, they bicker amongst themselves. Where Labor has led the debate, led the debate on negative gearing and capital gains tax, an important part of our reforms which of course we are recommitting to. But of course we recognise that more needs to be done.
Any plan which doesn't reform to negative gearing is a sham. Any plan which doesn't involve reform to capital gains tax is a joke. These are at the core of Labor's plans, but we have more to do, and today we are announcing more measures. I'll deal with measures around self-managed super and foreign investment and then Doug will deal with matters around social housing.
Firstly in relation to self-managed superannuation. In 2007 the Howard Government allowed self-managed super funds to borrow. Now, the Liberal Government commissioned David Murray, former chief executive of the Commonwealth Bank, to conduct the financial systems inquiry. It recommended two and a half years ago that this be banned for reasons of financial stability. Because the Murray Inquiry, as has the Reserve Bank, recognised that this is further overheating the market and is providing risks going forward, very real risks for our economy. And if the worst happens, it is people who can't afford to diversify their investments who pay the biggest price, who have all their investment, all their wealth tied up in their house. So this is first and foremost a measure on financial stability. Scott Morrison has been negligent on this matter. He has ignored the calls to ensure that our tax system has its distortions removed which encourage over leverage, and he has utterly ignored David Murray's advice, which I note that David Murray in the newspapers today reinforced and said the Government should adopt immediately.
Now it is true that self-managed super investment is a relatively small part of the market, but it is growing rapidly. It was around $2 billion in 2012, it's over $20 billion now. It is growing exponentially. It is an explosion, it is a factor in the overheating of the market and it needs to be dealt with.
Now another factor that needs to be dealt with is foreign investment. We would never say that foreign investment is the biggest cause of the house price explosion, but it is a factor. And as part of our well-calibrated, holistic plans, it does need to be addressed.
The measures we are announcing today complement what state governments are doing. Firstly the vacant property tax. We pay tribute to Daniel Andrews and Tim Pallas who have introduced such a tax in Victoria. We think it would be best done on national basis. To be clear, it would remain a state tax. The states would continue to receive the revenue created, but what we think would be best if there was a coordinated process through COAG to see the tax applied by states and territories in a coordinated way, and we would be happy to facilitate that, if states are willing to, through the COAG process under Bill's prime ministership.
Secondly, in relation to foreign investment, again, this is growing rapidly. It's a relatively small part of the market but growing rapidly – growing at a very fast rate. Again, many states have provided a surcharge on stamp duty for foreign investors. We would double the Foreign Investment Review Board application fees, and we would also double the
penalties for breaches of the law when it comes to foreign investment. Again, this is a carefully designed contribution to complement what the states are doing. To send a price signal in relation to foreign investment.
Now, we always recognise that there must be many parts to our plan, and importantly, social housing is part of that. Particularly before I hand to Doug, it's worth noting that the biggest cause of homelessness in Australia is domestic violence. And there have been cuts made under the Liberals which are unconscionable, and today we are making commitments to reverse those cuts and to do other things. Because social housing must be part of the broader solution which only Labor is providing.
The Government, at war with themselves, not only about housing affordability, but all sorts of things, while Bill and our team are focused on what matters to Australia and to Australians, caring about how to get into the housing market as we're underlying our detailed announcements today. Doug.
DOUG CAMERON, SHADOW MINISTER FOR HOUSING AND HOMELESSNESS: Thanks, Mike, Bill and Chris.
Not only is housing affordability a big issue in Western Sydney where I live, but it's an issue across the country. I must say that not only is housing affordability talked about, but rental affordability is a key issue as well. And Labor understand that it's not just about housing affordability. We also have something like 270,000 houses that need to be built so that people can get into housing generally across the country.
And what we have said is that we want to help build houses, and what we want to do is increase employment, and what we want to do is ensure that we have a process through a bond aggregator which will allow the community housing sector to engage in more house building across the country. I think the bond aggregator is accepted by everyone who has looked at it as an important aspect of building more homes in that social housing sector.
We also want to, as Chris has said, look after the most vulnerable in our society. And that terrible 2014/15 Coalition Budget took $44 million a year out of safe housing. Safe housing for older women who were in a homeless situation, safe housing for young people coming out of care.
So we will put that $44 million a year back in that the Coalition took out, and we will work with state governments to make sure that that $44 million is matched by state governments, to ensure that we have got community housing and safe housing for women in domestic violence situations, and young people coming out of care. That's an extremely important issue for Labor.
The next issue we want to deal with is the National Affordable Housing Agreement. We recognise that there are some deficiencies in how that agreement is operating, and we want to work with the states to get more accountability and more transparency. And we want to make sure that there are incentives in that agreement for planning reform, so that we get planning reform done quickly, and that we get that situation resolved to get more houses built.
We want to have inclusionary zoning, where if speculators and builders are making profits out of building, there should be something coming back into the social housing area, and you should include in the development applications, in the development that is awarded, inclusionary zoning for community housing, and we want accelerated release of state and territory land.
So we want to talk to the states about this. We want to make the National Affordability Housing Agreement, an agreement that looks after the renters in this country, looks after the disadvantaged, and works in coordination with what we're doing on housing affordability to make sure that no one in this country is left behind.
Everyone has got a right to a house, whether it is a bought house here in Claymore, or whether it is an affordable community house, or whether it's public housing, everyone deserves housing. Because that improves productivity, that improves economic stability, and that improves the capacity of us to be an internationally competitive economy.
I'll leave it at that.
SHORTEN: Thanks Doug. Are there any questions?
JOURNALIST: Mr Shorten, given your policy will only moderate growth rather than bring house prices down, isn't it a bit disingenuous to say that you've fixed the problem?
SHORTEN: I will get Chris to supplement my answer, but let's call it straight here. The Liberal Party is putting housing affordability for young Australians in the too-hard basket. You cannot be fair dinkum about helping first home buyers get their first home unless you are willing to reform negative gearing, unless you are willing to do something about foreign buyers, unless you are willing to do something about the self-managed superannuation fund borrowers in the future.
And let's also be straight – we are not making any retrospective changes. Anyone who has invested under current SMSF rules or under current negative gearing are not affected. Now, you could have a bigger effect if you were to do it retrospectively, but that's not the sort of government Labor intend to be.
But what we won't do is kick down the road the problem of housing affordability. Tomorrow, right around Australia, there will be auctions where young people and their parents and perhaps even their grandparents, have tried to get enough money for a deposit so they can bid on that house, and they face a rigged set of rules. It's like a big game of monopoly, which most Australians don't have the money in, and some people, because of unfair taxation laws have got an unfair advantage. So Labor is very committed to putting housing affordability up.
The other thing which we've got to be at pains to stress is our package is a fully thought-out package. It improves the budget bottom line, it will generate tens of thousands of extra jobs, it will tackle supply, but it also recognises that we've got lots of renters, we've got lots of people in public housing, we've got lots of people with very insecure housing or indeed, are homeless.
Only Labor has a plan for all Australians to have secure housing, but I might get Chris to talk further about the impact of our polices.
BOWEN: Thanks Bill. Very briefly, because Bill covered the field very well. Of course, remember Malcolm Turnbull and Scott Morrison ran around in the election campaign claiming that our policy will be too effective, that it was going to crash house prices, which was always a lie. What our policies are designed to do is take the heat out of the housing market and also to give, as Bill said, first home buyers a better chance, if you like, to change the composition of the buyers so that when a first home buyer or owner-occupier turns up here or anywhere else in Australia at an auction, they are not bidding with one hand tied behind their back as the investors have negative gearing in their hand. That is the case at the moment. That first home buyers get less support from the Government than the fifth, sixth or seventh home buyer adding to their property portfolio. We just think that's wrong.
JOURNALIST: Mr Shorten, what would the details be on the extra tax for foreign investors? And are you concerned that this will take out potential bidders to the market for those that already have houses, and have bought those houses on the faith that this could be bought from anyone, anywhere which could see the prices rise?
SHORTEN: We are not proposing retrospective changes to negative gearing, and we are not proposing retrospective changes to people who have invested under current SMSF borrowing rules. But we need to do something about housing affordability.
I mean let's have a look – the Government policies is get rich parents, move to the bush, get a different job, and now we notice Malcolm Turnbull today walking away from saying that housing affordability will be a centrepiece of the budget. So the latest housing policy is, it's all too hard, don't bother me. We have got a government who puts housing affordability in the too-hard basket.
Now, you go to the issue of foreign investors. The fact of the matter is, I think that whilst it is a relatively small proportion, and it is a small proportion, and I will get Chris to supplement it with numbers, foreign buyers, I think people probably think that there should be a charge if you are going to be invest in this country. And so we proposing doubling that. A vacant property tax is something which has been utilised in Canada, it's been utilised in Victoria, we want all of the states to have a look at that. And what we would like to see the states do is have a common approach so that foreign buyers can't game the system around the country. And what we would like to see states do is put some of that money they raised from a vacant property tax back into social housing and public housing, but Chris can talk a bit further about the numbers.
BOWEN: You just asked about the detail around the foreign investment changes, so it is pretty straightforward, Charles. At the moment, there are a set of fees, it depends on the value of house being bought. It ranges from $5,000 for less than a million, up to a bit more than $20,000, we would simply double those. So $5,000 fee becomes a $10,000 fee and so forth. And same with the penalties for not complying, and the penalties for not complying are substantial, but they need to be substantial, and they need to be more substantial in our view, otherwise people will take a punt that they can get away with it, and they will pay the price if they need be and they can factor that in.
As I said before, in and of itself, is this something which will change the entire housing market? Of course it's not. But it supplements what the states are doing, seven per cent surcharges now in most states for foreign investors. And it is a signal that we are sending, a price signal that we are sending to say, while of course foreign investment is part of the mix, we are entitled to send that price signal going forward and we are outlining very clearly, as we always do well in advance of the election, what our approach will be. There will be no surprises from a Shorten Labor Government.
SHORTEN: Are there other questions?
JOURNALIST: Mr Shorten, on the Government's proposed changes to citizenship, you've said that there may be merit to same of the Government's changes including longer waiting times and higher English standards. Are there any elements of the package you would not support?
SHORTEN: We haven't seen the legislation. Let's call this newfound interest by Malcolm Turnbull in the citizenship test for what it is. He is a desperate man trying to fend off Tony Abbott and the right wing of the party. And what he wants to do is distract people from his problems there.
Now, if there is a discussion about making sure that prospective citizens have got a reasonable grasp of English, well, that's fair enough. If they want to have a discussion about waiting times before you become an Australian citizen, well we will hear the detail of that.
But what I'm not going to do is be distracted from what I think some of the other big issues are in this country – housing affordability, Australian jobs - we've got a gas crisis. Malcolm Turnbull, now a month ago said he would fix the gas crisis in manufacturing, then he had a meeting on Wednesday which absolutely nothing happened. The real problem I think we have got in Australia is the making sure the crazy situation where a Japanese industrial company can buy Australian gas more cheaply in Japan than an Australian industrial company can afford to pay for Australian gas in Australia, now that's jeopardising tens of thousands of jobs. I want to know what Turnbull is doing about that.
I want to know what Turnbull is doing about housing affordability. My prediction is, having sort of tinkered and danced around and skirted around the edges of it, he will just attack Labor and he will say it is a state issue. The fact of the matter is that while states have a role in supply of housing, there is no doubt in my mind that the Federal Government has some levers. They need to reform negative gearing. They need to look at the vacant property tax and helping the states work on that. They need to look at the consequences of allowing unfettered borrowing by self-managed superannuation funds. Only the Federal Government can really clamp down and make sure that foreign buyers are contributing their fair share to Australia. So these are levers that the Federal Government has, and only the Federal Government can do some of the funding for social housing.
JOURNALIST: Is Tony Abbott still serving Australia?
SHORTEN: Well I think the problem in the Liberal Party is they have two Prime Ministers, and as a result, the Liberal Party needs to wake up to itself. They need to sort out who is running the Liberal Party, and what they need to do is get back to the job that they are paid to do by the taxpayers, which is not fight each other about one job, but start standing up for the jobs of all Australians.
Really, the circus has got to end. If Turnbull is too weak to deal with Abbott, well then maybe he needs, to you know, ask himself what he is doing in the job. This division is what turns people off politics. They have to stop fighting each other and start fighting for Australia.
Alright, thanks everybody.
ENDS
