Page 879 - Week 03 - Wednesday, 2 April 2008
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I think there is little doubt that public concern over interest rate rises, capitalised on by the then federal Labor opposition, was a strong factor in eroding support for the Howard government, which became the fall guy for the incompetence of the states and territories. In fact, at Rudd’s housing affordability summit, the focus by participants was not on rates but, in fact, on state and territory taxes and charges.
In the December quarter 2007, the house median rose above $450,000 for four out of eight capital cities, including Canberra. The report Beyond reach by the Residential Development Council found that an ambulance officer and a nurse earning between $75,000 and $103,000 could only purchase a median priced house at four locations—all in Melbourne and Hobart—and could only purchase a median priced unit in nine locations out of 16. A single full-time childcare worker on $35,000 would be completely locked out of home ownership and able to rent only in one location—Glenorchy in Hobart in Australia.
Renters are negatively affected by the increase in interest rates and property taxes. Recent media commentary in the Canberra Times suggests that home affordability can be improved by removing or restructuring negative gearing provisions. This is totally deluded as it would immediately decrease the supply of accommodation, already scarce in the ACT and elsewhere. The last time a federal Labor government tried this, this is exactly what happened, and Keating had to reintroduce it 18 months later. What we need are incentives to increase supply, not to take investment out of the housing market.
At the territory level, as Liberal leader Zed Seselja has often pointed out, we have had a problem with the Stanhope government’s failure to release land in a timely manner. It is scarcity of land and, in turn, housing stock due to bad management by this government as well as a raft of increasing taxes and charges which have made housing so unaffordable here in the ACT. The report of the ACT government’s affordable housing steering group last year was only the latest report to be given to this government about the parlous state of housing affordability in the ACT.
The government’s own task force on housing affordability brought down a report in 2002, but little action followed despite the task force warning that solutions could not be instant and something needed to be done urgently to stop the acceleration of housing stress. The Chief Minister admitted at the launch of the task force report that the ACT has the lowest rental vacancy rates in the country, as well as the highest rents in Australia. Yet he continues to churn out media releases celebrating the affordability of housing in the ACT. It was significant that Mr Stanhope admitted for the first time on this occasion that the government got it wrong in not having a land bank—that is, a stockpile of land ready to release to the market as required. The government is largely responsible for the creation of the land supply shortage through not releasing enough land. Why has the government taken so long to realise this? Canberra is a planned city and there is no excuse.
Speaking of the initiatives mooted in the task force report, on the plus side, deferral of stamp duty and lowering the amount of duty payable for eligible first home buyers are welcomed. The deferred land payment until the certificate of occupancy is obtained
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