Page 3240 - Week 09 - Tuesday, 19 August 2008
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vacated. The bottom line in all of this is merely that elementary lesson of economics—that price is determined by supply and demand. Where governments intervene in the market process to impose high levels of taxes, this also contributes to the costs.
I will admit that the government has taken some steps to alleviate the problem of housing affordability. The government is now looking at its land release and is taking steps to ensure that there is an adequate supply of land in the ACT.
I was intrigued when I heard Mr Seselja put quite a caveat on his position about making land available in the market. For three years I cautioned him about flooding the market with land, as he said that the problem was with a lack of land and that we should get a lot more land out there, which I know the developers who are going to some of these dinners he is having are thrilled to hear about. But I did remind him—and I remind him again for the record, as I have on many occasions—that about 67 per cent of this community own their own homes and that what is a cheap way of going into the market for some is an erosion of their principal asset to others. So when you talk about housing affordability, it means lots of different things to different people.
When I talk to 67 per cent of Canberrans about housing affordability, what it means to most of them is whether they can afford their mortgage costs because of the rising costs of interest, groceries, fuel and the like. When you talk to some others, younger people wanting to get into the market are saying that the cost of getting in is very high. So when we talk about housing affordability, we have to be sure we are clear on where we are coming from and where we want to put our focus.
The opposition leader has focused on those who want to get into the market and is not that concerned about those who have got an investment in the property market which, in most cases, is their most significant asset. But in this ageing community, we are going to find more and more people who are relying on those homes as a very important asset as they move into retirement. For that reason, we have to be careful, in making land available, that we do not repeat the mistakes of the Rosemary Follett era, when the bottom dropped out of the market here and people lost a large amount of money.
If a typical house worth, say, $400,000 or a bit higher drops down by $100,000 or $200,000, it takes one hell of a long time for the average salary and wage earner to effectively generate a $100,000 net improvement in their wealth. So I sound a note of caution, and I found it intriguing today that it was the first time I have ever heard Mr Seselja retreat from his “flood the market with land” position to a position where he is now saying that we have to be careful not to flood the market. I have said it—
Mrs Burke: You did not think housing affordability was a problem three years ago.
MR MULCAHY: I did not ever say that it was not a problem.
Mrs Burke: You said it is not an election issue.
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