Page 935 - Week 03 - Wednesday, 25 February 2009
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regulation he is moving, he is saying the only way that these things can be done is to bypass ACTPLA. We are seeing that more and more. So the delays in the planning system that have been caused by this government by its failure to actually act and make changes in ACTPLA have led to higher prices and a stalling in activity.
The combination of this has led to the situation where so many Canberrans find it increasingly difficult to purchase a home. Remember, this is a government that owns a lot of the land and is a government that develops a lot of the land and is a government that also sets the planning framework and, of course, the levels of taxation, They pull significant levers that go to whether housing is affordable or not, and over the last few years they have made it less affordable.
Let us look then at the scheme itself. We need to look at why this scheme is flawed, why we argued that the scheme was flawed from the start, and why we will continue to argue that. We oppose this legislation because of a number of concerns about how this would work in practice. Fundamental to those concerns is the unlikelihood of financiers coming on board. It is a very simple equation. The reason we have seen such a reluctance from financial institutions to lend under this scheme is because they do not have the security that goes with land. That is the reality.
At the time the Canberra Times said that the government had consulted with financial institutions, which had supported the scheme, and we had someone from NAB saying they may support it in principle. Doubts were raised again in August, and Jon Stanhope said that he had no reason to believe financial institutions would not lend to applicants under the scheme. Well, we have come many, many months since then, Mr Speaker. We did see a bit of a mixed message in yesterday’s question time when we were told by the Treasurer that no-one had received finance, and then we were told by the Chief Minister that one person had received finance.
We were told there were no lenders and then we were told that there is an anonymous lender who has given in-principle support. Well, we had in-principle support from someone who was not anonymous back when the scheme started, and now we have got in-principle support from someone who wishes to remain anonymous. This is the fundamental problem with the scheme. There is a reason why lenders are reluctant, and that is because the price of land tends to go up whereas the price of buildings depreciates. Because buildings depreciate, if a loan is against the building and not the land, there is a far greater risk for financial institutions. This is the simple equation. This is why it is being avoided by financial institutions and this is why the scheme is dangerous.
Secondly, we pointed out very clearly that there is a strong potential, because of the factors that I have just outlined, of people finding themselves in negative equity. They take out a loan and they see their asset—the house—depreciating and the land it sits on that they are renting appreciating and getting further out of their reach. But they do not get the benefit of that appreciation as people do in an ordinary transaction where they purchase a house and land package.
It is worth going through, Mr Speaker, some of the comments that have been made by the Chief Minister and how they compare with the comments of the families who
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