Page 1862 - Week 07 - Wednesday, 22 August 2007
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superannuation rather than in properties and, therefore, contributing to the housing affordability crisis. In contrast, experts in tax have pointed out recently that rates and land tax, which have been increased under his government, are more likely to dissuade investors from the Canberra market. Treasurer, what evidence do you have that supports his argument that new superannuation laws, rather than higher rates and property taxes, have discouraged investment in housing?
MR STANHOPE: It is probably fair to say a myriad of reasons influence decisions around investments. Some investors will take into account issues such as land tax or stamp duty, just as some other investors will choose to invest in the share market rather than housing. Other investors will choose to put any excess funds into superannuation. It is clearly nonsense for anybody to say—as I have seen recently in a newspaper report—that no investor has chosen between superannuation and housing, because some investors have. I know them.
Some investors have decided to invest in superannuation instead of in housing. Investors who previously sought to utilise the attractiveness of negative gearing and to invest in housing have shifted to superannuation. I have spoken to such investors. I do not have broadscale, detailed evidence.
Mr Mulcahy: Where is the empirical evidence? Even Michael Bannon’s year 11 economic student would not come up with that theory.
MR STANHOPE: That is what I mean. For somebody to come out and say this is nonsense, that it would never happen, is just crazy. Any reputable economist who would suggest that no investor has ever chosen to move from housing to superannuation is talking arrant nonsense. It is reasonable to suggest that one of the factors that has affected investment in housing is the move by some investors to other forms of investment, whether it be superannuation or shares. I stand by that.
I challenge anybody to suggest that there are not people now investing in superannuation who previously might have been investing in housing. It cannot be done and nobody would dare suggest it. I stand by the statement I made. There are a myriad of reasons for decisions that investors take. One of them is that they find superannuation easier, less messy, than a house. Others like the share market, some like housing. The bottom line is that the investment proportion of housing finance commitments in the ACT has remained essentially static over the past five years. The five-year average in investment in residential property within the ACT is 31 per cent. In the much-vaunted March to June quarter the level of investment in residential property in the ACT was 37 per cent—six per cent above the long-term average.
The Real Estate Institute and its president pontificated that there has been a rush of investors out of the ACT. That is not what the facts show. It is not what the statistics show. That is not what the finance commitments show. What they show—
Mr Mulcahy: You just contradicted yourself. You just said they had taken their money out of housing and put it into superannuation.
MR STANHOPE: I said some. Some would. I have spoken to them. I am not contradicting myself at all. I am contradicting the Real Estate Institute. I am
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