Page 581 - Week 02 - Thursday, 21 February 2019
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the market. That family, rather than being subjected to having a dog in their property while they are away and then fixing up the mess when they come home, getting the allergens out of the house so that their family can move back into it and not have their health threatened—and there are plenty of people like that—will sell their house or will not put it up on the rental market and will keep it empty for two or three years while they are on a posting. These are the practical things.
Mr Pettersson is right on one thing: the fact that once upon a time, 20 or 25 years ago, it did not matter what your income status was; there was still a high proportion of home ownership, no matter what your income status was. Even the lowest percentile of people in this country aspired to and achieved home ownership. It is without doubt a startling fact that today that is not the case. It is extraordinarily difficult for even people on very good incomes to get into the home ownership market.
As a parent, I know how difficult that is. As a parent, it is a barbecue stopper. For people of my generation who know the advantages of home ownership and know how difficult it is for their children to get into the home ownership market, it is a barbecue stopper. We talk about it all the time. Not every family can help all of their children through the bank of mum and dad. Not every family is sufficiently well off to help their children through the bank of mum and dad. Sometimes their families are too large. If you do it for one, you have to do it for all. The bank of mum and dad, when you have got five children, is pretty stretched. These are realities.
What was the thing that caused the decoupling of wages and house prices 25 years ago? I contend that it was not simply a sudden entry into the market of rapacious landlords. There were a range of issues. And what is the biggest and most significant issue in the ACT? It is the cost of servicing land and the fact that the cost of land has risen disproportionately in relation to the cost of building. That is the most significant issue. State governments and this territory government have in their possession the levers to fix that, to modify that, and they will not because they get fat on the revenues of selling land. The higher they sell the land, the more revenues they get, especially when they are the only owner of land in the territory.
The ACT government, which has been here for 18 years, has overseen the rising of prices of land so that it is disproportionately the big factor in house prices. This government, like every other state and territory government in the country, is addicted to the revenue that comes from land sales. That is the principal reason why there has been a decoupling of house prices from wages, not because building prices have gone up, not because rapacious builders are making a motza out of this.
They may laugh, but this is the truth. Mr Pettersson and I were at the same presentation in Melbourne on this very issue. What was the take-home message? The take-home message was that governments were making a killing on land sales and that was the thing that was driving up the cost of land. That is why young people today on low incomes cannot get into the housing market.
Mr Pettersson very conveniently did not report that part of the information. Mr Pettersson said that we on the Liberal Party side think that the only people in this town who are renters are students. I, in passing, by way of interjection, talked about
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