MATTERS OF URGENCY

Senator BRAGG (New South Wales) (17:16): The government must assume that the Australian people are absolutely stupid, because, when you have failed to get houses built, as this government has, and when you have presided over a massive collapse in new houses and when you have seen the biggest surge in our population since the 1950s and then come along with the gimmick of a five per cent deposit scheme where you have 95 per cent mortgages in that constrained environment—the Australian people are not stupid, and they know the result of that is going to be higher prices.

What we're seeing now is the highest price growth at the entry-level point for first home buyers in living memory. All because Labor have failed on supply, and they have now opened up this scheme to everyone. This was a scheme that was designed for lower income earners; now it is a scheme that is open to any Australian of any means, including, potentially, the children of billionaires.

What you're seeing now is people using the scheme who don't need that support from the government, and that is now inflating prices. As I say, the major problem with the government's housing policies is they have failed to get houses built. They inherited a housing system that was building 200,000 a year, on average.

They have crashed that down to 170,000 a year, on average, and they have enlarged the population by the biggest margin since the 1950s. It has been a massive failure on supply. Then you see the government's flagship scheme, the housing future fund—it's got 10 billion bucks.

It's been going for two years. It's built no houses, as far as we can find, but what it does have is a massive problem of governance and cohesion, and it is disgracefully overspending the money that it proposes to spend in the future. The average cost to build a house in Australia is about half million dollars, but the Housing Australia Future Fund proposes to spend up to $1.3 million per house.

What a disgraceful waste of taxpayer funds! Only the Labor Party could conceive of a scheme that doesn't build houses but proposes to build them in the future and overpay by up to three times more than they should. Now we see this home guarantee scheme come in, raise the prices and push first home ownership further away than it's ever been for many lower and middle-income Australians.

You wonder why people are frustrated. We would say that, if you want to have a government scheme like this, make it targeted, give it to lower income earners—people who really need government support. Don't debase a targeted scheme, particularly when you've failed on supply.

This is the main point. We can have a debate in this chamber about the nature of housing, but it is in some form a market of supply and demand. We can't escape that, whatever our political persuasions or views may be.

It is a product of how many houses there are and how many people want to buy them. That is going to drive, in the main, a part of the pricing. When you have fewer houses per person than you need, when you have fewer houses by any historical analysis because of a larger population and when you open up a free-for-all scheme, you're going to have a problem.

Those entry-level prices for Australians are going to be more out of reach than they ever were. I'm not sure whether the government has a brain or not—that's a question for the government—but, if the government had a brain and a heart, it would go back to the drawing board on its housing policies, because its Canberra based bureaucracy has failed to build houses.

Its five per cent mortgage scheme is going to make it harder not easier. So we would urge the government to take stock. Look at what you've done over these last 3½ years.

You've been in government for a long time now. The problem is getting worse and worse not better, and if all the Labor senators want to come in here and say how fantastic their five per cent scheme is then I would highly encourage them to go and listen to what people are finding in the marketplace. They're finding that they cannot buy an entry-level house.

This scheme is going to make it harder not easier. It is absolutely crazy, stupid and incompetent.