QUESTIONS WITHOUT NOTICE: TAKE NOTE OF ANSWERS
Senator SHARMA (New South Wales) (15:04): I move: That the Senate take note of the answers given by ministers to questions without notice asked by Opposition senators today. We're seeing a slow-motion wreck of the housing market. National Australia Bank just reported today they've seen a 16 per cent decline in home loan applications.
Westpac reported last week a 20 per cent decline in home loan applications. CBA had a 15 per cent decline, and ANZ had a 12 per cent decline. These are some of the biggest quarterly declines we've seen in the housing market.
It's not just a case of buyers losing out here. As the National Australia Bank chief executive Andrew Irvine said today: It's not just owners, occupiers and investors. There's a whole supply chain of people who make their living in the housing market, and they're struggling right now.
When the housing market suffers, the Australian economy suffers, and, more importantly, as house prices come down—which they are undoubtedly doing—it changes the economics of new builds and new constructions. It's less attractive for a private builder to enter the market if they're going to be able to sell the house for less, and with the high cost base they've got, all we can say is that this is going to further discourage new construction in the housing sector.
What we have here is a loss of confidence in the housing market. Investors are staying on the sidelines. Buyers are not entering the market; sellers are not putting their houses on the market.
We're seeing that in the decline in home loan applications across the board. But we're also seeing higher rents. In my own town of Sydney, the June quarter figures showed that rents increased by $50 a week, or 6.3 per cent.
That's the highest increase there has been in four years in rents. If you're not in the market to buy a house but you're in the market to rent a house, you are worse off as well. We're seeing fewer homes.
Labor's own budget papers—Treasury's authored budget papers—predict that there will be 35,000 fewer homes because of Labor's policy. We've got a situation where we've got fewer homes getting built, we've got higher rents for those who can't afford a home, and we've got a fall in confidence in the housing sector, which is discouraging new builders—and certainly investors—from entering the market.
When you couple that with the low productivity growth we are seeing in the economy, and we've just seen from the RBA Statement on Monetary Policy last week that productivity growth has declined. Rather than growing 0.2 per cent through 2026, as they expected, they now think it will contract by 0.5 per cent over the year. Even just over a year ago, the RBA downgraded its long-range forecast for productivity growth in the Australian economy from one per cent to 0.7 per cent.
We've got worsening productivity performance in Australia, and, as the Reserve Bank said last week as well, when the economy is as weak as it is, when productivity is not growing, that constrains the ability of the economy to grow anywhere above two per cent without generating high inflation. And that's what we've got in Australia at the moment. We've got inflation that has now been outside the RBA's target band for well over 36 months—still not within it.
We've got inflation still running at well over three per cent. We've got people's real wages declining. If you look at the ABS stats from last week, average weekly full-time earnings grew 3.7 per cent over the year.
Inflation over the same period was four per cent, and the higher nominal earnings mean they're paying more in tax. An average worker, on average full-time earnings, is worse off by about $570 a week. These are all design features of Labor's economic policy.
A weakening housing market is a design feature. High inflation has become a design feature. High interest rates, which accompany it are a design feature.
Low productivity growth is a design feature. Growing public sector spending is a design feature, and higher government debt—about $986 billion the last time I checked—is another design feature. These design features of the Australian economy are hurting Australian workers, and they're making our economy weaker.