MATTERS OF PUBLIC IMPORTANCE
Senator CADELL (New South Wales—Nationals Whip in the Senate) (17:39): I love it when people come in here and they have carefully manicured notes off their talking points and the secure website, what they should say on these issues such as housing. But there's always one little thing that comes along—that is, reality. The reality is that the Labor Party can't get here and say that this isn't by design, because Budget Paper No. 1, page 158, says that they expect the taxation changes will create 35,000 fewer homes.
It's in the budget papers. All the talking points in the world about how this isn't causing a problem don't matter, because the budget papers you relied on for these changes give the game away. It's more than that.
These are the budget papers that said rents would go up $2 per week based on these changes, when we've already seen $100 per week changes—and we heard Senator Pocock talk about one-third of people renting. You're ignoring the facts of what's actually happening on the basis of talking points, and that's not what Australia needs right now. When you go through this and see the fall of confidence in the market, we see prices stagnating.
We see prices falling in capital cities. We see billions and billions of dollars of earned wealth disappearing from people who already own their home, who've done their work, who've paid their taxes, who've paid their mortgages. You've reduced confidence in the market.
What you're forgetting is, in the market, almost half of all dwellings are built by developers for profit. In the fresh home market, the vast majority—about 75 to 80 per cent—are built by owner-occupiers: 'I want to build a home. I'm going to pay for it.' But when you get to apartments, when you get to townhouses, when you get to other things, the vast majority are built by developers.
They're looking at the increased costs of different things and they're looking at the bullying in the industry around the CFMEU, and they're saying the risk isn't worth it anymore. So, for the last four years, half of the 170,000 to 210,000 dwellings that are built every year in this country now have a big question mark—are they going to be built in the future?—because they don't stack up.
People I've been talking to say they look at their costings and they do their budgets and they know what's going on today, and they figure the costs they're exposed to over time by changes in structures and changes in the CFMEU will be compensated by the price rises of their property over the same time. They do their budgets now for what will happen, but now they know there is no increase in value from the moment they hit FID, final investment decision, to the time they construct it.
So now they're saying, 'I won't build it; I won't take the risk.' Imagine, when we are already bringing more people into the country than the homes we're building, taking another half of that market and not building it anymore. Say we dropped to 100,000 homes a year. What happens then?
There is a greater push on services and a greater push against migration—the migration we need in some instances—because we're not building enough homes. It is all because we have crashed confidence in the housing market by design, not accidentally. It's black and white on the pages.
We say we're going to build fewer homes. We say that knocking down the value of people's existing dwellings is a good thing, but it is not; it will cause problems tomorrow. Holding values might be one thing—we don't need to go up by the rates we've gone up historically—but dropping values is a bad thing.
When we hear the NAB saying there's been a 14.5 per cent drop and when we hear CommBank saying there's been a 16 per cent drop, when we see these numbers—that has real value; that is trillions of dollars of value across the Australian economy. Earlier today we heard an anecdote about a businessperson with property who's getting a margin call because they think the LVR, the lending-to-valuation ratio, has dropped to a point where they have to come up with a significant amount of money to cover that gap.
That is the reality of the confidence we are doing in the property market, and it is not good enough. It will cause secondary problems. When we are building fewer homes, it will judge out in the market itself: prices will eventually go up in two or three years, when these things aren't coming online.
But, in the meantime we'll have more social problems. The only way to have an efficient housing system and fix this housing problem is to facilitate construction, whether it be private homes or public homes. The settings are wrong right across this—from council planning laws to everyone in the world who thinks they've got an idea about what should go in the house, as well as the regulation and the building industry codes, which change every day.
It needs to be a simple, confident market where people know what they can build, know they can make money and develop the 170,000 to 210,000 homes we rely on every year. The ACTING DEPUTY PRESIDENT ( Senator Ghosh ): That concludes the debate on the matter of public importance.