MATTERS OF URGENCY

Senator BRAGG (New South Wales) (18:53): After 4½ years of government, the Labor Party seem confused and bewildered that their model of housing has not worked well. We have seen over this 4½ years more taxes, more red tape and more regulation, which has resulted in fewer houses. Under the Australian Bureau of Statistics data, you can see that we are getting at least 25,000 to 30,000 fewer houses a year under this government compared to the prior government.

After having spent billions of dollars and wasting billions of dollars of taxpayer funds on housing, and bragging about it with their silly social media posts, we are getting fewer houses. That is because the government has made home building uneconomic, and the way that we hear the government talk about small business—the way that they talk about the construction and building sector shows a fundamental misunderstanding that, in fact, in this sector of home building, there are many, many thousands of small businesses.

In fact, almost all the businesses that do business in the construction and building sector are small businesses. Three out of five businesses, on average, will be using a trust for the ongoing management of their building company, and so these changes to trusts will cascade through a sector which has already been smashed by taxes and regulation over these 4½ years.

As I say, the government seem confused that their economic model for housing where you have more taxes and more regulation has delivered fewer houses, but that's actually the orthodoxy working as it should, because, if you tax something more and you regulate it more, you are likely to get less output. That is what we are seeing with housing. The issue with this new trust tax is, yes, it is imposing a higher tax burden on something that the nation needs more of.

The government is saying we need to have more taxes on housing to get more houses, and that shows you really how bad and stupid the government is. The restructuring now that is going to be required might cost up to $13 billion in the building and construction sector, and that's all these small businesses. The tradies, the subcontractors, whatever, who are home builders are now going to have to consider restructuring.

What for? Just to pay higher taxes. The industry is on its knees.

It's on its knees. Look at the data. We're getting fewer and fewer houses.

Building companies are leading the nation in insolvencies, and so what's the government's solution? We should have a complicated, convoluted trust taxation that's going to apply to three in five businesses in the building and construction sector. That will solve the problem.

That will fix it. It'll be all sweet. That's their solution.

The proposal put forward the excluded election trust, which is a rigid approach which will fix the rules of trust, will mean that the trusts that have been used by building companies will no longer operate as intended, and so it introduces an arbitrage where, in fact, you might get a different outcome if you're in a trust compared to running as a sole tradership.

At the end of the day, why would the government want to impose restructuring costs on small building companies that are trying to build houses for Australians? It just seems bizarre to me. But they want to impose legal costs, accounting costs, valuation costs, licensing costs, insurance costs and, of course, stamp duty costs on these small businesses that are trying to build houses.

This is another ridiculous tax on the people who are trying to build Australia out of Labor's housing crisis. It shows a fundamental misunderstanding. The government doesn't understand that the bulk of the businesses in the housing system are using trusts.

They're using trusts because that is how they've been advised to set up for efficient operation, and they've already been underwater with 16 interest rate rises, new taxes, more red tape, more regulation and national construction codes which are designed for the unions not designed for the people. This is going to be the last straw, and people are just going to give up.

When the government say, 'We can't get enough houses built,' that's because—the government's been in office for almost five years. They've collapsed housing supply because they're stupid. They actually are stupid.

If they wanted to build houses then they would be honest and say: 'Yes, we did read the book Abundance. Jim Chalmers did read the book Abundance where we understand that the central thesis is less regulation and fewer taxes will promote construction and supply.'