Additional comments – Senator Andrew Bartlett
I support the Committee's report and the recommendations.
The report is a valuable and fairly comprehensive examination of a complex but
very pressing issue. It is a great shame that the previous government did not
engage in or examine many of these issues over a period when the crisis in
housing affordability continued to worsen considerably.
Given the seriousness of the housing affordability crisis
and its entrenched nature, I am concerned that there needs to be some more
immediate measures alongside the medium-term proposals put forward in this
report, as well as those being adopted and considered by the new federal
government. I believe the single most effective measure to provide an immediate
increase in affordable housing is to boost funding for the supply of affordable
rental housing. While I support and welcome the proposal in Recommendation 10.2
to boost the supply of social housing, given the urgency and entrenched nature
of the problem, there are grounds for supporting a greater boost in funding in
this area.
I particularly welcome the Committee's Recommendation 4.2,
which calls for a (long overdue) review of the impacts on housing affordability
of existing tax arrangements in the area of negative gearing and capital gains
tax. However, I believe this review must also consider the capital gains tax
exemption on the family home. It is unacceptable that so little effort seems to
have been put in by Treasury to try to quantify the scope of such a large tax
break, but this Committee's report (at Table 4.2) has estimated that this
exemption costs approximately $20 billion a year!
While many witnesses appearing before the Committee
acknowledged that removing or modifying this exemption would be very difficult
politically, I don't believe an exemption which provides such a huge tax break,
has the potential to significantly distort housing markets and is highly regressive
in its application should be seen as off-limits, given the seriousness of the
housing affordability problem and particularly the structural nature of the
problem.
Indeed, given the seriousness of the housing affordability
crisis, the enormous amount of revenue foregone as a result of this tax
exemption and the potential for such revenue to be invested into social or
affordable housing, I believe consideration should be given to immediately phasing
out or capping the capital gains tax exemption in the family home. Introducing
a tax such as this would have to be grandfathered, in the same way as the
capital gains tax itself was when it was introduced, but it is time this option
was put on the table.
I also welcome the Committee's consideration of modifying
the First Home Owners Grant Scheme, and the suggestion that any funds saved be
redirected into increasing the supply of affordable housing. However, in my
view the case has been made for the Grant to be means tested. Funds spent in
this area should be targeted at assisting people who couldn't otherwise afford
it to enter the housing market, not at helping people who can afford to buy a
house to buy a slightly more expensive one. For the same reason, there should
be a cap in the overall price of a house that First Home Owner Grant funds can
be used for.
Finally, the role of private rental in providing housing for
people was touched on by many witnesses. The terms of reference for this
inquiry unfortunately didn't lend themselves to a full examination of some of
these issues, which is unfortunate given that this sector is where the worst
affordability problems lie and where many people are most vulnerable in regards
to security over their homes. Given that it wasn't a direct focus of the
inquiry – in part because much of the issues are the responsibility of state
governments - it is difficult to make precise recommendations in this area.
However, I believe there is a strong case for improved tenancy laws at state
and territory level which strengthen the security of tenure and restrict
profiteering and excessively large or frequent rent increases.
Andrew Bartlett
Senator for Queensland
Navigation: Previous Page | Contents | Next Page