Housing Affordability and Foreign Investors
Mr HOWARTH (Petrie) (12:03): We live in the best country in the world here in Australia, and the things that make it so great are the very things that this coalition government is working to nurture, grow and protect. ‘Fairness’, ‘security’, ‘opportunity’, ‘reward for effort’—we heard those words many times on budget night and have done since. They are great things to keep top of mind as we work through the budget bills.
We have the chance to usher in a comprehensive solution to the legacy of a decade of Labor deficits. The opposition leader must be so pleased to have this opportunity to right the wrongs of his predecessors. Fairness, security, opportunity: they are the great things to remember as we work to repave the future path for the coming generations of younger people. We have a responsibility to relieve them from the burden those Labor deficits present—big debts on lots of little shoulders. A comprehensive solution to debt, the rising cost of living, hardship and lazy loopholes left over from Labor’s regretful reign—that is what the coalition government are committed to and what the 2017 budget is delivering.
It is great to be able to speak here on the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017. The bill offers some important savings, safeguards and provisions: it gives effect to changes to the foreign resident capital gains tax withholding regime; it expands the existing regime for new acquisitions, increasing the withholding rate from 10 per cent to 12½ per cent; and it reduces the withholding threshold from $2 million down to $750,000, making it applicable to an increased number of foreign residents—which is good. These reforms are necessary in order to assist with the collection of capital gains tax liabilities owed by foreign residents, to address low levels of compliance by foreign residents with their Australian tax obligations and to capture more property transactions.
If foreign investors wish to acquire Australian residential property, they will need to comply with our stringent capital gains tax rules. In addition to the measures contained in this bill, the housing affordability package outlined as part of the budget contains further reforms to capital gains tax for foreign investors. Foreign or temporary tax residents will no longer have access to the main residence capital gains tax exemption—which is great. At the moment, most Australians live in their home and they have the advantage of that exemption; foreign residents will not.
Importantly, the housing affordability package furthers the goal of ensuring Australian homes are within the reach of Australians. The provisions that bolster affordability include limiting foreign ownership in new developments and charging foreign owners who leave their residential properties vacant. An annual charge will be imposed on foreign owners of residential properties if the property is not occupied, or available to rent, for at least six months in each year—which is a good thing. This discourages foreign investors from buying Australian homes and just letting them sit vacant. The charge provides an incentive for the foreign owner to make their property available on the rental market if they do not intend to live there, which increases the number of homes available to Australia’s who wish to rent—and having more supply is very important.
This bill will ensure Australians homes are available for Australians, which will be well supported by the full scope of budget measures that keep the Australian dream alive. From first home owners, to those looking to downsize, to Australians in need of support and social housing, the coalition’s government commitment to housing affordability is part of our promise to Australians first and foremost. We will work to make housing affordable, we will work to bring down the cost of living and we will work to protect Australians and the values we hold dear—and that includes ensuring a roof over their heads.
The coalition government is making housing more affordable, ensuring Australian homes are available for Australians and supporting the Australian dream. We are backing first home buyers, enabling them to use their superannuation to save for a deposit, with the savings attracting generous tax concessions. The negative Labor member opposite, the member for Bruce, basically just said, ‘We won’t vote for that; that’s no good’ He has discounted the whole thing. This is on top of superannuation. If a young Australian is earning a wage or salary, they are receiving a minimum of 9½ per cent of their income in superannuation on top of their wage. At the moment, if they want to put $30,000 into a savings account, they are going to lose a third of it; they will end up with $20,000. This will enable them to put that money into their super scheme on top of their current super contributions and end up with more money in the hand—probably an extra $5,000—so they will get around $25,000 of the $30,000. This makes sense. The government is giving young people the opportunity to do that, and the Labor Party will vote against it. I will be reminding every young person in my electorate that Labor will vote against it. For a young couple, the savings are even greater if they can both put away a little bit of extra money. But those opposite just want to ridicule all at.
We are providing superannuation incentives for older Australians who are looking to downsize into a home that best suits their lifestyle. Baby boomers might want to retire. The kids have moved out of home and their grandkids have grown up. They are in four- or five-bedroom homes and they want might something smaller that is easier to clean and look after. There are incentives to sell the home, downsize and put money into their super on top of what they are normally allowed to do—a very, very good policy.
We are investing in housing to tackle homelessness, in social housing and in triaging the accommodation needs of domestic violence victims and our young people. We are increasing the capital gains tax discount to 60 per cent for affordable and social housing investment to stimulate supply. There is nothing from those opposite on that. It is a great policy. We are securing new state agreements to require planning reform and encourage the delivery of additional affordable housing. A national housing infrastructure fund and Commonwealth land bank will unlock land and infrastructure barriers.
It is only those on this side of the House who are protecting negative gearing for mum-and-dad investors, securing their future and increasing rental housing stock. It is not rocket science to know that if an investor cannot negative gear they are going to positively gear, and that means they need to make a profit, which means rents will go up. In areas like my electorate, that will have a big impact. The member for Fenner spoke before about how the Keating government reversed all this. But guess what? They changed their mind because they realised it was not working. With this bill we are introducing tougher real estate rules for foreign investors to make sure they pay their share of tax and do not leave properties empty.
I said at the start that we live in the best country in the world. Australia certainly is the best country. The things that make it so great are the very things that this coalition government is working to nurture, grow and protect. I mentioned fairness, security, opportunity and reward for effort. These are fair and sensible measures that help to ensure that all Australians have affordable housing. They contribute to the big picture solution of reducing the cost of living and they return savings to the public purse. They help to reduce debt accumulated through a decade of Labor deficits and ensure that future generations—like the young people up in the gallery—do not carry the weight of their economic failure. They acknowledge the important role that foreign investment plays, yet at the same time protect and prioritise the interests of Australia above all, as they should.