RAY HADLEY:
Treasurer G’day.
TREASURER:
G’day Ray.
HADYLEY:
The WA election. Landslide to Labor.
TREASURER:
Yes it was. There’s no hiding from that, that’s true.
HADLEY:
Yes, very funny. I’m looking for a comment.
TREASURER:
The issues in WA were the issues in WA. We understand that. Of all the states in Australia, that is the most true in a WA state election. At the end of the day, they were voted out of office. You’ve got to listen to the voters in these circumstances always, as you do in every election. The lessons that need to be learned there will be, look, I thank Colin Barnett for his service to our country, and particularly Western Australia, he’s a passionate West Australian. He did a great job over a long period of time and their time was up based on what happened on the weekend, and I wish Mark McGowan well and the Government will seek to work with them, but the challenges there are very significant and Western Australia is going through the real pointy end of that transition out of the mining investment boom and there’s a lot of important work to be done there.
HADLEY:
Must have seen it coming, the Prime Minister saw it coming because he didn’t go within cooee of there, I think he went once before the election, and then, in the lead up wasn’t sighted because I mean, you didn’t have to be Einstein to work out it was going to be a Labor victory. Not by the magnitude that it was, but it was probably smart for him to stay away.
TREASURER:
My understand is that over the course of the campaign things got a little better for the Liberal party, but that said…
HADLEY:
I beg your pardon? You mean it could have been worse?
TREASURER:
Things improved for us over the course of the campaign is the advice I have, but never-the-less, yes we did see that coming, and it’s unfortunate I think, but the voters have spoken and no amount of Bill Shorten photobombing election parties is going to put him in the frame on these sorts of issues. The challenges that we have to face across the country remain, and they are about the economy and improving what people can earn in this country, and lifting their wages, and that’s what we’re focused on.
HADLEY:
In relation to all of that, One Nation, the preference deal, and I understand the Federal Liberal party had nothing to do with it, but it would appear it didn’t do either the Liberal Party in Western Australia, nor One Nation any favours.
TREASURER:
Pauline Hanson is the leader of a political party, and she is going to get judged on her policies and she is going to get judged on her candidates. You had a bit to say about some of her comments in the lead up to the election on anti-vaxing and all of this sort of stuff, I mean at the end of the day we’re all members of political parties, and we put ourselves forward, and Pauline is the leader of another political party. They got a message on the weekend, as did we in Western Australia. You’ve got to learn from that. The preference deal, the party officials will look over that, honestly, if people think that’s the reason that the Western Australian Government lost the election on the weekend, I think they’re kidding themselves. We’d been in there for some time and time and those other issues locally took their toll. You’ve just got to take your medicine on that and move forward.
HADLEY:
It would be a brave Liberal in light of what happened there to say, we’re going to isolate the National Party in the upper house, not that it can happen in Queensland, but federally, and go with One Nation in the future.
TREASURER:
Well that would never happen at a Federal level because we’re in coalition with the National Party at a federal level, for listeners on the east coast the National Party in Western Australia isn’t the same as the National Party in the rest of the country, it’s quite different and the same is true in South Australia. In South Australia the National Party in the past has actually been in coalition with the Labor Party, so, they’re a different beast. In the eastern states in New South Wales and Queensland and Victoria, there is an incredibly strong coalition, so, that would just never happen at a federal level so it’s an aberration for what happens in WA.
HADLEY:
Let’s talk about the Budget. It appears that housing affordability will be one of the main platforms in the may Budget, and you know what, I’m thinking how do you actually make housing more affordable, in a market that’s gone crazy, particularly in major capitals. I can’t come up with the answer can you?
TREASURER:
Those answers will be delivered in the Budget, but let me say this Ray. It’s about trying to remove the pressures, you’ve got to put downward pressure on the increase in prices, the most important way you do that is you free up supply, that’s the most important thing. The reason why prices go up in a market like Sydney and Melbourne and why they’re going down in a place like Perth, or a flat in South Australia, there’s no one housing market in Australia, they’re all different and the reason prices go up is when you get too many people wanting to buy, and not enough stock. You have to address that imbalance that is there and that’s about planning, it’s about development, it’s about how much it costs to build a home, what’s the cost of developing a site, I was up in Tamworth on the weekend, and we were looking at a new housing development there in a new suburb of Tamworth and it was about $108,000 or there abouts a block. The vast majority of that, 90 per cent of that cost were the development costs of actually getting the site up to a point you could put a house on it, so these costs are very significant, there’s work for the state governments to do, and the local governments to do, but also the federal government and you’ve got to deal with the supply issues. I keep a close eye on the demand issues as well, the issues around investor loans and we’ve seen that go up recently, I met with the Council of Financial Regulators last week after those most recent numbers, now who that is, that’s the head of the Reserve Bank, it’s the head of ASIC, it’s the head of the Australian Prudential Regulation Authority, it’s the head of Treasury and I sat down with them to talk about this issue, and what the options were and they’ll continue to work that through. But it’s very complex Ray and people who say, oh you put up a tax and somehow you can buy a house anywhere you like, which is what the Labor Party is saying, that’s a lie.
HADLEY:
I know I harp on about this, but you go back to the 1960s, when there was a building boom in Sydney, the west then was Parramatta, it wasn’t Penrith, the West was Parramatta, and there was a state owned bank called the rural bank, they went to people in public housing like my mother and father and said how would you like to own your own house, oh we can’t afford that, yes you can. Yes you can. The deposit free, 3000 pound and you get your three bedroom house and, brick veneer, out of the fibro housing commission, and look at you go. A whole range of young Australians as my parents where then, who had no hope of buying a home, were into the housing market. Those homes by the way now, are worth a million plus dollars.
TREASURER:
There are programmes where people in public housing can do this, I think they’re good programmes, that happened remember under Margaret Thatcher in the United Kingdom and they started all the process, they’re good programmes. People getting access to money with interest rates being low where they are at the moment, I mean the feedback I get is that’s not so much the problem, the problem is being able to save quickly enough to get a deposit which is big enough to actually get yourself into the market. That is a big challenge, particularly for young people, and people are putting off when they buy their house, they’re even putting off when they have kids so they can save more. So the ramifications of this, run right through the community, in many different ways, and that’s why it’s a very important issue, and that’s why we’ll be addressing it in the Budget. But it’s got to deal with a whole range of things, I mean Labor is just saying get rid of negative gearing and all your problems are solved. That’s just ridiculous. Last time Paul Keating did that, rents in Sydney went through the roof, now I don’t see how increasing your rent helps housing affordability, particularly if you’re renting.
HADLEY:
What were you doing in Tamworth by the way?
TREASURER:
I was up there meeting with a range of businesses with Barnaby on Saturday afternoon I was looking at these housing developments, one of the areas we’re working on there is, Barnaby has already championed getting some big government department agencies out of Canberra and putting them into regional areas, and this is a good thing.
HADLEY:
How far out of Tamworth? I’ve done some ads for land in Tamworth in the last 18 months, two years, admittedly they weren’t building blocks, they may have been small acreages…
TREASURER:
It was just over the hill…
HADLEY:
So five or ten minutes from Tamworth?
TREASURER:
Absolutely.
HADLEY:
That would be in the vicinity, I spoke about these new estates.
TREASURER:
There was a great family up there, Mark and Loanna, they run a building company there, they’re building a hundred homes a year, that’s how confident they are about what’s happening in Tamworth. The buzz in Tamworth, and I got down to a little place called Willow Tree on the Saturday night, which is north of Scone…
HADLEY:
I know Willow Tree.
TREASURER:
A great little place there. I was talking to people, whether they were graziers or people in dairy, people in the cropping industry and so on, and they are telling me, they are particularly seeing the great response we’re seeing in the ag sector, we’ve got the agricultural sector in those December quarter accounts that came out just recently, the ag sector has been growing at 23.7 per cent. Now that is an extraordinary result. It’s an incredible result. We’ve seen that cash going into people’s pockets in places like that, and you’re seeing it in the towns, I was so pleased to see such a positive regional story in Tamworth and for young people who are thinking about, can I buy a house in Sydney, or can I buy a house in Melbourne or Brisbane, or things like that, now there is an option if people want to take it in places like Tamworth. That doesn’t mean they have to, but it’s important that these towns can say to people, you can have a future here, and there’s a great future for families in Tamworth.
HADLEY:
Alright thanks for your time, we’ll talk next week.
TREASURER:
Thanks Ray.