MINISTER TAYLOR (ASSISTANT MINISTER FOR CITIES AND DIGITAL TRANSFORMATION):
Welcome to Macarthur, just outside the electorate of Hume. It is fantastic to be here with the Treasurer, Scott Morrison. In the growth corridor where 15,000 new homes are planned in the coming years, we know that housing affordability is a barbecue stopper across Australia right now. We know right at the heart of our problem with housing affordability is a lack of supply. In Sydney alone, in the ten years leading up to 2015, only 17,000 new homes were built a year on average, and yet we needed more than double that to keep up with the population. One of the factors that is holding back housing supply is planning delays. Planning delays act as a tax on every new house. We pay for planning delays when we buy a house. Getting rid of planning red tape is a focus for the Federal Government and the announcement today, which was included in the Budget, is focused on taking away state and local government red tape to get houses into play faster for Australians looking to buy a house. But we don't just want new houses – we want new houses, near transport, near services and near parks and other amenities. That is why we have a range of supporting Budget measures, like the National Housing Infrastructure Facility focused on getting infrastructure in place in parallel with new housing developments. Right here at Macarthur station, we see a fantastic site for housing development – 5,000 new houses planned in the coming years, next to Sydney University and next to a train station and that’s exactly the type of development we want to see to get housing, transport, roads, as well as services all in place in parallel. We know to do that we need to work closely with state and local government and that's exactly what we are doing, in the Western Sydney City Deal – working with eight local councils in this area to make sure there is enough housing for young Australians coming into the market and that housing is well served by transport services and all that they need. I will now turn to the Treasurer.
TREASURER:
Thanks very much, Angus. It is great to be here in Western Sydney where it is all happening. It is all happening here. We are building the Western Sydney airport, that is an extraordinary thing to be able to say. We have been talking about this since before I and Angus were born as Australians and now it’s happening. We are now building it. We are investing in rail and other infrastructure across the country that is supporting our national growth. We have established a $10 billion National Rail Fund, which, for example, issues like Western Sydney rail and other projects around the country can potentially be part of that important investment. But out here in Western Sydney, through the Western Sydney City Deals that Angus has been negotiating with the councils and with the state government, that is clearing the way so new housing developments can get under way – new housing developments like the one we can see around here – and not just for new home buyers, but just 500 metres from here, just on the other side of that rail, BlueCHP are developing affordable accommodation right here, right here in Western Sydney with just a short walk to the train station. That is the sort of new housing that we need across the country, but particularly here in Western Sydney, to ensure that people can get access to more affordable housing. Now, there is no silver bullet when it comes to housing affordability. Anyone who tells you that is having an absolute loan of you. What we are doing instead is not running around making rash promises that you change one tax and everybody can buy the house they want. That’s a lie. But what we can do is we can do things right across the spectrum. We are acting to support Australians who slept rough last night here in south Western Sydney, through to those in south Western Sydney who want to buy their first home, with our First Home Super Savers account. What we’re also doing is we’re working with state and territory governments like the New South Wales Government here to increase supply by removing the planning delays and deadlocks which can frustrate the development of new homes. We are building the infrastructure. Angus and I, just on the weekend, were down in Melbourne unlocking Commonwealth land for housing development. We are acting right across the spectrum and the Western Sydney City Deals are all about doing exactly that. So, it is a comprehensive plan working right across the housing spectrum from whether you were homeless last night, looking for social or affordable housing which is being developed just across the rail here, whether you’re renting in the private market and you’re worried about there not being enough rental properties, whether you’re trying to buy your first home or, indeed, you want to downsize your own home having raised your family in the home you have lived in for many years, our package goes right across that spectrum. But right here in Western Sydney, where we are building the Western Sydney Airport and the roads and the other infrastructure to support that, that is going to make a real difference in the lives of people here in Sydney, but with similar measures around the country, similar positive changes there as well.
QUESTION:
Treasurer, the financial incentives for councils to unlock land, how does that work?
TREASURER:
There are two elements. The most significant is a new National Housing and Homelessness Agreement. In the past, what we have done is the Commonwealth, federal taxpayers have just signed away $1.3 billion to the states and territories every year and what they have asked in return for that was nothing. What we’re saying is in order to continue to get the same funding index going forward that we will simply be asking states and territories to reform their systems to reduce the regulation red tape and to get more houses built. These new agreements will require state and territory governments to ensure more homes are getting built because if you are not building more homes then you are increasing the pressure and you’re raising the price. There is a reason why in Sydney, house prices have been going up and in Melbourne, house prices have been going up and in Perth and other cities, they haven't. We have an undersupply problem here in Sydney and in Melbourne and we are addressing that. Supply is the issue. If you go around making changes to the tax system, you can't target it here in south Western Sydney, it goes across the whole country. And so, people in Adelaide, people in Hobart, people in Perth, which need the support through the tax system to see their housing sectors grow and develop, that’s what they need. So, it’s a comprehensive plan.
QUESTION:
On getting rid of red tape, is there any concern it gets rid of the checks and balances required, especially in Sydney with the dodgy property deals, is there any concern about that?
TREASURER:
I will let Angus comment on this as well. Simply saying, cutting red tape, there is not a bureaucracy in the country that can't come up with another way to slow things down and we do want to speed things up but the checks and balances in the planning system are important. But if we think they’re perfect, then anyone who has tried to get a DA through their local council will tell you a different story. So, the protections are important, I agree with you, but equally, we can't have a situation where those protections and the way they are being administered with the laws the way they are aren’t frustrating what is good development and more housing. Angus?
MINISTER TAYLOR:
We know that planning approvals in Sydney take as long as three times more than other cities in Australia. Now, it is true, we also need quality development. We need development which is near transport, which has services, that has roads, that has schools and health facilities. That is exactly what our comprehensive suite of initiatives in the Budget is focused on achieving. It is also what we are doing in the Western Sydney City Deal where we’re working with state and local governments to make sure every development is a quality development. But meanwhile, it is crucial that we reduce the amount of unnecessary red tape in the planning system to get more houses on the market and to take pressure away from housing affordability issues.
TREASURER:
Any other questions?
QUESTION:
Just on alleged leaks from the Oval Office…
TREASURER:
I don't work in the Oval Office.
QUESTION:
I understand that. But will Australia consider imposing a ban on in-cabin laptops on inbound flights into Australia?
TREASURER:
I will leave those matters to the Transport Minister. They have been considered, those issues, more generally within government. I am not about to make other comments on that. That is the focus of the Transport Minister and the relevant Ministers so I will leave them to make the appropriate response.
QUESTION:
I have another question about the land.
TREASURER:
Great.
QUESTION:
So, is there a particular density of housing we are talking about?
TREASURER:
Angus, did you want to come up?
MINISTER TAYLOR:
Yes so there is no doubt that where we have existing transport hubs and job hubs, there’s room for more density where we have that. We don't want density in the wrong places and this is the point about quality development. The key is in some areas are well-suited to density, some aren’t. But most of all, we want to see quality developments where we have housing near jobs and near services. The enormous investments that are going to Western and south Western Sydney now with the Western Sydney Airport, with other infrastructure packages, the Western Sydney roads package – the $3.6 billion the Federal Government and state governments are investing – gives us the opportunity for housing near transport and near services and that’s exactly what we’re focused on.
TREASURER:
And it’s also about the mix of housing too. I mentioned the BlueCHP development just across the line here, we’re almost up to 50 per cent of that development is for affordable housing. Now, when state governments are not putting requirements on new developments that there be a proportion of those developments, whether they be detached dwellings or townhouses or multi-storey apartments, it is important that the developers who are developing those buildings and those sites are able to actually sell those new buildings. Otherwise, the whole development doesn't work. Now I am a supporter, as is Angus and the Government is, of these fixed proportions of new developments to be making available affordable housing as well as reserving particular parts of new developments for first home buyers and we’ve already seen that in the market here in Sydney. Also reserving proportions of new developments for key workers – so for police, and nurses and teachers. I mean, it is a real problem that in so many parts of our city here in Sydney and Melbourne, as well, that the people who teach our kids, look after us in the hospital and keep our streets safe actually often find it hard to live in the same community. I know that in my own part of Sydney in the Sutherland Shire and so, having affordable accommodation for key workers – for our nurses and police officers and our teachers – making sure there’s the right mix of this accommodation is important. In the Budget, I announced special tax incentives for investors to invest in affordable housing. We’ve announced and have worked out with the states that investors in affordable housing can also have the confidence that the rent gets paid because we have put in place a system where we can directly deduct the Commonwealth rental assistance that people receive and from their welfare payments, their rent. That means their rent is always paid, which is good for the person who is renting, because the roof is always over their head, they will always have that to rely on, but the investor who is invested in making that accommodation available will have more certainty. So, there are tax deductions for investing in affordable housing and there’s also what we’ve put in place, the arrangements to make sure the rent is paid, which increases the certainty of that investment. We want to see mums and dads investing in affordable housing as well and use the tax incentives that already exist for investment in housing to support affordable housing.
QUESTION:
Have you been frustrated by the council in Sydney [inaudible] unlocking the land?
TREASURER:
Again, Angus has been working closely with them. Councils do an important job. They do. They have to represent the interests that are happening in their local communities. But we have planning laws and where they are clear, and where developments comply with those laws, I mean, that should be a straight-forward proposition. Once developments are complying with those laws and those laws have been well-consulted upon, we should just get on with it. Angus?
MINISTER TAYLOR:
I think state, federal and local government in this area are all aligned in seeing the need for more quality development, where we have got housing near services, near the university, health, schools and transport, of course. There is a real opportunity to speed up the pace of those developments, making sure they are quality at the same time and working closely with the councils on the Western Sydney City Deal – I think everyone is aligned in that objective – we can see the opportunity and that’s exactly what we will focus on in the coming months and years.
TREASURER:
I welcome the strong interest on all the housing questions today. It is a welcome change from other press conferences. Last night, I talked about the fact that we are getting rid of all of the capital gains tax discount concessions for foreign investors in residential real estate in Australia. We are reimposing the caps on foreign investment in new developments that Labor lifted when they were in government and the only area where we make an exception to that is where they are investing in affordable and in social housing. That’s where we want to channel that investment into those areas and we have been a very tough Government when it comes to ensuring that foreign investors can't bid up the prices against Australians and first home buyers and we have made the laws tougher in what we announced this year. But if there are other issues you wanted to raise before we move on, we’re happy to take that in one or two questions.
QUESTION:
When you talk about making housing affordable, the land at Camden, which was supposed to be affordable, but they have gone sky-high. Some of these people are renters, when you talk about small land blocks or they build homes on them, $700,000 and above, is that what you mean? Is it more…
TREASURER:
I’m looking for the full mix from everything from the affordable housing we see just across the railway line here.
[INAUDIBLE QUESTION]
TREASURER:
A community housing association-run facility which provides discounted rentals to Australians, and there is an established process for who is eligible for that, and who the local community housing association providers are, and they manage the rental roll, they manage the properties, they deal with the tenants in those situations, so that is discounted rental housing. We are supporting that through the tax concessions we have announced in this Budget, but we are also supporting it through the establishment of the National Housing Finance and Investment Corporation. Now, that is providing low interest, long-term loans, to community housing associations, to work with the private sector to develop more of the affordable housing stock. This is a major change. That type of initiative has been in place in the United Kingdom for some time. We have seen over there the community housing associations play a significant role. I want to support state and territory governments and community housing associations to build up the strength and viability of those groups to play an even more significant role here in Australia. They are a real player and need to be a bigger player to ensure more affordability for discounted rental housing. Beyond that, the more houses that are built, the less pressure there is on prices going up. Our infrastructure financing facility, for housing, which Angus referred to, that is helping Angus do these micro city deals on sites all around the country, which enables some of these sites to progress more quickly. That fund will support councils and others with things like utilities, or some road support on infrastructure, or other things that need to be dealt with to unlock a lot of those development sites which are currently frustrated. So, we have a comprehensive plan when it comes to putting downward pressure on rising housing costs. We don't make any false promises about it. We don’t say it is a silver bullet. We don’t say to Australians, “It will enable you to buy the precise house you want to buy, that you always wanted to buy.” It is tough doing that, particularly in a city like Sydney, but what we are doing is we’re acting in every area of the housing spectrum to try and make a difference and we’re being honest about the things we’re doing. We are not overpromising but we’re being upfront with Australians and not raising the false hopes that we have seen by our opponents who say you change one tax and you can buy a house wherever you like.
QUESTION:
Treasurer, just on the Budget, former Treasury Secretary, Ken Henry, has today criticised the Government’s proposed banking levy, saying it encroaches on to financial regulations. Will the Government consider a public inquiry [inaudible]…
TREASURER:
Big bank chairman Ken Henry says, “Don't have us pay more tax.” That’s not hardly a surprising headline. Ken Henry is welcome to his view. But Australians know that the very modest levy that we’re putting in place on the banks is a fair levy. It will be helping us pay for hospitals and for schools and for pensions, not just for the next few years but well into the future. The bank tax and, in fact, when Ken Henry was Treasury Secretary, he has actually advocated a tax on bank deposits. Now, we don’t think a tax on pensioners’ bank accounts is a good idea. Nor did we think his suggestion about a mining tax was a particularly good idea either. And one of the reasons why it turned out not to be a good idea was because it actually didn't raise any money. So this I think is a very fair measure. I am sure the Senate will take it through its normal processes when it comes to these issues. We have been speaking to both APRA and to the Reserve Bank about this measure well in advance of the Budget and working those issues through. And indeed, it was the banks themselves who suggested the regulatory agency that was best placed to support our new executive accountability regime should be APRA. So, look, I am not surprised that big banks are trying to delay the introduction of a tax on them. That is to be expected. I am sure Ken will continue to talk his book. But Australians know that this is a fair measure. It will come into place on 1 July. The legislation will be introduced when we go back to Parliament. It has the support of the Parliament and we will just now work with the banks constructively to ensure its effective implementation.
QUESTION:
Just on infrastructure surrounding new housing developments, how do we ensure the infrastructures in place before the developments go in so that people are not driving on roads and take them half an hour to go a short distance?
TREASURER:
Angus?
MINISTER TAYLOR:
Daniel, a terrific question and I think it is a very important question. We want to see infrastructure go in ahead of or in parallel with housing and, of course, in this region that hasn't been the case historically. That’s why we have got a $1 billion National Housing Infrastructure Facility, it’s focused on the supporting infrastructure that is needed for new housing developments. On top of that, in this area, a massive investment in Badgerys Creek in the $3.6 billion Western Sydney roads package and we have a $10 billion urban and regional rail fund. And we know that more investment in rail is going to be necessary as we build more housing. So there’s a very significant commitment from the government into supporting infrastructure, $75 billion over ten years. I know that we can use that to get ahead of the game, because we did get behind, or at least, other governments got behind in past years and that can't be repeated.
TREASURER:
And don't forget, we are building the Western Sydney Airport. That is a job magnet for Western Sydney – an absolute job magnet for Western Sydney is the Western Sydney Airport. I know that from where my electorate is in Sydney. We are just across the bay from Sydney's first airport. So many of the jobs in my electorate, in southern Sydney, in St George and Sutherland Shire area are tied in to the economic hub of the airport. Now, that will continue which is great for my part of southern Sydney but for Angus and Western Sydney and for all our members and constituents all throughout Western Sydney – this will be an important job hub, and so, the jobs will be there. We are putting the infrastructure in place with careful planning with the State Government, with Gladys and her team here in New South Wales. This is a very coordinated effort, and ten years from now we will continue to see things really moving ahead in a positive way for Western Sydney. I have talked about the better days ahead and that could be no more true than in Western Sydney. Thank you for your time.