The SPEAKER (09:31): I present report No. 18 of the Selection Committee, relating to consideration of committee and delegation business and private members' business on Monday, 23 October. The report will be printed in the Hansard for today and the committee's determinations will appear on tomorrow's Notice Paper. Copies of the report have been placed on the table.

The report read as follows—

Report relating to the consideration of committee and delegation business and of private Members' business

1. The committee met in private session on Tuesday, 17 October 2017.

2. The Committee deliberated on items of committee and delegation business that had been notified, private Members' business items listed on the Notice Paper and notices lodged on Tuesday, 17 October 2017, and determined the order of precedence and times on Monday, 23 October 2017, as follows:

Items for House of Representatives Chamber (10.10 am to 12 noon)

PRIVATE MEMBERS' BUSINESS

Notices

1 MR BANDT: To present a Bill for an Act to prohibit Commonwealth support for coal-fired power stations, and for related purposes. (Coal-Fired Power Funding Prohibition Bill 2017)

(Notice given 11 September 2017.)

Presenter may speak to the second reading for a period not exceeding 10 minutes pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

2 MR BANDT: To present A Bill for an Act to establish the National Integrity Commission, and for related purposes. (National Integrity Commission Bill 2013)

(Notice given 17 October 2017.)

Presenter may speak to the second reading for a period not exceeding 10 minutes — pursuant to standing order 41. Debate must be adjourned pursuant to standing order 142.

3 MR HAYES: To move—That this House:

(1) notes that 25 November 2017 is White Ribbon Day (WRD), the United Nations' symbol of the International Day for the Elimination of Violence Against Women;

(2) recognises that WRD aims to prevent violence against women by increasing public awareness and challenging attitudes and behaviours that allow violence to continue;

(3) encourages all Australian men to join the 'My Oath Campaign' and take the oath: `I swear never to commit, excuse or remain silent about violence against women';

(4) understands that:

(a) one in three women have experienced physical and/or sexual violence perpetrated by someone known to them;

(b) each week approximately one woman is killed by a current or former partner; and

(c) domestic and family violence is the principle cause of homelessness for women and their children;

(5) acknowledges the high economic cost of violence against women, which is estimated to cost the Australian economy $21.7 billion a year; and

(6) asks all Members to show their support for the principles of WRD by taking the oath and wearing a white ribbon or wristband on the day.

(Notice given 16 October 2017.)

Time allotted — 60 minutes.

Speech time limits ‑

Mr Hayes — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 12 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

4 MR FALINSKI: To move—That this House:

(1) acknowledges that:

(a) 15 October 2017 marks the 200th anniversary of the death of Tadeusz Kosciuszko; and

(b) on 22 June 2016 the Polish Sejm (the lower chamber of Polish Parliament) adopted a special resolution proclaiming 2017 'The Year of Tadeusz Kosciuszko', leading to world wide celebrations under the patronage of UNESCO;

(2) recognises Tadeusz Kosciuszko as an indomitable fighter for the universal values of freedom, liberty and equality;

(3) acknowledges the importance of Tadeusz Kosciuszko to the 180,000 strong Polish community in Australia, marked by our naming of the highest mountain on Australian mainland after him; and

(4) recognises the work of Kosciuszko Heritage Inc. whose mission is to promote Kosciuszko in Australia, and to organise activities aimed at commemorating this Polish national hero.

(Notice given 17 October 2017.)

Time allotted — remaining private Members ' business time prior to 12 noon

Speech time limits ‑

Mr Falinski — 10 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 1 x 10 mins + 4 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

Items for Federation Chamber (11 am to 1.30 pm)

PRIVATE MEMBERS' BUSINESS

Notices

1 MS BRODTMANN: To move—That this House:

(1) notes that:

(a) the World Endometriosis Conference is held every three years, with this year's conference being held in Vancouver, Canada on 17 to 20 May 2017;

(b) at this year's conference, Australia will nominate to host the 15th World Endometriosis Conference to be held in 2023;

(c) one in ten Australian women have endometriosis, a disease in which the tissue that is similar to the lining of the womb grows outside it in other parts of the body;

(d) there is a lack of understanding in the Australian community about endometriosis and the impact it has on women's lives;

(e) the disease can lead to extreme pain, infertility and other complications related to the bowel, periods, headaches and a variety of other symptoms around the body;

(f) there is a delay in diagnosing endometriosis of up to seven to ten years because the symptoms are variable; and

(g) University of Sydney research has shown that endometriosis costs Australia $7.7 billion each year—two thirds of this is in lost productivity and the rest is in direct healthcare costs; and

(2) calls on the Australian Government to:

(a) support Australia's nomination to host the 15th World Endometriosis Conference to be held in 2023; and

(b) end the silence about endometriosis by raising awareness of the disease and its symptoms across Australia and promoting further research.

(Notice given 9 May 2017.)

Time allotted — 30 minutes.

Speech time limits ‑

Ms Brodtmann — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

2 MS FLINT: To move—That this House:

(1) acknowledges the success of the New Colombo Plan (Plan);

(2) recognises that the Plan will have supported more than 30,000 Australian undergraduates to live, study and undertake internships in the Indo-Pacific by the end of 2018;

(3) welcomes the establishment of the Plan's alumni ambassadors program, which will support the Plan's alumnus from across the country to promote the value of engaging with the Indo-Pacific region;

(4) notes that numerous prime ministers, presidents and foreign ministers of the Indo­Pacfic region have lauded the Plan as evidence of Australia's commitment to building enduring relationships across the region; and

(5) recognises that the Plan is enhancing Asian literacy amongst Australian undergraduates, deepening Australia's engagement in the region and strengthening Australia's international education sector, which is one of our largest services export industries.

(Notice given 17 October 2017.)

Time allotted 30 minutes.

Speech time limits ‑

Ms Flint — 5 minutes.

Other Members 5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

3 MS MCGOWAN: To move—That this House:

(1) notes that:

(a) the planned closure of the regional processing centre on Manus Island in Papua New Guinea (PNG) on 31 October 2017 is creating a highly stressful situation for the 773 asylum seekers who remain on Manus Island;

(b) the Australian Government is seeking to relocate people to East Lorengau or elsewhere in PNG ahead of the deadline;

(c) there will be a withdrawal of current medical and mental health care, torture and trauma support and security services to detainees on 31 October;

(d) a UNHCR survey of the deterioration of the mental health of those on Manus Island and Nauru in May 2016 showed that more than 88 per cent of offshore detainees are suffering serious mental health issues after several years in detention; and

(e) there is enormous pressure on the detainees on Manus Island to relocate in PNG or return to where they fled, ahead of the deadline, whereas the UNHCR says a majority have been recognised as refugees who would qualify for resettlement; and

(2) calls on the Government to:

(a) urgently find viable and humane solutions outside of PNG and Nauru for those remaining under offshore processing arrangements; and

(b) ensure all detainees are settled safely and with appropriate medical support prior to the 31 October closure of the Manus Island regional processing centre.

(Notice given 13 September 2017.)

Time allotted — 30 minutes.

Speech time limits ‑

Ms McGowan — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

4 MR WOOD: To move—That this House:

(1) welcomes and congratulates the Government for banning the importation of African lion hunting trophies and its participation in helping end the practice of canned hunting;

(2) acknowledges and commends the Government for its elephant ivory and rhinoceros horn ban for products produced after 1975 but recognises that these

bans need to be implemented for all products produced prior to 1975 as well;

(3) notes that elephants and rhinoceroses are facing extinction due to poaching with:

(a) one elephant dying every 15 minutes for its tusks;

(b) one rhinoceros dying every 8 hours for its horn;

(c) less than 400,000 African elephants remaining; and

(d) less than 27,000 rhinoceroses remaining;

(4) notes with concern that we can still buy and sell elephant ivory and rhinoceros horn in Australia, which is part of the problem;

(5) notes the sadistic and cruel method poachers use when harvesting elephant ivory and rhinoceros horn;

(6) recognises that this ban is not about attacking legal hunters, it is about stopping illegal poaching and illegal trading in elephant ivory and rhinoceros horn; and

(7) calls on all governments to help Australia be part of the solution and prohibit the domestic trade of elephant ivory and rhinoceros horn, additionally to set up an infringement fine system, offense provisions and penalties.

(Notice given 17 October 2017.)

Time allotted — 30 minutes.

Speech time limits ‑

Mr Wood 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

5 MR WALLACE: To move—That this House:

(1) notes that:

(a) the Government's additional $23.5 billion investment in Australian schools over the next 10 years, on top of the 2016 budget, will deliver the real needs based funding that our students need to succeed;

(b) this funding package will ensure that all students and schools are treated fairly and equitably, and that students with the same need in the same sector receive the same support from the Commonwealth; and

(c) in the electoral division of Fisher this action by the Government will ensure that, for example, Glasshouse Christian College will receive an additional $28.5 million, Chancellor State College will receive an additional $24.6 million, and Meridan State College will receive an additional $23.5 million in funding over the next ten years;

(2) congratulates the Government on this major investment in Australia's future and on delivering needs based funding into the school system;

(3) welcomes the Government's action to ensure that this additional funding delivers improved results, through initiatives like the Review to Achieve Educational Excellence in Australian Schools, the Review into Regional, Rural and Remote Education, and the Teacher Performance Assessment; and

(4) encourages the Government to continue its focus on improving educational outcomes and ensuring that school funding is well spent, particularly in regional areas such as the Sunshine Coast.

(Notice given 17 October 2017.)

Time allotted — remaining private Members ' business time prior to 1.30 pm

Speech time limits ‑

Mr Wallace — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 6 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

Items for Federation Chamber (4.45 pm to 7.30 pm)

PRIVATE MEMBERS' BUSINESS

Notices – continued

6 MR CHAMPION: To move—That this House:

(1) acknowledges the important role Holden's workforce has played in Holden Australia's history including when it:

(a) was established in 1856 by James Alexander Holden as a saddlery business;

(b) became the exclusive supplier for General Motors in Australia in 1924;

(c) built the first all-Australian motor vehicle in 1948, the FX Holden;

(d) commenced construction on the current Holden site in Elizabeth, South Australia in 1958; and,

(e) hosted Queen Elizabeth II at the Elizabeth plant in 1963;

(2) congratulates the current Holden workforce for its ongoing professionalism which has ensured the Holden Elizabeth plant remains General Motors' top factory for quality globally; and

(3) acknowledges the role of Prime Minister Chifley and South Australian Premier Sir Thomas Playford in establishing the Australian automotive industry.

(Notice given 14 September 2017.)

Time allotted — 40 minutes.

Speech time limits ‑

Mr Champion — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 8 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

7 MS BANKS: To move—That this House:

(1) welcomes the announcement by the Minister for Foreign Affairs at the United Nations General Assembly on 22 September 2017 of the Women's Leadership Initiative (Initiative);

(2) notes that the Initiative is a five year program to support emerging women leaders in the Pacific and to help participants—selected from Australia Awards scholars—to fulfil their leadership potential and drive ideas and reforms in their communities;

(3) further notes that the Initiative is part of Australia's partnership with Pacific Island countries to meet shared challenges and support a stable, secure and prosperous Pacific region;

(4) acknowledges that the Initiative will deepen our long standing relationship with our Pacific neighbours and see Pacific women mentored by successful female leaders, including Australian Indigenous leaders, private sector representatives and pioneering leaders from the Pacific; and

(5) recognises that the empowerment of women and girls is a priority for Australia's development assistance and is fundamental to our increased engagement in the Pacific.

(Notice given 17 October 2017.)

Time allotted — 45 minutes.

Speech time limits ‑

Ms Banks —10 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 1 x 10 mins + 7 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

8 MS CLAYDON: To move—That this House:

(1) notes that:

(a) 15 to 21 October 2017 is National Carers Week and that it is estimated that there are 2.7 million carers who provide care and support to a family member or friend with a disability, mental illness, chronic condition, terminal illness, or who is frail aged in Australia; and

(b) the theme for National Carers Week is 'Carers Count';

(2) acknowledges the significant contribution that carers make to the Australian community, saving the nation an estimated $60 billion per year; and

(3) recognises the incredible sacrifices carers make and the challenges they face including fewer employment options and a restricted capacity to participate in community life.

(Notice given 14 September 2017.)

Time allotted — 40 minutes.

Speech time limits ‑

Ms Claydon — 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking = 8 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

9 MR MORTON: To move—That this House: (1) notes that:

(a) illicit drugs can cause untold harm in our communities and on our streets; and

(b) the Government:

   (i) is committed to targeting the supply, demand, and harm caused to our communities by the scourge of illicit drugs; and

   (ii) has made significant investments in our law enforcement agencies to do all they can to keep drugs off our streets;

(2) acknowledges that Australian law enforcement officers continue to confront Australia's drug market and combat the criminal syndicates that peddle illicit drugs; and

(3) calls on all Members to promote greater awareness of the harmful effects of illicit drugs on individuals and communities across Australia and support our law enforcement agencies in keeping drugs off our streets.

(Notice given 17 October 2017.)

Time allotted — remaining private Members ' business time prior to 7.30 pm Speech time limits ‑

Mr Morton 5 minutes.

Other Members — 5 minutes each.

[Minimum number of proposed Members speaking 8 x 5 mins]

The Committee determined that consideration of this matter should continue on a future day.

Ms MARINO (Forrest—Chief Government Whip) (09:31): I declare that the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 is referred to the Federation Chamber for further consideration.

Mr MORRISON (Cook—Treasurer) (09:32): I move:

That the amendment be agreed to

The reforms in the Competition and Consumer Amendment (Competition Policy Review) Bill stem from the Harper Competition Policy Review. This is the most comprehensive review of our competition law in decades, and the government are implementing the measures that are contained in this very significant review following the outstanding work done by Professor Harper, who now sits on the Reserve Bank board. The bill is a key part of the government's economic agenda and we're progressing many of those measures and these measures are contained in this bill. They complement reforms to strengthen the misuse of market power provisions, known as section 46, that the parliament passed in August, and with the passage of this legislation today both sets of amendments will be able to come into effect in the coming weeks. These reforms will strengthen Australia's competition laws, ensure they are fit for purpose and ultimately benefit consumers, business and the economy.

We're back here today to finalise this bill because the Labor Party chose to amend it to protect their union mates from tougher penalties when they break the law. That's why. We shouldn't have to be here to do this, but the Labor Party want to protect their union mates from tough penalties when they break the law. The government opposed this amendment in the Senate; however, we supported the passage of the remainder of the bill, as we will do here, to ensure that these important reforms and related reforms to section 46 come into law as soon as possible. All the reforms originally put forward as part of the bill are sensible and should not have been controversial.

We have not heard a peep from the opposition against any of these reforms since responding to the Harper review in late 2015 or as we drafted this bill and consulted on it. Now, suddenly and without notice, the opposition has cynically chosen to oppose schedule 6 of the bill in its original form. The original schedule 6 to this bill simply proposed to align the penalties for breaches of secondary boycott provisions of the Competition and Consumer Act to the same level as other breaches of the competition law, as recommended by the Harper review and the Royal Commission into Trade Union Governance and Corruption. Incredibly, in debate on this bill in the other place Senator Pat Dodson said that Labor welcomed the government's announcement that it will align Australian consumer law penalties with the rest of the act by increasing them to $10 million and then condemned the government for doing exactly the same thing with secondary boycott penalties.

Instead of supporting this sensible reform, Labor are doing what they always do—seeking carve-out options for unions that commit serious breaches of the law that are completely unrelated to industrial conditions that affect their members. Once again, Labor are happy to protect their union mates, break the law, at the expense of small business, workers, consumers and the wider economy. They do a disservice to the Australian economy.

Dr LEIGH (Fenner) (09:35): Labor is pleased that the government has dropped its attempts to raise the penalties on secondary boycotts. The House has just heard the Treasurer suggest that this was a Labor measure in the Senate, and indeed it was Labor that moved not to have an increase in fines for sympathy strikes. But it wasn't just Labor. We were joined by the entire crossbench with the exception of One Nation senators. The vote in the Senate was 33 to 25, a resounding defeat of the coalition's attempt to raise the penalties on secondary boycotts. That reflects the strong view of the crossbench that this is a bad reform. The government should now formally announce that it is dropping plans to raise penalties on secondary boycotts, given the clear view of the Senate.

The Treasurer mentioned earlier Labor's support for tougher penalties for anticompetitive and anticonsumer conduct and sought to suggest to the House that if Labor support higher penalties for anticompetitive and anticonsumer conduct we should by rights support higher penalties for secondary boycotts. But the distinction here is international best practice. Australia's penalties for anticompetitive and anticonsumer conduct are below those elsewhere, and that's why Labor called for the penalties for anticonsumer conduct to be raised to $10 million. We took that policy to the election last year and we were pleased when the government adopted it in their budget this year. We are continuing to call on the government to adopt Labor's policies for tougher anticompetitive penalties in line with the European Union system. But in the case of secondary boycotts Australia's rules are out of step with international norms. International law—specifically International Labour Organization Convention 87—permits sympathy strikes provided the original strike is lawful.

There is, as the House would be aware, a long tradition of secondary boycotts moving in and out of competition law. It was the Fraser governments of 1977 and 1980 that introduced secondary boycotts into the Trade Practices Act with the intention of targeting trade unions. The Hawke government, in the 1980s, sought to remove those provisions from the Trade Practices Act but was defeated in the Senate. It was the Keating government, in 1993, that moved some secondary boycotts into the Industrial Relations Act, only for the Howard government to return them to the Trade Practices Act in 1996.

If enacted, the maximum penalty for a secondary boycott would have been nearly 800 times higher than the maximum penalty for unprotected industrial action. There can be no possible justification for unprotected industrial relations activity under the Fair Work Act 2009 to be subject to a penalty of 60 penalty units, $12,600, while the penalty for a secondary boycott is $10 million. Or we can look at the penalties for noncompliance with a section 155 order: 20 penalty units, $4,200. The measure that the government sought to sneak into this bill was a measure that would've been made it harder for workers to organise. At a time when the union membership share in the economy is falling, the last thing Australian workers need is a further attack on their right to collectively organise from a government that is supporting cuts to penalty rates and supporting attacks on unions, because we know that one of the reasons inequality has risen in Australia is the decline in union membership share. Work by Jeff Borland suggests that about a third of the rise in Australian inequality is due to the decline in union membership share in the economy. Attacking unions undermines Australian egalitarianism. Attacking unions makes Australia a less equal country. This attack on unions, attempted under the guise of competition and consumers amendments, would have increased inequality in Australia. With inequality at a 75-year high, the last thing Australians need is a government attacking unions and workers' right to bargain collectively. Labor, again, calls on the government to abandon these ill-conceived provisions that have nothing to do with competition law and everything to do with this government's ideological attack on unions and its attack on the Australian fair go.

Question agreed to.

Ms O'DWYER (Higgins—Minister for Revenue and Financial Services) (09:41): I move:

That this bill be now read a second time.

This bill clarifies that passive investment companies do not qualify for the lower company tax rate.

The amendments in this bill will introduce a clear test that enables companies to determine whether they are eligible for the lower rate of tax of 27.5 per cent.

Companies that derive more than 80 per cent of their assessable income in passive forms will not be able to access the lower company tax rate. The 'passive income' test replaces the 'carry on a business' test as a requirement for access to the lower company tax rate. The new test will have effect from the 2017-18 income year. It will make it easier for companies to determine which tax rate applies, thus providing companies with greater certainty about their taxation liabilities.

The Turnbull government is reducing company tax to make Australia a more attractive location to do business. A lower rate will enable companies to reinvest more of their profits, grow their businesses and increase employment.

The consequential amendments in this bill will align imputation arrangements with the new test.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.

Mr KEENAN (Stirling—Minister for Justice and Minister Assisting the Prime Minister for Counter-Terrorism) (09:42): I move:

That this bill be now read a second time.

The Proceeds of Crime Amendment (Proceeds and Other Matters) Bill 2017 will make amendments to the Proceeds of Crime Act 2002 to further enhance the proceeds of crime regime.

The amendments in the bill will allow proceeds authorities, such as the Australian Federal Police, to restrain and forfeit property where illicit funds are used to make payments on that property. The bill does this by amending key terms in the act, including 'lawfully acquired', 'proceeds', 'instruments', 'improvements' and 'derived from an offence'.

These amendments are necessary as recent developments in case law have indicated that a person's interest in property is fixed at the moment of initial acquisition, and that any subsequent payments on the property are irrelevant to determining if the property is lawfully acquired or derived from crime.

This is a loophole that could allow organised crime groups to use a web of financial arrangements and asset protection structures to avoid forfeiture of property. For example: criminals may be able to avoid the current proceeds of crime regime by funnelling money into ongoing property maintenance and restoration costs, mortgage repayments and improvements.

The existence of this loophole is contrary to the central purpose of the act, which is to undermine the profitability of criminal enterprise.

The amendments in the bill support this central purpose by allowing proceeds authorities to restrain and forfeit property where illicitly obtained money is used to service repayments on loans taken out on the property or fund improvements to the property.

The amendments are designed to function alongside existing provisions in the act which protect individuals who unknowingly acquire proceeds of crime or do so lawfully. These individuals can continue to draw on robust protections which allow them to: exclude their property from forfeiture or restraint, transfer forfeited property back to themselves or obtain compensation for the proportion of the value of the property they obtained lawfully.

This bill demonstrates the government's commitment to making our communities safer by taking effective steps to combat the effect of serious and organised crime, which is estimated to cost Australia and Australians $36 billion every year.

Debate adjourned.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:46): I move:

That this bill be now read a second time.

The Migration Amendment (Skilling Australians Fund) Bill 2017 amends the Migration Act 1958 to provide for the collection of a nomination training contribution charge from employers nominating overseas skilled workers.

This measure is a critical element of the government's employer sponsored skilled migration reforms, which ensure that Australian workers have priority for jobs in this country.

I now turn to examine the bill in more detail.

Concurrent with the introduction of the Temporary Skill Shortage visa, the government is introducing a nomination training contribution charge, to be known as the Skilling Australians Fund levy.

The purpose of the Skilling Australians Fund levy is to require employers seeking to access overseas skilled workers to contribute to the broader skills development of Australians.

From March 2018, it is intended that the Skilling Australians Fund levy will be payable by employers nominating workers for the:

Temporary Skill Shortage (TSS) visa;

Employer Nomination Scheme (ENS) (subclass 186) visa; and

Regional Sponsored Migration Scheme (RSMS) (subclass 187) visa.

The Skilling Australians Fund levy will replace the current training benchmark requirement, reducing the regulatory burden on employers and providing improved training outcomes for Australians.

Since 2009, employers sponsoring an overseas worker for a subclass 457 visa have been required to demonstrate expenditure of at least one per cent of their business's payroll annually on the training of Australians, or alternatively, pay an amount equivalent to two per cent of their business's payroll into an industry training fund.

This system is overly complex and lacks transparency.

The Skilling Australians Fund levy will fully replace these training benchmark arrangements.

The creation of the Skilling Australians Fund aligns with recommendations by the 2014 Azarias review of the integrity of the subclass 457 program, and the 2016 Senate inquiry into the exploitation of temporary workers in Australia (temporary worker Senate inquiry).

The Skilling Australians Fund levy will offset expenditure from the Skilling Australians Fund, a training fund administered by the Department of Education and Training (DET), to support the skills development of Australians.

The levy is expected to generate $1.2 billion of revenue for the training of Australians over the forward estimates.

As the levy will not be charged until March 2018, the government will provide an additional $261.2 million in 2017-18 to the Skilling Australians Fund.

From 2018-19 onwards, the Skilling Australians Fund will funded by revenue raised from the levy.

The establishment of the Skilling Australians Fund will create a direct link between skilled migration and the training of Australians.

The government is committed to skilling Australians so they can get jobs at all levels and occupations across the Australian economy.

With matched funding from the states and territories, the Skilling Australians Fund will support up to 300,000 more apprentices, trainees, and pre- and higher-level apprenticeships and traineeships.

Spending from the Skilling Australians Fund will be prioritised toward projects brought forward from state and territory governments which support training in key areas, including:

occupations in demand

occupations with a reliance on foreign workers

industries and sectors of future growth

trade apprenticeships

rural and regional areas

people from targeted cohorts, and

industries experiencing structural adjustment.

All project proposals will need to demonstrate engagement with, and support from, employers and industry.

This represents a significant government commitment to ensuring that Australians can gain the skills to fill Australian jobs and succeed in a valuable career.

Employers will be charged the Skilling Australians Fund levy for each overseas worker nominated to fill a vacancy in Australia.

The amount of the levy will depend on the size of the business and the type and duration of the visa that the worker is nominated for.

It is intended that small businesses—that is, those with annual turnover of less than $10 million—will be required to pay:

$1,200 per year for each temporary overseas worker

a one-off Skilling Australians Fund levy of $3,000 for each permanent overseas worker.

Businesses with an annual turnover of $10 million dollars or more will be required to pay:

$1,800 per year for each temporary overseas worker and

a one-off payment of $5,000 for each permanent overseas worker.

Whilst the Skilling Australians Fund levy will vary depending on the size of the business and the intended length of stay of the overseas worker, it is in the order of magnitude of $4,000 per worker recommended by the temporary worker Senate inquiry.

The Skilling Australians Fund levy for the entire proposed period that the temporary worker intends to work in Australia will be collected at the time the employer nominates the overseas worker for sponsorship.

There will be no levy exemptions, reflecting the policy intent that employers seeking to access overseas skilled workers contribute to the broader skills development of Australians.

However, the Skilling Australians Fund levy will be tax deductible, and it will not be applied retrospectively—employers will not be liable to pay a levy for existing overseas workers unless the worker is nominated by that business for a new visa.

It is intended that refunds of the Skilling Australians Fund levy will be made in certain circumstances, such as where an employer's sponsorship application is refused.

The bill also includes amendments which will improve the visa application process. Specifically, the bill amends the act to formalise the current practice of accepting nominations for temporary overseas skilled workers by businesses that have applied to be a sponsor or entered into negotiations for a work agreement, rather than waiting for the outcome of that process.

These amendments will result in improved efficiency for both employers and the Department of Immigration and Border Protection.

The bill also amends the act to provide that the minister may prescribe the manner in which labour market testing (LMT) must be conducted.

The act requires that evidence of LMT must be provided with a nomination by a standard business sponsor unless:

an exemption applies due to a major disaster;

an exemption applies on the basis of the required skill level and occupation for a nominated position; or

it would be inconsistent with Australia's international trade obligations.

The bill amends the act to provide that the minister may, by legislative instrument, determine the manner in which labour market testing in relation to a nominated position must be undertaken and may determine the kinds of evidence of LMT that must accompany a nomination.

The matters to be prescribed in an instrument are expected to include the language in which a job advertisement must be written, the method of advertisement, the period the advertisement occurs in, and the period the advertisement must run for.

This bill will ensure a uniform approach to LMT from employers seeking to access an overseas worker.

It will also ensure that the quality of the LMT being conducted is properly assessed.

This amendment will help ensure that, where LMT is required, businesses properly test the labour market before nominating an overseas worker for a prescribed visa and provide evidence of that LMT.

The Skilling Australians Fund is a further demonstration of the government's commitment to Australian businesses and to Australian workers.

It will support targeted investment in critical skill needs in key regions and industries in the economy.

The administration of the Skilling Australians Fund levy will also increase the transparency and accountability of training contributions made by employers utilising the skilled migration program.

This will increase public confidence that skilled migration, and the businesses that bring in skilled migrants, are doing their part to help Australians prepare for the workforce.

I commend the bill to the House.

Debate adjourned.

Mr DUTTON (Dickson—Minister for Immigration and Border Protection) (09:55): I move:

That this bill be now read a second time.

The Migration (Skilling Australians Fund) Charges Bill 2017 imposes the nomination training contribution charge, as payable under new section 140ZM of the Migration Act.

This charge is to be known as the Skilling Australians Fund, or the SAF, levy.

The bill is a complementary measure to the Migration Amendment (Skilling Australians Fund) Bill 2017, which amends the Migration Act to provide for the collection of the SAF levy.

The bill provides that the amount of the SAF levy is the charge set in the regulations.

The bill also provides that the SAF levy must not exceed the charge limit.

The charge limit in the financial year beginning on 1 July 2017 is $8,000 for a nomination relating to a temporary visa, and $5,500 for a nomination relating to a permanent visa.

In subsequent financial years the charge limit will be indexed by reference to the consumer price index.

This charge limit provides flexibility for the Australian government to make increases to the SAF levy in future while providing certainty for business as to the limited scope for a potential increase.

For temporary visas, the intention is that the SAF levy payable will be calculated according to the number of years, or part thereof, set out in the nomination.

The charge limit for temporary visas is therefore calculated with reference to the SAF levy for a large business, $1,800 for each year of nomination, for a total of four years.

I commend the bill to the House.

Debate adjourned.

Mr HUNT (Flinders—Minister for Health and Minister for Sport) (09:57): I move:

That this bill be now read a second time.

The National Health Amendment (Pharmaceutical Benefits—Budget and Other Measures) Bill 2017 amends the National Health Act 1953 to implement measures negotiated with the pharmaceutical and pharmacy industries and announced in the 2017 budget.

1. Industry agreements — savings and policy stability

The amendments reflect compacts with Medicines Australia, the representative body for the innovative medicines sector in Australia; the Generic and Biosimilar Medicines Association, which is the representative body for generic and biosimilar medicine suppliers in Australia; and the Pharmacy Guild of Australia.

The compacts are underpinned by a range of shared principles to create a world-class health system, transparency in decision-making, accountability for reforms, and stability and certainty with regards to government investment.

Together these agreements will generate savings to the Pharmaceutical Benefits Scheme (PBS) of around $1.3 billion over four years from 2017-18, and $1.8 billion over the five-year term of the agreement with Medicines Australia. This in turn will support cheaper medicines for consumers, better value for money for Australian taxpayers and improved access to product innovations.

And while these savings are vital for current and future spending on medicines, the government recognises that they must be achieved in a way that works for industry and supports a viable and sustainable pharmaceutical industry in this country. It is real reform which delivers better access to more drugs while saving money and reinvesting that in new medicines.

The measures in the Medicines Australia agreement do that by delivering certainty for the medicines industry through a stable PBS environment, where funding for new listings is further supported through delivering price reductions for on-patent medicines that are reaching the end of their patent life, and when these medicines come off patent and become subject to competition.

This certainty will strengthen the medicines ecosystem by encouraging companies to continue to bring innovative, life-changing medicines to Australia, build partnerships with Australian researchers, and encourage investment in local clinical trials and manufacturing. This will ensure Australia remains at the forefront of the launch of new and innovative medical treatments.

2. Pricing policy changes— anniversary statutory price reductions

The first of the main pricing changes in the bill extends, for another two years, the existing five per cent price reduction that applies for single brand drugs on the F1 formulary on their fifth anniversary of listing. This measure was due to end in 2020, but now will apply until April 2022.

The second of the changes introduces two new anniversary price reductions for drugs on F1. These are a 10 per cent reduction after 10 years of listing on the PBS; and a further five per cent reduction after 15 years of listing. There will be a catch-up special reduction day on 1 June 2018 to apply these reductions to medicines that have already reached their 10-year or 15-year anniversary by that date, and subsequent anniversary reduction days will occur on 1 April of each year.

The F1 formulary has been the fastest growing part of the PBS by price for individual medicines, and by cost to the PBS. Every new drug is an additional investment by the government in companies in the innovative medicines sector, and each contributes directly to that sector's growth. I give as examples Stelara, Entresto, Opdivo and Ibrutinib. These are critical drugs that are life-saving or life-changing.

The Australian government continues to invest in new medicines by accepting all positive recommendations of the Pharmaceutical Benefits Advisory Committee (PBAC).

This is a significant and continual pipeline of reinvestment and revenue for the innovator medicines sector. It is reasonable that after a period of time, a small percentage is recouped to help support further new listings. That is the principle behind this fundamental reform. Delaying the first of the reductions until at least five years after PBS listing recognises that manufacturers need time to recoup their investment in developing and bringing new medicines to market.

2.1 Pricing policy changes— first new brand statutory price reductions

The third pricing change will increase the price reduction that applies on listing the first additional new brand of a medicine.

Under PBS pricing policy, when a first new competing brand lists alongside an existing brand of an F1 drug, an immediate price reduction occurs for the new brand and the existing brand. The reduction is also flowed on to other related brands and strengths of the medicine.

The new measure will increase this reduction from 16 per cent to 25 per cent on such an occurrence.

2.2 Ministerial discretion for price reductions

Under the new pricing arrangements, previous price reductions can be taken into account before a statutory price reduction is applied. For example, new anniversary reductions may be able to be reduced in part or waived in full by considering the net total of reductions since January 2016.

As is the case for new anniversary price reductions, the increased price reduction to be applied when a new, competing brand lists on the PBS can also be adjusted, taking into account previous price reductions that have applied to the medicine. On this basis, a statutory price reduction can be applied in full, in part, or not at all—depending on the amount of previous eligible reductions. The new method will adjust, taper and cap reductions to ensure that price reductions since January 2016 do not exceed certain maximums.

For example, where previous price reductions for a medicine are already equivalent to 40 per cent or more of the price on 1 January 2016 the reduction will be reduced to nil.

Where previous price reductions are between 15 and 40 per cent of the January 2016 price, the reduction will be less than 25 per cent. It will be adjusted and capped so that the final reduced price is 40 per cent of the original.

And where previous reductions are 15 per cent of the January 2016 price or less, the new brand reduction will be the full 25 per cent.

In addition to using previous reductions to reduce listing anniversary and new brand reductions, the amendments include other provisions for discretion in applying statutory price reductions. These provisions reflect the undertakings in the Medicines Australia agreement and include that any relevant matter may be taken into account in deciding to reduce or not apply a reduction.

2.3 Price disclosure— increased price disclosure price reductions threshold

Continuing the theme of considering pricing history and context in applying PBS pricing policy is a new measure for price disclosure.

Under PBS price disclosure arrangements, drug companies are required to report data on sales to wholesalers, pharmacists and other suppliers. The information is used as the basis for adjusting the price for all brands of a medicine to the weighted average price. If the weighted average sale price in the market is at least 10 per cent below the PBS price, the PBS price is adjusted. Over time, PBS prices are maintained, or reduced every six months in line with average market prices.

The new measure provides that after a medicine has had seven full cycles of price disclosure data collection and reduction days, the threshold for price disclosure price reductions will increase from the current 10 per cent to 30 per cent. This move should provide some relief from price disclosure reductions for medicines which may already have had repeated market-driven price reductions. It will mean that, as long as the weighted average discount for a medicine in this category is less than 30 per cent, there will be no price disclosure reduction to the base price for any related brand of the drug after the seven cycles.

This will help to protect the price of medicines where there is little room left for competition or where a price reduction could affect the viability of the medicine.

To ensure this measure is correctly targeted, the amendments also include that, if there are two consecutive cycles where the price disclosure reduction is at least 30 per cent, the threshold will revert to 10 per cent.

2.4 Listing of new presentations—not as new brands

A specific measure welcomed by the pharmaceutical sector is that a company will be able to list a new presentation of its own originator brand without being subject to a new brand price reduction. The new presentation must be listed within five years or, with discretion, within 10 years of the original listing of the drug on the PBS.

These new provisions will benefit consumers and companies by encouraging the early listing of products which are innovative new versions of already listed medicines.

2.5 Funding future medicines

The government is committed to making fiscally responsible investment decisions that are informed by the best available evidence about patient safety and improved patient outcomes. That is why this government came to office promising to respect the independence of the PBAC but to improve listing times on the PBS.

The agreement with Medicines Australia enables the government therefore to continue its commitment to list all medicines with a positive PBAC recommendation.

Since the budget the government has made significant new investments in medicines:

$1.1 billion for Opdivo for lung and kidney cancer

$378.5 million for Stelara for Crohn's disease

$466 million for Ibrutinib for leukaemia and lymphoma

3. ACPA and pharmacy location rules

I now want to turn to pharmacy location rules. Pharmacy location rules have been in place since 1990, when the Fifth Community Pharmacy Agreement was signed between the Pharmacy Guild of Australia and the Commonwealth of Australia. The location rules are also a fundamental component of the Sixth Community Pharmacy Agreement.

The location rules are in place to ensure a suitable geographic spread of pharmacies approved to supply PBS medicines, including in rural and remote regions of Australia.

The Sixth Community Pharmacy Agreement terminates on 30 June 2020, at which time all legislative provisions in the National Health Act 1953 relating to the rules and the ACPA are scheduled to cease.

This bill will remove the cessation of operation provisions from the National Health Act 1953, preserving the existing arrangements and providing ongoing assurance and certainty for pharmacies, particularly those in rural and remote communities.

Conclusion

In conclusion, the landmark compacts announced in the budget reflect the government and industry's shared desire to maintain a world-class health system.

They also reflect the outcome of extensive negotiations, which could only occur due to the positive and strong relationship that the government has and has been able to establish with these organisations.

I would like to thank all stakeholders who have worked collaboratively with the government in recent months to develop the industry agreements and the measures in this bill. In particular, I want to acknowledge Medicines Australia, and the strong leadership of its chair, Wes Cook, supported by the CEO, Milton Catelin. Wes has been an extraordinary person to work with. He asked his industry to accept very significant reductions in remuneration in return for the listing of new medicines, and the creation of a fund and a contingency for those medicines with the savings that were otherwise made. So all of the savings are being reinvested in new listings. I want to thank all of the members of the Generic and Biosimilar Medicines Association; and the Pharmacy Guild of Australia, led by the extraordinary George Tambassis and David Quilty.

This agreement, again, gives stability to the sector. In particular, it allows them to be able to plan on a long-term basis and it provides security for those pharmacists with their gearing and banking ratios.

I also want to acknowledge Alex Best from my office, who played such a critical and fundamental role in the negotiation of these agreements. He has been a source of immense guidance, wisdom and counsel, as we've achieved them. We were able to achieve five major compacts at the time of the budget, with the RACGP, the AMA, Medicines Australia, the GBMA and the Pharmacy Guild of Australia. Most recently—only last week—we were able to add to that the agreement with the Medical Technology Association of Australia, which will, in turn, contribute to the stability and the affordability of private health insurance going forward and the ability to list new devices at an earlier time, giving Australian patients better access. All of these compacts together represent the first and the second wave of our current health reform program.

The amendments in this bill, therefore, deliver a responsible and necessary response to growing pressures on the PBS. They provide for a fair outcome for pharmacies, the pharmaceutical industry, government and consumers. They also represent the value of taxpayers' dollars, which provide the funding for the PBS. The aim of this government is to ensure that Australians have access through the PBS to affordable medicines when and where they need them. Contributing to a more sustained and more sustainable PBS allows us to respond sooner to the increasing demand for innovative and often costly medicines. All up, this is an outstanding outcome for the medicines industry and, more importantly, for the patients of Australia. I commend the bill to the House.

Debate adjourned.

Dr LEIGH (Fenner) (10:12): I wish to begin my contribution on the Treasury Laws Amendment (2017 Measures No. 6) Bill 2017 in a somewhat unusual way for a tax debate by noting that this is the day on which girls take over parliament. The Girls Take Over Parliament movement is grounded in the fact that in 2017 we are still in a situation where women hold less than a third of the seats in the federal parliament. With the House and the Senate combined, the share of women is just 32 per cent. There are, of course, differences across parties. That share is 44 per cent for the Labor Party, House and Senate combined; 21 per cent for the Liberal Party; 14 per cent for the National Party; and 50 per cent for the Australian Greens. But, as in Australian business, women are underrepresented in the parliament.

Equally troubling, we have statistics showing that girls as young as 10 often feel as though they don't have the same chances in life. A survey by Plan International Australia and Our Watch found five out of six girls believe they're not given the same chances in life to get ahead as boys. One hundred and fourteen years after women were able to vote and stand in federal elections in Australia, we still have this entrenched gender inequity. So the Girls Take Over Parliament movement is the principle that women should have a greater say in Australian politics, that we need to ensure that the women leaders of the future have an opportunity to engage in this parliament. It's a movement which is taking place across the world, from Peru to Japan and Canada to Australia, in which young women and girls are stepping into the shoes of parliamentarians for a day.

I accept that working with me may not be quite as sought after as the job of the young woman stepping into Justin Trudeau's shoes as part of this movement! Nonetheless, I'm grateful to have Yasmin Hassen, a PhD student at the Australian National University's Crawford School of Public Policy, working in my office. When I was speaking with Yasmin about this particular bill, she emphasised the importance of making sure that cryptocurrencies, like bitcoin, have an important role in the future. She is passionate about start-ups and sees a vital role for Australia in the entrepreneurship economy of the future. Her views have informed my speech today and the comments I will make on this bill.

The Treasury Laws Amendment (2017 Measures No. 6) Bill ensures that the GST treatment of bitcoin is the same as for other supplies of money. This means that entities that are paying consideration in money are not liable for GST on the supply of money. This entrenches the notion that money is a medium of exchange, not consumed, and therefore not subject to GST. This accords with the principle that GST effectively applies tax to final private consumption. The treatment of bitcoin under this bill would bring Australia into line with the way the United States and the United Kingdom approach digital currencies. Neither of those jurisdictions apply value-added taxes to digital currencies, and the European Union has ruled that bitcoin is exempt from value-added tax.

The measure has the support of legal and tax professionals and the fin-tech sector. States and territories have of course been consulted on the reform, given that it affects the GST, and they have agreed to it. The Senate Economics References Committee and the Productivity Commission, in separate inquiries two years ago, both recommended this measure. And concerns about the use of digital currencies for criminal activity and money laundering are addressed in the anti-money-laundering and counterterrorism financing reforms, according to the advice we've received from Treasury. As Yasmin Hassen put it when I was speaking with her about this bill, it is important that we tackle the questions of money laundering, but it ought not be beyond our wit to do so while allowing the opportunity for digital currencies, such as bitcoin, to grow.

The second schedule of the bill amends the tax act to provide deductible gift recipient status for the Centre for Entrepreneurial Research and Innovation. The Centre for Entrepreneurial Research and Innovation is located near the University of Western Australia, in Nedlands, and was established in 2015. The centre is currently headed by Dr Carolyn Williams, a distinguished researcher in this field. Again, as we speak about girls taking over parliament, it's important to note that in the business sector we have not seen the same number of women becoming CEOs as men, so it is pleasing in the context of this bill to see the DGR status being provided to a centre that is headed by a prominent Australian woman researcher.

As we look at the question of tax adequacy, however, it is important to recognise the tax reforms that are being left undone under this government. This is a government that has failed to tighten debt deduction loopholes used by multinational companies and a government that has failed to provide the level of transparency that Australians demand. Australians want to see more tax transparency, not less. Yet the threshold for disclosure of tax data by private companies has been raised from $100 million to $200 million, effectively taking two out of three private companies out of the tax transparency net. The government has patted itself on the back for the Chevron judgement that secured an additional $340 million for the budget bottom line. But, extraordinarily, these are laws that the coalition voted against in 2012. Minister O'Dwyer has attempted to claim credit for Labor laws that she and her colleagues opposed. The chutzpah is extraordinary.

The coalition, if they'd had their way in 2012, would by now have left the budget $340 million worse off, and net debt would be rising even faster than it is already. Rather than dismissing Labor's policies to close tax loopholes, Minister O'Dwyer should accept that she was wrong in 2012 to vote against these laws. She's now praising their application in the Chevron decision, so she should issue the Australian people a mea culpa and say that she was wrong to vote against these laws and will now adopt Labor's sensible proposals to tighten debt deduction loopholes by moving to a worldwide gearing ratio rather than an arbitrary thin cap threshold. This would be an important way to boost the budget bottom line, crack down on multinational tax dodging, stem the growth of debt and ensure that we're able to fund the important investments in schools and hospitals that Australians demand.

An article written by TheGuardian correspondent Greg Jericho refers to a new study by the IMF examining the impact of the sorts of tax cuts which benefit the very top. It makes clear that the strategy, being pursued by the Liberal Party of Australia, of cutting taxes on the top two per cent of Australians while raising taxes on Middle Australia won't boost growth. The increase in taxes on Middle Australia that the government brought down in its budget is going to hurt growth, but the tax cut to the very top will do little to help, given that those at the very top have such high saving rates. No less an authority than the IMF has pointed out the error of the government's ways in attempting to cut taxes on those who have done the very best out of the Australian economy over the last generation. The last generation has seen the top one per cent's share almost double, yet that's a group that gets nine-tenths of the benefit from the government's decision to reduce the top tax rate by two percentage points. Nine-tenths of it goes to the top one per cent, a group which has done extraordinarily well over the past generation. By contrast, the government's budget increases taxes on Middle Australia and everybody earning over about $20,000. This retrogressive measure will see taxes on Middle Australia rise while taxes on the very top fall.

There are many sensible tax reforms that could be put in place. Labor has pointed out the way in which negative gearing disproportionately benefits those at the very top of the distribution. We've pointed out that without reforms to trusts Australia is seeing revenue flow away to the most affluent. Labor have had our policies carefully costed by the Parliamentary Budget Office. They have been carefully modelled. We know the benefits to the Australian economy of closing these tax loopholes. In the area of multinational tax, Labor is committed to providing protection for whistleblowers, reporting on entities evading tax and allowing whistleblowers, where their information results in more tax being paid, to collect a share of the tax penalty up to $250,000. It's an approach that has been used effectively in the United States and could bolster our coffers here in Australia. We've committed to mandatory shareholder reporting of tax haven exposure—that is, companies must disclose to shareholders as a material tax risk whether the company is doing business in a tax haven. We've committed to introducing public reporting of Australian Transaction Reports and Analysis Centre data and requiring the annual public release of international cash-flow data. We've committed to requiring government tenderers to disclose their country of tax domicile for contracts worth more than $200,000. If you want a government contract, Labor believes that you should have to state your country of tax domicile so that the Australian public clearly know where government tenderers are located.

Labor are committed to developing guidelines for tax haven investment by superannuation funds. We'll work with the Australian Tax Office, in collaboration with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, to develop guidelines for responsible investment by superannuation funds. We'll introduce a publicly accessible registry of the beneficial ownership of Australian listed companies, allowing everyone to find out who really owns our firms and preventing shareholders from using complex structures and sham ownership to avoid complying with corporate transparency rules. Finally, Labor would require the Australian Taxation Office's annual report to provide information on the number and size of tax settlements.

Labor will support the modest measures contained in this bill, but we do believe there is a deep and important tax reform agenda which must be pursued. We call on the coalition to move beyond these worthy but modest measures to much more significant reforms to our tax system to reduce inequality and build a more egalitarian Australia.

Debate adjourned.

Mr CIOBO (Moncrieff—Minister for Trade, Tourism and Investment) (10:26): by leave—I move:

That the Treasury Laws Amendment (2017 Measures No. 6) Bill 2017 be referred to the Federation Chamber for further consideration.

Question agreed to.

Ms TEMPLEMAN (Macquarie) (10:27): My 26-year-old daughter moved house yesterday. She and her flatmates have been through the hunt for a property in Sydney's inner west. They found one, were given verbal approval and then were gazumped when someone offered $150 more a week. They found another one, got approved and then had to find replacement tenants for their current home, which young people reckon is easier than trying to go through the tedious bond recovery progress. These rental properties are not bargains. They take a huge chunk of weekly earnings even when shared between as many people as can comfortably fit into a property.

The owners of these properties are not looking to provide a long-term home for anyone most of the time. They're looking to return a profit or benefit from negative gearing and make a capital gain, which hasn't been hard to do in the Sydney market. This is my daughter's fourth house in as many years, and her story is pretty typical of what young people from my electorate of Macquarie who gravitate to the inner west for study or work go through.

So what? They're young—they can do it. In fact, many of us would have had a similar nomadic experience in our 20s as we got through study and our first jobs. But unfortunately the likelihood is that this pattern will be repeated throughout my daughter's 30s, 40s and even 50s, given how unaffordable homeownership is becoming. In fact, far fewer people in their 30s, 40s or 50s own their own home, in spite of having steady relationships and steady jobs. Women nearing retirement who don't own a home are in an extremely precarious position.

The past five years have seen national home prices rise by 19 per cent while household incomes have risen by half that, at 9.2 per cent. Right now we're seeing the lowest wage growth on record. The 13th annual Demographia international housing affordability survey: 2017 shows that all but seven of 54 Australian markets that were studied are rated as either seriously unaffordable or severely unaffordable. There are the options of Karratha, Kalgoorlie, Gladstone or Port Hedland, which are rated as affordable, but they won't necessarily match up with people's employment options. By contrast, in the early 1980s every market except Sydney was rated affordable, which is actually how I came to live in the Blue Mountains on Sydney's fringe.

The 2016 census confirms that over the last decade home ownership rates have fallen significantly for all age brackets below the age of 55. Prices in my electorate have certainly risen fast. Analysis by the Grattan Institute shows that this will lead to generations of Australians becoming permanent renters. A report in August this year from the Committee for Economic Development of Australia called for 10-year or five-year lease agreements, acknowledging that an increasing percentage of Australians will become lifetime renters. The report also warns that the affordability crisis is likely to continue for another 40 years, unless there are major changes. That means it's not only the generations of Australians who are currently under 55, but many more to come, who will struggle to save enough to access the housing market, and the dream of home ownership may remain elusive.

So, this is the issue we face, and here we have a scheme by the government that purports to be trying to improve the affordability issue for first home buyers. But, without addressing the key driver of demand—namely, the investors competing in the market—it is doomed. Australian Bureau of Statistics data shows that investors make up 47 per cent of mortgage demand nationally, and in New South Wales it's 55 per cent. So, in New South Wales, a home is more likely to sell to an investor than an owner-occupier.

What's more, the measures being proposed by the government undermine the integrity of the superannuation system. It's a bit like building a new road: they simply shift the problem to another stage of the journey—in this case, retirement. I remember the first time in this place that I heard about superannuation. It was the early 1980s—in fact, it was in the old parliament. As a 21-year-old I had just begun in the Canberra press gallery. The then Prime Minister, Bob Hawke, his Treasurer and the ACTU leader, Bill Kelty, talked about employers paying three per cent of wages into superannuation. I don't think we'd even shortened the word superannuation to 'super' at that stage. I'm not really sure I cared about it, and that's the problem. When you're in your early 20s, and just starting out in a job, the least of your worries is how you will fund your retirement. But Prime Minister Keating recognised that we needed to talk about super. In 1991, he proposed a retirement income scheme where the age pension was augmented by a privately funded and employer related national scheme.

Superannuation accounts are supposed to be secured savings for generating retirement income, and not for use by governments for other reasons. This government is contradicting its own stated primary objectives for superannuation—that is, to provide income in retirement. The problem with this legislation is not just the exemption it is creating for first home buyers but the precedence it sets for many other possible exemptions. How many are you going to make? Will the government let someone access their super when their house burns down and they are under-insured, when they want to upgrade to a new home, or when they want a pool? This so-called First Home Super Saver Scheme will actually work to undermine Australia's world-class superannuation system.

If it's about encouraging young people to save, you can create other incentives for them to save for their first home, if you think that's a game-changer. But what I hear from young people is that they are barely able to cover their costs, let alone put away any savings. According to experts, including National Shelter, super saver accounts will make the housing crisis worse by pushing up prices. So this on its own is not going to help with housing affordability, and may make things worse.

As for the other measures in the bill, let's look at the measure about contributing the proceeds of the sale of a home to superannuation. I have no problem with the principle of helping people to downsize. Large family homes designed for children, and then visiting grandchildren, may not suit people's lifestyles and they may want to downsize. If this measure were split from the First Home Super Saver Scheme, we would be open to supporting it.

However, does it really reduce pressure on housing affordability? Labor piloted this idea in 2013-14, trialling a means test exemption for age pension recipients who downsized their family home. Up to $200,000 would have been put in a fund exempt from the pensions means test for up to 10 years. Sadly, this government scrapped that pilot program, so we don't really have a number of years of watching it to see what the impact might have been. And this version 2.0 has no data from Treasury to support its impact on housing supply—not a piece of evidence to show that it will make a difference. Industry Super Australia says the measure will be used by self-funded retirees rather than age or veteran pensioners because there are no changes to the pension income or assets test, and the numbers won't add up for people who, right now, would qualify for a pension. Typical of this government—a half-baked idea, poorly executed.

When it comes to tackling housing affordability, there is no doubt that there is urgency to act. If we want our current generations, who are looking at housing prices rising, to aspire to have a home, then this parliament does need to do something. But, if the government doesn't act on changes to capital gains tax and negative gearing, it is just going to make the situation worse. It really can't run away from that as a general principle. I'm reminded—and I think this bears repeating—that John Daley from the Grattan Institute described it really well when he said, with regard to this package of measures that the government has put up, 'You'll need a scanning electron microscope to see an impact on prices.' I gather that they help you zoom in and look at really tiny changes. That's what needed to see whether this would make any difference. Mr Daley says you won't see a discernible difference in the number of young people that buy a house. That's a tragedy, because we have a responsibility to make sure that every 26-year-old who moved house yesterday, no matter where there are in this country, can aspire to own their own home.

Many of us would appreciate the benefits of home ownership: the security of knowing that you actually have a place to age in and the security of knowing that you don't have to have three-monthly inspections where someone comes along and tells you whether you've been keeping the house neat enough. These are the sorts of invasions that people face. A common situation for so many renters in New South Wales is that you can't have pets in your home, unlike the situation under the Victorian government— (Time expired)

Mr CRAIG KELLY (Hughes) (10:37): I am very pleased to follow the member for Macquarie. She did make some very good points about the importance of housing affordability and giving all Australians, especially young Australians, an opportunity to own their own home. But I am confused as to why, if the member for Macquarie believes in all of those things, she will not be supporting the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. The member for Macquarie was correct when she said that young people often find that, after they go through all their living expenses and pay their rent, they don't have enough left over to make significant savings contributions to build up savings to pay for the deposit for a home. That's exactly correct. That is what this legislation tackles exactly. So I'm at a loss as to why members of the Labor Party, including the member for Macquarie, acknowledge that that is a problem but will not actually support this bill. It shows a difference in the concept of superannuation between the coalition and the Labor Party. On this side of the House, we understand that every dollar that gets put into someone's superannuation account has to be earned first. The money doesn't come from some mythical magic money tree. That money must be earnt. The wealth must be created. The money that would otherwise be in a person's salary gets taken out of their salary and put in a compulsory super contribution.

I am in my mid-50s and when I first started to work—before there was any superannuation scheme of any significance—I was able to take 10 per cent of my salary and save that up as a deposit for my first home. We tell this generation: 'We're sorry; you can't do that. Of the total wealth that you earn or create in the job that you do, we're going to take around 10 per cent of that and force you to put that into compulsory savings that you cannot touch until you are 65 years of age. And when you are 65 years of age you can then go and invest that money in a house.' Unless a person owns their own home when they reach the retirement age of 65, they will be reliant on the pension scheme from the government. The best savings that any Australian can have is to own their own home. That is what we are trying to do with this legislation.

We do have an issue with housing affordability in this nation. It is clearly more difficult for young Australians to get into the market today than it was a generation ago. If you look at the raw numbers, the actual mortgage repayments as a percentage of salary may not be that much higher but what is significantly higher is the cost of the deposit that they must pay. That is exactly the problem that we are attacking. With this bill, from 1 July 2017, individuals will be able to make voluntary contributions of up to $15,000 per year and $30,000 in total to their superannuation account to purchase their first home. These contributions, which will be taxed at 15 per cent, along with the deemed earnings, can be withdrawn from a deposit. Withdrawals will be taxed at the marginal tax rate, less 30 per cent offset and allowed from the 1 of July 2018. For most people, the First Home Super Saver Scheme could boost the savings they put towards a deposit by at least 30 per cent compared with savings in a standard deposit account.

This is exactly the way that this parliament can help young people get into their first home. If they can get into their first home, the greatest forced savings is their ability to pay off their mortgage. But those on the other side of the chamber say no, because they don't want to let people have control and make a decision about how they can best use their superannuation savings. They would rather that money go to some union controlled fund. That is what their opposition against this is all about. Those opposite don't want individuals to have a say about where their savings should go and how their savings should be used. They don't want anything that affects the money that flows into their union controlled funds and which their union mates get control of. That is what their opposition is all about. They're putting their union buddies ahead of young Australians and the opportunity for young Australians to get a deposit and get into the housing market. Support for their union buddies is more important.

The second part of this bill deals with the issue that we find in our society when many couples who own their own homes look to downsize when their kids move out of home. They're couples who were able to buy a house many years ago and have enjoyed a massive appreciation in the value of their house. When they look to downsize—which would normally be the common-sense thing they would like to do—and they do all the sums, the taxation arrangements and the superannuation arrangements deter them from making the decision to downsize. So we find in many of our suburbs a lot of housing stock—four- and five-bedroom homes in the outer suburbs of Sydney—and we have couples in retirement, aged over 65, that, all things being equal, would prefer to move to a smaller unit but don't do so because of the taxation and superannuation arrangements. If we were able to allow the market to work normally and people who lived in a four- or five-bedroom home who preferred to live in a two- or three-bedroom unit could do so, that would free up supply in the market. Freeing up supply is one way that we can get downward pressure on housing prices and make housing more affordable for young Australians. But, yet again, we see the Labor Party opposing this.

These are the principles we are proposing to help couples that have four- and five-bedroom homes downsize. From 1 July 2018, people aged 65 and over will be able to make a non-concessional, post-tax contribution to their superannuation of up to $300,000 from the proceeds of selling their home. The existing voluntary contribution rules for people aged 65 years and older—work tests for 65- to 74-year-olds, no contributions for those aged 75 and over—and restrictions on non-concessional contributions for people with balances above $1.6 million will not apply to contributions made under the new special downsizing cap. This measure will apply to a principal residence held for a minimum of 10 years. Both members of a couple will be able to take advantage of this measure for the same home, meaning that $600,000 per couple can be contributed to superannuation through the downsizing cap. These new contributions will be in addition to any other voluntary contributions that people are able to make under the existing contribution rules and concessional and non-concessional caps.

This is another sensible measure from this coalition government to try and get some downward pressure on housing, to try and change the supply and demand mechanisms that work in the market, to try and give young Australians greater opportunity to get into the housing market. Yet, like we see time and time again from this opposition, it puts its vested interests ahead of the interests of young Australians wanting to get into the housing market.

I will leave my comments there. I hope that members of the Labor Party will give some thought to this before they vote against this bill—will give some thought to those young Australians that are struggling to get into the housing market for the simple reason that the current superannuation laws that we have in this country force them to invest the money that they earn, the wealth that they create, in a way the government tells them, and it cannot be put into their house. Anyone who is over 55 or 60 and has a house will know that that is the best form of savings that they have had in their life. If we are talking about giving young people the opportunity to save, to build wealth for retirement, the best thing we can do is to give them the opportunity to get into their own home. So I ask members of the opposition to please put aside your union ties and think of those young Australians that this legislation will help save for their deposit. I commend this bill to the House.

Dr CHALMERS (Rankin) (10:49): That is 11½ minutes that we are never getting back, unfortunately! These housing bills have all of the things that we have come to expect from those opposite, all of the ingredients that characterise and comprise the policy failures of a struggling government—a government so out of touch that it has only just dawned on them, entering their fifth year in office, that there's a problem with housing affordability in this country. Housing affordability is at 60-year lows, and disproportionately it is young people who are finding it harder and harder to get a toehold in a very important market, a very important part of the economy. It is a government so dysfunctional that, having finally worked out that it's an issue, it has absolutely no idea of how to go about fixing it, a government so prone to overpromising and underdelivering, a government so incompetent that it introduced these bills 68 days after the initiative was supposed to begin. It announced the initiative in the budget in May. It was supposed to start on 1 July, and 68 days after 1 July the Treasurer got around to introducing the bills. It is a government so divided that it can't agree to pull the most important lever of all, which is the negative gearing and capital gains tax lever, even though we know from credible, authoritative reports that both the Treasurer and the Prime Minister were in favour of doing so but got rolled in the cabinet room.

It is a government so held hostage to the knuckle draggers and naysayers in the party that it is unable to do anything meaningful at all lest it be vetoed by the people who gather around the member for Warringah. It is a government so determined to shower largesse on the top end of the town, running a protection racket for a system that gives the biggest tax concessions in our budget and in our economy to those who need them the least. It is a government so welded to extreme ideology that it is compelled to threaten, diminish, undermine and tear at the foundations of superannuation, which is one of Australia's proudest policy achievements. All these elements, which poison its approach across the board—whether it be energy policy or whether it be the budget and the economy or, now, housing—are here in the bill we are debating today.

The bills implement two of the government's budget measures—the First Home Super Saver Scheme and contributing proceeds to super, allowing people to use the proceeds from one sale of their main residence to contribute up to $300,000 to their super if they are 65 or older. Other speakers have made it very clear that we on this side don't support the First Home Super Saver Scheme, and we don't think the downsizing measure is the best way to genuinely deal with barriers to downsizing. But we're always prepared to be constructive. If the government were to separate the two measures, we would likely not oppose the downsizing measure.

To truly understand what we are trying to deal with here, we need to go to the factual basis of the problem we're trying to address, because that will show how inadequate the measures contained in the bill are in dealing with a crisis in housing for a lot of people in our country. Homeownership is at a 60-year low. Just one in four young people aged 18 to 39 now own a home, which is down from more than 35 per cent 15 years ago, a fall of more than 10 percentage points over that 15-year period. Rates of property investment are at record highs, and rates of first homeownership are at record lows. That gives you a sense of the problem this side of the House is trying to address. We have the most generous tax concessions in the world, which preference property investors who are purchasing their fifth or sixth residential properties over young first home buyers trying to get their first crack in the market. At the same time, more broadly, living standards are under pressure, household debt is at record highs, underemployment is at near-record highs and wages growth is at record lows. All of these factors are combining to make it hard if not impossible for a lot of people to buy their first home.

In response to this, having finally discovered that this problem that has developed over the last few years is an issue, the government—true to form—overdid it. Before the May budget, some of those opposite were promising that their housing affordability package would be extraordinarily large, that it would be an impressive package, a well-received package. Talk about setting yourself up for failure! It's like a parent promising a kid a brand-new bike for Christmas and instead giving them a toothbrush or a pair of socks. This is the policy equivalent of a pair of socks. We get this package where the only retail item, the first home super saver package, won't work. It will undermine superannuation and obviously isn't even enough of a priority for the Treasurer to introduce it in time for it to be implemented by the start date that was promised in May this year. It can't be that great if the Treasurer can't be bothered getting around to introducing the legislation until 68 days after the thing was supposed to start.

When young Australians desperate for information, told that this is going to be some extraordinary breakthrough in housing affordability, they go to the ATO website, they are told, 'Legislation is currently being developed for this measure,' months after it was supposed to have started. And we have those opposite spruiking it as some kind of big policy triumph. That is embarrassing enough, but it's worse than that. It's worse than embarrassing for those opposite: it is a very dangerous development. They want to undermine superannuation. They don't believe in it. They say from time to time that they do, but they go out of their way to diminish it, to threaten the foundations of superannuation, to try to take the 'compulsory' out of compulsory super in lots of different ways. In this instance, they are ignoring the fact that super is supposed to be for retirement. It is not supposed to be for allocation at the whim of a government looking for something meaningful to say about the big and persistent problem that we have in our society with housing affordability. This really does reveal a deep obsession with superannuation. They can't understand what a proud achievement superannuation is not just for this side of the House—and we are proud of our role in developing and designing the system and making it a reality—but for the entire country, and it shouldn't be diminished and it shouldn't be undermined by those opposite playing their usual extreme-right ideological games.

Perhaps the biggest failure in these bills is what is not in them. The measures that they're proposing as they relate to superannuation are dangerous and we don't support them. What is even worse is that these bills show what the government are not prepared to do: they are not prepared to pull the most meaningful lever when it comes to dealing with housing affordability, and that is dealing with negative gearing and the capital gains tax concessions. They refuse to pull the lever. They will not do anything meaningful about negative gearing and capital gains, and, as a consequence, they will not do anything meaningful about housing affordability in this country, particularly for young people.

On this side of the House we are serious about levelling the playing field between first home buyers and investors. We don't think it's fair for a young couple, for example, to front up to an auction and to be competing against someone who might already own five or six homes and who is being subsidised by the Australian taxpayer in a way that makes it very difficult for that young couple to get into the market for the first time. That's why we announced our policies back in 2015—well ahead of an election, to give people the opportunity to hold our policies up to the light. We announced those policies on negative gearing and capital gains more than two years ago now. We took the reform out of the too-hard basket. We put it on the table and we said, 'Judge us on this policy,' and the Australian people responded. The Australian people appreciate that at least one side of this parliament is having a genuine crack at addressing housing affordability in this country.

And it wasn't just the Australian community that backed us in. A long line of people supported our policy on negative gearing and capital gains: former Reserve Bank governor Glenn Stevens; global organisations like the IMF and the OECD; the government's own Financial System Inquiry; the Grattan Institute; ACOSS; the Australian Institute of Company Directors; CEDA; Saul Eslake; and even a raft of Liberals, including Jeff Kennett and former New South Wales premier Mike Baird. Indeed, the former Treasurer from just over there in this House said in his valedictory speech that he wished he had dealt with negative gearing in this country.

On Friday we had a very important intervention in this conversation about negative gearing. At regular intervals the Reserve Bank puts out the Financial stability review, and we got one on Friday. The Financial stability reviewsaid something that is very troubling and that everyone in this House should be cognisant of:

The number of investors with multiple properties has grown relative to those with a single property … Indeed, the number of investors with five properties grew by 7½ per cent in that one year, compared with average growth of 4½ per cent over the previous nine years.

So there has actually been a substantial growth, a troubling and concerning growth, in people with a number of properties—in this case, people with five properties or more. That number is growing faster than the number of people with one property. That gives you a sense of the problem. When the taxpayer subsidises the investors and the speculators, that is the inevitable outcome, and that's what we're seeing.

The new data from the Reserve Bank showed that negative gearing increasingly does favour the most wealthy investors with multiple properties. That is more justification for our approach to negative gearing, so that first home buyers aren't going up against people with multiple properties who enjoy those big tax breaks from the government. In a tight budget environment it makes absolutely no sense to give the biggest tax concessions to the Australians who need them least. It's dumb. It's daft policy, and we need to fix it.

We need to fix it not just because of its impact on housing affordability—although that's its most important objective—but also because doing so will help repair the budget. There are not that many policies which can do a terrific job in pulling a policy lever and getting a good outcome and, at the same time, deliver substantial savings to the bottom line of the budget. We're talking about raising something like $37 billion over the medium term, $2 billion of that in the forward estimates. The budget needs that kind of savings. It needs that kind of strengthening. If we can do that at the same time as satisfying a policy objective on housing affordability, we'd be mad not to take up that opportunity.

Apart from negative gearing and capital gains, we've led the broader conversation on housing affordability on this side of the House. I pay tribute to Senator Cameron and to the shadow Treasurer and the Leader of the Opposition, who earlier this year put their heads together and announced what I think was a very substantial package of housing reforms on top of what we are proposing to do on negative gearing and capital gains. These were some of the elements. We said we should limit direct borrowing by self-managed superfunds, which was another recommendation of the government's Murray inquiry. We said we should work with COAG to get a uniform vacant property tax across all major cities. We said that we should establish a bond aggregator to increase investment in affordable housing. We said that with a bit of effort we can get better results from the National Affordable Housing Agreement. We said we should increase foreign investor fees and penalties. We said we should boost homelessness support for vulnerable Australians and that we should re-establish the National Housing Supply Council and actually have a minister for housing so we don't have this situation develop, as it has on that side, of a government which has taken until its fifth year in office to finally work out that Australians are hurting and struggling in the housing market, particularly those who can't get into it for the first time.

When all of our measures on negative gearing and capital gains and that Senator Cameron, the shadow Treasurer and the leader announced earlier this year are combined, we think we might be able to shift the needle, and we might be able to shift the needle to favour people who are working and struggling to get into the market for the first time. Our measures and our policies will help give people a real chance. They'll give people the opportunity to realise that great Australian dream of homeownership, not the nightmare of housing unaffordability that they have been experiencing under the Turnbull government—a government which is so out of touch, dysfunctional, incompetent and divided, so desperate to favour the top end of town and unable to lead on important economic policies like this one.

We have provided the alternative. We have shown that you can develop substantial, meaningful policy from opposition. We're happy to compare our policies on housing with the rabble of those opposite. And we're happy to fight an election, whether it be on housing or the mess that the minister has made on energy. We are prepared to put our policies up against theirs any day.

Ms PRICE (Durack) (11:04): I rise today to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill. The aim of this legislation is very simple—to give Aussie families a better shot at realising the great Australian dream. The dream of owning your own home is being cast as being incredibly unobtainable, but this should not be the case and it does not have to be.

This legislation aims to assist those seeking to buy their first home by enabling individuals to put money into their superannuation account with the specific intention of using that money as a deposit to purchase a home. This contribution will be capped at $15,000 per year and $30,000 in total. These contributions can be withdrawn for a deposit at the marginal rate, less a 30 per cent offset. This measure is estimated to reduce revenue by some $250 million over the forward estimates period. What this means is that $250 million will be left in the pocket of those Australians saving for and buying their first home. That's a quarter of a billion dollars extra over the forward estimates period that this government will set aside to free up support for first home buyers, and this is a significant contribution from this government.

This government is delivering for those younger Australians not only with this bill but also in many other ways, and let's just look at our recent record. The PaTH program is offering avenues to employment across a range of industries and allowing young people, in particular, to engage with the industry to get the skills needed to advance their careers. Revitalisation in education with the New Colombo Plan is strengthening that sector and broadening the horizons of our students. We are increasing the number of medicines and vaccines available or supplied to young people, ensuring their health as they age, and our innovation and science agenda, along with the NBN actually being delivered, is transforming and empowering our economy.

Unlike those opposite, rudimentary economics is not lost on us on this side. We know that the best way to lower the price of a commodity, be it electricity, raw materials or housing, is to increase the supply of that commodity. Therefore, to complement the First Home Super Saver Scheme initiative, people aged 65 and over will be permitted to make an exempt non-concessional super contribution of up to $300,000, or $600,000 for a couple, after selling their main residence that has been held for at least 10 years. This reduces the barrier for older Australians to downsize from the home they no longer need, helping to free up existing stock of larger houses for those younger, growing Australian families. This bill will help those younger Australians buy their first home by helping them save for and better access a deposit, which we all know is increasingly difficult to come by. It will also increase the supply of housing by helping older Australians downsize, if they choose to do so, into more appropriate dwellings without those front and back lawns we all despise on weekends.

We are upping the number of available rental properties with a foreign-resident vacancy tax. This will incentivise foreign investors to make their property available to the Australian rental market. Further, foreign ownership in new developments will be limited through the introduction of a 50 per cent cap of the number of properties that can be sold to foreign investors through development pre-approvals. We are also providing $117.2 million to support frontline services to address homelessness. The fact is, if you are homeless, you simply cannot get a job let alone get a housing loan, so this is critically important for this particular sector. As you can see, this government is putting in place measures by which outcomes across the entire housing spectrum will be improved.

It would be remiss of me, at this point, to not at least touch on the subject of negative gearing. Negative gearing as a mechanism does contribute to keeping rents lower than they would otherwise be, and Labor plans to tamper with this mechanism, as we heard from the previous speaker. Labor's plan to abolish negative gearing will push up rent and impact on investments for millions of Australians, including those in my electorate of Durack. Within Durack, 15 per cent of constituents reported a net rent loss on their financial-year returns for the years 2014 and 2015—that is, 15 per cent of taxpayers in Durack own a negatively geared property, which is markedly above the Australia-wide level of 10 per cent. Within Durack, almost half—some 49.7 per cent—of occupied private dwellings were rented in 2016. That is far higher than the Australian-wide level of some 31 per cent. This number skyrockets when you head to the more remote parts of Durack, as you would expect. Within the Pilbara region of Western Australia, for example, which is wholly contained within my electorate, as you well know, Mr Deputy Speaker Vasta, over 80 per cent of occupied private dwellings are rented. So Labor's reckless negative gearing policy, as you would understand, Deputy Speaker, will disproportionately harm my constituents in Durack.

The only changes that the coalition are making to negative gearing—and these are contained within the housing tax integrity bill of 2017—will be to disallow travel expenses associated with investment properties, reining in an incredibly high-growth deduction, and also a redefinition of which plant and equipment can be depreciated. This, in stark contrast to Labor's policy, will expand confidence in the negative gearing system and will have no impact on rent prices and investment levels, and it is welcomed.

We are aware that the amendments contained within the bill represent a marked change in superannuation policy in this country, and we know how fond those opposite are of the current superannuation arrangements, for a number of reasons. Firstly, there are the millions of dollars from their union mates that they are able to take from it—and we know what a rort that is. Secondly, and most importantly, they like superannuation because it's someone else's money. Nothing excites those opposite more than the prospect of deciding how to spend large sums of other people's money or, for that matter, telling people how to spend large sums of their money.

So, when looking at these proposed amendments, it's worth reflecting on the purpose of superannuation. As we know, it's designed to provide a means by which people can support themselves in their retirement. If an individual feels that a house of their choosing may be a better investment than a government-mandated super account, which they often have limited control over, as we know, why should we stand in the way of that? The amendment bill that we are discussing today will give Australians the option to boost the savings they can put towards a deposit by 30 per cent compared to saving through a standard deposit account, which we know is becoming increasingly hard to achieve. This is not something which should be opposed. Those opposite should realise that, by doing so, they are making it harder, not easier, for people to buy their first home.

Some have referred to the current high house price situation as an affordability crisis. I doubt those who own homes and are looking to sell their homes would consider that to be a crisis—but I guess that's a debate for another day. While this bill will allow those who are trying to break into the housing market another more effective avenue to save for the deposit, whilst also increasing the supply of the housing, there are other ways that people seeking to break into the housing market can find affordable housing. What I refer to here is housing stock in regional Australia. In my electorate of Durack, in the thriving and beautiful regional hub of Geraldton, a three-bedroom, one-bathroom house can be found for under $200,000. In the Wheatbelt town of Merredin, a three-by-one or a four-by-one house sells for under $200,000. In Carnarvon, which is a beautiful town on the Coral Coast of Western Australia, a three-by-one can be sold for under $200,000 and a four-by-two for under $500,000. I appreciate that in the Deputy Speaker's own electorate the same would be the case, as indeed it would in many other parts of regional Australia. I would just like to put on record that all parts of regional Australia would welcome first home buyers should the need arise. So, Deputy Speaker, you could argue that there is no housing affordability crisis if you bothered to look outside the capital cities. We know on this side of the chamber that there is more to Australia than just Sydney and Melbourne. Certainly, in the electorate of Durack, there are many opportunities for affordable housing.

In summary, this proposed amendment will increase the supply of housing. It will put more money into the pockets of first home buyers, it will enable first home buyers to save for their first home and, at the same time, it will support empty-nesters. It should be supported on its merits. I call on those opposite to support this bill, and I commend the bill to the House.

Ms McBRIDE (Dobell) (11:14): I rise today to oppose the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017 and to support the amendment moved by the member for McMahon. Schedule 1 of the bill implements the First Home Super Saver Scheme announced in the 2017 budget. We oppose this measure because it simply fails to address the real problem with housing affordability in Australia—the government's failure to address negative gearing and capital gains tax reform. Until these issues are addressed, the system will continue to unfairly advantage investors over first home buyers.

Schedule 2 of this bill implements a budget measure to allow people aged over 65 to contribute the proceeds of downsizing to superannuation. We don't have any objections to the principle of helping people to downsize. If the government were to split this measure from the First Home Super Saver Scheme measure, we would be open to considering it. However, this is not the best option in terms of actually reducing pressure on housing affordability. In the 2013-14 Labor budget, we had a pilot program that aimed to do just that—by trialling a means test exemption for age pension recipients who were downsizing from their family home. Up to $200,000 in proceeds would have been put in a fund which would have been exempt from pensions means tests for up to 10 years. Of course, this short-sighted government got rid of it. Some important factors in the decision to downsize, such as the age pension income and assets tests and stamp duty issues, are simply not addressed by the government's measure.

The government's super scheme will do nothing to address housing affordability, but it will work to undermine Australia's world-class superannuation system. This system, underpinned by the superannuation guarantee introduced by the Labor government in 1992, is designed to generate improved retirement incomes for Australian workers. It is not there to be a plaything of the government of the day. It is not there to be white-anted to provide the government with an alibi, to pretend that it is addressing an issue when it is failing to face up to the real problems its own policies are creating.

As previous speakers on this side have noted, in the absence of any measures to improve the supply of new homes, any extra money in the pockets of first home buyers is simply eaten up by price rises. If you look at the details of this measure, you see that it offers a paltry level of assistance for first home buyers. If you divide the cost of this measure in the budget by the number of first homes sold each year, the government, with great fanfare, is allocating an average of $565 for each first home. This is the government's solution for first home buyers struggling to compete with investors who have a major tax advantage—$565. Labor will not support this hoax, but we will deliver on our plan for affordable housing, addressing the unfairness created by the capital gains tax discount and negative gearing. Labor will drive the construction of 55,000 new homes over three years, creating 25,000 jobs every year. We will commit to more public housing, including for women and children fleeing family violence.

Before entering this House, I worked as a pharmacist in mental health at Wyong hospital for almost 10 years. One of the most difficult things that I saw when people were recovering from mental illness and taking their first steps to transition back into the community was social workers giving them a phone book, pointing them to the phone in the unit and saying, 'You have to try to find yourself a place to live.' I won't forget that. People with an enduring mental illness, taking those steps back into the community, would be standing at a phone in a public place with a phone book in their hand and dialling through, trying to find somebody who would take them, who would give them a chance in a competitive rental market. Often they didn't have a rental record or the documentation that was necessary or the means to compete in the private rental market.

Over the school holidays, I bumped into a young family I'd seen a few months before, who are expecting their next child. When I first met them they showed me a picture their youngest child had drawn. It was of their house, with a dog. This was because the child always wanted to have a pet, but, because of their circumstances—they had to move, as they weren't in long-term accommodation—they couldn't have a pet. The child had started at a local school but, because of the competitive rental market and their circumstances, the child had done only one term at school before having to move to another school. These are the types of families in my community and in communities across Australia who aren't being helped by these measures.

Affordable housing is not just about being able to buy your home. It's about affordable rental housing. A Shorten Labor government will establish a bond aggregator to help community housing providers to access cheaper finance for new affordable rental housing. Giving community housing providers a new source of low-cost, reliable financing will boost the supply of affordable rental housing options for low-income families and vulnerable Australians, like those I have just mentioned. This is particularly relevant to my electorate of Dobell, on the New South Wales Central Coast, where almost a third of households live in rental properties and the proportion of households paying over 30 per cent of their income in rent is higher than the national average. In pockets of my community, combined household income is about $600 a week and, commonly, rents, particularly for homes for families, are nudging $400 a week and above. How can families meet this?

I want to tell you about something a constituent of mine, Amy, let me know. Amy has lived on the Central Coast for 20 years, working and raising her two children. In 2010, she became ill and last year began to receive the disability support payment. When her father died suddenly, she moved in with her mum to help out, but her mum is struggling on her own to make ends meet. This family's search for an affordable rental property has been fraught. Amy says agents and landlords are reluctant to accept her, as a DSP recipient. But, for the housing department to assist, she has to find a property for rent at half her weekly income, or less. There simply aren't properties at this price for housing a family of four. Amy said, 'I didn't ask to get sick or not to be able to work. Life on the disability support pension is not easy, each week struggling to decide what is more important to spend money on. I don't have fancy clothes, equipment or phones or anything like that. After I pay rent of $430 per week, I'm left with $10 a week out of that pension. Rental properties have got higher and the waiting list for affordable housing is a joke. I don't want my kids to miss out or live like animals just because I have an illness that stops me from working.'

Another constituent, Lilly, who is 18 years old, wrote to me about predictions that young people will be forced to save for 40 years to purchase their first home. This is what Lilly has to say: 'As a young person I find this deeply upsetting. The issue, however, does not seem to be entirely economic. Policymakers have favoured negative gearing, made university much more expensive, axed the first home buyers rebate and casualised the workforce. This has made it impossible to get a fair go as a youth and made it difficult for wealth to flow freely within the economy, allowing children of the wealthy to grow their wealth while children of the poor are denied the same opportunities.' She continues, 'To me this is about more than housing. It is symptomatic of a parliament that no longer cares about youth.' It is not surprising that a young person like Lilly, from my electorate of Dobell, on the New South Wales Central Coast, comes to this conclusion when you consider the additional barriers the government is putting in the way of young people starting out in life and saving for a home of their own—their first home.

As a result of the government's proposed changes to higher education funding and higher education loans, students will face higher fees, which they will have to pay back sooner. These policies will create considerable financial stress for many young people completing higher education and entering the workforce. How will these policies help young people save for their first home? And what about young people working on weekends? They won't be getting penalty rates to help them save for a home of their own. What's this government doing to help them? Nothing. Members of the Turnbull government campaign for cuts to weekend penalty rates, and the Prime Minister hasn't lifted a finger to stop these cuts from coming into effect—just as the government hasn't lifted a finger to address the real issue around housing affordability. To put housing affordability into perspective, in 1981-82 the median dwelling price was around three times the median annual household income. In 2016 it was over eight times. In the 20 years between the 1995-96 census and the 2015-16 census, homeownership amongst younger households declined from 44 per cent to 36 per cent.

Labor is once again leading on housing affordability. Only Labor has a comprehensive policy to tackle this crisis. For years the Abbott-Turnbull government have ignored warnings to act on unfair and distortionary housing tax concessions and on the risks associated with increased borrowing in superannuation funds. They have simply failed to act. Building on our existing proposals to reform negative gearing and capital gains tax, Labor have announced policies to improve affordability, increase supply, boost jobs and reduce the economic risks associated with distorted investment decisions. Labor have a clear housing affordability plan. It will reform negative gearing and capital gains tax concessions, facilitate a COAG process to introduce a uniform vacant property tax across all major cities, limit direct borrowings from self-managed superannuation funds, increase foreign investor fees and penalties, establish a bond aggregator to increase investment in affordable housing, boost homelessness support for vulnerable Australians, get better results from the National Affordable Housing Agreement, and re-establish the National Housing Supply Council and a minister for housing.

A Shorten Labor government will establish a COAG process to coordinate and facilitate a more efficient and uniform vacant property tax across all of Australia's major cities. Australia's housing stock should be used to put a roof over people's heads, not to allow property speculators to lock up assets. Labor will also restore the general ban on direct borrowing from superannuation funds, as recommended by the 2014 financial system inquiry, to help cool an overheated housing market partly driven by wealthy self-managed super funds, which has seen an explosion in borrowing from $2.5 billion in 2012 to more than $24 billion today. We will also further help level the playing field between first home buyers and property speculators by doubling the screening fees on foreign investment and financial penalties that apply to foreign investment in residential real estate.

Labor will also provide $88 million over two years for a new safe housing fund to increase transitional housing options for women and children escaping domestic and family violence, young people exiting home care and older women on low incomes who are at risk of homelessness. This will reverse the Liberal cuts made in the 2014 budget. Recently I was talking to a constituent of mine who has worked her whole life and found herself having to remortgage when she was unexpectedly let go. She was trying to work out how she was going to meet her volunteer requirements under Newstart. It reminded me of another woman I met in a shopping centre. She had a shopping trolley containing a saucepan, cutlery and the basics for setting up a kitchen. I asked her what she was doing, and she said: 'Well, I looked after my grandchildren. That was a decision that was made and it was in the best interests of them and their wellbeing, but now that the youngest is grown I don't have any means anymore. As one of the conditions, I wasn't able to do anything other than look after them.' So she had been out of the workforce for nearly two decades. She asked, 'What am I to do now?' She was buying the basics to set up a kitchen in a local caravan park. This is a mother and grandmother who dedicated her life to raising her family and particularly supporting her grandchildren, who were born into very difficult circumstances—and this is how we, as a society, are looking after her.

We need to do more. It has to be fixed. Labor's plan seeks to restore some of the important housing initiatives that were cut by the Abbott-Turnbull government while outlining new policy actions which Malcolm Turnbull and Scott Morrison refused to take. Labor's package will see the construction of 55,000 new homes over three years and boost employment by 25,000 new jobs every year. Only a Labor government will tackle the housing affordability crisis and put the great Australian dream back within the reach of middle- and working-class families.

Mr HART (Bass) (11:29): I thank the member for Dobell for her insightful contribution today on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I say 'insightful' because it paints the picture of a government that, in an Orwellian manner, has labelled this bill as addressing housing affordability, but when you examine the bill and the government's response there is no answer for housing affordability. On this side of the House we understand the issues that have been outlined comprehensively by the member for Dobell—in particular, the personal stories of the effect of not being able to access housing.

It's important to note that, when you address the issue of housing, you're talking about not only those who aspire to homeownership but also those who are simply seeking to obtain shelter. This is of more than just peripheral relevance to the health of our communities; it's of vital importance to the health of our communities. There has been much work done, at both academic and practical levels, in joining up all the dots surrounding housing, education and health outcomes, particularly with respect to the social determinants of health. We know that, in circumstances of housing stress, whether it be access to social housing, access to a home that you are purchasing or the impossible rental market that the member for Dobell was describing in her contribution, there are real consequences. Those consequences don't just rest on individual families and individuals; those consequences are visited upon entire communities.

I am very fortunate to represent a community in northern Tasmania that has disadvantages and profound opportunities for the future, but, within those areas of disadvantage, housing is of prime importance. As the member for Dobell outlined, access to housing will affect your future employability, your access to education and your health outcomes for the long term. If we don't address in a real manner, with a proper comprehensive plan, the question of housing affordability and the issues of people that are mired in generational disadvantage then we will be making a greater problem for the future that will need to be addressed, certainly in the area of health, with overcrowded emergency services at our public hospitals, but also with long-term health outcomes, which are predominantly worse where there are significant issues with respect to housing stress, access to employment and the like.

I'm grateful that today I have the opportunity to rise and speak on this legislation, but I need to put on record my concerns about the measures that are being put forward in these bills. The bills seek to implement two of the government's 2017-18 budget measures which ostensibly relate to housing affordability. As I indicated in my outline, this government has a knack of, in an Orwellian fashion, saying one thing but delivering something completely different. The bills implement two key provisions. The first measure is the First Home Super Saver Scheme, which allows individuals who are saving for their first home to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under this scheme, first home savers who make voluntary contributions into the superannuation system can withdraw those contributions up to certain limits and an amount of associated earnings for the purposes of purchasing their first home. Under this scheme, concessional taxation treatment applies to amounts that are withdrawn under the scheme.

The second measure, something that Labor is prepared to consider if the bill is split, allows for the contribution of the proceeds of downsizing of housing accommodation to superannuation, which would allow an individual to use the proceeds of one sale of their main residence to make contributions of up to $300,000 to their superannuation provider if they are aged 65 years or over. This is called the downsizer contribution. These downsizer contributions could be made regardless of the other contribution caps and restrictions that might apply to making voluntary contributions. As I said earlier, this is something that Labor's prepared to consider, if the bill is split.

As I indicated earlier, there is a prime importance associated with the question of housing and housing affordability. It's obvious that something needs to be done with regard to housing affordability in this country. It had been a matter of national pride in recent decades that Australia enjoyed some of the highest rates of homeownership in the world. It's equally obvious that those days of record homeownership are long gone. It is a very telling statistic that close to 70 per cent of Australians are very concerned, or somewhat concerned, that they will never own a property in their lifetime, according to recent research undertaken by the Australian National University. The Committee for Economic Development of Australia released a research report last month investigating whether or not it's time for Australians, as a community, to let go of the great Australian dream of homeownership. The report indicated that Australia's housing affordability crisis is likely to continue for another 40 years—40 years!—unless there are major changes to the market. Historically low interest rates, an unprecedented period of continuous economic growth and strong levels of migration have contributed to increased demand and escalating house prices. The CEDA report concluded that demand pressures and supply problems are likely to continue for the foreseeable future. Between 1996 and 2006 Australian average house prices, relative to income, almost doubled. Indeed, this trend has been apparent for more than 20 years. While income doubled in the years 1985 to 2004, there has been a four-fold increase in house prices in the same time frame.

The impact of higher housing costs is most strongly felt by lower income groups, particularly low-income renters, for whom homeownership is increasingly out of reach. As I said earlier, this will have profound consequences for inequality in the future. This is an issue that this government denies is even a problem, while Labor wants to put inequality front and centre in the development of policy. There is, of course, a good reason for this. The government fails to understand or simply doesn't care about the interrelationship between inequality and health and education outcomes. In turn, education, housing and other factors, as I said earlier, are fundamental aspects of the social determinants of health. Labor's focus on jobs, health and education is designed to address the issue of inequality. Similarly, combating homelessness and addressing housing affordability is a constructive and practical measure in ensuring the health and economic security of our communities throughout Australia.

Labor wants to give those who are low paid and in insecure employment access to housing, including the opportunity to aspire to homeownership, whilst this Liberal government's policy favours those who are using negative gearing to acquire multiple properties. An estimated 875,000 households are experiencing housing stress—that is, they are paying more than 30 per cent of their income in housing costs. This is a contributing factor to increasing disadvantage and inequality, something the member for Dobell outlined in her speech. At the same time, these individuals and families who are struggling to afford their first home are being saddled with debt, ever increasing living costs and wage growth that has stagnated at the lowest level in decades. In contrast, those who are highly paid can, under this government, rely upon a tax cut, access to negative gearing and the capital gains tax discount. Indeed, those with access to family trusts can effectively elect how much tax they wish to pay with respect to investment or business income, unlike in the position adopted by Labor.

So, in the face of all this, what is this government going to do to address the housing affordability crisis that we are currently facing, which is an issue of profound concern to many Australians? A responsible government would listen to the concerns expressed by those who aspire to home ownership, but who are fearful that home ownership is, or will be, beyond them. A responsible government would look at the underlying supply-and-demand drivers of housing prices and deliver a comprehensive response—a plan for future home ownership. We have the government's grand plan before us in this bill, and I'm sorry to say that it does nothing to address the issues at hand. It only serves to undermine Australia's world-class superannuation system whilst at the same time failing to address housing affordability.

As a matter of public policy, superannuation accounts are supposed to be locked boxes to generate retirement income, not the playthings of a government of the day to give access to super savings for whatever priority they wish. Labor is justifiably proud of its track record in establishing and growing our system of compulsory superannuation—might I say, against the resistance of those opposite and the dead hand of successive Liberal coalition governments for over 20 years. Only Labor can be trusted to protect the national savings pool which is represented by our compulsory superannuation system.

The Treasurer's dodgy super scheme laid out in this bill will do nothing to address housing affordability. In fact, it will most likely have the exact opposite effect. Anyone with a basic understanding of economics knows that, if you stimulate the amount of money people have, it'll drive up demand—particularly if there's no further supply—and housing prices will consequently increase. The shadow Treasurer, the member for McMahon, explained this most succinctly in his speech on the bill just yesterday:

They don't understand that if two bidders, for example, at an auction—because this would be available to more than one person—come to that auction and said, 'We've got access to our superannuation, so we're going to bid higher', they're going to bid against each other, and they're going to bid the price up. The only winner in that scenario is the vendor, who can get more for their house. The actual person who purchases the house, having used some of the money that was set aside for their retirement income, is no better off. The person who missed out on the house is no better off. The person who is better off is the vendor, and that is making housing affordability worse. Whether it's an auction or whether it's just sold in the normal fashion through a real estate agent, the laws of economics are the same.

Only this Liberal government could so incompetently manage public policy as to introduce a housing affordability measure that does exactly the opposite of its intended effect and drives up prices. But there are other problems in principle presented by this absurd legislation. The government purports to be a friend of business and a supporter of the free market, but it makes clear with this bill and others that it indeed favours intervention, which will also have the effect of driving up prices, and it is not opposed to undermining our national savings.

Labor will oppose this legislation as the party that supports superannuation and as the party with a comprehensive plan to deal with housing affordability. Labor's plan to reform negative gearing and the capital gains discount will mean that a first home buyer does not have to compete with an investor who may be buying their fourth or fifth property. A reform of this kind creates a fairer tax system and a positive return to the budget. Yet those opposite refuse to even entertain the idea of such reforms, so concerned are they with protecting their mates from the top end of town, with their agenda based upon tax cuts for the well-off and cuts to Medicare and education. I do make the point, as I said previously, that if the government was to separate the two measures in this bill, Labor would not oppose the downsizing measure. However, I emphasise that any housing affordability package that does not deal with negative gearing and the capital gains tax discount is a sham.

Labor has been leading the way on housing affordability, and only Labor will properly deal with a system that advantages investors over the first home buyers. This is an area of public policy that we absolutely must get right. It's vitally important for our communities, particularly our disadvantaged communities, that we provide secure and affordable housing. If we don't provide secure and affordable housing, we will condemn future generations.

Ms BRODTMANN (Canberra) (11:44): I rise to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017. Over time the phrase 'the great Australian dream' has meant different things to different people, but for the better part of a century any reference to this phrase meant owning your own home. In his 'The Forgotten People' speech to a radio audience 75 years ago, Menzies said:

The material home represents the concrete expression of the habits of frugality and saving "for a home of our own." Your advanced socialist may rave against private property even while he acquires it; but one of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours; to which we can withdraw, in which we can be among our friends, into which no stranger may come against our will.

During his time as Prime Minister, there were a number of federal and state housing schemes that made buying a house more affordable and accessible. By 1966, the number of Australians who either owned a home or were living in a house that they were purchasing was significantly higher than in the early 1950s. At one stage, the dream was sold as a red brick home on a quarter-acre block with a Hills Hoist in the backyard. How things have changed! For many, owning a home is now becoming increasingly out of their reach, with the current state of the housing market meaning that many are missing out. The September Domain State of the market report revealed the median house price here in the ACT reached a record high of $723,980, and we have reports that the median house price in Sydney is now $1 million.

Despite the challenges facing first home buyers, an Australian National University report titled Attitudes to housing affordability: pressures, problems and solutions found that nearly three-quarters of Australians weren't prepared to give up the dream and viewed owning a property as part of the Australian way of life. Just seven per cent believe that owning a house is not all that important—just seven per cent from this ANU study. While views of the great Australian dream remain the same, confidence that it can actually be achieved continues to decrease. Close to 70 per cent of the participants said they were very concerned or somewhat concerned about whether they will own a property. For those who own a home, the poll highlighted the difficulties they face. One in five Australians reported difficulty keeping up with a mortgage or a rental payment, saying they're either falling behind with their payments or struggling to make their payments. Nearly a quarter said they would face financial stress in the event of a two percentage point interest rate rise, and to combat this they're spending less on essentials, they're working multiple jobs, they're working longer hours, they're delaying starting a family and they're even selling household items to make ends meet. The government's cuts to penalty rates do not help this one bit.

With housing affordability spiralling out of control, the government believes that part of fixing the problem is allowing first home buyers to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under the First Home Super Saver Scheme, first home buyers who make voluntary contributions into the superannuation scheme can withdraw those contributions and an amount of associated earnings for the purpose of purchasing their first home. What this fails to acknowledge is that superannuation was created to generate retirement income. It was created to ensure that Australians had a comfortable retirement. It was not created for buying a house. The government's scheme has received fanfare, particularly when it was announced on budget night, but it allows people to put away only $15,000 a year extra through contributions to their superannuation pre tax, and it can be used for only two years, equating to a maximum saving of $30,000 for singles.

The government also jumped the gun when the Treasurer talked up the scheme on social media in July, well before any legislation was introduced. Labor has long argued that the focus of the government should be on reforming negative gearing and the capital gains tax discount because 50 per cent of the benefit of negative gearing goes to the top 10 per cent of income earners and 70 per cent of the benefit of the capital gains tax concession goes to the top 10 per cent of income earners. Those figures are staggering. They clearly show that the current arrangements aren't to the benefit of first home buyers.

The other measure in this bill is about contributing the proceeds of downsizing. This will allow people aged 65 and over to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. If this measure were split from the First Home Super Saver Scheme there is a chance that Labor would consider this measure, because we're not opposed to the principle of helping Australians downsize. That's why when we were in government we made a multibillion dollar investment—historical investment—in social housing, to get those Australians who were in large family homes and who were empty-nesters into social homes, to free up that market for new families.

I've got areas in Rivett, I've got them in Curtin, I've got them in a range of suburbs right across my electorate, where we built these new social houses that were the brand new townhouses that assisted people in downsizing. These houses provided them with all the facilities they needed—a lovely terrace garden out the back; facilities allowing them to transition as they aged—and it freed up family sized social housing. It was an historic investment in social housing, the largest investment in social housing in Australia's history, all thanks to Labor when we were in government. So we understand the importance of downsizing, and we put our money where our mouth is. We did it when we were in government.

In the 2013-14 budget we also had a pilot program aimed at helping people downsize. We had that program that was designed for social housing; we also had a pilot program where people on aged pensions who wanted to downsize from their family home could do so. It's a means-test exemption. Up to $200,000 in proceeds would have been put into a fund that would have been exempt from the pensions means test for up to 10 years. It was this government's own short-sightedness that saw this measure scrapped. And questions on notice about the government's own downsizing measure saw Treasury fail to answer how many households would be expected to downsize as a result. It speaks volumes about where this government's priorities lie in this space, in terms of downsizing, housing affordability, negative gearing and capital gains tax, and just in terms of appointing a minister for housing and homelessness.

The top recommendation from a Senate committee on housing affordability in 2015 was:

… that the Australian Government appoint a Minister for Housing and Homelessness, with the portfolio to be located in a central agency such as the Department of the Prime Minister and Cabinet or the Treasury, or in the Department of Infrastructure with formal links to the central agencies.

This advice is two years old now, and what have we got from the government? Complete and utterly deafening silence. The government has ignored this advice, instead placing the responsibility for housing affordability and homelessness with the Minister for Social Services—and, right now, access and affordability just doesn't seem to be high on the priority list.

I am very concerned about where this government stands when it comes to housing affordability, particularly for those who are the most vulnerable in our community. This is a significant issue right across Australia, and it's a significant issue here in the ACT. It's a significant issue that was discussed at yesterday's ACT housing and homelessness summit. Community organisations, through that summit, are looking to the future when it comes to the types of affordable housing options being offered to Canberrans. We have to start looking at a range of options. We had that social housing model, the traditional family house I mentioned earlier, where we assisted with downsizing. That is one option, but we need to start getting creative and innovative in our housing options for the future, because one size won't fit all.

We need a range of solutions and a range of options for the many and varied families that we have in Australia. We have single women—I will speak about them in a motion later in this speech—and there's a significant challenge for older single women. In fact, this is one thing that keeps me awake at night: the tsunami of homelessness that is going to come for aged Australians, particularly older Australian women who have very little super and are currently in very low paying jobs. They are usually divorced and renting in the private rental market. The thing that keeps them awake at night is: 'What's going to happen to me when I retire from work? I own too much to be in social housing, yet I have limited super.' Facing being in the private rental market on a pension is a pretty grim future. That is the thing that keeps them awake at night, and it keeps me awake a night too. Every time I speak about this issue, I have women coming up to me after my speech, in tears, saying: 'You are speaking about me. You are talking about my future. I am worried; I am scared witless about what retirement means for me.' The options that we have at the moment are very limited for women like this.

Options were discussed at the homelessness and housing summit. There's the Nightingale option—the Nightingale model—which is a housing option that's growing in popularity. It was discussed as a possible alternative to lower the cost of housing in Canberra. It originated in Melbourne, and it focuses on sustainability and affordability. It cuts out the traditional developer, who limits investor profit margin, in an architect led model. The construction of the first Nightingale building in Brunswick is expected to be completed next month, so I look forward to hearing about the outcome of that.

Another model that I'm very attracted to is the model that the YWCA here in Canberra implemented a number of years ago, called Lady Heydon House. It is working very successfully. It's a housing arrangement for five older single women. Each woman has her own unit and her own access to her unit and carport, but there's also a communal living space. The units are metered and billed separately, but the cost of living in those units is not prohibitive; it's not crippling. As I said, these women are on modest incomes, have little super, are usually divorced and are still in the private rental market. This gives them the option of dignity in their retirement, and also the option of not being socially isolated by living in a one-room bedsit. How many of us, when we were students, lived in little one-room bedsits? Is that how we want to spend our time at the end of life? It was difficult and challenging enough as a student. That's not what I want for Canberran and Australian women in their retirement. I want them to have a dignified retirement, where they still feel they are contributing to the community, they are engaged and they are not socially isolated. That's why Lady Heydon House is very attractive, but there are other options for cooperative housing. We need to start exploring this and start getting far more innovative in this space.

As I said, the Equality Rights Alliance did a report a number of years ago where they were talking about this tsunami of homelessness for Australians. From memory, about 600,000 women in the next five to 10 years are potentially facing homelessness as they age, because of the circumstances that I outlined before. There are also 300,000 men. This is going to be a big problem and we need to start addressing it now. This is why the government's lack of a minister for housing and homelessness is a real concern. There is no-one actually focused on addressing this issue—this tsunami that is going to hit Australia in years to come of older Australians who have contributed all their lives to our society. Here they are, and how do we repay them? We repay them by making them homeless. It is a very, very big concern.

In the short time I have left, I want to underscore the fact that we have a significant issue with homelessness, potentially in older women, in years to come. We know that on the night of the 2011 census, 44 per cent of Australia's homeless population were women. The YWCA has been calling for appropriate, affordable and stable housing for women for a very long time now. It's why it's important that the government appoint a minister dedicated to housing and homelessness. It's why this government needs to show leadership on the housing affordability and homelessness issue—not tomorrow, not in the near future, but yesterday.

Ms RYAN (Lalor—Opposition Whip) (12:00): I rise to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I'm pleased to rise, following the member for Canberra, to speak on such an important issue, an issue that is alive in the electorate of Lalor—alive in the communities that I represent. Just this weekend I was in a conversation with a local person who wanted to talk to me about her family, her adult children, who she believes are locked out of ever affording their own house. She thinks the days of Australians owning their own home in communities like mine are over. Where does she get that impression? She gets that impression because the cost of buying a home in this country have spiralled out of control. With this bill, this government is putting an absolutely sham suggestion before us—the suggestion that allowing young people to access part of their superannuation for a short time, which would only create the possibility of a deposit to let them enter the market and only if they were already in recipient of superannuation payments, will somehow affect housing affordability. Well, it won't affect the cost of housing. It will have limited impact on young people in my electorate being able to break in to buying their own home.

This is the great Australian dream. It is a sad day when we have a Treasurer, the member for Cook, a Treasurer who comes up with the sham notion simply to get past the headlines, simply to kick this can down the road, at a time when we know that inequality is above 70-year levels. When wage growth is slowed and company profits are up, it is a sham to bring before this House a proposal that is next to useless.

We know that Labor created compulsory superannuation with a specific purpose: so that early contributions to superannuation will grow your investment over the long term to make for a dignified, comfortable retirement. That is the purpose of superannuation. This piece of legislation seeks to undermine that by encouraging young people to access that superannuation. There are a few problems I have with this from the get-go. The first of them is that it's not 12 months since I stood in this chamber to condemn the government because they were seeking to reduce the penalty for businesses who did not make superannuation contributions for their employees. We've gone from that to a government who says, 'We have a solution to housing affordability—it's allowing access to superannuation.' I have another local story. Quite recently I was in a conversation with a local young person working in retail in my electorate who was telling me about her two-year pursuit of a company she had worked for—a two-year pursuit, and she was still not in receipt of the superannuation that she was owed for a period of three years. What hope is there for her to access superannuation to get together a housing deposit when the superannuation hasn't been paid in the first place? It was taking longer than two years; it had been two years at the point I was speaking to her that she had been trying to chase down these funds and have them put into her superannuation.

We know that in this country we have a serious situation in term of housing affordability. No-one knows that better than me, because I represent the communities in Victoria that have the highest rates of mortgage default and tenancy evictions. People in rental properties in my electorate are doing it tough to keep up with paying their rent. The Victorian state Labor government has made changes to the tenancy act. They had a review and announced changes that they want to bring into the tenancy act. But really the only way to impact on both the number of evictions that are happening in tenancy and the mortgage stress that's happening in our community is to address housing affordability. Yet this government comes in here with a piece of legislation that will have no impact on housing prices in this country.

This proposal is a disgrace. It first encourages Australians to use superannuation for things that it was not intended for and second seeks to kick this can down the road and hope that headlines around housing affordability won't come back, while in a community like mine the number of renters massively increases and fewer and fewer young people can afford to break into the market. If the government were serious they would be addressing this issue. As the member for Canberra put so clearly, not having a minister for housing and homelessness speaks volumes about the care factor on the other side of this chamber about this issue and about the people in my electorate and electorates like mine. No action—this government's inaction—will see the housing affordability crisis worsen.

In contrast, Labor have clear policies, which we would dearly love those opposite to take with both hands and implement, that would have a real impact on the housing affordability crisis. Those opposite want to make an announcement with this piece of legislation that won't work, but it will take years to assess its effectiveness. Meanwhile, the housing affordability crisis will worsen. Fewer and fewer young people in electorates like mine will be able to afford to get into the property market at all. Labor have no problem with the plan, under the downsizing elements in this bill, to allow people over the age of 65 to make contributions of up to $300,000 to their super fund. If it were separated from the rest of this bill, Labor would support that measure. But we have real issues with the fact that this bill will not tackle housing affordability.

We need to be really clear in this place today that the government have many options. One of the ways in which they might support people in an electorate like mine would be to desist from their attacks on the take-home pay of the people who work in my electorate, which are best exemplified, of course, by the cuts to penalty rates that are occurring. In the electorate of Lalor 8,860 retail workers and 4,600 workers in food and accommodation, in total over 13,000 workers, have had their ability to afford a house directly affected by the inaction of those opposite towards stopping the cuts to penalty rates. If those opposite wanted to help housing affordability they could start there. We're in the fifth year of this government, so over the past four-year journey they could have not walked into this place and dared Holden to leave. They could have assured the 4,000 workers in my electorate whose jobs are linked to the auto industry, and the many more in Melbourne's west, that they would ensure the Toyota manufacturing plant in my electorate didn't close, with the consequential threat of the closure of many of the components-making factories in that industry. They could have done that. They chose not to. In fact, this week we've heard them try to whitewash history by suggesting they took no part, made no decision, that impacted on those things. We all know that's not true. We all remember being in this chamber when the Treasurer made that call to Holden and dared them to leave this country, which set about the closing down of not just Holden but Toyota as well. And their response to that closure has been far from satisfactory. Those workers who are in my electorate are not getting the level of support they had come to expect from federal governments when an industry closed. They are now scrambling to find jobs that will pay them a decent salary. Most of them will ultimately be looking to work in the transport and logistics field in my electorate because they see that as a growth industry. Unfortunately, that industry is dominated by labour hire practices which will not see them in secure work and will not see them receiving the rates of pay they were accustomed to in the auto industry.

If this government were serious about addressing housing affordability and, therefore, serious about addressing homelessness in this country, they would be taking a very different tack. Addressing housing affordability will help to alleviate some of the pressures that force people into homelessness. The shadow minister responsible, Senator Cameron, has visited my electorate. He has sat with people who are going through homelessness, who have fallen off that cliff into homelessness. He understands clearly housing affordability—what it means in terms of rent and what it means in terms of homelessness and the growing number of homeless in my electorate.

Next month, West Justice, the community legal centre in my electorate, will be releasing their report on couch surfing. I find it absolutely incredible that I am on my feet in Canberra talking about changes to superannuation to supposedly have a positive impact in this space while knowing the numbers of young people who are already unable to find employment and who are already technically homeless or casually homeless—in that they are moving from place to place with no fixed address, reaching out to community members for support, with no clear support from this government. These things are now going to compound, one after the other, as this government's inaction causes all these issues to be worse.

Achieving the Australian dream and owning a home is continually slipping from the reach of young first home buyers. As a mother of three adult children, I know this firsthand, and I speak to families in my electorate who do as well. The capacity to save for a house deposit while you are in the casual workforce is absolutely untenable. It is untenable that we would think that young people can be in those circumstances and save for a house. As they move from job to job, from workplace to workplace, and then spend time checking to see if their superannuation is actually being paid, we're a far cry from the stability of some of the communities those opposite may live in, where people have well-paid jobs, where people are not in casual employment and where people are having their superannuation paid in the first place.

We know that a former Reserve Bank governor, Bernie Fraser, has spoken against the current housing tax arrangements, calling them 'manifestly unfair'. Labor has put policies before this government that could assist in decreasing the cost of housing in this country and could allow young people to not be bidding against investors at every auction across my electorate. These are policies that this government should adopt. Two-thirds of those who negatively gear are on a taxable income of $80,000 or less. While they represent a large proportion of those who negatively gear, they only represent eight per cent of the population and only make up to 58 per cent of the negative gearing benefit. The top 20 per cent of income earners receive around half of the negative gearing benefit, and the top 10 per cent of income earners merely receive 70 per cent of the benefit. We can see that negative gearing disproportionately benefits a small wealthy minority. Changes, therefore, would manifestly assist the large majority. Limiting the use of negative gearing to newly built homes would result in a boost to housing supply while slowing the explosion in housing prices in established areas. As someone who represents a growth corridor, I can say that this policy would work for our community. We would see people continue to be employed in the housing building industry, while pressure on the middle wing of suburbs would be reduced. These changes would provide an extra $32 billion to the budget bottom line over 10 years.

This government continues to ignore the needs of the majority of Australians in order to support big business. This piece of legislation is about kicking the can down the road on housing affordability. It is about hoping that the headlines go away. Those opposite are living in a dream. The number of young people who can afford a house is dwindling every day, and the number of those in my electorate who are worried about this, concerned about this and prepared to talk about this is growing every day. I urge this government to adopt Labor's policies, to do something real about housing affordability in this country.

Mr BANDT (Melbourne) (12:15): About seven years ago, not long after being elected to this place, I went out with my now wife to look at buying a house. I'd previously bought a unit in Parkville, Melbourne, where I live, and we were then looking for a larger place around Melbourne. We went to quite a few auctions. As we went to those auctions, we kept seeing one person pop up every time. Every time this person was at the auctions, just when it got to the point where someone who, you could tell, was going to move into that house was about to buy it, she'd stick up her hand, increase the bid and say, 'I'm going to bid even more.' At one auction, she sat there, sticking her hand up time after time, buying on behalf of someone else, pushing the price up and up. We went to half-a-dozen or a dozen of these auctions, seeing the same person or similar people there every time. You could sense and tell that all of the people who wanted to buy a house to move into were sitting there and thinking: 'What can we do? We can't outbid this person. We don't know who they are, but we can't outbid them.'

It became apparent that this person doing the bidding, and winning these houses by pushing the price beyond where people could afford, wasn't about to move into the house; it was a property agent. They were there buying it on behalf of someone else. It became clear to us that they were bidding up the price of housing so that first home buyers couldn't get in, because they were buying on behalf of someone who could then take the house, rent it out and, if they made a loss on renting it out because they'd paid too much, write that loss off for a tax discount. Then in a few years time—so the agent was advising them—they could sell the house and get a tax break on that as well.

It was becoming crystal clear, as we were going around auction after auction and being outbid, that we were being outbid by people who had no intention of coming and living in these houses, starting a family in these houses, perhaps living close to where they worked. They were being bought by people who could rely on a tax system, which this place presides over, that would write them out cheques for buying their second, third or fourth house, at prices that put it out of the reach of first home buyers. Meanwhile the people who wanted to live in the house and buy their first home weren't able to do it.

That's what we have in this country. We have a tax system that rewards people who already have a house and says, 'We will give you billions of dollars in subsidies every year for you to buy your second, third, fourth or fifth house, and we don't care if that pushes up prices so much that aspiring first home buyers can't ever even buy their first.' This is coming from someone who's on a politician's wage, and my wife was working at the time as well. If a politician, earning the very good money that we do, whose partner is also working, can't even afford to buy a place near where they want to live, because the government is subsidising someone else to come in and buy that very same house as a tax write-off, at a cost to the federal budget, then the system is broken.

It is no wonder that I meet people in my electorate every week who have just given up on the hope of ever being able to afford to buy a house and those who have given up even being able to rent a house in inner-city Melbourne, near where they live or study. It's because we have this massive bubble that the tax system is pumping up and up, driven by negative gearing and capital gains tax. It means you can come in and buy a house and pay as much for it as you want—if you are lucky enough to have the money for it—because you can write-off your losses from it as a tax write-off, and then when you sell it you can get a tax break at the end, as well. It keeps the property agents, the accountants and the tax planners in business, because they develop these schemes that price everyday people out of the market. It means that if you have a couple of houses already you're doing all right. And I will tell you what: there are lots of people in this place who have quite a few houses and who take advantage of that lurk. But it comes at the expense of first home buyers.

In the 1990s the average house price was six times an average young person's income. If you finished university and went out and tried to buy a place it was about six times your average income. Fast forward to 2013 and it's 12 times an average young person's income, and it's gone up and up since then. At the same time, over a very similar period, the share of wealth that young people have in this country has gone down from about 10 per cent to about five per cent, and that's falling as well.

So we've got a huge problem in this country. The pea under the mattress that means no-one will get a good night's sleep until we remove it is the tax system—the tax system that rewards those who already have by giving them more at the expense of first home buyers. So we need to get rid of negative gearing and we need to get rid of the capital gains tax exemption which says that if you have the misfortune of having to earn your income by working you have to pay the full freight of tax but if you are wealthy enough to earn your income by being able to buy or sell houses or shares we will give you a 50 per cent tax break. We've got to get rid of that. That is going to start to make housing more affordable for people and it will mean the government will find more money for paying for things like schools and hospitals, to the tune of about $5 billion a year, if we do it right. If we wind it back right, we could find ourselves bringing in an extra $5 billion a year.

What should we do with that money? Well, it's time for a mind-shift in this country—not to do the kind of measures that the government is talking about in this bill, which is not to take away the tax breaks but to add more tax breaks into the system in the hope that somehow that will fix it. No. We need a mind-shift. We need to start thinking about housing the way we think about schools and hospitals. If there were 200,000 children being turned away from schools because not enough schools had been built, we would think it was a national scandal. If there were 200,000 people who couldn't get into the hospital in their local area because there weren't enough hospitals, we would think that was a national scandal. We need to start thinking about housing the way we think about Medicare. We need a Medicare for housing. Housing is a human right. It is not an opportunity to make a huge amount of profit. It is not something on which this government should be spending $5 billion a year giving tax breaks to people who have already have a house to go and buy their second, third or fourth. No. Let's think about housing the way we think about schools. Everyone deserves to have a roof over their head, in exactly the same way as every child has the right to go to a government school. In the same way as we would say that if you can't get into school we should build more schools and if you can't get a bed in a hospital we need to build more hospitals, it's time for the government to say that if you can't get an affordable house and a roof over your head it's time for the government to step in and build them and to make sure it happens. We need to think about housing the way that we think about Medicare.

That's what the Greens are campaigning on in Queensland at the moment—a home for all. We need to start thinking about housing and a home for all as a human right. They're pushing for a new Queensland housing trust that will start building a million affordable homes, that will create 16,000 jobs per year for 10 years and that will give people a home for life, and when you build the homes you get the rent that people pay on those homes and you plough that back into the system so that the system can continue.

In states like mine, in Victoria, we've suffered from the mining boom that drove up the dollar and put huge pressures on manufacturing. We've got 40,000 people, nearly, on the waiting lists for public housing, and if you're in the top category in Victoria you could be homeless for a couple of years before you find yourself a spot in public housing, but we haven't built more public housing on any large scale since the 1960s. What better way to deal with high youth unemployment and a rising homelessness problem than to engage in a large-scale build of affordable housing for people who are currently being locked out of the market?

We've got factories in Brooklyn and elsewhere in western Melbourne where they're creating modular homes on, largely, assembly lines in many places and doing amazing stuff. I've been down to Morwell where they've got a potential crisis facing them with unemployment, and we have the closure of Hazelwood Power Station and the potential closure of other power stations. Why not say that in the Latrobe Valley we will fund you to build affordable homes—perhaps even modular homes that we might ship up to Melbourne to house the people who are currently without an affordable home—creating jobs and homes in the process? So Australia becomes a place where everyone gets a roof over their head and where we do the two things that could start to make a real difference to housing affordability, not adding more tax breaks into the system for the wealthy as this government is proposing. It would actually do something real.

Firstly, we'd get rid of the tax breaks in the system that are pushing up prices to the point where people can't afford it anymore. Secondly, we'd do something that would start to drive rents and prices down, which is to increase supply of low-cost stock. At the moment, in my area of Melbourne, the general rule seems to be that if you find an old place, especially if it's an old warehouse in the city, knock it down and build on it the biggest, most expensive thing you can find. So we're getting more one- and two-bedroom units but they're out of the price range of many people. Let's start building properties that get rented out at less than market rent or that are sold only to people on lower incomes.

If I as a member of parliament with a partner who is working full-time find ourselves getting out-bid at auctions for very modest properties, then someone who is a cleaner coming into the city to clean the buildings at night—or a firefighter who works at a station or a nurse who works at a hospital—has almost no hope. Why don't we start building properties in the inner city for the key workers of the inner city, and say, 'You can only buy one of those properties if your income is below a certain point,' and the condition on it is it has to be resold at a certain amount? Why not start building some of the properties in the inner city and say we will only rent them out to people whose income is below a certain amount, and we'll rent them cheaply?

We've got a couple of trillion dollars floating around in superannuation funds. What a good place to invest them, in building affordable housing in the inner city. And then, when the government says, 'Well, we couldn't possibly start to think about housing the way we think about schools and hospitals and make it universally available for everyone,' I will remind them that there's $5 billion a year we could save by not giving tax breaks to people who've already got a house. Let's not give tax breaks to people who have a house so that they can buy their second, third or fourth house. Put $5 billion extra into the system and build more affordable housing. It will put housing back in the reach of young people and put renting a house back in the reach of young people. That's what a proper housing affordability strategy would look like.

Instead, because the government hasn't got the guts to tackle its base—the big donors who donate to it and the members of parliament who sit here with over a dozen properties in many instances under their name, while some people don't even have one; that's who this government is speaking for. Well, we will stand up for young people. The Greens will stand up for young people. The Greens will stand up for those who are being screwed over. The Greens will close the wealth gap that exists at the moment and push for real action to make housing more affordable for renters and for buyers. We will stand up to those vested interests, but the government clearly won't.

Mr WATTS (Gellibrand) (12:30): For many young Australians today, the dream of homeownership feels completely out of reach. I speak with them every day in my electorate in Melbourne's west. A generation of young Australians have watched property prices break away from wages. They are a generation who, no matter how much they save, see property prices growing faster than the deposit they need to get a foot on the property ladder. They are a generation who wonder how they can afford to live near their jobs and near their families. They are a generation who have been failed by this government.

Unfortunately, the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017, which are before the House today, represent a continuation of this failure. Labor does not support them. They won't improve housing affordability, because they duck the main problems in our housing market in favour of a grab bag of bandaid solutions. This represents, it's fair to say, progress of a kind on the part of the government. At least the Turnbull government is no longer actively denying there's a housing affordability problem in this country or telling young Australians that they need to just get a good job that pays well in order to break into the property market. The first bill does seem to show that the government at least understand that they have a political problem with housing affordability—it being named the 'reducing pressure on housing affordability measures bill'. It's a bit of a giveaway in this respect. But the measures in this bill are little more than a fig leaf for a lack of real action on this front. There's a long way to go before young Australians will see a comprehensive plan to deal with the pressure on housing affordability from their government.

We should say from the outset of this debate that we have a housing affordability crisis in Australia today. For 25- to 34-year-olds, only four in 10 own a home today, compared to six in 10 who owned a home in 1982. It's a big change that has consequences throughout the housing market for first home buyers, renters, people in public housing and, indeed, the homeless. It's a problem that is being felt particularly acutely in Melbourne. The Demographia International Housing Affordability Survey: 2017 found that Melbourne was the sixth least affordable city in the world. Current ABS statistics show that Melbourne's median house price has risen to a record $880,902—an increase of more than $100,000. The Grattan Institute has found that housing prices have increased by over 40 per cent over the past five years. If you already own your home, particularly if you bought it 20 years ago, this is all to the good; for everyone else, though, this has big implications. By the end of last year, 37 per cent of average disposable income would be taken up by the monthly mortgage repayments on a median priced home, after a 25 per cent deposit had been put down. That's 20 percentage points higher than the equivalent call on disposable income in 1997. In Melbourne, 35 per cent of families are suffering from rental stress. Ten years ago, around one in three rental properties in Melbourne was considered to be affordable for a struggling family, according to the Department of Health and Human Services. Today, just 5.7 per cent of rental properties are considered to be affordable for these families. The impact on the number of Australians who live in homelessness is obvious.

These market conditions demonstrate just how lazy it is to bash generation Y Australians in this debate, to blame them for their inability to break into this market. All too often, young people's aspiration for homeownership is met with condescension from their government and from far too many people in our general community. They're frequently told that, if they want a house, they should stop eating smashed avocado on toast or stop buying take-away coffee. To put down a deposit on a typical house in Footscray, in my electorate, you would need to forgo about 38,000 coffees or 150 years worth of weekly smashed avo brunches. It's a nonsense. According to the Australian Bureau of Statistics, generation Y already spends less on food and recreation and much more on housing than their predecessors, their equivalent generation, did in 1989. That is hardly surprising, given that they also confront an employment market with the lowest wage growth on record and very high rates of youth unemployment. If they were lucky enough to go to university, young Australians today also carry debt repayments for their higher education that are orders of magnitude higher than the debt faced by previous generations.

We should be clear: this isn't a morality play of lazy young people refusing to make the same sacrifices that previous generations did to break into the housing market. Instead, young Australians are confronting a housing market that is structurally different from the one that confronted their parents and indeed their grandparents. There are a number of reasons why Australia's housing market has evolved in this way, but one reason is the fact that the Turnbull government continues to insist on giving a tax break to people buying their second, third, fourth or fifth investment property but nothing to young Aussies trying to buy their first home. These tax breaks cost the budget $10 billion a year, and almost half of the benefit goes to the highest 10 per cent of income earners. More than 90 per cent of the lending for property investment of this kind goes into purchases of existing housing stock, so it doesn't even increase the stock of housing in the market in a significant way. It has helped growth in property prices outstrip growth in people's incomes in a way that the current prevailing low interest rates can never offset. It has empowered a new investor class in our housing market that has muscled first home buyers out of the market. As a result, home ownership is at a 60-year low and the proportion of first home buyers in the market fell to a record low of just 13 per cent in July 2016, before moving up slightly in the last quarter, thanks to stamp duty concessions for first home buyers given by the Victorian and New South Wales state governments.

There are a number of things that governments should be doing to respond to these changes in a holistic way. The federal Labor Party released a comprehensive housing affordability policy before the last federal election. We committed to reforming negative gearing and the capital gains tax concessions for property; limiting direct borrowing by self-managed superannuation funds; facilitating a COAG process to introduce a uniform vacant property tax across all major cities; increasing foreign investor fees and penalties; establishing a bond aggregator to increase investment in affordable housing; boosting homelessness support for vulnerable Australians; getting better results from the National Affordable Housing Agreement; and, finally, re-establishing the National Housing Supply Council and reinstating a minister for housing.

Our reforms to negative gearing would limit future negative gearing concessions to new housing stock, and we would reduce the capital gains tax discount from 50 per cent to 25 per cent. These are responsible changes that would moderate the growth in housing prices and target tax concessions to where we need them—for investment in new housing stock, increasing supply. Indeed, the McKell Institute estimated that a 10 per cent increase in construction as a result of these changes would lead to up to 18,500 new homes being constructed per year. It's a smart, responsible policy that backs in young Australians wanting to buy their first home.

In this changed housing market governments also need to do more for the larger number of Australians who will be spending a longer time in the rental market. That is why I was very pleased to see the Andrews Labor government's recent package of reforms to make renting fairer in Victoria. This package gives tenants more rights, longer leases and smaller and fairer bonds. The Victorian government has committed to banning rental bidding, a practice where potential tenants are asked to bid against each other for the privilege of renting a property. Rental increases will only be allowed on an annual basis, to deliver financial stability for long-term renters. Landlords will no longer be able to force tenants to vacate their leases for 'no specified reason'. Renters will be given basic human dignities, like the right to own a pet unless there's a good reason for the landlord to deny them consent for a particular property. Renters will also be given the right to make minor modifications to rental properties, like installing hooks for picture frames, and when tenants are forced to make urgent repairs to the property landlords will be required to reimburse them more quickly. Bonds will be capped at one month's rent where the rent is twice the median rent, and bonds will be required to be released to tenants more quickly at the end of tenancies when there has been no dispute lodged by the landlord. These are important reforms that strike a new bargain for renters in the radically changed new structure of the modern housing market in Australia.

Housing should not be thought of as just another investment category. It's a foundation of human dignity. While successive governments have created a situation in which property investors have been given an unfair advantage in the market over people seeking a home for their family, it's important in this context that government provides these basic protections for people who are unable to buy their own home and are forced to rent for increasingly long periods of time.

Federal Labor's changes to the tax treatment of property and Victorian Labor's fair renting reforms are the kind of holistic approaches that we need to address the housing affordability crisis. The bills before the House, on the other hand, are little more than ineffective bandaids. The so-called First Home Super Saver Scheme will do nothing to tackle housing affordability. What it will do is undermine Australia's world-class superannuation scheme, in a further attack on the future of young Australians. The government's plan on this front would mean that first home savers who make voluntary contributions into the superannuation scheme for their retirement could then withdraw these contributions, up to certain limits, and an amount of associated earnings for the purpose of purchasing their first home. Concessional tax treatment would apply to amounts that are withdrawn for this purpose under the scheme. The effect of this intervention on housing affordability would just be to pour further fuel on the housing market. Anything that first home buyers will be able to pull out of this scheme for a deposit to increase their bidding potential in the auction market will quickly be factored into the price of properties for sale on the market.

The other measure in this bill is about contributing the proceeds of downsizing to superannuation. The government proposes to allow people aged 65 or over to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. These contributions would be exempt from the age test, the work test and the $1.6 million balance test for non-concessional superannuation contributions. There's nothing wrong with this in principle and, if the government were to split this measure away from the First Home Super Saver Scheme measure, we'd be open to considering this measure. Indeed, in the 2013-14 budget there was a pilot program that had the aim of doing just this, trialling a means test exemption for age pension recipients who were downsizing from a family home for their retirement, freeing up that housing stock for young families who need that space for their new young children. Up to $200,000 in proceeds would have been put into a fund in which would have been exempt from the pension's means test for up to 10 years. But of course this short-sighted government axed this pilot program. So it's back to have another crack at the same issue in the bill before the House today. This proposal would be worth taking more seriously if it tackled related issues to this downsizing question, issues like the age pension income test, asset tests and stamp duty issues taken together. But as it stands this measure will have a minor impact on addressing the housing affordability crisis in Australia.

What's needed to tackle the housing affordability crisis in Australia is leadership. We need recognition of the scale of the problem and its causes. We need a government that's willing to go in to bat for young Australians and recognise the legitimacy of their aspirations for homeownership. We need a government with the vision required to outline a policy alternative that over time will create a new structure and a new bargain for young Australians trying to break into the housing market. We need to reconceptualise the way we think about housing. For too long housing has been a topic of reality TV shows and a topic of investment speculation rather than the foundation stone of human dignity, particularly the dignity of families living in our communities. We should not countenance a tax system that privileges property investors—some of them may be property speculators—over young families trying to build some financial stability and some home life stability for their young families.

This is an intergenerational inequality issue. If we want to have equity between the generations, we need to ensure the latest generation coming up the ladder aren't being kicked off—aren't being prevented from climbing aboard the property ladder that previous generations in Australia climbed aboard. In the past, homeownership has been the great Australian dream. It has been the foundation for families to invest in the new generation, to invest in the children coming up behind them and give them that stability of home life and that financial stability they need to thrive and reach their full potential. We need to get back to that. We need to address the housing affordability crisis in a holistic, comprehensive way, and, unfortunately, the bills before the House do not do that.

Mr ZAPPIA (Makin) (12:45): In speaking on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017, can I say that I support the amendment moved by the member for McMahon in this place yesterday. This legislation is the government's shallow response to the housing affordability crisis that exists throughout Australia and has existed now for some years. It contains two measures. Firstly, the First Home Super Saver Scheme, whereby a person can downsize their home, if they're 65 years or over, and place some $300,000 into their superannuation account. The other measure is the one dealing with the super scheme whereby a person can put money from their income additionally into super and then use that money to purchase their home. As the member for McMahon has quite rightly pointed out, if the two measures were split Labor would not oppose the downsizing measure. But the measure relating to the First Home Super Saver Scheme is one that we don't support.

The great Australian dream of homeownership is rapidly fading away for most Australians. To put that into some perspective, in 1970 in Sydney the average house price was around $18,700. In Adelaide, my home city, it was $11,900. Today in Sydney the average home price is $1.1 million and in Adelaide it's $436,000. The average wage in 1970 across Australia was somewhere between $5,000 and $6,000. Today it's $78,000. So we have a situation where the average wage has gone up around 15 times since 1970, whereas housing prices have gone up some 60 times over the same period in Sydney and 36 times over that period in Adelaide. Regardless of whether it's 36 times or 60 times, housing prices have gone up many more times than the average wage increase over that period. Understandably and logically, it's becoming more and more difficult for a person to buy their own home.

That has been reflected in other statistics that are also available. We saw in a report only yesterday in The Age by Clancy Yeates that Australian house prices have risen on average 8.1 per cent a year, for a cumulative rise of 6,556 per cent over a 56-year period. The 2016 census shows that some 31 per cent of Australians own their home outright. Some 34 to 35 per cent are in the process of paying off their home—that is, they have a mortgage over it. So between 65 and 66 per cent of Australians are either owning their home or paying it off. In 1966, 50 years earlier, 71.4 per cent of Australians either owned their own home or were paying it off. We have seen a reduction of around six per cent over that period. Six per cent may not sound like much, but it's actually quite significant. It's been on the decline pretty much ever since, and it continues to fall. I suspect it will start to fall at even greater rates in the years ahead unless governments address this issue through sensible policies that will have some effect.

As I pointed out earlier, housing prices continue to rise. In the last five years alone, housing prices have increased by 35 per cent. Notably—and I found this statistic very interesting—the highest home ownership rates in the world are in China, where 90 per cent of the population own their home, and in Russia, where 87 per cent of people own their own home. I thought that was quite interesting given that neither is what we would refer to as a capitalist country. A fifth of households with a mortgage are now paying more than 30 per cent of their income on their repayments, and that in turn is causing housing stress. When we go back to the people who are currently in the process of owning their own home because they have a mortgage on it—they've taken out a loan and are repaying it—one-fifth of them are now also under financial stress and finding it difficult to continue to pay off their mortgage. That should be of real concern, because if those people cannot pay off their home they will be left even worse off, because they will probably make a loss out of the investment they've made in their home.

Not only are housing affordability and higher house prices lowering home ownership rates in Australia. Because prices are at such a high level in comparison with incomes in Australia, when people want to rent a home, because they cannot afford to buy one, they're also faced with excessively high rental charges. The rental charges have to reflect the cost of the house in the first instance, and people who invest in homes want a return on their investment that is commensurate with returns they might get if they put their money elsewhere. Higher housing prices not only mean that people cannot afford to buy a house but mean that many people are no longer able to afford the rent that is being charged for them to have a roof over their head.

I said earlier on that housing prices are continuing to rise. I understand that as at the end of June the mean housing price across Australia was $679,000. That's an enormous amount of money for an average income earner to try to raise or to pay off if they're able to put a deposit down and get a loan. Not surprisingly, because of that mean housing price we now have some 105,000 people who are homeless. They can't afford to buy a home or even to rent a home. I don't have the figures for 2016, because I believe they haven't been released as yet, but my expectation is that the figure could be even higher than 105,000. Were it not for the fact that so many young people are living with their parents because they cannot afford to buy their own home or pay rent, the figure would be much worse. We're seeing the trend where young people are not leaving home when they reach 21 or 18—in fact, many of them are staying with their parents well into their 30s—because they cannot afford to live outside of their parents' home.

There are several factors for the housing stress and the homelessness, and pricing is one. But one of the others is that there has undoubtedly also been a reduction in public housing across the country. In 1991 public housing peaked. Some seven per cent of the housing was public housing, or social housing. In 2016 the figure was 4.2 per cent—just over half of what it was in 1991. We've seen state governments selling off public housing in order to pay down debt, but as they sell off public housing, of course, the people who are in desperate need have nowhere to go. I want to refer to a report put out by the St Vincent de Paul Society only last year. I will quote a passage from their report that talks about the crisis I've been referring to. The report says:

A measure of the housing crisis is the number of people around the country on waiting lists for social housing: 217,000 families in 2014. Moreover, for those several million Australians on Centrelink benefits, only 1 per cent of private rental properties are affordable. Reflecting this, more than 157,000 households in Australia are paying over 50 per cent of their income in rent, and therefore live in severely unaffordable housing. The most recent estimate is that there are 875,000 households in Australia that are experiencing housing stress.

The report goes on to say:

As at 2011-2012, 90 per cent of government expenditure on housing policies (direct expenditure and tax concessions such as capital gains tax exemptions) was received by homeowners (about $36 billion each year) and residential property investors ($6.8 billion). This compares to federal and state/territory governments spending around $5 billion on social housing.

So, we have nearly $43 billion being rebated in the form of tax concessions to investors in residential property, compared with only $5 billion going back into social housing from the state governments.

Therein lies the real problem. There is a housing affordability crisis in Australia, and public housing is unable to even meet the crisis we're facing. And the Turnbull government's response is to do two things, as I pointed out at the beginning of this debate—that is, to use super funds to help people get into housing and to allow people to downsize once they reach the age of 65. Those measures are not adequate and will not address the real problems we face. Time will tell, but I'm reasonably confident that they will not address the serious crisis in housing affordability in this country.

This is a coalition government that comes from years of never having truly been committed to the superannuation process in this country. We saw that they opposed superannuation when it was introduced into law and into society by Labor. But more recently we saw this coalition government freeze the contributions at 9.5 per cent until, I believe, the year 2021. The people they're saying might benefit from the scheme are being asked to put money into superannuation where they will get a tax benefit so they can then take it out with perhaps some of their other contributions and put it into housing.

The truth of the matter is that people cannot afford to put extra money into super in the first place. The people we're trying to help and who need help are the very people who are at the low-income end and do not have spare money to put into their super fund. But if they are fortunate enough to do so, and they can access that fund, it will mean that they will have a lower return on their fund when they reach retirement years, because they will have had less money in it. So they will lose out at the end of the process. The truth also is that most Australians aspire to two things in their life. Yes, to own a home has been one of the great Australian dreams. But the second has been to have a reasonable retirement, some stability in retirement—something they can look forward to. What we're saying, as the member for McMahon quite rightly pointed out in his own contribution to this debate, is that the government is saying to Australians: 'You can have one or the other, but you cannot have both. Either you can have a home and no retirement, or you can have retirement but no home, but you cannot have both.' And that is on the assumption that all the rules relating to the assets test and so on that relate to home ownership and entitlement to pensions and other concessions when one reaches retirement don't change between now and the years ahead. It's very likely that, having taken the steps the government wants people to take right now, the rules will in turn be changed years down the track, which will mean that they've made their decisions to no avail, because they will lose out in other ways.

Lastly, it is true that many factors have contributed to rising house prices in this country. But undoubtedly, and as the St Vincent de Paul Society report highlights, negative gearing and capital gains tax discounts have added considerably to the price of houses in Australia. This government refuses to address that issue. Labor has put forward some sensible policies that have been supported by independent analysts demonstrating that those policies will make a difference to housing prices. Yet this government refuses to concede what is an obvious and glaring contributor to the high prices in this country by refusing to tackle the negative gearing associated with investment in housing. And it refuses to do anything about the discounts that apply to capital gains tax when people do invest in housing. There are better measures than this, and the government should have the courage to face up to them and do what it knows is right.

Ms OWENS (Parramatta) (13:00): I rise today to speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017 and the First Home Super Saver Tax Bill 2017. Housing affordability matters in communities all across Australia and in my community surrounding Parramatta. It's raised with me by parents and by young people, perhaps more than any other subject, when I'm out in shopping centres and out doorknocking. Housing affordability matters. This government, in its fifth year now, has finally been dragged kicking and screaming to the table to do something—anything—on housing affordability. We've heard them in recent years say 'get your parents to help out', as if buying a $1.2 million median-priced property in Parramatta would be in the range of most parents in Parramatta, let alone their children.

I've heard in this debate in the last few days members opposite talking about the problem for young people getting into housing being getting a deposit. How out of touch is that? Really, homeownership is at a 60-year low. Homeownership by 25- to 34-year-olds has collapsed from 60 per cent to less than 40 per cent in 30 years. Prices have accelerated far more than wages, and that acceleration in prices has been driven largely by tax concessions that are paid for by the rest of the community. This response to what is a crisis—late as it is, in the government's fifth year—is rather pathetic.

There are two measures here on the table. The first, the First Home Super Saver Scheme, allows individuals who are saving for their first home to take advantage of the concessional taxation arrangements that apply to the superannuation system. Under the First Home Super Saver Scheme, first home savers who make voluntary contributions to their superannuation account can withdraw those contributions up to certain limits and under certain conditions.

We on this side of the House have been staunch allies of compulsory super since it was first introduced by a Labor government decades ago. We have defended it—

Mr Snowdon: It was opposed by them.

Ms OWENS: It was opposed by the opposition, I am well reminded, thank you—by the opposition of the day, the current government. We have fought to protect superannuation ever since, and here we are once again defending Australia's great superannuation system against a government that really doesn't have great affection for it. They have slowed down the increase in contributions. Contributions should have been going up by 9½ or 10 per cent. They have now slowed that down, or paused that. And here the government are now suggesting that people should be able to dip into their super to buy a home. What that does is two things. It increases demand. Fighting accelerating prices with another tax concession would be risky at any time, but actually allowing people to dip into their super—which in later years will reduce their retirement savings—is foolish. It pushes the problem further down the road. We oppose it.

The second measure is one we would be willing to talk about, which is about allowing seniors to use the proceeds in relation to the sale of their main residence to make contributions of up to $300,000 to their superannuation provider, provided they're over 65 years of age. We'd be prepared to talk about that because we actually introduced a pilot scheme that allowed seniors to downsize, when we were in government just over four years ago. The government that was elected under former Prime Minister Tony Abbott scrapped that. Here they are back again with an idea that is similar—not the same. We don't believe it's as effective, but we would be prepared to talk about it if the government was prepared to separate these two measures rather than bundle them together, because we will not support allowing people to dip into their superannuation for the purchase of a property.

I know that, on the government side, they think it's a good idea, because they believe that the deposit is the problem. I want to talk through some of the figures for Parramatta, just to try to point out to them exactly how out of touch they are. In Parramatta the median price for a home has now reached $1.2 million. Parramatta is the heart of Sydney. It's the middle of the west. The median rent is now over $500 a week, and the growth has been 17.3 per cent. That means that every year the increase in the value of a property is $21,675, which means that, if you are saving for a deposit, for every year of the price increase of the house, you need an extra $4,335 on the deposit you were saving for. Not only are we talking about $240,000 for a deposit of 20 per cent for the median house in Parramatta but we're also talking about that deposit going up by nearly $4,500 every year, because of the increase in prices. Parramatta is not a particularly poor area. Only 15 per cent of the population in my electorate are in a low-socioeconomic group. Very few people in Parramatta can afford the median house price of $1.2 million, particularly those that work there. Over 80 per cent of people that work in Parramatta come in from elsewhere. They come in from an hour further out to work in Parramatta—incredible distances to travel to work.

I want to stop there and talk a little bit about why housing affordability matters. It's not just about owning a house or security in retirement. I don't want to talk about the good old days, but there were aspects in past decades which produced benefits for a community and which we're losing because of changes in the way our communities operate. Back in the days when we had full-time work, large companies that employed large numbers of people in a community, local media and local ways of meeting with each other, and people lived and worked in the same suburb that their parents lived and worked in, there was a baby in that bath. We've lost the bath in many ways, but the baby was the social cohesion. People knew their community well. They lived near their parents. They lived near their grandparents. They knew the parents of the kids that went to school with their children. They knew each other. They met after work. They built relationships which supported families through good and bad times. When a partner went back to work, people in the area assisted with looking after the kids. There was a cohesion.

Small country towns still have it. In a few suburbs of Sydney occasionally you'll find small pockets where it still exists, largely because those pockets didn't boom and are still as they were. As the boom times came through, the price of housing went up so much and people had to live further and further away from their parents and where they worked, we lost this important cohesion. When we talk about housing affordability, we're not just talking about people buying a house 1½ hours away from where they work or from their family; we're talking about having communities in which people can live and work in the same communities, close to their family support structures. If you do that, a whole range of other social issues are alleviated by the community connections that protect people in their worst of times. The neighbour that has lived beside you for 50 years is there for you when you're 85. Again, I've seen even unit blocks where the residents have been consistent over time and where, as people age in place, there are support systems for them. If we don't deal with housing affordability in a very real way, not just in the ability to buy a house but in the ability to buy a house in a community in which you live and work, then we are losing the important part of home ownership, which is that baby: the social cohesion, the connection you get when a community works very well.

It is incredibly important that we have this discussion, and it's a great shame to me that, on the other side, this government walked away from so many of Labor's policies when they first came to government. We knew that housing affordability was a problem, as this government should have on the first day they were elected. They should have known about it in opposition and should have watched the policies we had. They did watch them, but when they came in they scrapped them. We had the National Rental Affordability Scheme, which has been praised by many in the community for doing incredibly good work in Parramatta. It provided $622 million over four years from 2008-09 for the development of up to 50,000 affordable rental properties by mid-2012. It was to deliver an additional 50,000 properties onwards, but, of course, it was scrapped. We produced The road home white paper on homelessness and developed national strategies and targets to reduce homelessness. We committed to the Housing Help for Seniors pilot, which was an earlier version of the second part of this bill—scrapped, of course, by the Abbott government. We provided $6 billion to the states and territories for affordable housing. Those who live in areas like mine will have seen the building that went on in those years of new housing stock. We negotiated the National Partnership on Homelessness, which saw the Australian state and territory governments provide over $1 billion for reducing homelessness. We established the National Housing Supply Council—of course, scrapped. We appointed a dedicated minister for housing and homelessness—again, scrapped and not replaced when this government was elected over four years ago.

So the work that was being done in the housing space was undone and then we had four years of nothing and, in fact, denial that it was a problem. The government said it was a problem of a deposit and young people should borrow it from their parents. They ignored this massive—over 17 per cent—rise in housing prices in my community every year. They ignored the absurdity of a person on a median wage being able to buy a median house at $1.2 million. Who is buying them? I don't know. But certainly nobody on the median wage, which sits at $60,000 a year, is buying properties like that. No, they're not. And those who are buying properties are at great risk of interest rate rises. We've heard that recently from the Governor of the Reserve Bank also.

We've had a government that's basically cut what was happening and has done very little or nothing in the meantime and has now come up with something that is really quite ineffective at best and, to be honest, damaging. Recently the Australian Housing and Urban Research Institute published a review that found:

… there is almost no effort within high-level policy thinking at the federal level that is dedicated to constructing and articulating a systematic conceptual understanding of the links between housing policy objectives, housing policy instruments and mechanisms, and their effect on the economics of housing systems or economic productivity.

That is really a damning indictment of a government that's been in power now for four years on an issue that was absolutely obvious when we were in government, which is why we acted on it—to get into government and ignore something this basic in the community! You can't go to a shopping centre or a school or anywhere without finding a parent who will tell you how scared they are that their children will not be able to buy a home or are talking about how they dipped into their retirement savings to provide that possibility for their children, which means, by the way, that as those parents reach retirement age it's more likely the taxpayer will be subsidising their retirement than we would be if housing affordability were not such a major issue.

In the couple of minutes I have left, I want to talk about Labor's policy. Before the last election we announced that we would act on negative gearing on new stock. You only have to go to an auction and look at what's happening in areas like Parramatta, where there is so much building going on, to see that the new properties coming onto the market are almost exclusively going to investors. You can see the prices going up and up. You can see properties that are specifically built for investors. They're built for the return. They're built to be negatively geared. They're built for the tax-advantage system we have. And we're not seeing properties coming on to the market in areas like Parramatta that are designed and built for people on the median wage or even twice the median wage. We're just not seeing it.

We know that, in order to slow down the speed of the price rises in housing in areas like Sydney, we need to tackle the tax concessions that are turbocharging the housing market, that are driving the massive increases that are putting the price of housing out of the reach of average Australians week after week after week. We need to tackle negative gearing and we need to tackle the concessions on capital gains tax. If at any time in the foreseeable future we want people on the median wage or even double the median wage to be able to afford to buy houses close to where they work and close to where their parents are in our major capital cities, we have to act on those levers because they are putting housing affordability out of the reach of most Australians and every month this government delays on acting on that they make the situation worse. This bill is at best a fig leaf. Housing affordability really matters and this bill will only make the situation worse.

Ms SHARKIE (Mayo) (13:15): There is merit in trialling the First Home Super Saver Scheme and the downsizer super contributions provisions. However, we all know that they are not holistic solutions to the housing affordability crisis, and I and my Nick Xenophon Team colleagues call on this government to show greater leadership on the issue of housing affordability.

Before I talk more broadly about the sheer scale of the housing affordability challenge in Australia, I will briefly mention some of the concerns I have in relation to the First Home Super Saver Scheme. Firstly, most of the benefits under the scheme will accrue to those who are in higher tax brackets, as those in lower tax brackets are unable to obtain the full advantage of the differential in tax paid between their marginal tax rate and the super contributions tax. Secondly, it is a demand-side measure when we do not have a demand-side problem with first home buyers. The problem facing the housing market is a combination of too much demand by investors in existing property and not enough supply. Australia saw the effect that the first home buyer grant had on housing prices—much of the benefit from the grant was simply transferred to the sellers through inflated prices across the market. There is no guarantee that this measure will not simply create the same outcome, although by a more convoluted mechanism. But, as I say, the trial has merit, and NXT reserves its right to come to a final position in the Senate.

I would like to talk more broadly about the housing crisis facing Australia. Our homelessness levels are growing and our young adults are now delaying or avoiding having children because they cannot afford to buy a home in which to raise a family. Housing affordability is causing massive distortions, not only economically but socially as well. Having a roof over your head is recognised by social service agencies as one of the four key factors in determining how well a person will negotiate life. It has also rapidly become a factor that divides the haves from the have-nots in Australia—a divide that is growing wider generation by generation. But 'affordable housing' means different things to different people. Sadly this is not an issue just on the eastern seaboard, although I do acknowledge that Sydney and Melbourne are incredibly expensive cities. It is something that affects people right across Australia. There are fewer employment opportunities and lower wages in regional areas, and rental supply is often quite tight.

In 2011 the census found that over 105,000 Australians were homeless, a massive increase of 17 per cent since the previous census. That figure is expected to rise when homelessness figures from the 2016 census are released. The St Vincent De Paul Society's recent report The ache for home notes that housing affordability is hitting the poorer sections of our population the hardest, with women over 55 being a group that is over-represented in homelessness statistics. Domestic violence is a piece of the puzzle, with the report noting that this social ill is a factor in 36 per cent of homelessness cases. Indeed, family violence is the leading cause of homelessness in my electorate of Mayo, where we have more people without homes than the state average, at 48 persons per 10,000 compared to 38 per 10,000 across South Australia.

But you don't have to come from a violent home to find it hard to break into the housing market. Aided by our taxation and financial systems, richer families with properties are able to bequeath or otherwise help their children get a financial head start in life so they can get a foot in the housing market door. It is a head start that poorer families have no way of matching.

With each passing generation, capital continues to be concentrated in a property class, and inequality rises, and the policy measures required to bridge the gap will become more onerous upon government finances. The problem only compounds as the population ages, because, in the past, paying off your own home had been the predominant pathway to financial security, particularly in retirement. Today, too many of our young people cannot afford to buy their first home—not even a bedsit. Worse still, many have given up because the cost of housing is considered so far beyond their reach. In simple terms, the up-front cost of housing for the ordinary Australian has increased from almost three times their household income in 1980 to almost 9½ times their household income in 2016. Homeownership is declining, falling from 57 per cent of adults being homeowners in 2002 to just over 51 per cent in 2014. This decline is more marked among first home owners, with the rate of homeownership dropping from 38.7 per cent in 2002 to 29.2 per cent in 2014.

Just recently, the consumer advocate group CHOICE and its partners National Shelter and NATO released the report Unsettled: life in Australia's private rental market. This report showed that in the decade to 2013-14 the number of Australians renting rose from 25 to 31 per cent, nearly 40 per cent of renters are under 35 and half of them have personal incomes of less than $35,000. More than 80 per cent have a no-fixed-term lease or leases that are for 12 months or less, and 20 per cent are on month-to-month rolling leases. This is incredibly instable housing. CHOICE claimed that this was leading to greater insecurity among renters, with half of those surveyed admitting that they were reluctant to exercise their rights, such as asking for household repairs, because they were worried about being blacklisted and they were worried about not being given another extension on their lease.

Housing insecurity is a documented factor in entrenched poverty. Low-income private renters are more likely to move frequently, which affects their employment and their social networks. It also affects children's schooling because children are moved from school to school as families try to find an affordable place to live. Where does this all lead? Again, I say that it leads to a growing divide between the haves and the have-nots that is arresting the full development of our country. Some might argue that there have always been haves and have-nots and it is not the role of government to intervene. This view presumes an equality of opportunity that doesn't exist.

I cannot help but notice that in the generation since 1984, when negative gearing was introduced, we've seen a huge distortion in the housing market. The government intervened in Australia's financial markets then, and it needs to do so again now. What that leadership will look like and what it will take into account in the reality of today's market are yet to be decided. Certainly, there is much discussion by the public on how we can address this. The government most certainly needs to play a greater role than the limited measures before us in these two bills. An increasing number of Australian people are missing out on the social and economic benefits of homeownership, and as a country we are all suffering from their lack of prosperity. This merit has trial, but, as I've said, much more needs to be done, and I look to government to work with the entire parliament to address housing affordability.

Mr KHALIL (Wills) (13:23): I rise to also speak on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Bill 2017. As other speakers have outlined and as many of the speakers on this side of the House have mentioned, Labor will be opposing this bill. We know that the dream of owning your own home is pretty much completely out of reach for too many Australians. Working- and middle-class families are being priced out of the housing market. The evidence shows this very clearly. Ownership rates for young people aged between 25 and 34 have tumbled in recent years from 60 per cent to 48 per cent. Just as disturbing is the fact that young people are being forced to take on levels of debt unimaginable just a few decades ago.

You'd be forgiven for finding our opposition to this bill surprising, given the name of the bill—the so-called measures to reduce pressure on housing affordability. That name would lead you to believe that the government had recognised the problem and was taking the appropriate action. Why shouldn't we support that? But the devil is in the detail. While this bill purports to address the issue of housing affordability, it does nothing more than pay lip service to one of the greatest issues and challenges facing the Australian economy. We had to wait several months to see this legislation and get across the detail. What we got was nothing more than a collection of half-baked ideas and thought bubbles. Make no mistake: the measures contained in this bill are ineffective and will solve nothing. We were told that the government was going to rescue first home buyers—they were going to come in and be rescuing superheroes. The member for Deakin, Super Sukkar, was going to fly in—he's here today—

The DEPUTY SPEAKER ( Mr Irons ): Order! The member will refer to members by their correct titles.

Mr KHALIL: The member for Deakin was going to fly in and rescue first home buyers. But what did we get? We got thought bubbles and half-baked ideas.

The first schedule of this bill, particularly, is one of the most egregious parts of the proposal. It would allow first home savers who make voluntary contributions in the superannuation system to withdraw them up to a certain limit, and an amount of associated earnings, for the purpose of purchasing their first home. The concessional tax treatment would apply to amounts that are withdrawn under the scheme. I understand why this would be tempting to many. But the proposition to undermine the retirement future of Australians not only has the potential to make housing less affordable; it will also compromise the financial security and the dignity in retirement which superannuation has been designed to provide and has been such an effective part of our nation's policies.

Let me be clear about this: the Treasurer's superannuation scheme will do nothing to address housing affordability. Superannuation is supposed to be sealed—deposited to generate retirement income—not the plaything of the government of the day to give access to super savings, undermining the very important concept of mandatory accumulation and the promotion of compound earnings. This shouldn't be touched or tampered with for whatever priority they have on that particular day or to get themselves out of trouble. It was Labor who built that world-class superannuation system all those years so, against opposition from the other side. We won't stand idly by while this government tries to tear it apart. You can't trust the Liberal government to protect superannuation. They carped and criticised at its introduction under the Hawke-Keating government and they have been attacking it ever since. It's in that Liberal-National coalition DNA to attack the great initiatives that Labor has put in place over this nation's history. Indeed, those opposite loathe Medicare as much as they resent universal superannuation.

So I echo the calls of previous speakers and ask the Senate to reject this measure and send a clear message to the Turnbull government that it's time to get real on housing affordability. The failure of this government on housing affordability is being felt by so many people across my electorate, where property prices are skyrocketing. According to the CoreLogic report commissioned by the Real Estate Institute of Victoria, the median house price in the suburb of Brunswick in my electorate is $1.1 million—$1,110,000. Until last weekend I lived in that very suburb, in Brunswick.

I have to confess that I have a personal interest in this issue, as so many other millions of Australians have. My family and I were renting our home in Brunswick. Our landlord decided to put the property on the market and we were told we had 60 days to find a new place to live. Life as an MP, as we all know on all sides here, is very difficult with a young family. I thought, rather than going house hunting I will see what they want for this property. It doesn't really leave us a lot of time for house hunting when we have to fly to Canberra all the time. We tried to buy the house, or rather asked them what they wanted for it. When I was told the asking price, my jaw literally hit the floor. We make a good salary in this place; but they were asking for somewhere around $2 million for a small three-bedroom house in the suburb of Brunswick. There is no way we could afford that. We loved that home and we loved Brunswick as a suburb, but I can assure you that was far from a palatial home that we were living in, that we were renting. We are fortunate enough to earn a good salary, yet we found the prospect of buying an ordinary home in our area obscenely unaffordable. This is the experience of millions of Australians around the country in the struggle that they go through. So I understand better than most on the other side the struggle that many Australians have who are trying to achieve the dream of homeownership. Labor has led on this with its policies to reform negative gearing and the capital gains tax discount. Those policies were immensely well received by the electorate, and for good reason. They are likely to work and are likely to deliver real outcomes for people trying to enter the housing market. They say that no party has a monopoly on good ideas but, make no mistake, this policy lever is available to the government. They can do this; they can adopt the reforms.

The DEPUTY SPEAKER ( Mr Coulton ): Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the member for Wills will be given an opportunity at that time to conclude his contribution.

The DEPUTY SPEAKER ( Mr Coulton ) (16:11): The question now is that the amendment be agreed to.

Mr KHALIL (Wills) (16:11): I am pleased to be able to resume my contribution to the debate on the so-called reducing pressure on household affordability measures. I was talking about how I as an MP with a good salary was priced out of my own suburb in my electorate. The asking price for the house we were renting was almost $2 million, and we just couldn't afford that. So you can imagine the difficulty facing millions of Australians: young Australians, first home buyers, working- and middle-class Australians who have worked hard but can't get anywhere near the dream of homeownership.

No party has a particular monopoly on good ideas. We hear that all the time. But let's make no mistake here: this government has the policy lever in its hands to reform negative gearing and the capital gains tax discount, but it is unable to do so—unwilling to do so. They can act and deliver relief to so many millions of Australians who are trying to get into the housing market, but they have actually refused to do so. Among all of the advanced economies, Australia has some of the most generous taxation concessions for housing investments. In recent years this has helped fuel an investor-driven property boom, leaving more and more young people—first home buyers and even young families—unable to purchase a home. The interaction of negative gearing and the capital gains tax discount has also encouraged speculative behaviour, exposing the economy to unnecessary levels of financial risk. I would like to quote from a Grattan Institute report on housing policy:

The combination of capital gains tax rule changes in 1999 and negative gearing has strongly increased the demand for investment properties. Investors compete directly with potential homebuyers, particularly for established houses. This makes it harder for first home buyers to secure a property.

From all the anecdotal stories you hear, that is certainly true. When young couples or young couples with a family—their first kid or even two kids—go to an auction, they're competing with someone who is going for their third, fourth, fifth, sixth, or even seventh investment property, and they are just unable to compete.

On that basis, I unequivocally support the amendments moved by the member for McMahon as they acknowledge that the First Home Super Saver Scheme will do nothing to address housing affordability but will instead work to undermine Australia's world-class superannuation system. Any housing affordability package that does not include reforms to negative gearing and capital gains tax is a sham.

Fairness is at the heart of this debate—at least on our side. I believe Australia tries to be a fair society. We expect our tax system to align with this value. Most Australians have taxes withheld by their employer in a pay-as-you-go scheme. Of course, the more you earn, the more you pay. The progressive nature of the way most Australians pay tax doesn't apply to some other aspects of the tax system. Tax subsidies, like negative gearing, disproportionately favour wealthy people who have large amounts of capital at their disposal. And it has to be understood that a dollar of tax avoided in one case is probably an extra dollar of tax paid by everyone else. It's simply unfair.

I now want to turn to schedule 2 of this bill, which provides for a scheme for profits achieved through downsizing a property to be placed into superannuation to achieve a tax efficiency. As some speakers noted, there is a legitimate debate around this issue. While I do not believe that older Australians should ever be coerced into selling a beloved family home because they fear being financially penalised if they do not, there are many cases in which a large family home is not required later in life, once people's kids have moved out and retirement is upon them. Labor has looked at the interaction between downsizing and the pension and looked at people on low and middle-class incomes who might consider the need to downsize. The government is concentrating on the superannuation side of things, proposing to allow people aged 65 or over to make a non-concessional contribution of up to $300,000 from the process of selling their home. These contributions would be exempt from the age test, the work test and the $1.6 million balance test for non-concessional contributions. This measure would overwhelmingly impact on people at the highest end of the spectrum when it comes to savings, not those who are concerned about the interaction with the age pension. While there is a debate to be had on that score, it is a flawed premise that this will promote the release of housing stock and thus ease pressures on property values.

I note that the member for McMahon put questions on notice to the Treasurer to provide an estimate of how many people may opt to downsize as a result of this proposal. As we've heard, the Treasurer appears to have no idea of how many people would in fact choose to downsize. How on earth can the Treasurer conclusively say that more housing stock will be available in the market without any indicator on this front? It's blind faith at best. It's nothing more than guesswork. This debate is an opportunity to highlight the government's capricious disregard for the budget bottom line, which has grown worse under the weight of this government's mismanagement. Reckless tax subsidies are unsustainable and unaffordable. Indeed, several tax subsidies, including negative gearing, are growing at a rate that is unsustainable. Quite simply, the budget position today and over the medium term cannot afford both these generous subsidies and the necessary investments required to boost growth and jobs.

It is appropriate that every budget line item that is growing rapidly undergoes close scrutiny to ensure that the subsidy is achieving its stated objectives and that the quantum is appropriate when evaluated against competing policies. Two specific deductions—negative gearing and capital gains subsidies—are both significant calls on the budget and are growing at such a rapid rate that they need to be addressed. It is undeniable that negative gearing and the capital gains discount have not achieved their aim to boost housing supply and encourage the building of more new houses. In fiscal year 2016-17 they cost the budget over $10 billion. As an illustrative comparison, that's more than the government spends on higher education or child care. The capital gains discount subsidy is growing so rapidly, with revenue forgone doubling from $4.2 billion in 2013 to $8.6 billion by 2018-19. The repeated claims by the government—the justification for the immense cost to the public purse—that the benefits of such tax subsidies go overwhelmingly to low- and middle-income earners are simply incorrect. The government uses income data after deductions have been applied. More reliable data that uses gross income shows that the benefits go overwhelmingly to higher income earners. We see on this side, and it is there for all to see, that this is where the skewed priorities of this government come into sharp focus.

Mr HILL (Bruce) (16:18): I'm going to make a big call at the outset of my contribution to this debate on the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Bill 2017. I'm going to say that from my point of view the greatest disappointment in this year's budget, in the Treasurer's pathetic speech, was the sheer lack of understanding shown by the government towards young people looking to buy their first homes. I say that's a big call because there was a lot that was disappointing in this budget. Mainly, though, I think you can say they were bad calls: a tax cut for everyone in this chamber and a tax rise for everyone else in Australia, $65 billion of unfunded company tax cuts, cuts to education—I could go on. But I say that this is disappointing because in the lead-up to the budget the newspapers were full of speculation. Government ministers were on the telly talking up the big housing reform package we were going to see. Did we see a strategy? Do we have a minister for housing? Still—in the fifth year of this government—there is no minister for housing. Did we see anything real? No. Like the Prime Minister—who has now lost, I think, 21 Newspolls in a row—the housing reform package is a fizzer. There is nothing substantial in the budget. There's a mishmash of teeny, tiny, little measures that don't do much harm but don't really do anything.

We've had a few bills through to give effect to this 'nothing much' of a package. Most are actually integrity measures. You might remember in June, for those avid listeners at home, the foreign resident capital gains withholding payments bill, which apparently was part of the housing reform package—innocuous, but it didn't do anything in relation to housing reform. It was honestly described as an integrity measure. When we finish this debate, the next couple of bills to be debated cognately are three measures. Two are actually described, in a moment of honesty by the government, as 'integrity measures'. I won't breach the standing orders by debating those bills now, but I just note the impact, because it is relevant to the second reading amendment. Those two measures are travel deductions and previously used asset deductions. I am entirely unclear on what the impact on housing affordability might be—tighten up the tax system? Sure. There's a vacancy tax. It might pop a few more houses into the supply. Great. But there's negligible impact on housing affordability.

But those bills that masquerade as a housing affordability package are more evidence that the government has no clue. They are not listening to experts. They are not listening to people in the community. they have no idea. They are seriously out of touch. In fact, they've given up, as we've seen this week with the energy package, any pretence of actually governing. Just do whatever the member for Warringah says in the party room. I notice there's a bill on the Notice Paper as well that talks about new offences for impersonating a Commonwealth officer. I'd be very worried the Prime Minister might actually be charged under that bill for impersonating the Prime Minister! This is a housing affordability sideshow—say some words and maybe someone will believe you're doing something.

The re-election strategy has started to become clear this week: burn coal for higher power prices, spread copper for slower internet, and spin crap for—well, I don't know, just because. Context, however, is important. As our second reading amendment makes clear, the government's housing affordability package is a sham and Labor's policies are superior. The context in this country is house prices keep going up, year after year, quarter upon quarter, faster than incomes. Meanwhile, homeownership rates have plummeted to record post World War II lows. You simply cannot be credible, as speakers before me have said, on housing affordability unless you're prepared to tackle the distorting, unsustainable, regressive and damaging tax concessions. These tax concessions, negative gearing and capital gains tax—indeed, the deadly, toxic combination of the two—are fuelling investor demand for established housing, and they are pricing first home buyers, people who actually want to live in the house and create a home, out of the market. The fact is it is still easier in this country to buy your second, your third, your fourth, your fifth, your 10th or your 39th investment property than it is to buy the most important one—the first. We hear about supply and demand. It is a market, so there is supply and there is demand. But the government point-blank refuses to look at demand. I say it's damaging, because no society, no sensible society, no decent society, wants to see house prices keep rising faster than incomes.

The party of Menzies, the mob opposite, get very sensitive when you talk about their patron saint, Menzies. I think it's the 5,000th year or something, so we've heard all year from his seminal 'forgotten people' speech. He had a vision for a nation of homeowners, versus today's vision for a nation of landlords and renters, with the landlords on that side of the House and the renters being everyone else. The fact is we have too much growth in prices driven by investors. This is not a leftie, communist, socialist plot; it's what every sensible economic commentator and every sensible academic tells us.

The fact is that, for a high-income earner in this country with a bit of spare cash in their pocket—perhaps due to the government's tax cut of two per cent that we got in the last budget, when we're the least deserving people in the country of getting a tax cut—the most rational thing to do on a Saturday morning after having your coffee and reading the paper is to trot down the street to the nearest auction and, with your spare cash, bid up the cost of an existing property because you get a great big tax concession which means more to you than anyone else in the country. I say it's unproductive and distorting. You'd think, with the current investment levels in the productive part of the economy, you'd want to re-engineer the tax system to encourage people with a bit of spare money to do something productive with it, like invest in a business, or a start-up, or shares—something apart from bidding up the cost of an existing property, which does nothing for the economy. I say it's unsustainable, as has been said, because the cumulative cost of these regressive tax concessions is tens of billions of dollars to the budget when we're lectured that fiscal responsibility and structural repair is needed, and I say it's regressive because overwhelmingly the benefits go to those who have the most.

This is perhaps the clue, as many speakers before me have wondered, as to why the government refuses point-blank to address these glaring problems in the budget. Every sensible economist, economic body and policy expert says change is needed, and even Joe Hockey—remember him?—and the person impersonating the Prime Minister, when he was old Malcolm, used to know that. Just like we saw with superannuation, when you strip away the pretence of care for the middle class, when you get past the waffle about, 'Oh yeah, we care about poor people; inequality is not a thing, but we're kind of a bit sympathetic to people in poverty,' they are the party of the rich. They are the party of the people who have the most. They have wealth and privilege, and reducing inequality runs against their very purpose. It is at the core of Liberal Party DNA that its members and donors jack up if it does anything to make a structural change that reduces inequality and makes things a little fairer, or if it takes away any perk or loophole that helps money flow back to those who have the most and levels the playing field.

We saw this most clearly in the last couple of years when they wrestled pathetically with the need to reform the unsustainable superannuation tax concessions—those concessions that meant you could have $15 million in an account and pay not one cent of tax. We've made that point for years and we've been clobbered over the head. We put forward sensible policy in an election. At the last minute the government went, 'All right, okay, you've got a point; let's not talk about it, but we'll pocket some savings,' and then all hell broke loose, to put it politely, in the Liberal Party. They lost donors, they lost volunteers, and they say they almost lost the election through that stopping of the flow of cash from people who pay no tax. And now the poor member for Higgins is under siege and may not even be here if the preselection challenge is successful, because Jack Rush QC left the Liberal Party and has started up the 'anti the member for Higgins group' because he thinks he shouldn't have to pay any tax. That is exactly the kind of thing that happens to those opposite, so I do understand it's difficult for them when they try to make things a little bit fairer.

I said at the start that most of the housing affordability package is a nothing package; it's actually integrity measures. That relates directly to the second reading amendment we have moved, suggesting that this is a sham. Unfortunately—and this goes very directly to the bill—not all of the housing measures are innocuous. Indeed, some of them, the supposed budget centrepiece, are truly ridiculous. They're worse than a sham because they're actually damaging, like the ridiculous scheme to bastardise the superannuation scheme. We have the first home buyer super saver tax scheme. It is a mouthful. It's like the government thought, 'We'll throw as many fun words as we can into one policy and that will be appealing to young people.' It's a bad idea. It's a bad idea because, firstly, it fuels demand—remember that old supply-demand thing we touched on earlier? It puts more cash in buyers' pockets. It gives a tax break, which again is regressive, to save up to $30,000 to put towards a house. If you increase the demand for housing in an already hot market, it can only increase housing prices. The scheme will make matters worse for young people trying to buy their first home, and the only people this scheme really helps are those who want to see prices rise even further.

I say this tax break is regressive, that r-word—making things better for people who have most and worse for those who have least—because the scheme, by its very nature, through the tax break, delivers the greatest benefit, surprise, surprise, to the highest income earners. Who knew? From the Liberal Party! It's fundamentally inequitable for those who are at the bottom of the income ladder and still dreaming of buying a home one day. The government's answer, and we've heard this story before, is to blame young people for not saving enough. At the same time that the government is already asking young people to put up with cuts to schools and universities; to pay more for a university degree; to run up bigger debts to go to uni or TAFE and then to pay their loans back earlier, when they start earning $42,000, which apparently is wealthy for this mob—who knew?—it is getting them stuck in a debt trap as they are trying to climb up this ladder of opportunity we keep hearing about, this mythical ladder. It is now asking young people to raid their retirement savings just to try to buy a house in a market that is already warped by investors. In a sensible world—the one where you listen to the economists and your advisers and all that kind of stuff—this is not only bad economic management but also ethically wrong. We are a parliament and a generation that is at serious risk of handing a lower standing of living to the next generation. That is shameful. It's no accident though. This government is complicit in this and is driving it. This scheme is also dangerous, as it undermines Australia's world-class superannuation system and hurts young Australians whose future is already uncertain, and I'm pleased and proud that the Labor Party is standing against this bill. Labor, of course, created Australia's superannuation guarantee and we will not see it undermined by the Liberal Party.

Here is a fun fact as I drift towards closing: it was this government that introduced the Superannuation (Objective) Bill 2016 to parliament, and that bill proposed to legislate that the primary objective of the superannuation system was to 'provide income in retirement to substitute or supplement the age pension'. It doesn't say anything about providing a tax break or a tax rort for people to save $30,000 towards housing, to push up the cost of housing—even though that's about one-quarter of the median price rise in the capital city markets over last year. But that bill seems to have quietly dropped by the wayside.

In the last couple of minutes of my time I'll add a couple of comments about the proposed downsizing incentives for older Australians. I'm supportive of the notion that we should encourage downsizing. My mum was one, like many, who sat in her big house that she didn't need primarily because of the stamp duty barrier. I know that some state governments are starting to think about this, but I'm not convinced that the government's current policy as expressed in this bill will achieve the desired objective.

The cruel hoax in this policy was laid bare in an excellent essay by Richard Denniss, in The Monthly a few months ago, called 'Grandfathering the Australian dream'. It looks at the consistent wealth transfer to those who already have property and are in the market away from those who are trying to get a foothold as the next generation. He said:

There is some logic to encouraging older people to downsize their residence. But to suggest that allowing older Australians to tip some of their multimillion-dollar capital gain into tax-free superannuation accounts is an effective or equitable way to help young people buy or rent a house is yet another cruel hoax.

If Australia is to be a genuinely fair nation we need to have genuine policies that are achieving genuine solutions to the housing affordability problem. First and foremost, residential property must be for providing affordable homes for people to live in, and policy has to be organised around that central objective. Fuelled by the tax system and those opposite we've ended up in la-la land, where housing has preferred tax treatment and is the destination of choice for spare capital. This is profoundly dumb economic policy by the economic geniuses opposite.

The Australian people had a clear choice in this area at the last election and will have a clear choice at the next election. We will reform the unsustainable, regressive, damaging, distorting tax concessions that overwhelmingly benefit those who already have a foothold in the property market and who continue to work to push up prices faster than incomes and so lock out young people from the hope of ever owning a house.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (16:33): In summing up, I would like to thank all members of the House who made contributions in this debate, with some exceptions. It is quite shocking to see any political party take a view that a tax cut for first home buyers is something they cannot support—so, instead of paying money to the Australian Taxation Office, having that money redirected to savings towards a deposit for a house—and this is quite surprising to me. Nonetheless, I thank everyone on our side of the House and members of the crossbench for their contributions.

I also want to note the misconceptions—very deliberate, I suspect, in most cases and, in some cases, born out of ignorance—put forward by some members opposite. Firstly, the First Home Super Saver Scheme is not an attack on superannuation. It just provides individuals with an opportunity to save more money, voluntary contributions that wouldn't otherwise enter superannuation to be put into superannuation for the purposes of a first home deposit. Individuals' retirement savings are not a target of this measure, despite the quite disingenuous or ignorant scaremongering of some opposite. With average fund returns exceeding the deemed rate of return under the scheme, the average user will likely end up with more super in their account, not less, even after they have withdrawn those amounts to purchase their first property. And, of course, in the unlikely event that there is a market downturn, individuals' retirement savings will be protected, as they will have full control over the amounts that they withdraw.

Secondly, this is not an inflationary measure. In fact, it's obviously Labor's ill-thought-out negative gearing housing tax that will actually push more first home buyers out of the market, because that, as we know, will hike up rents and will confine all new developments, which are typically the province of first home buyers, as being the only place that investors will go, being the only place that tax-preferred status will exist. So it will do quite the opposite.

Thirdly, members should be assured that all contributions will be tracked by the ATO through monthly reporting requirements. I want to reassure members that this measure did commence on 1 July and voluntary contributions made since then will be eligible for release after 1 July 2018. It's clear from his statements that the member for McMahon just doesn't understand the measure, because his focus has not been on the legislation but instead on the Facebook posts of the Treasurer, which was one of the more curious contributions to the debate.

In summing up, the First Home Super Saver Scheme will of course help young Australians to get into the housing market by letting them build up a bigger deposit inside superannuation. Every dollar less that they have to pay to the tax office, which they can put into that superannuation account that will then be used as a deposit for their first home, is surely something that every single person of good conscience in this House should support. The scheme is based on providing a tax cut to additional voluntary savings and the additional benefit of higher earnings inside superannuation, compared with what you can get through a standard saving account, which we know is what prospective first home buyers use when saving for their deposit. Again, it won't negatively impact on first home buyers' retirement balances, because it's not based around the release of existing contributions: it just relates to voluntary additional contributions of sums that would never find their way into super in the first place. We know Australians are entering the housing market later in life than in previous generations, and with house prices high difficulty saving a deposit is clearly the biggest barrier to getting into the market. That's why these changes are essential and why we need to act now.

The second aspect of this bill, which I was quite surprised to hear negative comments about from those opposite, is that older Australians will also be given flexibility to contribute proceeds of the sale of their home into superannuation. This, self-evidently, will help free up housing stock, in particular larger homes, for younger, growing families, because it will reduce the barriers for older Australians downsizing from homes that no longer meet their needs. The downsizing measure is intended to assist people aged 65 and over who are currently unable to contribute proceeds from the sale of their home into superannuation because of the restrictive existing caps. Fiscal restraints make allowing any exemption from the age pension means test much more difficult to achieve than this measure. These changes were announced in the budget and this bill gives effect to those announcements. I therefore enthusiastically commend these bills to the House.

The SPEAKER: The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for McMahon be agreed to.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (16:51): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (16:55): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (16:57): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr BOWEN (McMahon) (16:58): Here we have, for the second time this week, legislation introduced by the government which purports to be about housing affordability and, in this case, housing tax integrity; but, of course, this is not the case. The Labor Party in this instance will not oppose the passage of the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017 through this House or the other house.

These bills are not objectionable, but what they are is ineffective. These bills are tinkering. These bills are just at the edges, a minor attempt, compared to what is necessary when it comes to reform of negative gearing, in particular. The government talks the big talk and the minister, Mr Tudge, who has just left, talks the big talk about housing affordability. He says that the government has a comprehensive plan and a big strategy, and this of course is errant nonsense. The government has a grab bag of measures, and these measures are amongst that grab bag. These bills seek to introduce three measures that were announced in the budget—disallowing the deduction of travel expenses for residential rental property, limiting plant and equipment deductions to outlays actually incurred by investors, and introducing an annual charge on foreign owners of under-utilised residential property. I will deal with each of these three measures in turn.

The government's big idea when it comes to negative gearing reform—the government's big agenda, their bold and aggressive approach to negative gearing—is not to reform it, limit it to new properties or make sure it's fit for purpose but to say you can't claim for tax purposes the travel cost to get to your holiday house or your rental property under negative gearing. That's it; that's all they've got! It is a joke. It will do nothing to make housing more affordable. We don't oppose it; in fact, we think it's serviceable. But, of course, our policy is to completely reform negative gearing and actually add substantial amounts to the budget over the forward estimates and the decade. What we are seeing here is the most minor of tinkering which will do nothing to impact on housing affordability. Often you have a mixture of investment housing and holiday houses, and there's nothing wrong with that. Landlords can visit their investment house and check on it. There's nothing wrong with that, and it shouldn't be tax deductible, but to suggest that this is part of a wideranging housing affordability policy is a sick joke. Those who are struggling to get into the housing market look at the government's agenda and say: 'Seriously? This is what you've got? You're going to abolish the tax deductibility of travel to investment properties and you think that helps me get into the property market?' Young people across the country will look at this and shake their heads, and well they might, because the government's agenda is devoid of anything substantial. If this is the best they've got then people are entitled to be very cynical.

The second measure involves limiting deductions for assets in residential premises, denying deductions for the decline in value of previously used depreciating assets used in gaining or producing assessable income from the use of residential premises for the purposes of residential accommodation. Again, this is minor tinkering. We don't object to it; we support it. We're all for ensuring that tax concessions are targeted. But they need to do much, much better than this. This is not a housing affordability measure. Treasury, in answer to a question on notice, said so. They said it's an integrity measure—an important thing, of course, but it does nothing to reduce the pressure on housing affordability.

The final measure in these cognate bills is the charging of foreign owners of residential property when the property is not occupied or genuinely available on the rental market for at least six months of the year. The government estimates this will generate $16.3 million over the forward estimates. That's it—$16.3 million. Again, we don't oppose this but we have a better plan. We announced in our housing affordability policy that what we would do is coordinate through COAG a nationally consistent vacant property tax. To be clear: we would not be seeking the revenue. The revenue would go to the states. But we think it should be done in a nationally consistent fashion. Some states have gone down this road. Victoria was the first to introduce a vacant property tax—and congratulations to Tim Pallas, who's a very good reforming Treasurer of Victoria, because we do think it's appropriate that there be a vacant property tax. If a property is held, for whatever reason, and is not being rented out or lived in, it's doing nothing for the social fabric or to help people into the housing market, so there should be a price signal, a disincentive to do that. But it shouldn't just be about foreign owners; this should apply regardless of ownership. There are varying reports as to the number of vacant properties, but it's a surprising number. Many people would be surprised at how many properties are held vacant. It's not a particularly economically rational thing to do but some people do it, so sending a price signal is important. But why is it limited to foreign owners? In other jurisdictions it's not limited to foreign owners. Other places have done this and haven't limited it to foreign owners.

It would make more sense to do this reform properly and work with the states cooperatively to coordinate a consistent rate. We should encourage states to take up a vacant property tax and have a consistent rate so that we don't have the regulatory disharmony of different rates but have one consistent rate across the country, with the revenue going to the states. Again, Treasury admitted in an answer to a question on notice that the states and territories weren't consulted in relation to this measure. It's also notable that the Treasury confirmed, in answer to a question on notice, that there wasn't a direct assumption about how many foreign owners of residential property would decide to make their properties available for rent as a result. No modelling—a theme emerges in the government's approach. So, again, this is really pretty ordinary tinkering on the part of the government.

As I mentioned, we will not be opposing these bills. But this is Clayton's reform. This is the reform that you have when you have to pretend to be reforming. You can just imagine the Prime Minister talking to the Treasurer and saying, 'We've got to have an announceable; we've got to have something we can announce.' They might have said, 'It doesn't have to be real, it doesn't actually have to have any impact, but we've got to have some measures that we can talk about in the budget, and then we can talk about our housing affordability plan.'

We haven't heard the Treasurer say much about these since the budget, and there's a good reason for that. These are just so minor and so tangential to the reform task that's necessary across the country that you would be surprised if he spent much time talking about them. I'll talk about our negative gearing reforms at any opportunity, as my colleagues know. My colleagues will talk about our negative gearing reforms at any opportunity, because they're all proud of them, as the Labor Party should be, because we're leading the debate; we're actually taking on the difficult issues. We know that not everybody agrees with us. Whenever you engage with sensible but big tax reform you're going to have people who are against it, who run a scare campaign or who don't like it in the context of their personal circumstances. But we're being honest with the Australian people about our agenda. We want to win the next election with a mandate to do big and important things—not the sort of tinkering we see from this government, which has run out of puff and run out of a reform agenda.

So, I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill and related bill a second reading, the House notes that any housing affordability package that does not include reforms to negative gearing and capital gains tax is a sham".

And that's what it is. We have from this government a housing affordability package that is a sham. The Treasurer has a big lever at his disposable. That lever is negative gearing reform and capital gains tax reform. Does he pull on the lever? No, he doesn't. He casts around looking for something small that he can then use to pretend he has an agenda when it comes to housing affordability, and that's what we're seeing in this legislation today. Well, we'll get on with the job. We'll pull the big levers available to us to improve housing affordability for young people in particular—that is, reforming the most generous property investment tax concessions in the world that we have in Australia, putting a more level playing field in place for first home buyers, getting rid of the situation whereby we provide more support for people buying their fifth, sixth or seventh home than people receive to get their first home and making our budget fairer, making our tax system fairer and improving housing affordability—not this sort of pathetic tinkering that we're seeing from the government.

The DEPUTY SPEAKER ( Mr Hastie ): Is the amendment seconded?

Mr Brendan O'Connor: I second the amendment.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time. To this, the honourable member for McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to. I call the honourable member for Fairfax.

Mr TED O'BRIEN (Fairfax) (17:08): I'm surprised that the member for McMahon didn't take his tie and shirt off and start beating his chest during his contribution on the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and related legislation. Such bravery: the big silverback from the Labor Party drags his knuckles across to the dispatch box and tries to claim—and this was the entire theme of his contribution, and he said it I think three times—'This all you got?' Says the big, brave silverback, 'This all you got?' The problem is that what the silverback is suggesting would actually give an entire backhander—not to the government, but to the Australian economy. It would completely smash longstanding, proven tax principles while, by the way—in true Labor form—introducing new taxes. It would totally crash property prices and completely destabilise rental markets. So I'm glad the silverback kept his tie and shirt on. And for the sake of the Australian economy, thank God he is not the Treasurer of this country.

I rise today to support this bill. We're talking about homeownership and property investment. For the past 20 years it has been difficult to imagine a topic that is more consistently talked about around the dinner tables across Australia. The footy and the cricket all have off-seasons, but not this topic. Obsession with residential real estate rolls on and on, following every twist and turn and every up and down of the market. It's a roller-coaster. It seems that the almost irresistible lure of property, whether for occupation or speculation, is a shared characteristic found deep within the DNA of most Australians.

However, times are changing. Today, the great Australian dream of owning your own property, and in particular owning your own home, is slipping beyond the grasp of many Australians and is becoming a distant dream. The recent Grattan Institute analysis of the 2016 census data shows a continual decline in homeownership in all but the 65-plus age group. There has been a steady decline over the past 30 years, coupled with an unprecedented increase in housing prices. This has resulted in an extraordinarily high mortgage-to-income ratio of 25 per cent for 25- to 34-year-olds.

Those who have traditionally transitioned to homeownership by their 30s and 40s are staying longer in the rental market, placing increased pressure on the reliable supply of affordable rental properties, especially around locations where employment and career prospects are best. While it has long been the norm in Europe, and to a lesser degree in the United States, for there to be a far higher proportion of long-term and even lifelong tenants than owner-occupiers, this is a relatively new challenge for Australia, one that flies in the face of our traditional aspirations and, perversely, is at odds with the sense of boundless space that has come to define us as the only people on earth with an entire continent to ourselves.

While these observations are demonstrably true, it must be said that the Australian real estate market, both for sales and rentals, is inherently patchy. In Australia, not all markets are equal, and not all locations experience the same phenomena at the same time. You could, in fact, liken the Australian residential property market to a rolling earthquake, with powerful epicentres in Sydney and in Melbourne and shockwaves radiating outwards, striking satellite and secondary markets later—sometimes much later, if at all. There is one key observation here, which is that the challenge of housing affordability is most critically acute in Sydney and Melbourne, followed at quite some distance by Canberra and still further by Brisbane. This is such a crucial point, as it highlights the danger of taking a heavy-handed, silverback-like, one-size-fits-all sledgehammer approach when addressing this problem, because it's a problem that runs the full gamut of market variability, all the way from a full-blown supply-driven affordability crisis in middle to inner Sydney to almost the reverse situation elsewhere around the nation.

That is why this government has sought to introduce a suite of measures through a targeted and comprehensive plan to reduce pressure on housing affordability, as opposed to dangerous market manipulations involving the removal of negative gearing and capital gains provisions, as is currently being advanced by an economically hapless opposition and hapless shadow Treasurer. The Turnbull government prefers to take a more sophisticated and sensitively nuanced approach to addressing housing affordability and supply in both the selling and rental markets, especially in those markets that need it most. The bills before the chamber today further reinforce a package of measures proposed by the government, reforms squarely aimed at improving housing affordability and rental availability by implementing key provisions of the 2017 budget.

There are three key reforms in this bill. The first two seek to strengthen the integrity of the tax system, while the third goes to boosting the supply of rental properties in key markets. The housing tax integrity bill makes changes to the Income Tax Assessment Act to tighten existing laws and remove tax deductions relating to travel expenses for individual investors when visiting their residential investment properties. Frankly, I think we all know that some residential property investors have been rorting the system, some for many years, by claiming expensive annual holidays as tax deductions on the pretext of inspecting or maintaining their conveniently located investment property.

Well, the gig is up. This bill makes a very welcome amendment, removing this deduction for individual investors without affecting genuine claims for third-party property management services. Aside from the expectation that this reform will reclaim an estimated $540 million over the forward estimates, small business is also set to gain, with likely increased demand for local property services—everything from professional property managers to handyman service providers. This means jobs. We in the coalition just can't help ourselves: by instinctively helping small business, we help those businesses to grow and create more jobs, even when the direct aim of a reform, such as this one, is in fact something else.

The second proposed amendment to the Income Tax Assessment Act closes another loophole by limiting depreciation deductions on plant and equipment assets, such as dishwashers and air conditioners, to only the original purchaser of that asset. Under the current system, depreciation may be claimed by consecutive property owners, in many cases to an amount well in excess of the value of the asset. In provisions allowing some relaxation for new residential property investments purchased within six months of completion, and providing a grandfathering mechanism for existing investments, the benefits of extensive community and stakeholder consultation on this and related measures is plain to see. These changes make perfectly good sense. They will remove another obvious abuse of the tax system and better target deductions for residential investment properties.

Complementing these reforms, which improve taxation integrity and assist housing affordability, is a crucial amendment to the Foreign Acquisitions and Takeovers Act—a reform to help unlock the supply of rental accommodation right where it is needed most and reduce pressure on housing affordability. First, some context. The 2016 census revealed that 11.2 per cent of homes were unoccupied on census night. That is over one million empty homes. Granted, many of these would have been unoccupied holiday homes, homes under renovation or those belonging to people on holidays; however, when seen in the context of a 14.3 per cent rise in the national occupancy rate over the decade—conceding market variations and vacancy rates across state capitals—this strongly suggests many investment properties are being deliberately left unoccupied, particularly in supply-depleted state capitals.

The Turnbull government is responding to genuine community concerns on this issue. We are acting to improve the supply of rental accommodation in key capital city markets, and this measure is intended to do precisely that. By amending the Foreign Acquisitions and Takeovers Act to establish a significant annual vacancy charge on foreign owners of residential properties who leave them unoccupied for six months in any 12-month period, the government is providing a strong financial incentive to have the properties tenanted. This is good news on two fronts: firstly, for those looking to rent, and secondly, and perhaps less immediately, for those looking to buy. By releasing supply back into the market, either for rent or for sale, housing affordability is expected to be improved, particularly in strained inner-city markets, which have traditionally seen higher levels of foreign investor activity in recent years.

Unlike Labor's own ill-conceived housing affordability plan, designed to disrupt the longstanding principles of taxation, to smash property prices and to completely destabilise the rental markets across Australia, the coalition prefers to utilise a comprehensive suite of subtle targeted reforms that will assist pressured markets to self-correct and return to balance. However, it must be said that even the Labor Party can find little fault with this reform. That is why, despite their poor attempts at mockery, they stand with the government in wishing to support this bill. There is also a fine balance to consider here, where the government must ensure adequate, affordable housing for Australians while at the same time continuing to encourage sustainable, job-creating foreign investment. That's what we are doing with this bill. By creating the right incentives to strengthen the integrity of Australia's tax system, while helping to unlock supply, this government is delivering on its commitment to improve housing affordability for all Australians. For that reason I'm delighted to commend this bill to the House.

Mr THISTLETHWAITE (Kingsford Smith) (17:20): I'm speaking in support of these two bills, which seek to implement three of the government's 2017-18 budget measures, ostensibly related to housing affordability. Schedule 1 of the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 amends the Income Tax Assessment Act to ensure that travel expenditure incurred in gaining or producing assessable income from residential premises is not deductible; and not recognised in the cost base of the property for capital gains tax purposes. This particular amendment seeks to address concerns that some taxpayers have been claiming travel deductions without correctly apportioning costs or have been claiming travel costs that were for private purposes. The amendments are not intended to affect deductions for institutional investors in residential premises, nor are they intended to affect deductions for travel expenditure incurred in carrying on a business. That's a very important distinction to make.

It's clearing up an area of our law where tax concessions have been too generous, but this bill doesn't go far enough in respect of those generous tax concessions that exist in housing, particularly when it comes to investment properties. I'm speaking, of course, of negative gearing and the capital gains tax discount, which this government has allowed to stay in place and refuses to tackle, fuelling an explosion in house prices, particularly in Sydney and Melbourne. Basically, although we are supporting this particular measure, the bill simply doesn't go far enough. If the government were fair dinkum about tackling housing affordability and taking the upward pressure off house prices, particularly in markets like Sydney and Melbourne, they would look at this issue of negative gearing. If two people rock up to an auction on the weekend to compete for a house, and one of them is an investor, who may be going to negatively gear their seventh or eighth investment property, they get more support from the government than the other, who is going along to seek to buy their first home and get a foot in the door of the market. That is simply unfair and something that Labor stands against.

Schedule 2 of the bill amends the Income Tax Assessment Act to deny income tax deductions for the decline in the value of previously used depreciating assets used in gaining or producing assessable income from the use of residential premises for the purposes of residential accommodation. These bills will implement an annual vacancy fee on foreign owners of residential real estate where residential property is not occupied or genuinely available on the rental market for at least six months in a 12-month period. The Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017 imposes the vacancy fee and establishes the amount payable. Broadly, the fee which will be payable when the dwelling is left vacant is the fee that was payable at the time of the foreign investment application. Labor support these measures, and we won't oppose them.

It's clear, however, that these aren't about housing affordability. These are, plain and simple, primarily integrity measures. When it comes to housing affordability the government is unwilling to do what's necessary to tackle these issues of negative gearing and capital gains tax. That represents just how out of touch the government is. In the electorate that I represent not a week goes by where I don't get a complaint or a concern from a constituent, predominantly a parent or grandparent, worried and concerned about the fact that their kids will never be able to afford to buy a home in the community that they grew up in around their family networks and friends. In modern-day Australia, that's a great shame. It represents a failing of government. It's incumbent upon governments to ensure that housing is affordable for Australians as really housing is a human right.

I've discussed in this place in the past the reality of attempting to buy a home in the community that I live in. In the last three years—2014 to 2017—the price of a home in the suburb of Malabar has grown by a whopping 46 per cent to an average of $2 million, adding $635,000 to the value. That equates to an increase of $580 every single day. That is how much the value of properties in Malabar has gone up every single day, on average. In Coogee the case is no different: on average, prices there have grown by $592 every day to just under $2.4 million. These are the eye-watering facts about the area that I represent. As you can imagine, it's causing considerable concern among people struggling to enter the housing market and struggling with the soaring costs of rents associated with that generally high cost of living.

The seriousness of this issue requires a serious approach. Unfortunately, the government are not giving that serious consideration. Their total indifference to the fact that they're completely out of touch on this issue has left Australians facing unprecedented financial pressures when it comes to housing affordability. This week we've seen the government fail to alleviate another area of cost pressure for households, with their so-called plan for energy. They've come up blank when it comes to dealing with this issue. All we're going to see is household electricity prices continuing to increase into the future.

Investors have been given a leg up for too long by this government when it comes to the housing market. It's absolutely unacceptable that a person going along to an auction this weekend to purchase their seventh or eighth investment property will get a tax deduction from this government to negatively gear over the years to come and gets more support from the government than a young couple that may be just married and are seeking to buy their first home. Australia has a progressive taxation system, and improving the fairness of that system should be a key priority. Currently the way that system works is unfair, because 50 per cent of the benefit of negative gearing goes to the top 10 per cent of income earners. The people that are benefiting from this outdated system, the most generous tax concessions in the world for property investors, are the wealthiest Australians. The top 10 per cent are absolutely getting the benefit from this. Fifty per cent of those benefits go to the top 10 per cent.

When it comes to capital gains tax concessions and discounts, the problem gets even worse, because in terms of the capital gains tax discount—the 50 per cent discount on the capital gain that you make from selling an investment property—70 per cent of that benefit goes to the top 10 per cent of income earners. That says everything about the inequity that exists in the housing market at the moment which is fuelling outrageous increases in prices. When it comes to superannuation we have a similar scenario, where 30 per cent of the benefit of superannuation tax concessions goes to the top 10 per cent of income earners.

If you're fair dinkum about tackling some of those issues and bringing a bit of equity into the system, you need to look at that system of negative gearing and capital gains tax discounts and who's benefiting from them. Ultimately, you're shrinking the pie of homeownership for the majority of Australians by providing a tax concession that encourages the few to invest in more. First home buyers now only make up around 13 per cent of all home purchasers—well below the historic average of 20 per cent. This is quite an alarming trend. With housing making up 60 per cent of all assets owned by Australian households, it has become a source of great frustration and misery for those who are missing out in our society. For many, home ownership has transformed from a dream into a nightmare.

That's something that Labor have been listening to the community about and are serious about changing. We want to end some of the imbalance that exists in our taxation system at the moment when it comes to overly generous, massive concessions that benefit the most wealthy in our country at the expense of the majority. Labor will build on our existing proposals with new policies to improve housing affordability, to increase supply, to boost jobs and to reduce economic risks.

We've announced a housing affordability policy. It's been there for some years. We announced it in the lead-up to the last election, and we haven't been a small target on this issue. We have been willing to listen to the community and willing to do the necessary legwork when it comes to the economic modelling and working out how changing the system would affect the market. We've announced the policy, and we've had the policy independently modelled and independently costed, importantly, by the Parliamentary Budget Office. That has indicated that the policy raises additional revenue—not only over the forward estimates but over the medium term—that we can put back into the budget to ensure we properly invest in schools and hospitals. It will also create 25,000 new jobs per year in Australia and over 55,000 new homes over three years to boost those employment numbers.

The elements of the policy are quite simple. Firstly, we'll reform negative gearing and ensure that it's restricted to new housing stock. Anyone that's currently in the system will be grandfathered. So, it's an orderly transition. There's no dramatic change for people who are currently in the system. If you're negatively gearing a property, you'll be able to continue to do so. But, from a particular date in the future, if Labor is elected, negative gearing will be restricted to those people seeking to buy off-the-plan developments. That will boost the housing supply and create jobs in this sector. We will reduce the capital gains tax discount on the sale of investment properties by half—reducing the generosity of a policy that, when it was introduced by Peter Costello as the former Treasurer of this country during the Howard government years, was unfunded. That says everything about the profligacy of that particular government and the spend-at-all-costs approach that they had—which we are all paying for now. It was that government that introduced policies like the 50 per cent discount on capital gains tax, the changes to superannuation and uncapping payments for people. Those policies were unfunded. In other words, there was no source of funding for them in the budget. We are all paying for that now. Not only were they bad policies; they were irresponsible fiscal policies and Australians are paying for them now.

But we will fix that. We will: reduce the capital gains tax discount on the sale of investment properties by half; facilitate a COAG process to introduce a uniform vacant property tax across all major cities; limit direct borrowing by self-managed superannuation funds that invest in property; increase foreign investors fees and penalties; establish a bond aggregator to increase investment in housing affordability; boost homelessness support for vulnerable Australians; get better results from the national rental affordability agreement; re-establish, importantly, the Housing Support Council; and, importantly, make sure that there's a seat at the cabinet table for a minister for housing who can advocate on behalf of Australians about the importance of this issue.

That is a set of policies that demonstrates a party is fair dinkum about the issue of housing affordability in this country. That's a serious housing affordability policy. That's what a serious housing affordability policy looks like. It is fully costed, it is independently verified that it will work, it will create 25,000 jobs in the economy and it will boost housing supply by 55,000 dwellings over the course of three years. It is independently costed and independently modelled, and it is something that will work. That's what Australia needs if we're going to tackle this housing affordability crisis. Only Labor are fair dinkum about making sure that we tackle the issues of negative gearing and capital gains tax and that we produce a bit of affordability in the housing market in Australia to ensure that particularly those young families who are seeking to get into the market have the opportunity to get a dwelling and a roof over their head and to live, importantly, close to their families and in the communities which they grew up in.

Mr HOWARTH (Petrie) (17:35): It gives me great pleasure to speak on the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017. The legislation before the House takes practical steps to ensure that we have a strong rental market and that people are not taking advantage of our tax system.

The Treasurer outlined an array of measures in his budget speech earlier this year to ensure integrity and stability in the real estate market. Yesterday, I spoke on key legislation that will help first home buyers supercharge their savings as they plan to purchase their first home. I also spoke about incentives for older Australians to downsize, opening up the market for growing families. Today, I rise to speak on legislation that is aimed at improving our rental property market and the integrity of our tax system. I'll outline, firstly, measures that impose the framework of our tax system with regard to deductions for rental properties and assets and, secondly, measures that ensure the rental market increases the number of homes available to Australians.

The bill focuses on individuals who claim travel expenses when visiting their rental properties. I was speaking to one constituent who was telling me that he owned and managed his properties in Bundaberg, approximately 340 kilometres from his home. He was very concerned about the discontinuation of his ability to claim a deduction for travelling to and from his rental properties; he felt that it would not be financially viable to continue managing his properties. These proposed amendments don't prevent investors from engaging third parties to provide property management services. These services will still remain deductible. Yes, this bill does limit people travelling to their property and claiming deductions for travel. That's no longer going to be available. So I would say to people, if you're going to drive 340 kilometres return to visit your house to do a bit of maintenance on it, it's probably more viable to ensure that a local handyman, plumber or gardener—for whatever it is that you need doing—in that area services the property for you. That would make a lot more sense.

Unfortunately, we've seen some people take advantage in relation to this claim when they've actually been on holidays and so forth. They have been treating the system unfairly. For example, a person living in New South Wales who owns a home on Queensland's sunny Gold Coast may decide to take a trip up to their unit once or twice a year to inspect it, replace a flyscreen or put some mulch on the gardens. However, the primary purpose of their trip was a holiday; it was to enjoy the beaches and maybe do just a little bit of handyman work. That's fine. They can still have an investment property there, but their airfares to fly or to drive there and return won't be tax deductible. So from here on in it might be worth it getting a real estate agent to manage that property and to use the services of local tradespeople in that area. I noted previously—and I want to emphasise this to property investors—that maintenance is still fully deductible, but I encourage all people to employ a local tradie and help boost the economy and then claim those expenses back on their tax return. You can still maintain your rental properties. However, you can no longer claim your airfares or any associated travel costs for your trip.

The bill also tackles another integrity measure regarding generous valuations for plant and equipment purchased. We are cracking down on property owners claiming depreciation of assets that were part of their original contract when they purchased the property. So if you've bought a new property and the dishwasher was included or some type of vehicle or machinery was included, you've really purchased that as part of the property price. You've really got that as part of the value. You won't get to also depreciate that asset when it's being purchased as part of that property.

I'd like to expand on some key aspects of the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017. The government is very aware of the importance of foreign investment. However, we want to discourage foreign investors from buying real estate in Australia and leaving it empty for months or even years on end. If a person from overseas, perhaps living in Europe, bought a house in Australia, firstly they would need to seek approval through the Foreign Investment Review Board, commonly called FIRB. Key to this approval is that foreign investors are allowed to purchase only new properties in Australia—not renovated homes but brand-new houses, townhouses or units.

This legislation we are debating today ensures that owners of non-residential foreign investment homes prove that their property in Australia is being rented out for at least six months a year. Otherwise, they will be charged a vacancy fee. The fee will vary depending on the property. For example, a $600,000 property would be charged $5,500, whereas a property valued at $2 million would be charged $22,300 if the property is left vacant. The purpose of this is to ensure that these properties are not left vacant. It's to free up accommodation for Australians to rent, to make sure that there is plenty of supply for Australians. And this is very important. New properties have to be bought so that the supply increases, but we also want to make sure that those properties are rented out. I want to stress that these amendments do not apply to Australians. So, for Aussies who own a home, wherever in the country it is—in Townsville or Cairns, or in Western Australia—and who use that home only during school holidays, for a few months a year, that is okay. That is up to them. They can continue to do that if it's a holiday home and they can afford to do so. So it doesn't affect Australians.

We are serious about ensuring that strict regulatory practices are in place to protect Australia's real estate. There are multiple cases where investors have had to sell their property because they didn't have the correct approvals through FIRB. The Treasurer has ordered the forced sale of 61 houses since the coalition was elected, totalling over $107 million. Labor cannot be trusted with foreign investment. The member for McMahon, who spoke earlier, when he was the Assistant Treasurer made changes to the foreign investment legislation to make it easier for foreigners to buy property without any scrutiny at all. He dumped the screening arrangements for temporary residents to notify the Foreign Investment Review Board of residential purchases. When the opposition was in government, not one divestment order for a property was issued for illegally acquiring a property—not one. There have been 61 since we came in, totalling over $107 million. And the shadow foreign minister wants to change the Foreign Investment Review Board requirements for the purchase of agricultural land—wants to put it through the roof. The coalition brought it down to $15 million, and the Labor Party want to put it back up.

In my electorate, people do not support that. They want to make sure there is a register that is accountable so that the government knows how much of our land is foreign owned. I remember that when the Kidman cattle station came up for sale people wanted to make sure it was majority Australian owned. They'd been very, very clear about that. So, taking that $15 million combined level—an aggregate level—and increasing it through the roof, as the shadow minister for foreign affairs, Senator Wong, wants to do, is not supported by my electorate and I suspect is not supported by the people in the electorates of many of those on the other side of the House.

The coalition has been at the forefront of ensuring that foreign investment is regulated. As I said, we want to ensure that we know how much foreign investment we have in this country. It was a Liberal government that established the FIRB back in 1976. This non-statutory body was established to monitor foreign investment proposals and compliance within its policies. The coalition government have continually moved to improve our foreign investment framework. The government have also introduced tough new laws to ensure capital gains tax is paid by our foreign investors and those who purchase property whilst living in Australia on a visa. We want to ensure that taxes owed to the Australian government are paid here and not taken overseas, and this is a very important area that the coalition are also cracking down on. We have continually taken measures to ensure we know who is buying our land and to restrict the types of properties foreign investors are able to buy. This legislation is just another example of our government always looking to protect Australia's interests.

Our government is committed to affordable housing. Ensuring our community has affordable housing and making sure that supply increases, and that the current supply is available for rent, provides options and ensures that there's much more housing available for those who need it most. Our goal is to increase the number of rental properties available for Australians to live in. I believe Labor's policy to try to fix the property market through abolishing negative gearing will only push house prices down and rental prices up. As an example, in my electorate, someone like Lisa and Todd might purchase a home for $450,000 up in Burpengary East in my electorate, or perhaps in Griffin in my electorate. They put a $35,000 deposit down. They don't have 20 per cent, so they'll probably be up for mortgage insurance as well. They currently would owe $415,000. Labor want to abolish negative gearing on existing homes. Lisa and Todd have got a new home, an existing home, and they will owe 415 grand on it, having purchased it for $450,000. If the value of that home drops by just five per cent when Lisa and Todd go to sell, it will be worth $425,000. That means, because of Labor's policy of abolishing negative gearing, they will have lost $25,000 of their own deposit. I see a lot of young couples in my electorate in this situation, with less than 20 per cent deposit. It would be great if they had a bigger deposit, but Labor is voting against our super saver scheme that will give those people and everyone in their electorate a $6,000 tax break. They're voting against young people who want to be able to do that, and I fear their policy could mean that people who buy a house and have to sell in a reasonable time frame will see the value of their house fall and, when they pay out their loan, there goes their deposit.

The other thing, which we didn't campaign on in the last election—the coalition was very positive in the last election—concerns the people in my electorate, in Deception Bay, Kippa-Ring and Clontarf, who rent. I've continually said that there are a lot of low-income people who won't buy their own home. They can't afford to buy their own home. There is always a percentage of Australians on lower wages and there needs to be lots of rental stock available. If people can't negatively gear then I like to say they'll have to positively gear. They'll have to make sure that the rent is covering the loan on that property. Right now interest rates are low—God help these people if the interest rate goes up. If interest rates go up, rents will go up significantly and you'll see a real housing crisis for the people in this country who can least afford it.

Labor don't like this bill and the bill we introduced yesterday because they go a long way to addressing some of the excesses in the rental property market. People going on holidays—travelling—because of rental properties will be gone, and we will be making sure that people can't claim deductions for things when they were bought as part of a house. Sure, if the dishwasher or the air conditioner breaks down and they need to buy a new one, great, then they should be able to claim that as a deduction—but not when it has been purchased as part of the house and it's already part of the deal. The coalition has been moving on that. We also see Labor wanting, as I say, to not have the records that the coalition have kept in relation to foreign investment, which will see more foreign investment. They talk about wanting to make sure Australians have a big deal—this is important.

It's good that the opposition is actually supporting this bill, as the shadow Treasurer has said. These bills are important steps in making sure that housing is more affordable and that there are more rental properties available—and they're good for our housing market and for my electorate in general.

Mr DICK (Oxley) (17:50): I rise to enter the debate today, and I want to thank the member for Petrie for confirming exactly what Labor's policy will deliver, when he said, 'If Labor's policy was adopted, prices would go down.' We know that at the moment that, for young people to get into the housing market, it is not the Australian dream; it is the Australian nightmare. We know from listening to middle Australia and listening to people who want to own their own home that the best way and the fairest way is to make sure there is a government in this nation that recognises and gives a tax break to people who want to enter the housing market, not one that rewards those who are looking at buying their eighth, ninth or 10th property. As we heard from the member for Kingsford Smith, Australia has the most generous negative gearing in the world when it comes to taxation.

The government continues to dance around the issue of housing affordability whilst a generation of Australians face the prospect of simply being locked out of the housing market. Before the House tonight, we have the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017, both of which will do nothing to address the housing affordability that this government likes to claim it is doing something about—but which, by the way, are opening the door for young Australians to reduce their own superannuation savings. That was a debate we had last night in this chamber, so it's a bit like groundhog day when it comes to talking about housing affordability. But it is a really important issue for the constituents I represent in this place.

I know, from representing one of the fastest growing corridors in Australia, the battle—and it is a battle—that young people face to get into the housing market. I mentioned last night, here in this place, the submission from Industry Super Australia, in which they say that the First Home Super Saver Scheme—which we just heard about from the member for Petrie—'potentially exacerbates the housing affordability problem' rather than does anything to address it, and 'also undermines the important goal of the superannuation system as a provider of adequate retirement income'. I said in my address to the House last night when dealing with this scheme that, since superannuation came into force—since the legislation was first enacted under the leadership of the Keating government, under the leadership of John Dawkins—the coalition have opposed it, and now they are undermining it.

The government continues to tiptoe around the issue and put forward bills such as these. Make no mistake; these measures have nothing to do with housing affordability. Any housing affordability package that does not deal with negative gearing and the capital gains tax discount is a sham. That's why I am a strong supporter of the member for McMahon's amendment, which we will be voting on. I will be strongly supporting it, and I will be asking members of the government to think about and consider the measures before us tonight, but, more importantly, the amendment, which says:

"whilst not declining to give the bill and related bill a second reading, the House notes that any housing affordability package that does not include reforms to negative gearing and capital gains tax is a sham".

I say that very deliberately because, within the community I represent, I see the struggle that young people have with housing affordability. I note that, when my friend the member for Lindsay is out in her community, when any single Labor member is out in their community, and they talk to residents at shopping malls, markets, cafes, community groups and town halls—just as the Leader of the Opposition, Bill Shorten, does week in, week out, sitting down, rolling his sleeves up and listening to middle Australia—the issue of housing affordability comes through crystal clear. We've heard the message on this side of the House but, sadly, the government, with its tin ear and its out-of-touch Prime Minister, is sitting on its hands. We just heard about Tom and Lisa, constituents of the member for Petrie. I want to imagine that it's four years from now and, as a 22-year-old who maybe recently graduated with a degree in engineering, they've worked hard, their parents have supported them, and they can't wait to take the skills and knowledge that they learned, perhaps through university, a trade or TAFE, and now apply it to the real world. Maybe the last four years of study has been tough. Since moving out of home they've had to fork out for the expensive rents that come with living near enough to perhaps the closest capital city university or regional centre. They've been working more than 20 hours casually to support themselves through study, but it's all made tougher, we know, since the government has cut penalty rates. Sundays used to bring in that bit of extra cash to help with the groceries and increasing rents, or maybe the electricity costs or paying off your car or just getting out and about with your friends.

Nonetheless, you have graduated from university and you're ready to take on the world. However, you quickly learn that the job market is very tough and finding employment in your field isn't as easy as you thought. The youth unemployment rate for people aged 15-24 is still double that of the national average. You're desperately keen to get your foot in the door, so you take an admin role, perhaps in a leading engineering firm, until something opens up for you. The starting pay is just $48,000 a year, but it's better than nothing. You soon learn that, because the government has cut the threshold for HELP repayments, your take-home pay is now even less. On top of that, you're hoping to land an entry-level engineering job. You also have hopes of saving up for the elusive home deposit.

The government are proud to say that they're happy to do nothing about negative gearing. House prices have continued to rise, and the average home on the outskirts of a capital city has an asking price, if you're lucky, of $500,000. This issue has been bubbling around since the government, now in its fifth year, came to power. The previous Treasurer, Mr Hockey, said, 'Well, you should just go out and get a good job.' Moving forward, when the Prime Minister was asked on radio about how to get a deposit and own your home, the Prime Minister, straight from Point Piper, said, 'Well, have you thought about getting rich parents?'

We know that in the real world that simply doesn't happen. With tight budgeting and maybe not eating any smashed avos, you're able to save $50 per week. The bank will require a 20 per cent deposit, meaning you have to save $100,000. At the current rate, this will take around 2,000 weeks to save—the next 38 years of your life. It's a sobering situation, but this is the one issue facing thousands and thousands of young people right across the country. I know from talking to mums and dads and grandparents in the suburbs that I represent that they talk about this. They deal with this issue: how do you get the 20 per cent deposit, with prices rising up and up?

I understand it and members on this side of the chamber understand it. But, if you've never heard it or you've never lived in the real world, or perhaps you're not walking down the same shopping centre aisles or going to the same cafes or community meetings that I go to, you don't understand it. You don't understand what it's like being forced to scrape and save every single day just in order to own your own home. In doing so, young people are forced to take on record levels of debt that were unimaginable just two decades ago. For those who have been able to buy a home, mortgage debt among 18 to 39-year-olds doubled between 2002 and 2014, jumping from $169,000 to $336,000. This is not sustainable and cannot continue, which makes the government's one silver bullet—raiding your own super scheme—all the more crazy. They want young people to take on more debt and more risk to get into the housing market, so when you do finish your working life you're less prepared to have a guaranteed income. Their entry scheme, which we've just heard about from members of the government, would see demand for housing increase and push up prices even further.

As we heard from the shadow Treasurer, what we must do is address the issue of negative gearing and the impact that it is having on homeownership rates. The recent report from the Grattan Institute highlighted that negative gearing has many undesirable consequences. It reduces rates of homeownership, it reduces the availability of long-term rentals and it increases the volatility of housing markets, increasing the risks to the Australian financial system. The Grattan Institute summed it up best when it said:

The most obvious thing the Commonwealth Government could do is reduce the capital gains discount and abolish negative gearing. It wouldn't solve the problem but it would help.

Everybody seems to get this and everybody seems to understand it, except the government. I've said it in this place before and I'll say it again: what will it take for this government to realise that it must follow Labor's lead and act on negative gearing and housing affordability? We on this side of the House understand it. We represent middle and working Australians proudly. They are crying out for leadership. They are crying out for someone to stand up for them. They simply don't believe the spin and the nonsense that comes from the government about raiding superannuation. It is not the answer; it will only make it worse. That's what they want to do—tinker at the edges with bills like the ones we're debating today and raid the superannuation accounts of young Australians to increase demand and push up property prices.

We know the government doesn't believe in the integrity of the system of compulsory super. The government will look for any opportunity to weaken—not strengthen, but weaken—our system of superannuation. This is a government attempting to set a precedent that Australia's $2.3 trillion in retirement savings can be accessed for something other than what it was intended for—retirement income. It goes against the core objective of superannuation. We know from speaker after speaker from the government that they're not interested. They're not committed to dealing with the issue of housing affordability. When I speak to local families and mums and dads and grandparents, I know that they are worried—people in suburbs like Springfield Lakes, Springfield, Collingwood and Bellbird Park, which are seeing a huge amount of demand coming online. But the prices are being pushed up and up, and the government refuses to do anything when it comes to the supply side issue.

I could go on about some of the other suburbs I represent, but I am no different from any other member in this House. Right across Australia, people are hearing the same message about housing affordability. Right across Australia, people want to see action so that their kids and grandkids have the same opportunity that everyone else had—the great Australian dream. The government simply aren't speaking with everyday Australians. They certainly aren't talking with potential first home buyers.

Earlier today I was speaking in the Federation Chamber about the government's other pet issue—its other set obsession—which is giving a $65 billion tax cut, of which we know billions of dollars will go offshore and also to large multinational companies. If the government is serious about wanting our support for housing affordability and if it is serious about tackling these issues, it must, and it has to, look at the issue of negative gearing and capital gains tax. It's that simple.

We have to have that conversation in the community, because the community is demanding it. Time and time again we've been calling on the government to listen to what the community is saying. Time and time again we have been calling on the government to listen to the superannuation industry, which is not supportive of what the government is doing to undermine our retirement income planning for this nation. If you're lucky enough to buy your seventh, eighth or ninth property, good luck to you—you've done well and you've been a success. All we're simply saying on this side of the chamber is that everyone deserves the opportunity to enter the market as a homeowner. But, more importantly, every young person in this country deserves the opportunity of owning their own home.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (18:04): Firstly, I want to thank all members who contributed to the debate. The 2017-18 budget demonstrates the government's commitment to reducing pressure on housing affordability so that homeownership is more achievable for Australians. This legislation delivers on this commitment by improving the integrity of Australia's tax system and boosting the availability of rental accommodation in the market.

Schedule 1 of the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 amends the Income Tax Assessment Act 1997 to disallow deductions for travel costs incurred in producing or gaining assessable income from residential premises as residential accommodation. The changes mean travel costs for individual investors, such as to inspect and maintain properties, will no longer be deductible. This will stop residential property investors from using the tax system to pay for their holidays by claiming costs as a rental expense. However, these changes don't prevent investors from engaging third parties, such as real estate agents, to provide property management services. These expenses will continue to be deductible. The change to disallow travel expense deductions has an estimated gain to revenue of $540 million over the forward estimates.

Schedule 2 of this bill amends the Income Tax Assessment Act 1997 to limit, from 1 July 2017, plant and equipment deductions for investors in residential investment properties to assets not previously used. There has been an abuse of the tax system when it comes to property investors claiming excessive deductions for plant and equipment items. These changes will improve the integrity of the tax system by better targeting these deductions. Investors who purchase new plant and equipment for their residential investment property after 9 May 2017 can continue to claim a deduction over the effective life of the asset. However, subsequent owners will not be able to claim deductions for those plant and equipment items. These changes will not affect capital works depreciation deductions relating to residential property investments. The change to limit depreciation deductions has an estimated gain to revenue of $260 million over the forward estimates. These changes, together with the change to deny travel deductions, improve the integrity of the tax system and reduce the opportunities for excessive deduction claims.

Schedule 3 of this bill, along with the imposition bill, implements an annual vacancy charge on foreign owners of residential real estate where property is not occupied or genuinely available on the rental market for at least six months in any 12-month period. The vacancy charge builds on the government's existing foreign investment regime, which seeks to increase the number of houses available for Australians to live in. The charge provides a financial incentive for the foreign owner to make their property available on the rental market. The charge payable will be equivalent to the residential application fee that was paid by the foreign person at the time the application to purchase the property was made to the Foreign Investment Review Board. The vacancy charge applies to foreign persons who make a foreign investment application for residential property from 7.30 pm on 9 May 2017. For eligible foreign owners of residential real estate the vacancy charge will be levied on an annual basis. The annual vacancy charge is expected to result in greater use of foreign owned properties. Reporting and notification requirements are also expected to provide greater visibility of vacancy rates for foreign owned properties. The Australian Taxation Office will administer the vacancy charge. The changes contained in the legislation have been designed to open up the residential rental market and strengthen the integrity of Australia's tax system. I therefore commend the bills to the House.

The DEPUTY SPEAKER ( Mr S Georganas ) (18:08): The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. Therefore, the immediate question is that the amendment be agreed to.

Question negatived.

Original question agreed to.

Bill read a second time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (18:09): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Mr SUKKAR (Deakin—Assistant Minister to the Treasurer) (18:11): by leave—I move:

That this bill be now read a third time.

Question agreed to.

Bill read a third time.

Ms O'NEIL (Hotham) (18:11): All of us in this House have in our lives children who are important to us. I am the mother of one- and four-year-old boys who are the centre of my existence, and I'm a former foster parent. The welfare of Australian children is one of the driving passions of my life, as a person and as a politician. I talked about this in my first speech. Every time a child in this country is abused, harmed by another person, this parliament has failed. It is our job to protect them. That much should be beyond debate. But we fail far too often. The sexual abuse of children is abhorrent. It sickens me and it sickens everyone in this parliament. I believe, and Labor believes, that the people who commit these crimes must be punished. Most sex crimes are state offences, but as a Commonwealth parliament we play an important and growing role in protecting Australian children. We are responsible for offences that relate to telecommunications and offences that occur overseas, and it is child abuse occurring in these contexts that is the subject of most of this bill, the Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measures) Bill 2017.

I have the great privilege of working with a lot of organisations within my portfolio area that protect Australian children. One of them is the Alannah & Madeline Foundation. You would remember Alannah and Madeline. They were three and six years old when they were tragically killed in the Port Arthur massacre. The organisation that is their namesake was created by their very brave father, Walter Mikac. The CEO of that organisation is fond of saying that protecting children on the internet is the defining child protection issue of our age, and I don't think any parliamentarian or any parent in the community would have a different view about that. The reality is that children today face dangers that didn't exist 10 years ago. They didn't exist when any of us in this chamber were children. These changes are not academic. They are not the invention of tabloid newspapers. They are absolutely and completely real.

In this country we are seeing massive growth in the number of people who are viewing and sharing child abuse images. Indeed, the volume is so large that the Federal Police do not have the ability to investigate and prosecute more than a very small proportion of perpetrators. The Australian Federal Police receive more than 10,000 reports of child exploitation every year, and we know that that number is growing every year—and they are just the offences that we are aware of. We are seeing incredibly disturbing trends with how the crimes in this area are changing on the internet. We're seeing sexual predators target children to produce abuse materials themselves on apps that many of the children of people in all of our communities use—things like Snapchat and musical.ly. We are seeing the growth of absolutely disgusting trading and selling of child abuse materials on the dark net. We are seeing a growth in the use of FaceTime and Skype to target the abuse of children who are living in poor countries right throughout our region. The Philippine National Police receive over 6,000 cybersex abuse case referrals every month from other law enforcement agencies around the world.

I want to take a moment to mention the men and women working in the Australian Federal Police who have to review, handle and classify this material when they go to work every day. I cannot say how strongly I commend the bravery of the officers who undertake this work. It is so difficult that the Australian Federal Police officers who do it have to work constantly in pairs—they're not allowed to work on this alone—and they have to have regular psychological check-ups. I know from talking to Australian Federal Police officers that the sole reason they go to work to do this, frankly, traumatic work every day is that they care so deeply for the children who are at the other end of these images. I know we speak as one voice as a parliament when we say how much we truly appreciate the efforts of those officers.

Labor believes that, due to these extensive changes in the way that child abuse is proliferating online, there is a need to review the law in this area. That is why the opposition will be supporting this bill, with some amendments. I want to talk about some of the areas that we believe are particularly worthy of support in this bill. One of those is the additional supports that this law will provide to vulnerable witnesses. In this context, of course, we're referring mainly to children who are going to sit in court and testify against adults who are older, who are stronger and who are much more powerful than they are. Those children exhibit incredible bravery in their willingness to tell their stories to try to prevent further abuse of other children. They deserve every protection that the law can provide to them, and we are very pleased to see some improvements made in the bill before the House in this area.

We are supportive of the new grooming offences that are contained in the bill, and we're supportive of the clarification this bill provides on the scope of some of the child sex offences that are contained in the Criminal Code. We also support the change in the terminology that is contained in this bill. The bill changes the words that we use to describe the material in question to 'child abuse materials'. This may sound like a small thing, but it is absolutely not. We talk often in the public realm about this problem being called child pornography, but that does not recognise the seriousness and the abject criminality that is at the heart of these images. These images harm children in their creation. But every time these images are accessed and every time they are viewed, there is an additional violence and an additional abuse being undertaken. That is because, every time those images are looked at, there is further humiliation done to that child. Every time those images are looked at, there are citizens of this country who are doing something to support an industry which only thrives and survives on the abuse of some of the most vulnerable people in our community.

Labor is of the view that the crimes contained in this bill are so horrendous that there are in fact some areas that need a much tougher approach. I want to talk about some of the amendments that Labor will be making to this bill to make sure that the paedophiles who are harming children are locked up for as long as we can manage. Child sex abuse which involves subjecting the child to cruel, inhumane or degrading treatment, or which causes the death of that child, is barbaric. We want courts to be able to lock up people who commit this horrendous crime—really, what must be the worst crime that can be committed. We want judges to have the power to put those people away for life. Labor will move amendments in the Senate to bring in life imprisonment for aggravated sex offenders.

Labor will be moving further amendments to increase the maximum sentences for the most serious child sex crimes by five years, to 20 and 25 years imprisonment. We believe that predators who go overseas to prey on and abuse vulnerable children should face tougher penalties than those the government has proposed. Labor are particularly sickened by the examples that we are aware of where vile website moderators encourage other people who are part of these horrendous networks to commit crimes against children. People who incite violence and cruel, inhumane or degrading treatment against children deserve further punishment. They are the despicable ringleaders of these child abuse networks. They facilitate the production and distribution of sometimes sadistic and brutal material, and courts must be able to punish them appropriately. Labor will be moving amendments to add aggravated offences to target these vile criminals. We will also target offenders who play a role in coordinating, organising or inciting other people's participation in these most serious sex offences with new aggravating sentencing factors. We want child sex offenders to be appropriately punished and we want to focus on the worst offenders because bringing them down is critical to stopping the proliferation of these absolutely sickening crimes.

Labor have looked at and tackled this bill with only one issue in mind, and that is the protection of children. That is our only goal here. The government's bill contains mandatory minimum sentences, and this is the only section of the bill that we will oppose. We will do that because these sections of the bill will not make Australian children safer. We made this decision very thoughtfully and with extensive expert advice. There is almost a uniform view in the law enforcement and legal community that this is a legal device which will not further protect Australian children—indeed, it may have the opposite effect. Prosecutors are opposed to this measure, and the Law Council and just about every other organisation like them are opposed to it. In fact, the Attorney-General's Department, part of the government that sits on the other side of the House, is also opposed to this measure. Mandatory minimums let guilty people off the hook because juries are less likely to convict them when they know there is no discretion about the sentence. Mandatory minimums mean that criminals will not cooperate with police to bring the kingpins who run these networks to justice. I don't want paedophiles on the street—I've got two children; I shouldn't need to say that. I don't want to put people away for five years—I want to catch the kingpins who are the drivers of this disgusting behaviour and I want judges to be able to put them away for life. That is what Labor's amendments will allow for.

One of the additional issues in this bill is that the mandatory minimum sentences will have very significant unintended consequences. As the bill stands, schedule 6 would attach a mandatory five-year jail term to an 18-year-old in a consensual relationship with a 15-year-old. I want to make that clear to people listening. What the government is proposing would mean that an 18-year-old in a consensual relationship with a 15-year-old would end up in jail for five years. The Law Council has provided examples of some of the behaviour that they believe will be captured by these provisions. One of them is an 18-year-old and a 15-year-old who go on a school trip together. They might be year 10 and year 12 students. They engage in sexual activity overseas. Under this bill the older person in the relationship would be up for a mandatory five-year jail term. That means the judge has no discretion about whether that punishment fits the crime. We are speaking here about 18-year-olds and 15-year-olds who are engaged in sexual activity over Snapchat. This is something that a lot of teenagers do. The Law Council points out that this behaviour between a 15-year-old and a 17-year-old in a consensual relationship is perfectly legal. On the day the older person turns 18, suddenly that person has committed a range of federal offences and will go to jail for a minimum of five years. These are crimes. A consensual sexual relationship between a 15-year-old and an 18-year-old is a crime; I don't devalue that. But does the Minister for Justice really believe that the young people in this relationship belong in jail for five years?

I want to return to the bill at large. I do believe that this parliament needs to send a clear message that the sexual abuse of children is absolutely intolerable and that not only is it intolerable but also this parliament universally regards this as the most heinous crime that can be committed. We will be supporting this bill and we will be strengthening it. We want to send paedophiles to jail for longer. I say that as the parent of two young boys who are right in the age of target for these horrendous criminals. Labor have and always will fight to protect children here and overseas. Indeed, we have a long history of acting to protect children in this way. It was Labor, under former Prime Minister Paul Keating, that introduced some of the first offences that targeted those who sexually abused children, and those were world-leading laws at the time.

The previous Labor government did extensive work in this area. One example is the establishment of the Royal Commission into Institutional Responses to Child Sexual Abuse. That was the first inquiry of its kind at a national level. One of the most important roles of that royal commission, which is still underway, is understanding this problem better and providing advice to this and other parliaments around the country about what we can do to improve the law in this area, and we will be keenly awaiting their final report to consider further law reform.

Labor wholeheartedly support the object of this bill. We have no tolerance for child sexual abuse. But we believe this bill needs to contain even stronger messages of condemnation for these horrible crimes. We will be pleased to support this bill with strengthening measures in the Senate.

Mr DREYFUS (Isaacs—Deputy Manager of Opposition Business) (18:26): Labor have always fought to protect children in Australia and overseas from abuse and exploitation. We have a strong record on protecting children from child sexual abuse. Labor first introduced world-leading offences, targeting Australians who engage in the sexual abuse of children overseas, in 1994. Labor established the Royal Commission into Institutional Responses to Child Sexual Abuse when we were last in government. And Labor appointed Australia's first national children's commissioner to advocate for the rights of Australia's young people in 2013.

All members of this parliament know that the sexual abuse of children is vile and disgusting. Children are the most vulnerable members of our society and we must do all we can as legislators to protect them. Labor are and always have been tough on paedophiles, but we want to do it right and make sure that offenders are properly imprisoned and kept away from harming vulnerable children. The government's bill aims to protect children but it doesn't go far enough. It's Labor's priority to ensure that those who prey on vulnerable children get the punishment they deserve through the justice system. And we want to make sure the punishment for child sex offences acts as an appropriate deterrent to prevent abuse from occurring in the first place.

Labor welcome several aspects of this bill but we want it to be tougher and more effective. That is why we will be seeking amendments in the Senate to ensure that offenders are appropriately punished. We will be moving amendments that will ensure that child sex offenders are appropriately punished and amendments that we hope will improve the effectiveness of the criminal justice system. We want courts to be able to lock up the worst offenders for life. We want to see higher maximum sentences available for courts to hold perpetrators accountable. We want to make sure that people watching child abuse remotely are covered by the existing offences. People are watching child abuse material through webcams and live streaming, so we need to make sure our laws are keeping up with the pace of technological change.

We will also be proposing new aggravated offences for people who incite or direct the production of child abuse material. There are vile people who can be found lurking in chatrooms and encouraging people to create new child exploitation material. It's a truly disgusting practice and we need to act to stop it. Labor will also be moving amendments that will improve protections for children. If a person engages in sexual intercourse or activity with a child outside Australia, they may be able to rely on the defence of marriage under the Criminal Code. Both the Law Council of Australia and Anti-Slavery Australia have called for this defence to be removed from the Criminal Code.

Labor also takes issue with schedule 13 of the bill, which relates to national security. Schedule 13 would allow information to be withheld by the Attorney-General where, in the opinion of the Attorney-General, it is likely to prejudice national security. These provisions go beyond the stated purpose of the bill and are of general application. If the government wishes to proceed with this general national security measure, it should be introduced as part of the bill dealing with national security matters and referred to the Parliamentary Joint Committee on Intelligence and Security for review in accordance with the usual practice of this parliament. There are also a number of concerning aspects of this bill, and Labor will be moving amendments to address these. In particular, the bill introduces a mandatory sentencing scheme for a large number of child sex offences, and my colleague the member for Hotham, the shadow minister for justice, has already spoken eloquently in relation to these matters.

This bill would apply mandatory minimum sentences for what the government has defined as 'the most serious Commonwealth child sex offences' and 'all Commonwealth sex offences that are a second or subsequent offence'. There are no exemptions for persons who may be significantly cognitively impaired. Mandatory minimum sentences are not the solution to Australia's crime problems, they're not the solution to Australia's gun problems and they're not the solution to child sexual abuse. There is no evidence that mandatory minimum sentences act as a deterrent. In fact, they actually make Australia's criminal justice system less effective, because they make juries less likely to convict. Perpetrators who should be convicted may escape punishment altogether. Juries may decide not to convict, even though they think they're guilty, because they may not want to inflict on an offender a sentence they think is disproportionately harsh based on the circumstances of the crime. Mandatory minimum sentences also make offenders less likely to plead guilty. Offenders facing mandatory minimum sentences lose an incentive to provide useful information or assistance to prosecutors.

These concerns have been repeatedly expressed by state and territory prosecutors, but the government is choosing to completely ignore them. The government is ignoring similar concerns that have been expressed repeatedly by the legal profession through the state and territory law societies and the Law Council of Australia. The Law Council of Australia is the peak body for lawyers across Australia. It has said about this bill:

Mandatory sentences actually make it harder to prosecute criminals, by removing the incentive for anyone to plead guilty or to provide information to the police. There is every incentive to fight on and appeal against convictions.

Of course, we're used to the government ignoring the advice of experts, but the government is even ignoring the advice of the Attorney-General's Department, which has issued formal guidelines opposing mandatory minimum sentences. It is clear that mandatory sentences do not work, and Labor is firmly opposed to them. It is the role of the judiciary to make decisions about sentencing criminals, and that is what our system of justice is founded on. This is a clear separation-of-powers issue. It's not up to the legislature to decide what the sentences should be for individual offenders regardless of the particular circumstances of the case. Our system of government is based on the fundamental principle of judicial independence. It's the role of judges to decide on sentencing, because they are impartial and unbiased; they can come to each decision with a clear mind and determine what justice requires in each case. It is the role of judges to make the punishment fit the crime. That role can be carried out only by a court that has examined all the circumstances of the particular crime—something this parliament cannot seek to do in legislation.

The role of the parliament is to indicate to courts the seriousness with which parliament views different classes of crime, in particular by setting maximum penalties. The High Court of Australia is not in any doubt about the importance of maximum penalties. In a decision handed down just last week, Director of Public Prosecutions v Dalgliesh, the Chief Justice and Justices Bell and Keane quoted with approval from a 2005 decision of the court, Markarian v The Queen. In that case, former Chief Justice Gleeson and Justices Gummow, Hayne and Callinan said this:

… careful attention to maximum penalties will almost always be required, first, because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before court at the time; and thirdly, because in that regard, they do provide, taken and balanced with all of the other relevant factors, a yardstick …

The High Court has been equally forthright about the importance of judicial discretion in sentencing. Later in their judgement in that same case, Dalgliesh, Chief Justice Kiefel and Justices Bell and Keane quoted another earlier decision of the court and offered their own view. They said:

In Elias v The Queen, former Chief Justice French of the High Court, and Justices Hayne, Kiefel, Bell and Keane said: 'the administration of the criminal law involves individualised justice'.

Then they added:

… the imposition of a just sentence on an offender in a particular case is an exercise of judicial discretion concerned to do justice in that case.

This has been the clear position of the High Court for decades. Former Chief Justice Barwick of the High Court, while recognising the power of the legislature to determine penalties for offences, in Palling and Corfield in 1970 said:

It is both unusual and in general, in my opinion, undesirable that the court should not have a discretion in the imposition of penalties and sentences, for circumstances alter cases and it is a traditional function of a court of justice to endeavour to make the punishment appropriate to the circumstances as well as to the nature of the crime.

In 1981, Chief Justice Gibbs said in Sillery and The Queen that even in the case of a most serious crime:

... there may exist wide differences in the degree of culpability of particular offenders, so that in principle there is every reason for allowing a discretion for the judge at trial to impose an appropriate sentence not exceeding the statutory maximum' and that mandatory sentencing 'would lead to results that would be plainly unreasonable and unjust'.

Other legal figures have voiced the same principle. The President of the International Commission of Jurists Australia, former NSW Liberal Attorney-General and former NSW Supreme Court Justice John Dowd, called for a judicial inquiry into mandatory sentences in 2012. He said:

It is a breakdown of the rule of law and sentencing, where the court determines what is appropriate.

Former NSW Director of Public Prosecutions Nicholas Cowdery AM QC said in 2014:

It is unrealistic, therefore, and unjust, to prescribe a penalty or minimum penalty that must be imposed for any serious offence before it has been committed or is even in contemplation (or can even be foreseen by Parliament), before all the facts and circumstances are known and without knowing anything of the offender; and experience has shown that such measures do create injustice. Justice requires proper consideration of all the circumstances of the offence and the offender.

And Justice Michael Adams of the NSW Supreme Court powerfully said in 1999:

To remove judicial discretion in such a vital area of the liberties of the subject is tantamount to a vote of no confidence in the judiciary … The assertion by the elected politicians of the right, in effect, to impose particular sentences for particular crimes, as a response to immediate political exigencies is a significant interference with traditional and well settled principles of the separation of powers.

In a submission to a 2012 parliamentary inquiry, the Australian Human Rights Commission said:

Laws that impose mandatory minimum terms of imprisonment are inconsistent with Australia's international human rights obligations, including obligations under the International Covenant on Civil and Political Rights (ICCPR).

A particularly concerning example—it has already been given by the member for Hotham, but it bears repeating—of how these mandatory minimum sentences would work in practice is that an 18-year-old and a 15-year-old who engage in sexual activity while overseas, perhaps on a school trip, would be captured by the offences. An 18-year-old in this situation would receive a mandatory minimum sentence, under the government's bill, of five years in jail. There would be no room for judicial discretion to take into account the particular circumstances of the case. This is unacceptable.

In speaking out against the mandatory minimum sentences in this bill, the Law Council of Australia raised this example and pointed out:

Teenage years can often be marked by rash decisions and regrettable mistakes. A blunt instrument like a mandatory minimum sentence will not take this into account.

The Law Council said:

Mandatory sentencing is always likely to trigger unintended consequences that are at odds with the intention of the laws and fundamental principles of justice.

What has been the government's response to this long-expressed opposition to mandatory sentences? It has been to ignore it. The government has produced no evidence that mandatory sentencing works and has not even bothered to explain its reasons for attempting to impose these mandatory sentences. Mandatory sentences will not make children safer. Juries are less likely to convict, perpetrators are less likely to plead guilty and perpetrators are less likely to cooperate in bringing down ringleaders.

In this area of child sex abuse Labor want courts to be able to lock up the worst offenders for life. We want to see paedophiles imprisoned and kept away from vulnerable children. Labor want to see higher maximum sentences and the sentences of life imprisonment that we are going to propose for this bill to make sure that Commonwealth child sex offences do work effectively. But mandatory minimums don't work and are wrong in principle, and that is why we are opposing them.

Mr FALINSKI (Mackellar) (18:40): I rise to speak on the Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measures) Bill 2017. Imagine that you or a loved one had been subjected to child abuse. Wouldn't you want to know that the law was on your side? Our outdated rules have failed to recognise the heinous and disgusting nature of this vile crime and the seriousness with which we must combat this scourge. Whilst past administrations have failed to give the subject the attention and amendment required, I'm glad to support a government that values the protection and wellbeing of the next generation.

This bill targets all aspects of the child sex offender cycle by strengthening measures at the time of charging, bail, sentencing and upon release. Our reforms will criminalise emerging forms of child sexual abuse, strengthen community protection from child sex offenders and ensure that sentencing of child sex offenders reflects the gravity of this type of offending. They will ensure that terminology used in Commonwealth legislation reflects the seriousness of child sexual abuse and improves protections for vulnerable witnesses. It is the largest such change to the Criminal Code in decades, and seeks to provide genuine deterrence, punishment and protection.

At the moment legislation is too weak and our criminal justice system has arguably not given sufficient weight in its sentencing for these crimes—41.3 per cent of child abusers never serve time in prison. Just think about that for a moment: over one-third of child abusers never face the justice that they deserve. And, of the preposterously low portion of offenders that are imprisoned, the average sentence for carrying out one of society's most unspeakable evils is a paltry six months.

We are seeking to protect our communities from some of the most horrendous ills imaginable by shifting courts towards a preference for imprisonment rather than mere suspended sentences. We can maximise safeguards against these criminals, ensuring that the most dangerous predators are imprisoned and kept away from those who they seek to harm. In the same vein, the introduction of mandatory minimum sentences will go a long way to alleviating the institutional biases and embarrassing weaknesses inherent within a criminal justice system that has been rendered toothless by the turn-the-other-cheek attitude of previous regimes. For all the naysayers that have prejudged this bill, based on nothing more than their preconceptions of mandatory sentencing, I say this: this law will target those who attempt to do harm to the most vulnerable members of our society, ensuring that they face the penalties that they deserve. What possible objection could members have to that? By spelling out clearly to the courts what is and is not within their remit, this parliament can reinforce its power to mandate the law and its enforcement. This issue is just too important to be left to the whim of a judiciary that has been perceived as insufficiently harsh to such criminals.

We would also like to see change to the mindset of the courts to better align it to contemporary Australian society and prioritise civil safety, giving greater balance to victims and the community over the rehabilitation of convicted criminals. Importantly, this bill prevents judges from using an offender's standing in the community to discount their sentence, if it was used to assist in the commission of the offence. In cases involving the worst offenders, we would like to see the courts make it more difficult to release defendants on bail. Similarly, by mandating that courts state and record their reasons for releasing suspects on bail, we can finally begin to stand up for ourselves, to strengthen our resolve against these criminals and better protect our children. We also are making it compulsory for the courts to have regard to the objective of rehabilitating offenders, including setting appropriate treatment and supervision conditions. It's an aspect we cannot overlook if we want to lastingly reduce the number of offences committed against children every year.

We are not, as I'm sure some of the opposition would dreamily machinate, shifting towards dictatorial tendencies. This law does not mark a shift in civil liberties. We will continue to maintain the principle of innocence until proven guilty. This is a tenet of our free liberal society and one that we will not change. Rather, what this bill does is enhance our freedoms. We should be confident that our law enforcement and justice systems can securely guarantee that our loved ones won't be harassed, hurt or abused. Surely we should have the freedom to live without fear that child abusers, having been given free rein by the courts to roam free, strike again, harming our children.

In yet another example of utter contempt for victims, unscrupulous defendants have been allowed to unnecessarily and inappropriately harass their victims through harsh and brutal cross-examinations. By making it simpler to pre-record testimony, allowing such video recordings to be used as evidence and introducing greater restrictions on the scope of cross-examination, this government aims to right the wrongs of the previous government's ham-fisted approach to the sensitivities of victims—that is, our children.

Four years ago in the UK, 48-year-old Frances Andrade took her own life after being subjected to hostile, aggravating and downright selfish cross-examination by the defendant's legal team. She was forced to relive, in public, over and over again, the horrors of her abuse as a 14-year-old. The subsequent inquest blamed the needlessly aggressive hostilities as a key reason behind her suicide. No-one wants to see that happen here. Not a single parent wants to see their child subjected to such extended, repeated and unnecessary torment when they are doing the right thing—speaking out and making sure their attacker can never do this to someone else. So I beseech those opposite to get on board, to stop dragging their feet, because we can make a difference.

With this bill we also are amending legislation to bring criminal legislation up to date with the digital age. With such dramatic changes in the way we interact and communicate, particularly when technology is becoming ever more complex and the internet more available, it is time to update our child-protection legislation. Unfortunately, paedophiles are constantly seeking new ways to exploit emerging technology to commit their crimes. Where the vast majority of us see wonderful opportunities to improve our lives, a sickening minority have harnessed the internet and the dark web to enact their sickening and deplorable fantasies. They rob our children of their childhoods, of their innocence and of their sense of security. We must crack down on the loopholes that have helped and will continue to help abusers get off scot-free.

Internet carriers have their role to play in monitoring and reporting such highly offensive material. Failure to act, to report on abuses and remove any material, will carry greater financial penalties than ever before, because we are serious. Everyone must be vigilant and everyone carries a responsibility to speak out. This will greatly aid law enforcement agencies in their efforts to monitor the ever-expanding vastness of the internet and its 24/7 nature.

Our desire to tackle this issue and protect our most vulnerable is nothing new. This bill reflects the Turnbull government's continuing commitment to protecting our children and builds upon previous child protection legislation passed in this very parliament. In June this year, with the Passports Legislation Amendment (Overseas Travel by Child Sex Offenders) Bill 2017, the Turnbull government stopped child sex offenders from travelling overseas to sexually abuse children in more vulnerable parts of the world. We also introduced Carly's law to target online predators preparing or planning to cause harm to procure or engage in sexual activity with a child, increasing police powers to intervene. This government is steadfast in its commitment to the principle that all children should be safe from abuse wherever they happen to be born and, most certainly, in Australia.

This morning I saw bipartisan support at the launch of the Polished Man campaign by my colleagues the member for Kooyong and the member for Fisher, who were inadvertently joined by our Prime Minister, the member for Wentworth. The will is there. The will is bipartisan. We can all agree that any violence, including sexual violence, against our children is despicable and must end. Let's end it now and let's end it together.

Mr PERRETT (Moreton—Opposition Whip) (18:52): I rise to speak on Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measures) Bill 2017. To state the obvious, sexual abuse of children is abhorrent. The very thought of children being harmed in that way breaks my heart and I'm sure it breaks the heart of all members of this House. To give you some context, a fortnight ago my wife Lea and I celebrated the 25th anniversary of our very first date. For those entire 25 years, and for a few years before, she's either been a frontline child protection worker or a lawyer representing people giving evidence in the Royal Commission into Institutional Responses to Child Sexual Abuse, or in her current role, which is as a prosecutor dealing with child abuse.

On Monday, Minister Keenan associated the Australian Labor Party, including me, with paedophilia or child abuse in a grubby, disgraceful and unforgivable tactic in this chamber. He stood right there, at that front bench. He said, whilst pointing at the Australian Labor Party, 'What is there to prevaricate about? We want paedophiles off the street and we believe this legislation deserved bipartisan support.' That is something I will never forgive him for, even if he comes back into this chamber and apologises. I will never, ever forgive his comments. They were disgraceful. The Australian Labor Party has a long, proud tradition of standing up for Australian children. Minister Robert Tickner commissioned the Bringing them home report. Prime Minister Kevin Rudd's apology to the stolen generation was delivered on my first day in this chamber. Prime Minister Julia Gillard apologised to the victims of forced adoptions. Policies flowed from these apologies, such as the Closing the Gap commitments and the Royal Commission into Institutional Responses to Child Sexual Abuse, which Prime Minister Julia Gillard kicked off. We have a long, proud tradition—like those opposite, I will say—of standing up for Australian children wherever we can.

The extent of abuse uncovered by the Royal Commission into Institutional Responses to Child Sexual Abuse has shocked Australia and the world. For my wife to transfer from being a social worker to being a lawyer—I thought I'd heard it all, and I've heard stuff that would break anybody's heart. Night after night after night, especially when she came home from night duty after not being able to go to the gym after work, I heard horrible stories over the last 25 years. Then she was to go and work for the royal commission, for no more, where she heard worse details of child abuse. That royal commission shone a spotlight on a shame that has been hidden for far too long, and I know those opposite would agree. Around 8,000 survivors of sexual abuse have given evidence in private sessions in the royal commission, and I thank the royal commissioners for the great work that they do. That must be an incredibly difficult process. There were 8,000 children who had their lives broken by vile paedophiles or sadists or both. There have been 2,393 referrals to authorities from the royal commission thus far—thus far—because of a Labor Party decision, because of a Labor Prime Minister's decision, to hold that royal commission. When institutions that are charged with caring for our children violate that trust, it shatters all trust in all institutions. I look forward, two years on, to some redress movement from this government.

The royal commission has reported some of the impacts of child sexual abuse on the victims and survivors. They report that there are both short-term and long-term effects, and many may be lifelong. Children and adolescents face emotional, physical and social impacts. These impacts often extend into adulthood, affect life choices and mental health and may lead to victims committing suicide, I'm sad to report. The nature and severity of the impacts vary between survivors, but it's all often incredibly horrible. The impacts extend beyond the immediate victims, affecting their parents, colleagues, friends and, sadly, sometimes their families and the community.

There is no doubt that all children deserve our protection and support. I commend the member for Hotham for her stance in this area. We know, as parents and as good politicians, that children are our most precious resource—hope distilled, as I've described it in the past—and they are also, sadly, the most vulnerable members of our community. We must do everything we can to protect every single child in Australia. But we also know that there will be more children who will be abused. We won't be able to protect every child, no matter how hard we try, and sadly some children will have their lives broken by predatory paedophiles. And, worse, more often than not, that abuse will be perpetrated by a family member. The very nature of child sexual abuse makes it difficult for children to disclose and for others to detect. Where infant children are involved, communicating the abuse becomes even more difficult. But, wherever child abuse is reported or detected and then prosecuted, the perpetrators of this most sickening crime should feel the full weight of Australian laws. They should be punished and they should be locked up.

We must make our laws the best they can be to give every child the maximum chance of living a childhood free from harm. I want to keep my own children safe; I want to keep the children in Moreton safe; I want to keep all Australian children safe. So Labor will be moving amendments to this bill in the Senate. Those amendments will make this bill tougher, giving greater protections to children who are at risk of being abused. We are seeking these amendments so that the bill will impose higher maximum sentences and courts can lock up the worst offenders for life. Our laws reflect the ever-changing ways that paedophiles procure their child victims and export vile images to other paedophiles on the web. People who incite others to commit child abuse will be subject to aggravated offences. These stronger measures, put forward by the member for Hotham, on passing through the Senate, will protect children. We know that paedophiles manipulate; they create opportunities for abuse like you wouldn't believe. The royal commission has recognised that it is often difficult for parents and others who care for children to recognise the grooming behaviour used by paedophiles to trap their victim. We need strong protections so that, when grooming behaviour is recognised, it is punished. The perpetrators should face tough penalties appropriate for such a heinous crime.

There is one aspect of this bill that Labor will not accept and that I personally do not support—that is, the provision of mandatory minimum sentences—for one simple reason: mandatory sentences do not work. We know that. The experts know that and have told us that. The Law Council of Australia, the peak body for lawyers, says:

Mandatory sentences actually make it harder to prosecute criminals, by removing the incentive for anyone to plead guilty or to provide information to the police. There is every incentive to fight on and appeal against convictions.

The Australian Institute of Criminology, the Queensland Law Society, the Victorian Sentencing Advisory Council and prosecutors, just to name a few, have warned that, in some circumstances, where an offender is facing a mandatory jail sentence, a jury may refuse to convict. I repeat that: a jury may refuse to convict. Mandatory sentences make a good headline grab for a media-hungry politician, but sadly, they don't work. Even the Attorney-General's own departmental guidelines recognise this. We need laws that work, that will make it more likely that we can lock up paedophiles. This should not be about political ideology and grubby political posturing; it should be about protecting our children. It's no use having laws that say judges must lock up convicted paedophiles for a period of time, if those same laws make it less likely that paedophiles will be convicted. Mandatory sentences take away the discretion of the judge to determine an appropriate sentence in the circumstance of that particular case.

It's very easy to say, 'Paedophiles should be locked up regardless.' Many people would agree. I would agree. My wife would agree mostly vehemently, and, as I said, she has devoted nearly 30 years of her working life to protecting kids and hunting down paedophiles. But it is the unintended consequences of mandatory sentencing that create the mischief. You will see sentences that do not fit the crime. It would be a tragedy to see laws designed to protect children actually convicting young people engaging in normal adolescent behaviour and sending them to jail. Let me give some examples that have been provided by the Law Council of Australia:

For example, a 15 and 17-year-old might be sharing sexual images with each other in a consensual relationship, yet the day the older partner turns 18, under this legislation that 18-year-old would be looking at an automatic five-year sentence.

On a scout's trip to New Zealand, a 18 year old student has sex with his 15 year old Year 10 girlfriend.

The 18 year old student would be sentenced to a mandatory minimum of five years jail.

On a holiday overseas between two families, an 18 year old and 15 year old commence a romantic relationship and they touch each other.

The 18 year old would be sentenced to a mandatory minimum of five years jail.

An 18 year old and a 15 year old exchange images and sexual stories on Snapchat.

An 18 year old and a 15 year old engage in sexual activity using FaceTime.

The 18 year old would be sentenced to a mandatory minimum of five years jail.

An 18 year old text messages her 15 year old friend encouraging him to send an intimate image to his 18 year old girlfriend.

The 18 year old who sent the text message would be sentenced to a mandatory minimum of five years jail.

An 18 year old boy and a 15 year old girl are in a relationship and constantly exchange intimate images. The boy has previously been convicted for a child sexual abuse offence.

He would be sentenced to a further three years mandatory jail. These could be any children. We could say, 'Children should not have phones; children should not send images.' I know what the world should be, but we also need to reflect the world as it is. These could be any children making poor decisions in any family, in any suburb of Australia. This is not the behaviour that this legislation was designed to catch, but it could easily happen in a suburb near you. These kids would be caught nonetheless. They would go to jail because the impartial, informed judge would have no discretion. Judges would have no choice but to sentence these kids that I've mentioned in the scenarios to a minimum five-year jail sentence.

This is why we have judges who have discretion in sentencing. No politician would ever say that every judge gets every decision right every time, but I will guarantee that the Australian justice system gets it right more times than that of any other country. No-one can imagine the thousands of different scenarios that may come before a judge and be caught by these offences. Not having a mandatory minimum sentence will not prevent paedophiles from being jailed, but it will prevent some young people who do not deserve to be jailed from being jailed and potentially having their lives ruined and their families' lives ruined. As the Law Council of Australia has said:

When you take away the ability of a judge to take into account the seriousness of the offence, the degree of culpability of the offender, their personal circumstances or the explanation for offending, you generate disproportionate and, often, unconscionable outcomes.

What Labor proposes is to have higher maximum sentences. We want judges to be able to lock up the worst child sexual abuse offenders for life. That would truly protect our children—without the unintended consequences of young adolescents being locked up for behaving like adolescents and making foolish decisions—and not punish them forever.

Labor is proud of its record on fighting to protect children, both in Australia and overseas, from all types of abuse and exploitation. In 1994 Labor led the world in laws that targeted Australians who engaged in sexual abuse of children overseas. In 2009 the Labor government implemented the National Framework for Protecting Australia's Children, an important initiative that was accompanied by an injection of $63.6 million. In 2010 it was Labor that made it an offence to target preparation for child abuse. In 2013 Julia Gillard as Prime Minister established the Royal Commission into Institutional Responses to Child Sexual Abuse, the first of its kind in the national forum and perhaps the most important inquiry ever to be conducted in Australia. As I said, it has made 2,393 referrals to authorities so far. In 2013 Labor appointed the first National Children's Commissioner to advocate for the rights of all Australia's young people. And in 2013 Labor introduced the Vulnerable Witness Act. Labor is strongly committed to protecting Australian children from all forms of abuse and exploitation. We have been consistent in our approach. There is still much work to do to tighten up our laws, to protect children so that our laws cannot be used as a tool to avoid detection or punishment.

The chair of the Royal Commission into Institutional Responses to Child Sexual Abuse, the Hon. Justice Peter McClellan, recently said in a speech:

Our work has shown that across many decades many institutions failed our children. Our child protection, criminal and civil justice systems let them down. Although the primary responsibility for the sexual abuse of an individual lies with the abuser and the institution of which they were part, we cannot avoid the conclusion that the problems faced by many people who have been abused are the responsibility of our entire society.

It is our responsibility as lawmakers to make sure our laws are adequate and fit for purpose and to have faith in the expertise of our judicial officers. It is our responsibility as lawmakers to make sure that our laws don't have unintended consequences. It is our responsibility to make sure that our children are protected. Labor wholeheartedly supports the objects of the bill but will move amendments in the Senate to make it even tougher.

Ms MARINO (Forrest—Chief Government Whip) (19:07): I think everybody in this place understands that children are incredibly precious and they have a right to be protected. No child should ever be in a situation where they are sexually assaulted, but we know that that is what's happening.

This Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measures) Bill 2017 adds to the government's recent legislation relating to child sexual abuse. Carly's law passed the parliament in the last session, a law that makes it a crime to plan to harm a child who is under 16. It targets online predators who misrepresent their age with the sole purpose of grooming the child online for sex. These people are pretending to be young children, like the children they are grooming online. The first arrest using this law has already been made. The government also recently passed legislation that stops convicted sex offenders from travelling overseas to commit criminal acts against children in other countries. This bill specifically targets some inadequacies in the criminal justice system that result in outcomes that don't sufficiently punish, deter or rehabilitate offenders. The bill also introduces new offences directed at the use of the internet for the sexual abuse of children.

Today I'd really like to acknowledge the member for Fisher, Andrew Wallace, for his Polished Man campaign. It's a campaign encouraging men to take a stand and actively commit to ending violence against children by painting one fingernail for the month of October. I looked at the statistics provided at this gathering. They show that more than 120 million girls and 73 million boys have been the victims of sexual violence. I thank Prime Minister Malcolm Turnbull and the Minister for the Environment and Energy, Josh Frydenberg, for their support of this campaign.

The government has become increasingly concerned about manifestly inadequate sentences for child sex offenders. These sentences do not sufficiently reflect the harm suffered by the victims of child sex abuse or protect the community from the risk of future harm. These sentences also do not fully reflect the fact that these crimes actually increase the demand for child abuse material, particularly online. I read that—and this really concerned me—since 2012, less than two-thirds of Commonwealth child sex offenders have received a term of imprisonment after conviction. This means that 269 child sex offenders, convicted of a Commonwealth crime, were released directly back into the community over the past five years. I find that appalling. Of those who were imprisoned, the most common sentence length was 18 months and the most common non-parole period was six months. I can't think of anyone in my electorate or any Australian, in fact, who would think that these are adequate sentences for those people who sexually abuse children.

I'm a mum. How would any mother and father feel if the person who was convicted under federal law of sexually abusing their child actually served no time in prison? All of us here know how we would feel if it was our child or our grandchild. I know exactly how I would feel. These are vile, heinous crimes. The trust and the vulnerability of children we see every day. We see it in our own children; we see it in every child. I had a group of wonderful children with special needs who came into this parliament today from Busselton in my electorate. The thought of anybody taking advantage and sexually abusing one of those extremely vulnerable young children, to me, requires the sort of legislation that we're putting forward here. I don't want to see any person who sexually abuses a child not suffer the punishment they deserve. I would suggest that there isn't one member of parliament or one parent or one grandparent who wouldn't feel the same. It is absolutely disgusting and abhorrent. We see these beautiful kids who trust us as adults—they trust us to look after them. What's love to a child? Love is security. And that's what we are here to provide. I see my role in this place as providing as much security as I can through the legislation that we enact, and that's why I support the measures within this bill.

I agree with the Minister for Justice, our federal laws should punish and deter offenders unequivocally. They should send a very simple message out into the community. None of us here, in any way, believe that a sex offender should not be punished. They should be punished, and we should be deterring potential future offenders. That's why this bill introduces mandatory sentencing for specified offences—to address the disparity between the seriousness of child sex offending and lenient sentences. It's critical. The community depends on us to provide the laws to protect the community, as much as is possible, across the board, and no-one more so than our children. That's what I expect. If I weren't a member of parliament here, that's exactly what I would expect of the members in this parliament and the government of the day.

Mandatory minimum sentences will send a very clear message. They will apply to the child sex offences that attract the highest penalties—not just any penalty; the highest penalties—and to reoffenders, as they rightly should. Are those reoffenders of the 269 who weren't sent to jail and, as a result, they've reoffended? What message did they get out of that?

If they are reoffending they clearly have not learnt from their original offence.

I find that it's applying to the highest penalties. That cannot be understated in this debate. It combats the evolving use of the internet in child sexual abuse. I know firsthand from young people in my electorate that offenders are using the internet to groom young people for sex. As most members here would be aware, I've spoken about this frequently and worked actively in this space. I've seen this as an opportunity for paedophiles. I've delivered hundreds—hundreds—of cybersafety presentations. The minister at the table worked with me, historically in his previous roles, in establishing the Office of the eSafety Commissioner, focusing on children and specifically providing resources in this space.

I have delivered hundreds of cybersafety presentations to young people, parents and community groups. Following one of these presentations the mother of an 11-year-old girl contacted my office and said, 'My daughter came to your presentation today and she's come home and she's had to confess to me that she's realised after listening to my presentation that she, at 11, was being groomed online for sex.' It's made even easier on the internet, because paedophiles are grooming these children to have sex with them, but they're also encouraging them to meet them in person. It's extremely disturbing for me, having delivered this to primary school aged children, to find eight children in one class of 11-year-olds who had the courage and the honesty to admit to me that they had been to meet people in person that they first met only online. I'm continuing to do these presentations. What disturbed me even more, which is why I'm strongly supportive of this bill, is that too often it's usual for me now to come across classes where, when I do my secret survey and I ask them if they would be honest about what's happening to them online—I ask them if they have ever been to meet in person someone they had first met only online—the hands go up. Can you imagine how horrified the teachers are? And can you imagine how horrified the parents who have come along to some of my sessions are when I tell them that's the response I get? It's not happening to someone else's children. It's happening to our children. So, every time I can get to one child it's a very good day. That's what we are trying to do here. We're trying to protect those wonderfully innocent, precious children. I make no excuse for that. I think it's the best thing this government can be doing and I'm proud of the fact that we take it so seriously.

It concerns me, too, that sentencing for child sex offences needs to be commensurate to the seriousness of the crime, and we are talking about the most serious crimes. We need to make sure that the sentences imposed adequately reflect the seriousness of the offending that's occurred. That's important for community trust in us. That's what the community expects of us here. We pass a lot of laws in this place and there are a lot of laws around this space at the state level as well. But when they involve Commonwealth offences, such as using a carriage service—which, as the minister knows, involves using a phone, an iPad, the internet or any form of service—to abuse, harass and, of course, to sexually abuse, it is against the law, as it should be. It is a federal offence. Child sexual offences are also federal offences in this space.

I'm very pleased that we are introducing this legislation to make sure that we are doing everything we can. We the government are very serious about ensuring that child sex offenders are off our streets as soon as possible and for as long as possible, especially when there are those who reoffend. There are a number of measures contained in this bill, and community safety is the primary consideration here. Those listening to this speech may find it surprising that community safety is not already the primary consideration. This bill makes it explicit: it is to ensure the protection of the community. It ensures that, once an offender's parole has been revoked, they will serve time in custody. That's what that mum, that dad, that grandparent, the brothers and sisters and the friends, expect us to do. The families of every child who has been sexually abused expect us to have the laws to not only try to protect that child but also then to punish the person who offends. I'm very pleased that this is the road that we're taking on this.

Two new measures target online sites especially. If you have a bit of a look around the internet, the amount of pornography available online, and the amount of aggressive physical pornography and some of what's available on the dark web, is just extraordinary. I am greatly concerned about what our children have access to and what they're accessing and how young they are when they have access to it. The second measure, criminalising the transmission of communications to groom any person with the aim of procuring a child for sexual activity, is very, very important and a measure I'm strongly supportive of. I've just seen too much of it. It wasn't just an 11-year-old; 13- and 14-year-olds were also being groomed online for sex. That came out of a group that I had previously. We need to make sure that there is harsh punishment. We need to send a very clear message to offenders and potential offenders that we as a government and we as a society are not going to stand by and allow more young people, our children, to be sexually assaulted.

Ms HUSAR (Lindsay) (19:22): Sexual crimes against children are abhorrent. Children are among the most vulnerable members of our community, and every measure should be undertaken to ensure their safety and their security. Sexual crime against children is not a debate for political handballing and pointscoring. But, sadly, that's what we've seen today. I'm proud to support the members for Hotham, Moreton and Isaacs who spoke before me on the Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measures) Bill. Labor is committed to strong legislation that will keep children safe. Children deserve our absolute protection and our support and we must do everything within our power to ensure that kids are safe from sexual predators both here and abroad. We have an obligation also to the children of other countries. We must protect them from the criminals who stalk them on the net, groom them, deceive them and exploit them in the most heinous way possible. Labor are committed to doing what we can to protect children from harm and abuse and we have zero—zero—tolerance for child sexual abuse. The tragedy is that children who are victims of sexual abuse endure lifelong suffering, carrying the burden of crimes that should never have been committed. The parents of these children are affected. Nobody wants to go through the nightmare of losing a child, but to lose your child at the hands of a sexual predator would be nothing more than a living hell. No-one's child should be subjected to sexually explicit conversations or to being stalked by sexual predators who are using social media platforms or apps that specifically target children.

These crimes are being committed in Australia and overseas. Anti-Slavery Australia reported in its submission to the Senate Legal and Constitutional Affairs Legislation Committee that children in the Philippines are lured to sex tourism hotspots, such as Angeles City, Metro Manila and Cebu City, on the promise of legitimate jobs. Thereafter they are physically and/or emotionally coerced into working in the sex industry, including, increasingly, online exploitation dens, where they are made to perform on webcams for foreign online sex tourists. In 2013 it was estimated that tens of thousands of boys and girls were in the webcam sex tourism trade alone, with that number predicted to increase. What depraved, sick humans they are who consume this. Adding to the terror are the children trapped in child trafficking and slavery. There has been an increase in trafficking to use children in online exploitation. This is driven by the financial support from Australian offenders who encourage the production of sexual exploitation materials.

Labor have no tolerance for these crimes by paedophiles, and we want to see them stopped and perpetrators locked up, facing the most severe penalties. The criminals who groom and procure children online need to be stopped. The international paedophilia rings that traffic and enslave children need to be stopped. We welcome some of the changes in this bill, including: the new offence to criminalise the grooming of third parties for the purpose of procuring a child for sexual activity; new aggravated offences for child sex abuse where a child is subject to cruel, inhumane or degrading treatment or which causes the death of a child; the addition of residential treatment orders as a sentencing alternative to allow intellectually disabled offenders to receive access to specialised treatment options; and the removal of the requirement to seek leave before a recorded interview of a vulnerable witness can be admitted as evidence in chief. We believe the government is playing sick politics with laws that protect children from sexual abuse. We are not going soft on the perpetrators of these crimes, and those who seek to score political points are nothing more than sick.

We commend the actions of the Australian state and territory police and the Australian Federal Police in combating this scourge and stopping the sexual offenders who are exploiting children. As the member for Hotham pointed out, what a horrible job it is for those AFP men and women who have to trawl through this material. I want to support the member for Hotham in her statement of thanks and gratitude for what these men and women go through in having to classify this material. I can only imagine it would be incredibly horrendous to watch.

The police in each state and territory and the AFP work closely with international counterparts to rescue children and stop the offenders. We commend task force agents of the Queensland Police Service and their international counterparts for the many operations that they run, including the operations which they undertook and ran on the dark web network over many months which led to the rescue of 85 children. That means 85 kids are now removed from that life. There were hundreds of arrests, including the site's operator, Shannon McCoole. He is serving a 35-year sentence for the sexual abuse of multiple children. David Cecchin, a member of the paedophile Shannon McCoole's child exploitation website, had previously pleaded guilty for possessing, accessing and disseminating child exploitation material. He regularly disseminated child exploitation material on the website, and he's been sentenced to seven years and five months jail. He had 1,500 items of child exploitation material on his computer. Ninety per cent of that material was photographs and the rest was videos.

The creation of new child exploitation material needs to be stopped. The paedophiles and criminals who are running these internet sites and creating the content need to be stopped. No child should ever be exploited in this way. We believe the bill should be tougher, stronger and more effective by: increasing maximum sentences, with the worst offenders locked up for life; keeping up with changing technologies such as criminals watching child abuse through webcams and live streaming, and stopping them, charging them and bringing them to justice; and introducing new aggravated offences for people who incite or direct the production of child abuse material.

This bill introduces mandatory minimum sentences. We do not support mandatory minimum sentences, because we know mandatory minimums do not work. As the member for Hotham has already pointed out, all of the agencies, including the Attorney-General's Department, have said they don't support mandatory minimums either. The bill's mandatory sentencing is problematic because of different ages of consent across Australia. And mandatory minimums can lead to fewer prosecutions and convictions, sometimes leading juries to acquit rather than sentence, and can conflict with the role of the judiciary. People will not have an incentive to plead guilty or to inform police on others' actions if they know they face a mandatory sentence. It builds in the incentive to fight and appeal against convictions. Even former Prime Minister John Howard has previously commented, 'As a matter of public principle, I do not agree with mandatory sentencing and, in the end, I do think these matters ought to be determined by judges and by magistrates.' It's a shame that those opposite only seek to champion John Howard when it suits them. He's only getting rolled out for his opposition to other things and not his opposition to mandatory sentencing.

Debate interrupted.