Footnotes

Chapter 2 - Social aspects of home ownership

[1]        See article 25 of the Universal Declaration on Human Rights, and article 11 of the International Covenant on Economic, Social and Cultural Rights.

[2]        High Commissioner for Human Rights (1991).

[3]        Mr M Zaltron, Urban Development Institute of Australia, Committee Hansard, 14 April 2008, p. 2.

[4]        Australian Institute of Health and Welfare (2008a, p. 5).

[5]        Chamberlain and MacKenzie (2003), cited in Australian Institute of Health and Welfare (2007a). The rate of homelessness ranges from 1 in 253 people in the Australian Capital Territory to 1 in 35 people in the Northern Territory.

[6]        Winter and Stone (1998), cited in Dockery and Milsom (2005, p. 5).

[7]        Ipsos Mackay Report (2007).

[8]        Ipsos Mackay Report (2004).

[9]        H Mackay, cited in Banks (1989, p. 2).

[10]      Mr P Jackson, UDIA (South Australian Division), Proof Committee Hansard, 28 April 2008, p. 9.

[11]      Productivity Commission (2004, p. 3).

[12]      Productivity Commission (2004).

[13]      Home ownership would be more consistent with labour mobility if transaction costs on buying and selling homes, notably stamp duties, were lower. Stamp duties are discussed in Chapter 7.

[14]      As the Australian Association of Social Workers notes, 'home ownership is not inherently virtuous and does not make economic sense for everyone'; Submission 54, p. 6.

[15]      Mr M Myers, Queensland Community Housing Coalition, Committee Hansard, 14 April 2008, p. 51. Similar remarks were made, for example, by Mr J McInerney, Common Equity Housing Ltd, Committee Hansard, 23 April 2008, p. 11.

[16]      Professor P Troy, Committee Hansard, 1 April 2008, p. 111.

[17]      Australian Institute of Urban Studies Queensland Division, Submission 9, p. 1.

[18]      ABS study based on an internationally recognised measure of housing utilisation, the Canadian National Occupancy Standard. Australian Bureau of Statistics (2007a).

[19]      Harding, Lloyd and Greenwell (2001).

[20]      Harding, Lloyd and Greenwell (2001).

[21]      Burke (2007).

[22]      Major D Eldridge, Salvation Army, Committee Hansard, 23 April 2008, p. 38.

[23]      Mr T Davies, Committee Hansard, 15 April 2008, p. 18.

[24]      Ms S Naden-Magee, Proof Committee Hansard, 24 April 2008, p. 12.

[25]      Ms S Naden-Magee, Proof Committee Hansard, 24 April 2008, p. 13.

[26]      Al-Yaman, Bryant and Sargeant (2003).

[27]      Australian Institute of Health and Welfare (2008a, pp 47–49).

[28]      Australian Institute of Health and Welfare (2008a, p. 49).

[29]      Mr P Gallagher, Treasury, Committee Hansard, 1 April 2008, p. 37.

[30]      Mr P Gallagher, Treasury, Committee Hansard, 1 April 2008, pp 36–37.

[31]      Mr P Gallagher, Treasury, Committee Hansard, 1 April 2008, p. 45.

[32]      Mr R Tanton, National Centre for Social and Economic Modelling, Committee Hansard, 1 April 2004, p. 86.

[33]      Jones et al. (2007), cited in Australian Institute of Health and Welfare (2007b).

[34]      Mr P Gallagher, Treasury, Committee Hansard, 1 April 2008, p. 45.

[35]      Deans (2004).

[36]      Waters (2001) cited in Australian Institute of Health and Welfare (2008a, p. 47).

[37]      Australian Association of Social Workers, Submission 54, p. 9.

[38]      Dr D Faulkner, Australian Housing and Urban Research Institute, Proof Committee Hansard, 28 April 2008, p. 46.

[39]      Deans (2004, p. 4).

[40]      Australian Bureau of Statistics, (2007b).

[41]      Australia's Indigenous population has a low level of home ownership by international standards. It is well below the 45 per cent in Canada, 48 per cent in New Zealand and 55 per cent in the US, despite overall home ownership rates comparable with these countries. Lawson and Milligan (2007, p. 21); Table 2.1.

[42]      Australian Institute of Health and Welfare (2008a, p. 44).

[43]      Ms T Vine Bromley, NT Shelter, Proof Committee Hansard, 28 April 2008, p. 18.

[44]      Australian Housing and Urban Research Institute, Southern Research Centre (2006).

[45]      Mr A Johnson, Australian Council of Social Service, Committee Hansard, 2 April 2008, p. 76.

[46]      Australian Institute of Health and Welfare (2008a, p. 44).

[47]      ABS data cited in Edmund Rice Centre (2007).  

[48]      Australian Institute of Health and Welfare, (2008a, p. 46).

[49]      Altman (2000).

[50]      Wilkinson (2005).

[51]      Ms T Vine Bromley, NT Shelter, Proof Committee Hansard, 28 April 2008, p. 17.

[52]      Waters (2001).

[53]      ABS data cited in Australian Institute of Health and Welfare (2008a, p. 49).

[54]      Australian Bureau of Statistics (2007c). 

[55]      Australian Institute of Health and Welfare (2008a, p. 50).

[56]      Professor A Beer, Australian Housing and Urban Research Institute, Proof Committee Hansard, 28 April 2008, p. 44.

[57]      Kadmos and Pendergast (2001, p. 5).

[58]      Research estimates of the proportion of homeless people who have a mental health problem range from 25 to 75 per cent.  Kadmos and Pendergast  (2001, p. 6).

[59]      Kadmos and Pendergast (2001, p. 7).

[60]      AHURI (2003).

[61]      Kadmos and Pendergast (2001, p. 7).

[62]      Australian Council of Social Service, Submission 40, p. 1.

Chapter 3 - Measures of affordability

[1]        A similar pattern is observed if the price measure is restricted to houses bought by first home buyers. Yates (2007, pp 5 and 9) suggests the house price/average wage ratio had been only 3 to 4 in the late 1950s. This may have been a low point. While data are scarce, there are many accounts of housing shortages in the immediate post-WWII period (although rent and price controls limited the extent to which they are reflected in market data). Merrett (2000, pp 244, 251) says that from the 1860s to the 1930s the average cost of building a house was five times the average wage. The Committee of Inquiry into Housing Costs (1978, p. 30) concluded that house prices were 3–4 times average earnings in Melbourne and Adelaide in the first half of the 1970s, but somewhat higher in Sydney. A new narrative by Stapeldon (2008) suggests average house prices were fairly steady from 1880 to the 1940s, jumped after price controls were removed in the late 1940s and trended up thereafter.

[2]        Professor J Yates, Committee Hansard, 2 April 2008, p. 39.

[3]        See Urban Development Institute of Australia (2007). This approach does not work well for regions with very heterogenous income groups. For example, the UDIA report rates Karratha as one of the more affordable parts of Australia, presumably because mining workers pull up the average income. But as described in Chapter 8, for non-miners housing is extremely unaffordable in Karratha.

[4]        Richards (2008). The RBA measure represents an estimate of the proportion of all dwellings (both houses and apartments) transacted in any year that would have been accessible to a households headed by persons aged between 25–39 years, based on certain assumptions about bank lending behaviour.

[5]        Conversely, 'we have also seen a great preponderance for Australians to borrow against the equity in their housing for non-housing consumption and investment' and some of this is probably misclassified as borrowing for housing; Professor R Stimson, Committee Hansard, 14 April 2008, p. 43.

[6]        Australian Prudential Regulation Authority, Submission 51, p. 3. This rule dates back at least to the latter 1940s; Merrett (2000, p. 239). For a discussion of how lenders are moving away from this rule of thumb, see House of Representatives Standing Committee on Economics, Home Loan Lending, September 2007.

[7]        National Housing Strategy (1991, p. 7).

[8]        This '30/40' measure is advocated by federal government agencies such as the Department of Families, Housing, Community Services and Indigenous Affairs (Committee Hansard, 1 April 2008, p. 2) and the Reserve Bank (Governor Stevens, Appearance before House of Representatives Economics Committee, 4 April 2008, p.16); prominent academics such as Professor J Disney (Committee Hansard, 2 April 2008, p. 27), Professor J Yates (Committee Hansard, 2 April 2008, p. 38); the AHURI network (Submission 19) and the NATSEM modellers (Mr R Tanton, Committee Hansard, 1 April 2008, p. 83); the Tasmanian government (Submission 81, p. 7); local governments such as Brisbane City Council (Committee Hansard, 14 April 2008, p. 19), Casey City Council (Committee Hansard, 24 April 2008, p. 3) and the Local Government Association of Tasmania (Submission 15, p. 4) and many others, such as the Australian Council of Social Service (Committee Hansard, 2 April 2008, p. 71) and Infrastructure Partnerships Australia (Submission  100, p. 2). The ACT's Affordable Housing Steering Group has a modification, using 30 per cent for renters but 40 per cent for some purchasers to allow for the investment aspect of home purchase; their report is contained in the ACT government, Submission 75.

[9]        Professor R Stimson, Committee Hansard, 14 April 2008, p. 43.

[10]      NATSEM estimates cited in Making housing affordable again and by Mr R Tanton, Committee Hansard, 1 April 2008, p. 83.

[11]      Using just the 30 per cent benchmark – that is, including higher income households – the proportion is over 20 per cent; Mr R Tanton, Committee Hansard, 1 April 2008, pp 83–84.

[12]      Sedgwick (2008).

[13]      An absolute poverty level may be based, for example, on the cost of acquiring sufficient calories to live. A relative poverty level may reflect societal norms and be defined as, for example, half the median income and so rise over time; Mr A Johnson, Committee Hansard, 2 April 2008, p. 71.

[14]      Mr R Battellino, Reserve Bank of Australia, Proof Committee Hansard, 24 April 2008, p. 9.

[15]      For example, Mr Battellino remarked that 'income growth in this part of Sydney [the poorer western suburbs of Sydney which show high housing stress] is substantially slower than in other parts of Sydney and Australia', Proof Committee Hansard, 24 April 2008, p. 9.

[16]      Mr R Battellino, Reserve Bank of Australia, Proof Committee Hansard, 24 April 2008, p. 8.

[17]      Battellino (2007).

[18]      Senator R Siewert, Proof Committee Hansard, Melbourne, 24 April 2008, p. 10.

[19]      Ms C Wall, FaHCSIA, Proof Committee Hansard, 7 May, p. 2.

[20]      Professor J Disney, Committee Hansard, 2 April 2008, pp 27–28.

[21]      The home ownership ratio rose from around 50 per cent to 70 per cent during the 1950s and stayed around this level for the next few decades; Professor P Troy, Committee Hansard, 1 April 2008, p. 109; and Yates (2007, p. 5).

[22]      UDIA (2007, p. 11).

[23]      Mr R Battellino, Reserve Bank of Australia, Proof Committee Hansard, 24 April 2008, p. 11.

[24]      Reserve Bank of Australia (2003, pp 23–24).

[25]      Tanton, Nepal and Harding (2008, p. 3).

[26]      Reserve Bank of Australia (2003, p. 29); Ellis and Andrews (2001) and Table 11.1.

[27]      This estimate by Abelson and Chung (2005) is cited by Richards (2008).

[28]      The ABS data shown in Table 3.5 concord with the industry view. The Housing Industry Association comment 'construction costs have not really got out of kilter with the general increase in cost as measured by the CPI'; Mr P Jones, Committee Hansard, 1 April 2008, p. 27. An exception to this is in certain mining areas, discussed in Chapter 8.

[29]      Productivity Commission (2004, pp. xvii, 68 and 123).

[30]      Reserve Bank of Australia (2003, p. 7).

[31]      Mr R Battellino, Proof Committee Hansard, 24 April 2008, p. 8. Similar comments were recently made by the Governor; 'People have become more affluent, their borrowing power has increased and they have sought to enjoy a better standard of housing. In the process, because the supply is finite—indeed, the supply of the really well-located stuff is fixed—the price has risen'; House Economics Committee Hansard, 17 August 2007, p. 22. The former governor made a similar argument when he appeared before that committee on 18 August 2006, pp 26–27.

[32]      R Robertson, 'RBA still seems unlikely to hike; Coastal cities still relatively expensive!', 22 January 2008. This view seems consistent with data shown in tables 3.3 and 3.4.

[33]      Reserve Bank of Australia (2003, p. 31). Similarly, Sedgwick (2008) says 'more efficient supply at the fringes will not of itself stop the rise in prices of well-located housing close to the city centre'. Ellis (2006, p. 28) concludes 'the facts suggest that allowing for more spread out cities or, more generally, untrammelled supply of extra dwellings, would not have prevented a large increase in Australian housing prices over the past decade'. An econometric study by Otto (2007) explaining increases in house prices included dwelling approvals per capita in the model as a proxy for the possible effects of supply restrictions. He found 'for most capital cities there seems to be no systematic effect on the growth rate of house prices from dwelling approvals' (p. 231).

[34]      The 'supply' line is completions data from the ABS. There is less clarity about the source of the underlying demand data. The footnote to this chart in FaHCSIA's publication sources it to 'Treasury and ABS' but gives no more information. At the hearing (Ms C Wall, Proof Committee Hansard, 1 April 2008, p. 9) FaHCSIA sourced the numbers to the Reserve Bank's November 2007 Statement on Monetary Policy (p. 35) which does not itself give a source. The Housing Industry Association has similar, but not identical, estimates (see Table 5.1), as does the ANZ Bank (cited in CFMEU, Submission 36, p. 2). The grey band around the demand line is presumably meant to indicate a degree of uncertainty.

[35]      The underlying demand figure seems best suited for medium-to-long term planning as the demographic factors are much easier to predict in the long term than are interest rates, incomes and employment.

[36]      Dr Ronald Silverberg, Committee Hansard, 1 April 2008, p. 95.

[37]      FaHCSIA's charts are based on REIA and Treasury data.

[38]      Reserve Bank of Australia, 'Statement on Monetary Policy', May 2008, p. 31.

[39]      Salt (2005, p. 14) argues that household formation has been running well ahead of population growth as 'nuclear families' splinter, but this process will slow as the number of nuclear families drops.

Chapter 4 - Factors influencing the demand for housing

[1]        Goldbloom and Craston (2008) show that since 2000 household net worth has risen more than 10 per cent a year, while inflation has been averaging only 2½ per cent.

[2]        Some press reports have suggested as many as 8 per cent of Australian households own a holiday home; Australian Financial Review, 30 May 2008, p. 9.

[3]        Productivity Commission (2004, p. 60) cite studies suggesting that real house prices in Australia might increase by around 1½ per cent for every 1 per cent increase in real income, but note these estimates seem well above those from other countries. Tu (1999) suggests that house prices rise more than proportionately with income in both Australia and the United Kingdom. Sutton's (2002, p. 49) study concluded 'a 1% increase in the growth rate of GNP is associated with a rise in real house prices in the range of 1–4% after three years' in advanced economies, with Australia at the lower end of the range. For Australia, he suggests income increases and interest rate declines explain most of the rise in house prices from 1995 to 2002.

[4]        Disney (2008, p. 253).

[5]        ABS data show that between 1995–96 and 2005–06, mean disposable household income grew by 33 per cent for the lowest income quintile, 34 per cent for the second lowest and middle quintiles, 31 per cent for the second-highest quintile and 40 per cent for the highest quintile.

[6]        Australian Institute of Health and Welfare (2008a, p. 8); Professor T Burke and K Hulse, Submission 33, p. 3. Total HECS/HELP debt was around $800 million in 2006.

[7]        Divorce in particular raises the demand for housing where both parents need to have sufficient accommodation for children; Queensland Community Housing Coalition, Submission 18, p.3.

[8]        Australian Institute of Health and Welfare (2008, p. 7).

[9]        Dr R Silverberg from the Housing Industry Association describes immigration as 'a very significant influence on the demand for housing'; Committee Hansard, 1 April 2008, p. 94. Its importance was also highlighted by a number of academics: Professor P Troy, Committee Hansard, 1 April 2008, pp 107–8; Professor T Burke, Committee Hansard, 24 April 2008, p. 26; and Professor T Sorensen, Submission 50, p. 7. Others to emphasise the impact of immigration included Sustainable Population Australia's Tasmanian branch, Submission 12; Mr P Pollard, Proof Committee Hansard, 7 May 2008, pp 59–60; and Mr G Holman, Submission 10.

[10]      Dr B Birrell, Committee Hansard, 24 April 2008, p. 31.

[11]      Ms S Davis, Gecko-Gold Coast and Hinterland Environment Council Association Inc, Committee Hansard, 14 April 2008, p. 24.

[12]      Mr S Chamberlain, Committee Hansard, 1 April 2008, p. 99.

[13]      Mr J Symond, Aussie Home Loans, Proof Committee Hansard, 7 May 2008, p. 67.

[14]      2008–09 Budget Statement No. 1, p. 1-29. See also box 7 on p. 2-27 of the same document.

[15]      Mr G Stevens, Transcript of appearance before House of Representatives Economics Committee, 17 August 2007, p. 19.

[16]      There are also arguments that central banks should be concerned about increases in asset prices because of the potential damage that can be wrought when overpriced assets suddenly fall in value. These matters are, however, outside the scope of this inquiry.

[17]      Mr P Williams, Submission 61, pp 10–11.

[18]      Mr G Stevens, 'Statement on Monetary Policy', Reserve Bank of Australia, Media Release, 3 June 2008.

[19]      Mr R Battellino, Proof Committee Hansard, 24 April 2008, pp 13–14.

[20]      Reserve Bank of Australia, Financial Stability Review, March 2007, p. 17 and Mr J Laker, APRA chair, 'Credit standards in housing lending—some further insights', address to Institute of Chartered Accountants in Australia, 20 June 2007, p. 1.

[21]      For more information, see House of Representatives Standing Committee on Economics, Finance and Public Administration (2007, pp 4–10).

[22]      Laker (2007, p. 5).

[23]      Dr J Yates, Committee Hansard, 2 April 2008, p. 45. This is one of the arguments for the new First Home Saver Accounts scheme, discussed in Chapter 9.

[24]      Mr R Sharpless, Urban Development Institute of Australia (Ipswich), Committee Hansard, 14 April 2008, p. 3.

[25]      Ms McIvor, Macarthur Community Forum, Committee Hansard, 3 April 2008, p. 11.

[26]      Mr J Symond, Aussie Home Loans, Proof Committee Hansard, 7 May 2008, p. 66.

[27]      Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 37.

[28]      Dr B Edgerton, Committee Hansard, 14 April 2008, p. 14. Yates (2007, p. 6) refers to 'an obsession with the role of home ownership in contributing to wealth accumulation'.

[29]      Productivity Commission (2004, p. 22) comments that a much higher proportion of Australian households own investment properties than do households in Canada, the UK and the US.

[30]      Mr P Pollard, economist and town planner, Proof Committee Hansard, 7 May 2008, p. 58.

[31]      Professor J Disney, Committee Hansard, 2 April 2008, p. 29.

[32]      R Gittins, 'Renters can't home in on jackpot', Sydney Morning Herald, 19 September 2007, p. 13 reprinted in Australia Institute, Submission 56.

[33]      The Industry Commission (1993, p. xv) noted 'the full costs of housing assistance are not recorded and governments do not know whether assistance is well targeted or delivered efficiently'.

[34]      The Productivity Commission (2004, p. 109) estimated the cost at about $8 billion in 2003.

[35]      The Industry Commission (1993, p. 21) cite estimates that in 1990-91 subsidies to homeowners in the top quintile of income earners averaged $3 180 while those to private renters in the bottom quintile were less than half as much, at $1 440.

[36]      This is reported as costing 'over $1 billion' in Tax Expenditures Statement 2007, Treasury, p. 161. Australian National Audit Office (2008, pgs 19 and 115) says 'approximately $13 billion' but this appears to just repeat the estimate of $13 billion in 2001, given in Yates (2003) and cited by Productivity Commission (2004, p. 109). Scaling this $13 billion up for the doubling in the value of the housing stock since 2001 would give an estimate of $26 billion. Alternatively, taking the $3,300 billion value of the housing stock, allowing for two-thirds being owner-occupied, assuming conservatively that over the long term houses prices grow four per cent a year (sum of inflation and productivity growth), and an average marginal tax rate of 30 per cent, also gives an estimate of $26 billion. Alternatively, as the Australian Tax Office's Taxation Statistics 2005–06 reports total capital gains tax discount claimed by individuals for real estate was $14.3 billion in 2005–06, in the absence of the discount they would have paid $28.6 billion. As there are twice as many owner-occupied homes as investor properties, capital gains on them may have been around $57 billion, which if taxed at a marginal tax of 30 per cent would have raised $17 billion in 2005–06, which would likely have increased in subsequent years.

[37]      The capital gains tax discount claimed by individuals was $14.3 billion in 2005–06 (ATO Taxation Statistics 2005–06, p.80). As real estate accounts for about 1/3 of capital gains of individuals (p. 77), the discount for investor property was $5 billion in 2005–06 and it is likely to have grown since. Alternatively, taking the $3,300 billion value of the housing stock, of which two-thirds is owner-occupied, conservatively assuming that over the longer term houses prices grow at an annual rate of 4 per cent (sum of inflation and productivity growth), and assuming an average marginal tax rate of 30 per cent, gives an estimate of $6.6 billion.

[38]      The Productivity Commission (2004, p. 109) estimated the cost at about $7 billion in 2003. Scaling up on the conservative assumption that land prices grew at the same rate as house prices would give an estimate of over $10 billion. Alternatively, land taxes raised $4.4 billion in 2006–07 (ABS cat. No, 5506.0). As two-thirds of homes are owner-occupied, adding them into the net would at least triple the revenue, implying revenue foregone is well over $8.8 billion.

[39]      The ATO's Taxation Statistics 2005–06 reports 1.6 million taxpayers had rental income in 2005–06 with an aggregate net loss of $5.1 billion. A conservative assumption of a 30 per cent marginal tax rate would cost negative gearing at $1.5 billion. Since 2005–06, both rents and interest rates have increased. This estimate is below those provided by witnesses; $2½ billion (Mr M Myers, Queensland Community Housing Coalition, Committee Hansard, 14 April 2008, p. 51); $3½ billion (Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, p. 74) and $5 billion (Mr M Munro, Real Estate Institute of Australia, Committee Hansard, 7 May 2008, p. 41).

[40]      Imputed rent for owner-occupied housing was $74 billion in 2006–07 (ABS 5204.0). As a significant proportion is owned by retirees, a conservative assumption of an average marginal tax rate of 20 per cent is applied to generate an estimate of revenue foregone of $15 billion.

[41]      According to the Productivity Commission (2004, p. 78), this discount was introduced in 1999 with the goal of 'promoting investment in innovative and high growth companies'.

[42]      This argument is put by Mr Harnisch, MBA, Committee Hansard, 1 April 2008, p. 29.

[43]      Mr A Farrar, NSW Federation of Housing Associations, Committee Hansard, 2 April 2008, p. 8. See also, for example, Professors Burke and Hulse, Submission 33, p. 5.

[44]      Dr B Edgerton, Committee Hansard, 14 April 2008, p. 14.

[45]      Mr W Harnisch, Master Builders Australia, Committee Hansard, 1 April 2008, p. 29.

[46]      Master Builders Australia, Submission 30, p. 10.

[47]      Professor A Sorensen, Proof Committee Hansard, 7 May 2008, p. 54.

[48]      Professor P Troy, Submission 11, p. 4.

[49]      Professor A Sorensen, Proof Committee Hansard, 7 May 2008, p. 55. A similar view is put by National Shelter, Submission 57, p. 3.

[50]      Land tax was most famously advocated by Henry George (1879). It has a number of advantages over stamp duty, such as not discouraging labour mobility; Stilwell and English (2004). The head of Tasmania's Treasury praises it as one of the best state taxes; Tasmanian Legislative Council Select Committee on Housing Affordability in Tasmania (2008, p. 88).

[51]      Shelter WA, Submission 42, p.2. Similar views are expressed by their national body; National Shelter, Submission 57, p. 3.

[52]      Disney (2008, p. 261).

[53]      ATO Taxation Statistics 2005–06.

[54]      Reserve Bank of Australia (2002, p. 3).

[55]      Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, p. 74.

[56]      Mr J Sutton, Proof Committee Hansard, 24 April 2008, p. 4. Shelter WA recommend it be limited to those in the lower three quintiles of the income distribution; Submission 42, p. 2.

[57]      Mr W Harnisch, Master Builders Australia, Committee Hansard, 1 April 2008, p. 29.

[58]      Mr P Bushby, Real Estate Institute of Tasmania, Proof Committee Hansard, 5 May 2008, p. 17. The Australian Tax Office's data show that, in 2005–06, three-quarters of individuals claiming net rental losses had taxable incomes below $63,000 (after claiming the deduction!). About two-thirds of investors with a rental property have only one. On the other hand, those using negative gearing planned to recoup their losses from capital gains, and over 80 per cent of the tax on capital gains comes from individuals earning over $95 000; Taxation Statistics 2005–06, pgs 12, 13 and 75.

[59]      Mr W Harnisch, Master Builders Australia, Committee Hansard, 1 April 2008, p. 29; Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 41.

[60]      Reserve Bank of Australia (2003, p. 45).

[61]      Mr P Bushby, Real Estate Institute of Tasmania, Proof Committee Hansard, 5 May 2008, p. 17.

[62]      Ms P Winzar, Department of Families, Housing, Community Services and Indigenous Affairs, Committee Hansard, 1 April 2008, pp 18–19 and Ms C Wall, Proof Committee Hansard, 7 May, p. 4.

[63]      Reserve Bank of Australia (2002, p. 5) note that after the 1987 share market decline there was a surge in lending to property investors. Mr P Pollard claims 'the only real studies on the effect of the partial removal of negative gearing in 1985 show that the claims that it forced up rents and dropped building and so on are completely unfounded.'; Proof Committee Hansard, 7 May 2008, p. 62.

[64]      Mr P Pollard, Proof Committee Hansard, 7 May 2008, p. 58.

[65]      Professor P Troy, Committee Hansard, 1 April 2008, p. 114.

[66]      Mr Jackson, UDIA (South Australia), Proof Committee Hansard, 28 April 2008, p. 13.

[67]      Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, p. 74. Similarly, the Queensland Community Housing Coalition (Submission 18) argue that even if negative gearing results in some additional rental property, it is not the most cost-effective means of doing so.

[68]      Mr P Pollard, Proof Committee Hansard, 7 May 2008, p. 60.

[69]      Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 40.

[70]      Professor A Sorensen, Proof Committee Hansard, 7 May 2008, pgs 54 and 56.

[71]      Mr P Pollard, Proof Committee Hansard, 7 May 2008, p. 60. A similar position is put by Mr D van der Klauw, Submission 80.

[72]      Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, p. 75. This was also advocated in a supplementary personal submission from Robin Spragg, the social planner from Tweed Shire Council, Submission 76.

[73]      Professor T Burke, Committee Hansard, 24 April 2008, p. 22.

[74]      Professor P Troy, Submission 11, p. 6 and Mr C Geyde, Submission 78, are among those favouring its elimination.

[75]      Mr C Simpson, Submission 1, p. 2.

Chapter 5 - The challenge of housing supply

[1]        'Housing starts' refers to the number of new dwellings.

[2]        Ms P Winzar, FaHCSIA, Committee Hansard, 1 April 2008, p. 3.

[3]        Mr N Savery, Committee Hansard, 1 April 2008, p. 59.

[4]        Ms P Winzar, FaHCSIA, Committee Hansard, 1 April 2008, p. 5.

[5]        See Birrell and Healy (2003, pp 43–56).

[6]        Moran (2006, p. 4).

[7]        Dr A Moran, Committee Hansard, 23 April 2008, pp 63, 66 and 68.

[8]        Mr S Chamberlain, Committee Hansard, 1 April 2008, p. 99.

[9]        Mr S Worn, Committee Hansard, 23 April 2008, p. 57.

[10]      Professor T Burke, Committee Hansard, 24 April 2008, p. 27.

[11]      Professor T Burke, Committee Hansard, 24 April 2008, p. 23.

[12]      Professor T Burke, Committee Hansard, 24 April 2008, p. 23.

[13]      Mr A Farrar, Committee Hansard, 2 April 2008, pp 4–5.

[14]      Professor J Disney, Committee Hansard, 2 April 2008, p. 28.

[15]      The idea was proposed by Marchetti (1994). The WA Government refer to 30 minutes travelling as 'the established critical threshold'; Submission 87. Interesting accounts of the importance placed on restricting commuting times in planning the expansion of housing are given in Stretton (2005, chapter 5) on Adelaide and Reader (2004, chapter 18) on Stockholm.

[16]      Professor P Newman, Submission 2, p. 3.

[17]      Mr M Papageorgiou, Committee Hansard, 14 April 2008, p. 20.

[18]      Professor J Disney, Committee Hansard, 2 April 2008, p. 28.

[19]      Western Sydney Regional Organisation of Councils, Submission 31, p. 2.

[20]      Mrs S Fingland, Committee Hansard, 3 April 2008, p. 20.

[21]      Mr J Lawrence, Committee Hansard, 3 April 2008, p. 27.

[22]      Mr P Tosi, Committee Hansard, 3 April 2008, p. 29.

[23]      Ms J Burke, Submission 63, p. 1.

[24]      Professor B Randolph, Committee Hansard, 2 April 2008, p. 43.

[25]      Professor B Randolph, Committee Hansard, 2 April 2008, p. 40.

[26]      Narre Warren is a suburb within the City of Casey. The City has 30 suburbs which also include Cranbourne and Fountain Gate.

[27]      Mr L Hodgetts, Committee Hansard, 24 April 2008, p. 4.

[28]      Mr L Hodgetts, Committee Hansard, 24 April 2008, p. 4.

[29]      Mr L Hodgetts, Committee Hansard, 24 April 2008, p. 7.

[30]      Mr L Hodgetts, Proof Committee Hansard, 24 April 2008, p. 7.

[31]      Dr B Birrell, Proof Committee Hansard, 24 April 2008, p. 32.

[32]      Mr L Hodgetts, Proof Committee Hansard, 24 April 2008, p. 4.

[33]      Mr L Hodgetts referred to the term 'magnet infrastructure': 'infrastructure that will really make the community last and survive in sustainable terms and for generational change'. Proof Committee Hansard, 24 April 2008, p. 5.

[34]      Department of Sustainability and Environment, 'Melbourne 2030: Planning for sustainable growth', Victorian government, http://www.dse.vic.gov.au/melbourne2030online/ (accessed 12 May 2008).

[35]      Mr S Worn, Committee Hansard, 23 April 2008, p. 61.

[36]      Productivity Commission (2004, p. 134).

[37]      Professor P Troy, Submission 11, p. 4.

[38]      Professor Rob Moodie, Mr David Whitney, Mr Michael Wright QC and Dr Ann McAfee, Melbourne 2030, Audit Expert Group Report, March 2008, p. 7.

[39]      Professor Rob Moodie, Mr David Whitney, Mr Michael Wright QC and Dr Ann McAfee, Melbourne 2030, Audit Expert Group Report, March 2008, p. 67.

[40]      Mr T Powell AO, Submission 79 (Attachment), p. 3. Mr Powell is a former Director of the National Capital Planning Authority (1974–1985).

[41]      Birrell and Healy (2008, p. 1).

[42]      Dr B Birrell, Committee Hansard, 24 April 2008, p. 29.

[43]      Dr B Birrell, Committee Hansard, 24 April 2008, p. 29.

[44]      The Hon. Paul Holloway, 'A New Urban Boundary for Adelaide', Press Release, 20 December 2007.

[45]      Mr P Jackson, Proof Committee Hansard, 28 April 2008, p. 13.

[46]      See Dr N Gurran, Submission 47, p. 2.

[47]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 26.

[48]      Professor R Stimson, Committee Hansard, 14 April 2008, p. 46.

[49]      Mr R Blancato, Committee Hansard, 2 April 2008, p. 61.

[50]      Mr T Powell AO, Submission 79 (Attachment), p. 4.

[51]      Urban Development Institute of Australia, New South Wales Division, Submission 49, p. 4.

[52]      Mr R Blancato, Committee Hansard, 2 April 2008, p. 65.

[53]      Mr G Hoffman, Committee Hansard, 14 April 2008, p. 33.

[54]      Ms K Kelly, Proof Committee Hansard, 28 April 2008, p. 33.

[55]      Ms K Kelly, Proof Committee Hansard, 28 April 2008, p. 33.

[56]      Ms D Goostrey, Committee Hansard, 8 April 2008, p. 70.

[57]      Mrs A Arnold, Committee Hansard, 8 April 2008, p. 38.

[58]      Dr S Rowley, Committee Hansard, 8 April 2008, p. 48.

[59]      Mr B Hailey, Committee Hansard, 14 April 2008, p. 3.

[60]      FaHCSIA, 'Making Housing Affordable Again', March 2008, p. 6.

[61]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 31.

[62]      Migration Act 1958

[63]      Dr R Silverberg, Committee Hansard, 1 April 2008, p. 97.

[64]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 23.

[65]      Mr J Sutton, Proof Committee Hansard, 24 April 2008, pp 3–4. See also Productivity Commission (2004, pp 184–5).

[66]      Dr B Birrell, Committee Hansard, 24 April 2008, p. 31.

[67]      Mr S Chamberlain, Committee Hansard, 1 April 2008, p. 99.

[68]      Professor A Beer, Proof Committee Hansard, 28 April 2008, p. 49.

[69]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 27. The MBA submission made no mention of skills shortages as a supply constraint.

[70]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 23.

[71]      Ms G Jacob, Committee Hansard, 7 April 2008, p. 54.

[72]      Ms D Ekelund, Committee Hansard, 8 April 2008, p. 5.

[73]      Mr B Gillan, Committee Hansard, 14 April 2008, p. 12.

[74]      Mr S Chamberlain, Committee Hansard, 1 April 2008, p. 78.

[75]      Dr R Silverberg, Committee Hansard, 1 April 2008, p. 96.

[76]      Mr W Harnisch, Committee Hansard, 1 April 2008, p. 23.

[77]      Mr N Savery, Committee Hansard, 1 April 2008, p. 58.

[78]      Mr N Savery, Committee Hansard, 1 April 2008, p. 59.

[79]      Mr Russell, Committee Hansard, 28 April 2008, p. 2.

[80]      Mr M Papageorgiou, Committee Hansard, 14 April 2008, p. 23.

[81]      Mr G Hoffman, Committee Hansard, 14 April 2008, p. 34.

[82]      Brisbane City Council, Submission 37, pp 2–3. A similar idea was proposed by Master Builders Australia, Submission 30, pp 21–22.

[83]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 5.

Chapter 6 - Housing diversity

[1]        Professor T Burke, Committee Hansard, 24 April 2008, p. 22.

[2]        Ms J McIvor, Committee Hansard, 3 April 2008, p. 4.

[3]        Ms J McIvor, Committee Hansard, 3 April 2008, p. 8.

[4]        Ms S Fingland, Committee Hansard, 3 April 2008, p. 15.

[5]        Mr S Darby, Committee Hansard, 8 April 2008, p. 30.

[6]        Dr R Silberberg, Committee Hansard, 1 April 2008, p. 102.

[7]        Ms P Winzar, Department of Families, Housing, Community Services and Indigenous Affairs, Committee Hansard, 1 April 2008, p. 19.

[8]        Mr N Savery, Committee Hansard, 1 April 2008, pp 58–59.

[9]        Mr S Scott, Ballina Shire Council, Committee Hansard, 16 April 2008, p. 6.

[10]      Mr J Black, Committee Hansard, 23 April 2008, p. 55.

[11]      Professor T Burke, Committee Hansard, 24 April 2008, p. 27. See also Gurran (2008).

[12]      Mr A Pisarski, Proof Committee Hansard, 7 May 2008, p. 75.

[13]      South Australian Government, Submission 88, p. 3.

[14]      Ms K Kelly, Proof Committee Hansard, 28 April 2008, p. 32.

[15]      Mr D Bailey, Proof Committee Hansard, 28 April 2008, p. 34.

[16]      ACT Government, Submission 75, p. 8.

[17]      Mr G Tomlins, Proof Committee Hansard, 7 May 2008, p. 16.

[18]      Mr G Tomlins, Proof Committee Hansard, 7 May 2008, p. 18. The submission by the Village Building Co. referred to their success in selling affordable houses within new developments; Submission 82.

[19]      Gurran et al (2007, pp 33–34).

[20]      Mr M Papageorgiou, Brisbane City Council, Committee Hansard, 14 April 2008, p. 18. Similarly, the Geelong City Council adopted a 'housing diversity strategy' in July 2007; Mr C Brenton, Committee Hansard, 23 April 2008, p. 24.

[21]      Mr M Papageorgiou, Committee Hansard, 14 April 2008, p.18.

[22]      The Council voted unanimously in May 2008 for greater heights and densities in West End, Fortitude Valley, Woolloongabba, South Brisbane and the Kurilpa precinct. The Lord Mayor indicated he envisaged towers of around thirty stories along the river; Courier-Mail, 23 May 2008.

[23]      Cr Julie Bourke, Submission 63, p. 1

[24]      Mr P Tosi, Campbelltown City Council, Committee Hansard, 3 April 2008, p. 30.

[25]      Professor T Burke, Committee Hansard, 24 April 2008, p. 22.

[26]      Mr L Hodgetts, Committee Hansard, 24 April 2008, pp 7–8.

[27]      Mr M Scott, Urban Development Institute of Australia, Committee Hansard, 1 April 2008, p. 73.

[28]      Mr V Marcelino, Committee Hansard, 8 April 2008, p. 60.

[29]      Ballina Shire Council, Submission 72, pp 4–5. A similar approach is being adopted in the new Melbourne suburb of Williams Landing which will encourage 'modular housing' where couples could add rooms to the house as their families grow; The Age, 1 May 2008, p. 8.

[30]      Professor B Randolph, Committee Hansard, 2 April 2008, pp 40 and 46.

[31]      Dr N Gurran, Committee Hansard, 2 April 2008, p. 40.

Chapter 7 - Impact of state and local government charges

[1]        ABS, Taxation Revenue 2006–07, cat. no. 5506.0.

[2]        Professor A Beer, Proof Committee Hansard, 28 April 2008, p. 48.

[3]        This theory was put by Senator C Bernardi, Proof Committee Hansard, 28 April 2008, p. 11. Mr Jackson from the UDIA's South Australian branch replied that it is a small factor relative to the increase in the wholesale price of broad hectare land for development.

[4]        Productivity Commission (2004, p. 75).

[5]        Reserve Bank of Australia (2003, pp. 33–4).

[6]        Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38. Similar views were put by Mr P Donald, Submission 5, p. 1 (who added that stamp duty thresholds should vary with postcode).

[7]        Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38.

[8]        Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38.

[9]        Dr G Dufty, Committee Hansard, 23 April 2008, p. 49.

[10]      Dr G Dufty, Private Correspondence, 13 June 2008.

[11]      Professor Julian Disney, Proof Committee Hansard, 2 April 2008, p. 29.

[12]      Professor Julian Disney, Insight, SBS television, 25 March 2008, http://news.sbs.com.au/insight/out_of_reach_543170 (accessed 10 May 2008).

[13]      Professor Terry Burke and Associate Professor Kath Hulse, Submission 33, p. 6. See also Professor Terry Burke, Committee Hansard, 24 April 2008, p. 24.

[14]      Mr C Simpson, Submission 1, p. 2; Mr V Mangioni, Submission 55.

[15]      Professor P Troy, Committee Hansard, 1 April 2008, p. 119.

[16]      Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38. A similar view is put by Professor A Sorensen, Proof Committee Hansard, 7 May 2008, pp 55‑6.

[17]      Mr N Savery, Planning Institute of Australia, Committee Hansard, 1 April 2008, p. 57. This was also advocated by the Urban Research Centre of University of Western Sydney, Submission 32.

[18]      Mr N Savery, Planning Institute of Australia, Committee Hansard, 1 April 2009, p. 63.

[19]      Professor P Troy, Committee Hansard, 1 April 2008, p. 119.

[20]      Mr M Myers, Queensland Community Housing Coalition, Committee Hansard, 14 April 2008, p. 47. Similarly, Gurran et al (2007, p. 22) argue that 'developers may opt to produce “upmarket” housing with a greater margin for profit as a way of recouping costs'.

[21]      Mr W Harnisch, Master Builders' Australia, Committee Hansard, 1 April 2008, p. 25.

[22]      Productivity Commission (2008a, p. 129).

[23]      Mr W Harnisch, Master Builders' Australia, Committee Hansard, 1 April 200 8, p. 25. A similar view was expressed by Mr Marker from the UDIA (South Australia), who said a 'developer levy' is 'a cost to the developer which has to be added to the price of the allotment or the house and land that is being sold. So it is a homebuyer levy; it is not a developer levy'; Proof Committee Hansard, 28 April 2008, p. 12.

[24]      Mr R Blancato, Urban Development Institute of Australia (New South Wales), Committee Hansard, 2 April 2008, p. 60. However, their submission refers to it sometimes being passed back to the vendor of the raw land (Submission 49, pp 9, 13).

[25]      Mr C Dutton, UDIA (Gold Coast), Committee Hansard, 15 April 2008, p. 21.

[26]      Local Government Association of Queensland, Submission 71, p. 18.

[27]      Dr N Gurran, Committee Hansard, 2 April 2008, p. 41. Similarly, a witness in Ballina opined that 'we do not believe that an abolition of developer fees will automatically lead to an immediate reduction in prices'; Mr T Davies, Northern Rivers Social Development Council, Committee Hansard, 15 April 2008, p. 16. Mr Hehir from the ACT government implied that developer charges are passed back to the landowner; Proof Committee Hansard, 7 May 2008, p. 19. Mr P Pollard also said 'Whenever the industry speak about the need for reduced taxes and charges on housing, to take their proposals seriously, they need to demonstrate that the reductions they are seeking will pass through to the homebuyer. If they cannot pinpoint a mechanism where the likelihood is that that will happen then obviously their proposals carry less credibility.'; Proof Committee Hansard, 7 May 2008, p. 60.

[28]      Productivity Commission (2004, p. 165).

[29]      Mr C Brenton, Geelong City Council, Committee Hansard, 23 April 2008, p. 22.

[30]      Urban Research Centre of University of Western Sydney, Submission 32. This view is also expressed in a summary of the literature in Gurran et al (2007, p. 22).

[31]      Property Council (2007) makes this point; see Table 7.4. The South Australian division of UDIA commented that in NSW 'infrastructure charges have been a major factor while these have had virtually no impact in South Australia'; Submission 20.

[32]      Table 7.5 from the Property Council suggests that charges in NSW are higher. Table 7.2 is supportive but it is four years old and only relates to two specific suburbs. On the other hand, the Productivity Commission (2008, p. 133) report that the average developer contribution revenue per new dwelling commenced in New South Wales is below the national average.

[33]      Productivity Commission (2008a, p. 117).

[34]      NSW Government, Submission 90, p. 2.

[35]      House of Representatives Standing Committee on Economics, Finance and Public Administration (2003) discuss the challenges faced by councils due to cost-shifting and is critical of rate-capping.

[36]      Geelong City Council, Submission 85.

[37]      Mr C Brenton, Geelong City Council, Committee Hansard, 23 April 2008, p. 20.

[38]      Mr C Brenton, Geelong City Council, Committee Hansard, 23 April 2008, p. 19. A similar stance is taken by Professor B Birrell, Committee Hansard, 24 April 2008, pp 30 and 32.

[39]      Mr P Pollard was one witness who suggested this; Proof Committee Hansard, 7 May 2008, p. 64.

[40]      This is discussed further in chapter 8. There were suggestions in South Australia that their Land Management Corporation was unduly focused on maximising profits; Mr I McKean, UDIA (South Australia), Proof Committee Hansard, 28 April 2008, p. 10.

[41]      UDIA (NSW), Submission 49, p. 16.

[42]      Mr S Woodcock, Urban Development Institute of Australia, Committee Hansard, 1 April 2008, p. 80. This view is echoed by his NSW colleague, Mr R Blancato, UDIA (NSW), Committee Hansard, 2 April 2008, p. 61. The same point is made by Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38.

[43]      UDIA (NSW), Submission 49, p. 17.

[44]      Productivity Commission (2004, p. 75 and pp 96–100).

[45]      Productivity Commission (2004, p. 100).

[46]      For example, Mr C Cook, Submission 4, p. 1.

[47]      Mr W Hemsley, Committee Hansard, 8 April 2008, p. 62.

[48]      Mr P Bushby, Proof Committee Hansard, 5 May 2008, p. 18. The UDIA's Western Australian division was critical of bracket creep in land tax in that state; Submission 45.

[49]      'Report of the Affordable Housing Steering Group', p. 11, included with the ACT Government, Submission 75.

Chapter 8 - Specific issues in particular areas

[1]        This is not to say there are not other pockets within Australia facing similar issues. However, these areas were of particular note in the context of the committee's deliberations.

[2]        T Lawless, 'Australia's top growth suburbs', Eureka Report, 14 April 2008.

[3]        Pilbara Area Consultative Committee, Submission 93, p. 9.

[4]        Cr David Hipworth, Committee Hansard, 7 April 2008, p. 11.

[5]        Or had bought there before the mining boom (resisting the temptation to sell up and move).

[6]        The Hon F Riebeling MLA, Committee Hansard, 7 April 2008, p. 9.

[7]        Cr B Snell, Committee Hansard, 7 April 2008, p. 12.

[8]        Mrs P Brook, Committee Hansard, 7 April 2008, p. 46.

[9]        Mr B Neville, Committee Hansard, 7 April 2008, p. 21.

[10]      Mrs L Cooper, Committee Hansard, 7 April 2008, p. 26.

[11]      Pilbara Area Consultative Committee, Submission 93, p. 7.

[12]      Mr G Slee, Committee Hansard, 7 April 2008, p. 59.

[13]      Mrs L Cooper, Committee Hansard, 7 April 2008, pp 26 & 27.

[14]      Mr W Brook, Committee Hansard, 7 April 2008, p. 47.

[15]      Ms G Jacob, Committee Hansard, 7 April 2008, p. 55.

[16]      Pilbara Community Legal Service, Submission 92, p. 1.

[17]      Cr D Hipworth, Committee Hansard, 7 April 2008, p. 16.

[18]      Mrs L Cooper, Committee Hansard, 7 April 2008, p. 28.

[19]      Mr W Brook, Committee Hansard, 7 April 2008, p. 48.

[20]      Hon F Riebeling MLA, Committee Hansard, 7 April 2008, p. 9.

[21]      Cr B Snell, Committee Hansard, 7 April 2008, p. 13.

[22]      Cr D Hipworth, Committee Hansard, 7 April 2008, p. 16.

[23]      Mr B Neville, Committee Hansard, 7 April 2008, pp 19–20.

[24]      Mr G Slee, Committee Hansard, 7 April 2008, p. 56.

[25]      The Hon. F Riebeling, Committee Hansard, 7 April 2008, p. 3.

[26]      Mr M Moloney, LandCorp, Committee Hansard, 7 April 2008, p. 65.

[27]      Mr R Neville, Committee Hansard, 7 April 2008, p. 24.

[28]      Dr S Rowley, Committee Hansard, 8 April 2008, p. 46.

[29]      Real Estate Institute of Western Australia, Submission 53, p. 4.

[30]      Mr M Moloney, Committee Hansard, 7 April 2008, pp 63, 66.

[31]      Mr B Haase MP, Committee Hansard, 7 April 2008, p. 42.

[32]      Mr B Haase MP, Committee Hansard, 7 April 2008, p. 43.

[33]      Cr B Snell, Committee Hansard, 7 April 2008, p. 17.

[34]      Mr A Ellson, Committee Hansard, 7 April 2008, pp 16–17.

[35]      Mr B Haase MP, Committee Hansard, 7 April 2008, p. 41.

[36]      Pilbara Regional Council, Submission 96, p. 2.

[37]      Real Estate Institute of Western Australia – Pilbara Division, Submission 94, p. 1.

[38]      Mrs L Cooper, Committee Hansard, 7 April 2008, p. 26.

[39]      Hon F Riebeling MLA, Committee Hansard, 7 April 2008, p. 9.

[40]      Hon F Riebeling MLA, Committee Hansard, 7 April 2008, pp 3–4.

[41]      Hon F Riebeling MLA, Committee Hansard, 7 April 2008, p. 9.

[42]      Pilbara Association of Non Government Organisations, Submission 95, p. 3.

[43]      Pilbara Regional Council, Submission 96, p. 4.

[44]      Cr D Hipworth, Committee Hansard, 7 April 2008, p. 12.

[45]      Ms G Jacob, Committee Hansard, 7 April 2008, p. 60.

[46]      Cr B Snell, Pilbara Regional Council, Committee Hansard, 7 April 2008, p. 13.

[47]      Professor F McKenzie, Committee Hansard, 8 April 2008, p. 50.

[48]      Pilbara Regional Council, Submission 96a, p. 3.

[49]      Mrs L Cooper, Committee Hansard, 7 April 2008, p. 30.

[50]      Mrs L Cooper, Committee Hansard, 7 April 2008, p. 28.

[51]      Senator A Eggleston, Senate Hansard, 13 May 2008, p. 1568.

[52]      Mr B Haase MP, House of Representatives Hansard, 12 February 2007, p. 88.

[53]      Mr G Slee, Committee Hansard, 7 April 2008, p. 59.

[54]      Hon F Riebeling MLA, Committee Hansard, 7 April 2008, p. 5.

[55]      Ms G Jacob, Committee Hansard, 7 April 2008, p. 59.

[56]      Pilbara Area Consultative Committee, Submission 93, p. 11.

[57]      See Marshall et al (2003, p. 6).

[58]      Ms C McCool, Gold Coast City Council, Committee Hansard, 15 April 2008, p. 2; Ballina City Council, Submission 76; Hon C Cusack MLC, Submission 91.

[59]      UDIA (SA), Submission 20.

[60]      Salt (2005, p. 11); Demographia (2008).

[61]      Gurran, Squires and Blakely (2005, pp 4–6).

[62]      Gurran, Squires and Blakely (2005, pp 2–3).

[63]      Mr T Davies, Committee Hansard, 15 April 2008, p. 21.

[64]      Mr T Davies, Committee Hansard, 15 April 2008, p. 22.

[65]      Gurran, Squires and Blakely (2005, p. 2).

[66]      Ballina Shire Council, Submission 72, p. 2.

[67]      Mr R Kenk, Committee Hansard, 15 April 2008, p. 2.

[68]      Ballina Shire Council, Submission 72, p. 1.

[69]      A study by Fitch Ratings cited in The Age, 30 May 2008, p. 7. This point was also made by the Reserve Bank; Proof Committee Hansard, 24 April 2008, p. 9.

[70]      Mrs S Fingland, Committee Hansard, 3 April 2008, pp. 13–14.

[71]      Mrs S Fingland, Committee Hansard, 3 April 2008, p. 17.

[72]      Mr C Berryman, Committee Hansard, 2 April 2008, pp. 14–15.

[73]      Mrs S Fingland, Committee Hansard, 3 April 2008, p. 14.

[74]      Mr R Battellino, Proof Committee Hansard, 24 April 2008, p. 9.

Chapter 9 - Current and proposed schemes to increase home ownership

[1]        FaHCSIA, Submission 104, p. 8.

[2]        UDIA–Queensland, p. 23.

[3]        Master Builders Australia, Submission 30, p. 11; UDIA (2007, p. 22); Mr P Bushby, Real Estate Institute of Tasmania, Proof Committee Hansard, 5 May 2008, p. 17; Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 38.

[4]        Professor J Disney, Committee Hansard, 2 April 2008, p. 30.

[5]        Mr Johnson, Australian Council of Social Service, Committee Hansard, 2 April 2008, p. 79. Other advocates of some form of means testing for the grant include Professor Phibbs (Committee Hansard, 3 April 2008, p. 50); Mr T Davies, Northern Rivers Social Development Council, Committee Hansard, 15 April 2008, p. 23; Mr J Sutton, CFMEU, Proof Committee Hansard, 24 April 2008, p. 7; Shelter WA (Submission 42, p. 3); Community Housing Coalition of WA (Submission 86) and Mr P Bushby, Real Estate Institute of Tasmania, Proof Committee Hansard, 5 May 2008, p. 17. The latter's national body conceded the grant 'possibly could be better targeted'; Mr M Munro, Real Estate Institute of Australia; Proof Committee Hansard, 7 May 2008, p. 42.

[6]        Shelter WA, Submission 42, p. 8.

[7]        Dr S Tually, Proof Committee Hansard, 28 April 2008, p. 44.

[8]        Productivity Commission (2004, p. 214).

[9]        Professor Atkinson, Submission 26; Professor Beer, Proof Committee Hansard, 28 April 2008, p. 49; Professors T Burke and K Hulse, Submission 33, p. 7.; Professor J Disney (2008, p. 259); Professor P Phibbs, Committee Hansard, 3 April 2008, p. 50; Professor T Sorensen, Submission 50, pp 7, 9; Professor R Stimson, Committee Hansard, 14 April 2009, pp 40–1; Stretton (2005, p. 121); Urban Research Centre of University of Western Sydney, Submission 32; Mr N Savery, Planning Institute of Australia, Proof Committee Hansard, 1 April 2008, p. 58; Australian Association of Social Workers, Submission 54, p. 7; Mr T Davies, Northern Rivers Social Development Council, Committee Hansard, 15 April 2008, p. 16; National Shelter, Submission 57, p. 12; Dr B Edgerton, Submission 74; Mr D van der Klauw, Submission 80. It is also the view of the head of the Tasmanian Treasury; Tasmanian Committee on Housing Affordability (2008, p. 96). Under questioning, Mr Harnisch from Master Builders Australia also conceded 'perhaps it has been capitalised into housing prices', Committee Hansard, 1 April 2008, p. 24. Even the UDIA conceded 'it could be argued that giving a rebate or a grant to everybody as a first home buyer had an inflationary effect'; Mr M Scott, UDIA, Committee Hansard, 1 April 2008, p. 73.

[10]      Richards (2008).

[11]      R Gittins, 'Renters can't home in on jackpot', Sydney Morning Herald, 19 September 2007, reprinted in Australia Institute, Submission 56.

[12]      UDIA (2007, p. 24).

[13]      Mr W Harnisch, Master Builders Australia, Committee Hansard, 1 April 200 8, p. 24.

[14]      A similar argument was put by Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 41.

[15]      In 2005–06, 86 per cent of first home buyers bought an established home; ABS (2007a).

[16]      Abacus, Submission 52, p. 8. Similarly, Professor T Sorensen comments, 'the merit lies in encouraging would-be home‑purchasers to save for their future and, hopefully, develop a life‑long habit'; Submission 50, p. 11.

[17]      Abacus, Submission 52, p. 9.

[18]      Mr N Hossack, ABA, Committee Hansard, 2 April 2008, p. 16.

[19]      Abacus, Submission 52, p. 8.

[20]      FaHCSIA, Submission 104, p. 8.

[21]      Among those making this criticism were National Shelter, Submission 57, p. 14.

[22]      Ms A Sampson, 'Budget helps first-home buyers to save a bit faster', Sydney Morning Herald, 17 May 2008, p. 49.

[23]      Dr B Edgerton, Submission 74.

[24]      Mr N Hossack, Committee Hansard, 2 April 2008, p. 15.

[25]      WA Government, Submission 87.

[26]      Not necessarily symmetrically; Rismark typically keeps 40 per cent of capital gains but incurs only 20 per cent of capital losses; Mr C Joye, Rismark, Proof Committee Hansard, 7 May 2008, p. 27.

[27]      Mr M Hirst, Bendigo & Adelaide Bank, Committee Hansard, 23 April 2008, p. 9. It is described by Rismark as follows: 'It is a zero interest home loan for up to 20 per cent of the value of the property in question. It is a 25-year loan that requires no repayments during that 25-year term. It can be repaid by the homeowner or the borrower at any point in time over the 25 years with no prepayment penalties and no switching costs. It is used in conjunction with a traditional home loan.'; Mr C Joye, Rismark, Proof Committee Hansard, 7 May 2008, p. 27.

[28]      Mr C Joye, Rismark, Proof Committee Hansard, 7 May 2008, pp 27 and 33.

[29]      Mr M Hirst, Bendigo & Adelaide Bank, Committee Hansard, 23 April 2008, p. 9.

[30]      Mr G Tomlins, ACT Government, Proof Committee Hansard, 7 May 2008, p. 17.

[31]      Mr M Hehir, ACT Government, Proof Committee Hansard, 7 May 2008, pp 22-3.

[32]      WA Government, Submission 87.

[33]      Mr M Munro, Real Estate Institute of Australia, Proof Committee Hansard, 7 May 2008, p. 44. The UDIA's Western Australian division supported the First Start scheme there; Submission 45.

[34]      Mr J Symond, Aussie Home Loans, Proof Committee Hansard, 7 May 2008, p. 67.

[35]      Dr L Crabtree, Committee Hansard, 3 April 2008, p. 53. See also Dr L Crabtree, 'Models of perpetually affordable home ownership: report and case studies from the United States of America', Urban Research Centre, University of Western Sydney, June 2008.

[36]      Mr G Tomlins, ACT government, Proof Committee Hansard, 7 May 2008, p. 17.

[37]      Mr M Hehir, ACT Government, Proof Committee Hansard, 7 May 2008, p. 23. It also has some similarity to the 'community land bank' scheme proposed by Dr S Turnbull (Submission 62) as a means of improving affordability by 'democratising wealth'.

[38]      Mr C Joye, Proof Committee Hansard, 7 May 2008, p. 31.

[39]      The Canadian model is the Canada Housing Trust. The idea was discussed at the 2020 summit and is being pushed by the Australian Securitisation Forum; Australian Financial Review, 30 April 2008, p. 58. It will be examined by the House of Representatives Standing Committee on Economics as part of its recently announced inquiry into competition in the banking sector. https://www.aph.gov.au/house/committee/economics/banking08/index.htm Mr Joye described the proposal in an article in The Age on 10 April 2008, p. 10.

[40]      Mr J Symond, Proof Committee Hansard, 7 May 2008, p. 67.

[41]      CFMEU, Submission 36, p. 8.

[42]      Professor A Sorensen, Proof Committee Hansard, 7 May 2008, p. 56.

[43]      Mr J Symond, Aussie Home Loans, Proof Committee Hansard, 7 May 2008, pp 65-6. The plan is set out in Symond (2007). The scheme is capped at property prices of $500 000.

[44]      Mr P Bushby, Real Estate Institute of Tasmania, Proof Committee Hansard, 5 May 2008, pp 18–19.

[45]      Professors Burke and Hulse, Submission 33, p. 7.

[46]      One press report says over 9000 applications for accessing superannuation to forestall home repossession were approved last year; Herald Sun, 8 May 2008.

[47]      Professor T Sorensen, Submission 50, p. 11.

[48]      Abacus, Submission 52, p.7.

[49]      Mr R Hunt, Committee Hansard, 23 April 2008, p. 3.

Chapter 10 - Measures to increase affordable rental housing

* Source: MacKenzie et.al, (2007), p. 11

[1]        Ms C McCool, Committee Hansard, 15 April 2008, p. 5.

[2]        FaHCSIA has advised the committee that the current agreement will continue until December 2008.

[3]        Unless otherwise stated, information in this section has been sourced from the following document: Department of Families, Community Services and Indigenous Affairs (2007), Housing Assistance Act 1996, Annual Report 2005-06, Commonwealth of Australia.  

[4]        Commonwealth of Australia, (2003), 'Housing Assistance (Form of Agreement) Determination 2003', Commonwealth of Australia Gazette, No. S 276, 17 July. 

[5]        South Australian Centre for Economic Studies (2008, p. i).

[6]        Australian Council of Social Service, Submission 40, p. 3.

[7]        FaHCSIA website: www.fahcsia.gov.au/internet/facsinternet.nsf/housing/rentassist.htm

[8]        Productivity Commission (2008, p. 16.5).

[9]        AIHW (2008a, p. 28).

[10]      Ms B Kitching, Committee Hansard, 8 April 2008, p. 25.

[11]      Major D Eldridge, Committee Hansard, 23 April 2008, p. 39.

[12]      Hancock and Barnett (2005, pp 17–18).

[13]      Hancock and Barnett (2005, p. 18).

[14]      Dr L Crabtree, Committee Hansard, 3 April 2008, p. 50. Similarly, Professor P Troy opined that 'the rental assistance appears to simply increase the level of asking rents for rental housing'; Submission  11, p. 4. This argument was also made by Mr P Pollard, Submission 25.

[15]      See for example, Major D Eldridge, Salvation Army, Committee Hansard, 23 April 2008, p. 39 and Dr Crabtree, Urban Research Centre, Committee Hansard, 3 April 2008, p. 50.

[16]      Mr A Johnson, Committee Hansard, 2 April 2008, p. 73.

[17]      AIHW (2008a, pp 28–29).

[18]      AIHW (2008a, p. 29).

[19]      Professor P Troy, Submission 11, p. 2.

[20]      Mr A Farrar, Committee Hansard, 2 April 2008, p. 3.

[21]      Hall and Berry (2007, p. 1).

[22]      Hall and Berry (2007, p. 13).

[23]      Mr Farrar, Committee Hansard, 2 April 2008, p. 3

[24]      Professor J Disney, University of New South Wales, Committee Hansard, 2 April 2008, p. 33.

[25]      Mr A Farrar, Committee Hansard, 2 April 2008, p. 3.

[26]      Mr A Johnson, ACOSS, Committee Hansard, 2 April 2008, pp 72–73.

[27]      Mr Davies, Committee Hansard, 15 April 2008, p. 21.

[28]      AIHW (2007a, p. 457).

[29]      Productivity Commission of Australia (2008, pp. 16.5-16.6).

[30]      Mr A Johnson, Australian Council of Social Service, Committee Hansard, 2 April 2008, p. 74.

[31]      Cited in AIHW (2008a, p.16).

[32]      AIHW (2008b, p. x).

[33]      Ms J McIvor, Committee Hansard, 3 April 2008, p. 6.

[34]      Ms T Vine Bromley, Proof Committee Hansard, 28 April 2008, p. 20.

[35]      Professor J Disney, Committee Hansard, 2 April 2008, p. 33.

[36]      Professor J Disney, Committee Hansard, 2 April 2008, p. 33.

[37]      Mr A Johnson, ACOSS, Committee Hansard, 2 April 2008, p. 78.

[38]      Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, p. 75.

[39]      Ms P Winzar, FaHCSIA, Proof Committee Hansard, 7 May 2008, p. 10.

[40]      AIHW (2007a, p. 232).

[41]      AIHW (2007a, p. 232).

[42]      Mr J McInerney, Committee Hansard, 23 April 2008, p. 12.

[43]      AIHW, (2008c, p. ix).

[44]      AIHW, (2008c, p. 21).

[45]      Mr A Pisarski, National Shelter, Proof Committee Hansard, 7 May 2008, pp 75–76.

[46]      Mr B Murnane, Committee Hansard, 3 April 2008, pp 39–40.

[47]      Mr B Murnane, Committee Hansard, 3 April 2008, p. 40.

[48]      See, for example, Mrs K Fijac, Department of Housing and Works, Western Australia, Committee Hansard, 8 April 2008, p. 9; and Mr M Hehir, ACT Department of Disability, Housing and Community Services, Proof Committee Hansard, 7 May 2008, p. 22.

[49]      Mr B Murnane, Committee Hansard, 3 April 2008, p. 41.

[50]      Ms P Winzar, FaHCSIA, Proof Committee Hansard, 7 May 2008, p. 10.

[51]      Ms P Winzar, Proof Committee Hansard, 7 May 2008, p. 10.

[52]      Mr A Pisarski, Proof Committee Hansard, 7 May 2008, pp 75–76.

[53]      FaHCSIA website: www.fahcsia.gov.au/internet/facsinternet.nsf/housing/saap_nav.htm

[54]      Productivity Commission (2008, p. 15.56).

[55]      Productivity Commission (2008, p. 15.55).

[56]      Major D Eldridge, Committee Hansard, 23 April 2008, p. 39.

[57]      Productivity Commission, (2008, p. 15.61).

[58]      Major D Eldridge, Committee Hansard, 23 April 2008, p. 39.

[59]      Department of Families, Housing Community Services, and Indigenous Affairs, (2008).

[60]      FaHCSIA website: www.fahcsia.gov.au/internet/facsinternet.nsf/housing/fhpp.htm

[61]      MacKenzie et.al. (2007, p. 11).

[62]      MacKenzie et.al, (2007, pp. 17-20).

[63]      MacKenzie et.al, (2007, pp 46-47).

[64]      MacKenzie et.al, (2007, p. 48).

[65]      MacKenzie et.al, (2007, p 56).

[66]      Major D Eldridge, Committee Hansard, 23 April 2008, p. 39.

[67]      Note: the current programme does not exclude home owners, however, as noted above, the vast majority of clients are in some form of rental accommodation.

[68]      Professor A Beer, Australian Housing and Urban Research Institute Southern Research Centre, Proof Committee Hansard, 28 April 2008, p. 51.

[69]      MacKenzie, et.al. (2007, p.62).

[70]      Information about the Scheme has been sourced from the Australian Government (2008b).

[71]      Mr A Johnson, Committee Hansard, 2 April 2008, p. 79.

[72]      Mr B Murnane, Committee Hansard, 3 April 2008, p. 46.

[73]      Mr A Farrar, Committee Hansard, 2 April 2008, p. 9.

[74]      Ms C Kakas, Proof Committee Hansard, 24 April 2008, p. 16.

[75]      Ms C Kakas, Proof Committee Hansard, 24 April 2008, p. 16.

[76]      Mr J Sutton, Proof Committee Hansard, 24 April 2008, p. 5.

[77]      Mr A Farrar, NSW Federation of Housing Associations, Committee Hansard, 2 April 2008, p. 9.

[78]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 15.

[79]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 17.

[80]      Mr A Farrar, Committee Hansard, 2 April 2008, p. 9.

[81]      Ms P Winzar, FaHCSIA, Committee Hansard, 1 April 2008, p. 17.

[82]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 16.

[83]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 16.

[84]      Ms P Winzar, Committee Hansard, 1 April 2008, p. 16.

[85]      Ms C McCool, Committee Hansard, 15 April 2008, p. 3.

[86]      Western Sydney Regional Organisation of Councils Ltd, Submission 31, p. 4.

[87]      Ms J McIvor, Committee Hansard, 3 April 2008, p. 10.

[88]      Major D Eldridge, Committee Hansard, 23 April 2003, p. 40.

[89]      See Mr A Johnson, ACOSS, Committee Hansard, 2 April 2008, p. 77.

[90]      Mr J McInerney, Committee Hansard, 23 April 2008, p. 12.

[91]      Mr J McInerney, Committee Hansard, 23 April 2008, p. 13.

[92]      Urban Research Centre, University of Western Sydney, Submission 32, p. 6.

[93]      Urban Research Centre, University of Western Sydney, Submission 32, p. 6.

[94]      Mr H Stretton, Proof Committee Hansard, 28 April 2008, p. 26.

[95]      The scheme is described in Submission 16, and draws on Stretton (2005).

[96]      For example, the scheme has similarities with the Community Land Trust model in the United States.

Chapter 11 - Longer-term responses

[1]        Professor J Yates, Committee Hansard, 2 April 2008, p. 38.

[2]        This calculation is based on the existing stock of housing. If new stock is brought on at lower prices, it would pull down the average price and speed up the process. However, this may not be possible without also bringing down the price of existing housing.

[3]        National Housing Strategy (1991b, p. xiii). The projection of the majority being well placed for housing was made despite, or perhaps because of, projections that interest rates would have remained over 10 per cent by 2006. 

[4]        Senator B Joyce, Committee Hansard, 1 April 2008, pp 32 and 68.

[5]        Senator B Joyce, Committee Hansard, 1 April 2008, p. 69.

[6]        Professor J Disney, Committee Hansard, 2 April 2008, p. 30. Similar views were put by National Shelter, Submission 57, p. 3.

[7]        Professor J Disney, Committee Hansard, 2 April 2008, p. 35.

[8]        Professor J Disney, Committee Hansard, 2 April 2008, p. 36.

[9]        Professor J Disney, Committee Hansard, 2 April 2008, p. 32. Australia's urban structure is also cited as a reason for high house prices by Mr P Pollard, Proof Committee Hansard, 7 May 2008, p. 59.

[10]      Self (1995, p. 253).

[11]      Mr M Papageorgiou, Committee Hansard, 14 April 2008, p. 20.

[12]      Yates (2007, p. 7) and Ellis and Andrews (2001).

[13]      Professor R Stimson, Committee Hansard, 14 April 2008, p. 44.

[14]      Australian Public Service Commission (2006, p. 54).

[15]      Mr D Rumbens, cited in Canberra Times, 13 December 2007, p. 1.

[16]      Ms J McIvor, Committee Hansard, 3 April 2008, p. 7.

[17]      Mrs J Fingland, Committee Hansard, 3 April 2008, p. 24.

[18]      Garnaut (2008, p.48).

[19]      Ms K Kelly, Proof Committee Hansard, 28 April 2008, p. 33.

[20]      Professor P Troy, Committee Hansard, 1 April 2008, p. 117. Similar concerns were expressed by Ms P van Reyk, Submission 8, p. 1.

[21]      Professor P Troy, Committee Hansard, 1 April 2008, p. 119.

[22]      Ms S Davis, Committee Hansard, 14 April 2008, p. 30.

Additional comments from the Australian Greens Senator Rachel Siewert

[1]        For example, United Nations Special Rapporteur on adequate housing, Miloon Kothari, Mission to Australia, Preliminary observations, 2006

[2]        As discussed in Chapter 2 – including financial security, stability of social networks and engagement, connection to community, sense of control over one's environment, enhanced of self esteem, continuity of children's education and friendships ...etc

[3] Models of perpetually affordable homeownership: report and case studies form the United States of America. URC. June 2008.