Question time – Housing Affordability

October 1, 2014

Senator DAY (South Australia) (14:33): My question is to the Minister for Finance, Senator Cormann. I refer to my question last Wednesday about price gouging by state government land management authorities. I remind the minister that the forerunner to these authorities, the South Australian Land Commission, had in its governing legislation that land agencies were to be not-for-profit entities, and were to provide land to assist those in the community who were least able to afford to buy their own homes. The Financial Review today reports that the government is to abandon billions of dollars of budget measures because they are currently blocked in the parliament, leaving few options for budget repair—one of those being states and territories missing out on grants funding. If the government is exploring cuts to state grants, would it consider cutting funding to those states which are creating the most damage to the economy and to housing affordability by their price-gouging practices?

Senator CORMANN (Western Australia—Minister for Finance) (14:34): I thank Senator Day for that question. Let me just say right up-front, so that there is no misapprehension: the story in The Australian Financial Review today that, somehow, the government is retreating from various budget measures is wrong. The government remains committed to all of its budget measures and, indeed, many of our budget measures have already passed the parliament. We will continue to work with the Senate in relation to the important structural reforms required, for example, to ensure that our welfare system is put on a sustainable foundation for the future, and also that our budget is on a sustainable foundation for the future.

Having said that, we of course do recognise that housing affordability is an important policy issue. We also recognise that Senator Day has a particularly strong interest in this, and that he lives in a state with a particularly bad state Labor government which—like Labor governments are always known to do—goes for cash grabs wherever they can, including through the particular body that he has mentioned, in his question and before. Our focus here is this: our focus is on building a stronger, more prosperous economy, where stronger growth can, of course, create opportunities for people to get ahead and to get access to the housing market—but we are also mindful of the need for state and territory governments to do their bit as part of that cause.
It is difficult to see how housing construction can be part of closing the gap completely, because housing construction is already in the middle of an upswing, with dwelling investment forecast to grow by 7½ per cent in 2014-15. All states and territories have agreed to implement the recommendations of the Housing Supply And Affordability Reform report, which aimed to make development and other regulatory processes more efficient. We certainly call on the South Australian state government to do their bit in implementing those recommendations.

Senator DAY (South Australia) (14:36): Mr President, I ask a supplementary question. Given the economy- wrecking distortions wrought by the land development sector, in cahoots with state and territory land management authorities, to the tune of $600 million gouged by these agencies in the last reporting year, will the government:

(a) ask the ACCC to investigate state land management agency price gouging, or (b) if the ACCC will not act, amend their legislation to require them to do so?

Senator CORMANN (Western Australia—Minister for Finance) (14:37): The ACCC is an independent statutory authority responsible for enforcing the Competition and Consumer Act 2010. The Competition and Consumer Act prohibits anticompetitive practices, including misuse of market power, price fixing and other collusive conduct. If there is evidence of anticompetitive practices, the ACCC is able to investigate and take action through the courts where appropriate. There are a number of avenues for people to raise concerns with the ACCC; however, ministers are specifically precluded from giving the ACCC a direction regarding the performance of its functions or the exercise of its powers.

As a government, we commissioned the Harper review, which, in its draft report, canvasses a wide range of issues, including planning and zoning issues. The draft report states:

Regulations relating to planning and zoning often restrict competition and impede structural change. Such restrictions can be addressed by including competition principles among the objectives of the various state and territory laws dealing with planning and zoning to ensure that competition issues are always considered.

Draft recommendation 10 is particularly relevant. (Time expired)

Senator DAY (South Australia) (14:38): I ask a further supplementary question. A landmark 2006 High Court decision firmly established that section 51 of the Constitution, the corporations power, could be used to address virtually any issue involving a corporation. In 2009, former Prime Minister Kevin Rudd addressed the Business Council of Australia vowing a federal takeover of planning powers. Would there be scope to use the corporations power to address price gouging by rapacious state government land management agencies?
Senator CORMANN (Western Australia—Minister for Finance) (14:38): Former—
Senator Wong interjecting—

Senator CORMANN: Senator Wong just cannot stop interjecting. I think that the Leader of the Opposition in the Senate is highly disorderly. On a point of order, the clock is already running and it should not be running.
Honourable senators interjecting—

The PRESIDENT: Order! We will reset the clock for Senator Cormann. I ask all senators to cease interjecting.

Senator CORMANN: I would say to Senator Day that former Prime Minister Rudd promised the world and delivered nothing. He promised to take over the world, he promised to take over hospitals and he promised to take over zoning laws. He is still working on taking over the world. Apparently he is somewhere in New York trying to take over the world, and I am sure that Senator Conroy is his numbers man on the United Nations Security Council in order to get him elected as the Secretary-General of the United Nations. Just because former Prime Minister Rudd promised something, you should not follow his lead, is what I would say to Senator Day.
What I would say on the more general point is that this government is actually not about centralising more power in Canberra. This government wants to make the federation work better, which is why the Prime Minister has initiated the federation white paper review process, through which we will seek to make genuine improvements in the way our federation operates. I would like to think that we will be able to find a way to better address the issues that Senator Day cares about. (Time expired)