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Transcript 16119

Joint Doorstop Interview with Housing Minister Tanya Plibersek, ACT Chief Minister John Stanhope and Managing Director Housing Industry Association Ron Silberberg

Photo of Rudd, Kevin

Rudd, Kevin

Period of Service: 03/12/2007 to 24/06/2010

More information about Rudd, Kevin on The National Archive website.

Release Date: 15/09/2008

Release Type: Interview

Transcript ID: 16119

PM: Well thank you ladies and gentlemen for being here and to be here with the Chief Minister of the ACT and of course with our friends from the Housing Industry Association and also with Tanya Plibersek, the Housing Minister.

The Government is committed to building an Australia for the future where the great Australian dream of being able to own your own home is kept alive. Part of that is the debate we had a year or so ago as an alternative Government on the whole question of housing affordability.

And back in opposition we convened a housing affordability summit and at that housing affordability summit in which the Housing Industry Association participated, we went through many of the supply side problems in dealing with the housing affordability crisis.

On housing affordability, the basic fact we need to be aware of is this: that back in 1996, your average cost of buying a new home represented some four times the average annual wage.

By the time we reached the election at the end of last year, it was 7.5 times the average annual wage. That is a huge impact on your ability to turn the great Australian dream into a reality. So we had a discussion with our friends in the industry about what you do about that.

And two of the responses that we have developed on the supply side go to, how do you increase the overall stock of affordable rental accommodation, and the Ministers have been talking about that recently with our new National Rental Affordability Scheme. And on top of that, how do we also deal with the actual costs of new developments like this which are being released? And that goes to our National Housing Affordability Fund.

What we are announcing today is, we are launching the Housing Affordability Fund itself. This is a half billion dollar program to reduce the costs of families buying a new home in a new development. The scheme, this half billion dollar scheme, is now open for business. This half billion dollar scheme means that local authorities and others around the country can put in their submissions to become partners with us in this scheme.

What happens on the ground? The idea is this: as we said last year, to come up with a scheme which enables us to bring down the cost of a new development or a new house in a development such as this, by up to $20,000.

That is, up to $10,000 in terms of the actual direct contribution by the Commonwealth with participating local authorities and others on the infrastructure charges which go into a new development.

And on top of that, part of the deal is to reduce the holding costs on a new house as well so that the local authority will enter into an agreement with the Commonwealth to say that they can speed up the development approval process, bring down the holding costs and therefore bring down the overall costs of the new house as well. Again by a further, up to a further $10,000.

This is a practical set of measures to bring down the costs, the on costs, the infrastructure charges and the holding costs on new houses in new developments like this.

And the challenge is this: to make it work. To make it work for families out there so that the dream of owning your own home becomes more of a reality.

Can you just add to this, Tanya?

PLIBERSEK: Thank you, Prime Minister.

Look, it's terrific to be here today to launch the Housing Affordability Fund application process.

We've already contributed $30 million of this money to an electronic development assessment process. So the Housing Affordability Fund has already been active in changing an eighteenth century paper based development system to a 21st century electronic development assessment system. But today's launch is the ability for local councils, State Governments, developers and partnerships of those organisations, to make applications to the fund.

In an area like this, a Greenfield site, a local developer might partner with a council and say that we believe if the Housing Affordability Fund can contribute $x million, we can bring down the cost of a new home by $10,000 or $20,000. The local council might say, ‘well that's terrific, instead of taking a year to approve that development, we'll take six months', and that saves you another $5,000.

So by working together with developers and different levels of Government, this Housing Affordability Fund will make a major saving for young Australians, particularly those buying entry level modest homes.

This is only part of the Government's housing affordability agenda. A National Rental Affordability Scheme is designed to help people renting homes for 20 per cent less than the market rent. We've also got our First Home Saver Accounts, which will be operational in October. We've got major banks and a number of financial institutions that are very enthusiastic about offering our First Home Saver Accounts. Our housing supply council and our measures for homelessness are also being developed and announced and released at the moment.

We're here today with the Chief Minister of the ACT, who might want to say a few words as well.

STANHOPE: Thank you Prime Minister. Just to support this fantastic initiative to acknowledge that it is about partnerships. Partnerships working, partnerships between different levels of Government. And for the States, Territories and local councils, there are of course significant embedded costs.

Costs in development, major infrastructure costs in any development such as this - the roads, the sewage, but also the community facilities, the infrastructure which every new development drives, new schools or libraries, or other community facilities. And a program, a project, such as this acknowledges and recognises the role which all levels of Government play. It is about a partnership.

The Commonwealth has a capacity to contribute and to be part of the resolution of this overwhelmingly complex issue of housing affordability. As the Prime Minister has said, this remains the great Australian dream and it's a dream that many Australians unfortunately have seen perhaps more difficult to attain and through initiatives such as this, the prospect for partnerships that this project raises that many more Australians, many more Canberrans in my instance who perhaps have felt the enormous frustration of their capacity to enter the housing market, now perhaps will see a greater opportunity through this particular announcement and the other aspects of the Commonwealth's housing affordability package.

So, it's great to be here, I endorse it absolutely, it is about Governments working together to resolve issues that all Australians face and there is nothing more important than this issue of owning one's own home, and that great dream that we have for ourselves and certainly for our children and our grandchildren.

PM: (inaudible)

SILBERBERG: Thank you Prime Minister, Tanya Minister for Housing and Chief Minister of the ACT. HIA is delighted to have been invited to participate a the launch of the Housing Affordability Fund. The Housing Affordability Fund is the third major election commitment by the Government which is aimed at improving housing affordability.

HIA recognises that closing the housing affordability gap is something that will take a period of time. But thankfully both the Prime Minister and the Minister for Housing are determined and passionate about addressing the housing affordability challenge. And on behalf of HIA I would like to acknowledge our appreciation to both the Prime Minister and to the Minister for Housing.

Quite rightly the Housing Affordability Fund aims to improve the supply of new housing and it does so by offering financial incentives primarily to local government to improve planning approval processes and importantly to bring down the costs of social and community infrastructure which currently is embedded in the price of new housing.

The Housing Affordability Fund provides in excess of half a billion dollars for that purpose. The new home purchaser will be the fundamental beneficiary of savings that will be passed through as a consequence of the Housing Affordability Fund.

HIA agrees that the potential savings represent about $20,000 off the cost of a new house and land package. Will the Housing Affordability Fund reduce the value of existing real estate? No it will not. The fund will ensure that local government is provided with funding support for community and social infrastructure that currently is paid for typically out of new residential development charges.

So all local residents will have the benefits that flow from having the community and social infrastructure facilities and services that they will be paid for in part through the Housing Affordability Fund.

HIA is pleased that the Commonwealth has recognised that it has a part to play in contributing towards the funding of social and community infrastructure in new residential developments. And hopefully the Housing Affordability Fund will form part of a bridge to a deeper Commonwealth engagement in supporting the provision of social and economic infrastructure in our major cities and regional centres - infrastructure that is vital to the effective operation of a modern community.

Each of the Federal Governments housing policy initiatives are innovative, they are novel and as with any new programs that break new ground it is possible that there might be some tweaking required to ensure that the programs have cut through and that they are effective. But HIA believes that we have in our Federal Government Ministers and the Prime Minister who are committed to ensuring that these initiatives will be effective.

So HIA is delighted to support this initiative and we look forward to continuing a close working relationship with the Federal Government.

Thank you.

PM: Thanks very much Ron and just before I turn to your questions to finish where Tanya left off. This is one more than $2 billion worth of initiatives on housing affordability and its really important, because its all about making sure that young Australians in particular get access to their own home. And I simply say in the past we didn't have a Housing Minister, we have got one now. In the past there wasn't a housing policy well we have got one now. We now have $2 billion worth of new programs.

First Home Saver Accounts, National Rental Affordability Scheme, together with this new Housing Affordability Fund and the other measures which Tanya referred to before.

Over to you folks.

JOURNALIST Prime Minister as you pointed out during the campaign as well it used to cost 4 times the annual income to buy the average home, now 7 times. What do you think would be an appropriate measure given the ratio that you are using and how long will it take for you to achieve the sort of level that you are after?

PM: Well I think where we would like to get to is to bring that down over time. I can't put a number on that, but what I do know is if you just put it at arm's length and say not my problem its just going to get worse. And so therefore the overwhelming presentation to us by industry 12 months or so ago at our summit on housing affordability was you need to match demand side measures with supply side measures.

So on the demand side measure we have First Home Savers accounts to enable people to save enough for a deposit, that helps. But on the demand side measures what do we do to pump out more affordable rental accommodation - 50,000 units of affordable rental accommodation is a large commitment and that's what comes of the $600 million plus fund which Tanya has been talking about recently. And this helps with new housing developments like this.

None of these represents the total solution. But what I am signalling loud and clear as Prime Minister of Australia is that we want to tackle the housing affordability crisis for Australian families. It has got out of control and we need to start bringing it back under control.

JOURNALIST: (inaudible)

PM:Well you know something there is a housing market out there and the Government doesn't seek directly to interfere in the housing market.

What can Government do about housing affordability? One, create responsible economic policies which enable the Reserve Bank to take decisions to bring interest rates down, that's one thing. And after ten interest rate rises in a row under the previous Government, it's good at last to have seen some crack of light on that.

The second thing you can do is to intervene on these supply and demand side measures that I've spoken of. The alternative is simply to say, ‘not my problem, not my responsibility, not my concern, you go out and look after yourselves entirely'. As I've said before, and I think Ron has said as well, this is part of a response. And obviously there is a housing market out there which will be driven by its own, you know, factors as well. But this is part of a response aimed at making housing, in particular for first home buyers, but not exclusively, more affordable than it currently is.

JOURNALIST: Mr Rudd, Peter Costello says that you're a boring Prime Minister. He says he could have beaten you last year. Do you have any response to that?

PM: Oh look, I think the Liberal Party leadership is a matter for those guys. It's kind of like a rolling three ring circus between Mr Costello, Mr Turnbull and Dr Nelson. I saw there was some flattering things said about me also by Mrs Costello. And, can I just say, I've met Mrs Costello a few times, I think she is a lovely lady, and I understand her sticking up for her man.

JOURNALIST: (Inaudible) being a bit mean spirited if you vote down the Opposition's bill to raise the single aged pension?

PM: I think the challenge here is after 12 years of neglect the Liberals come up with a short term measure which leaves 2.2 million carers, widows and the disabled with nothing. Our approach is long-term proper reform. That's what we're embracing on top of the measures we brought in through the last Budget. And we intend to do that.

JOURNALIST: (Inaudible) helping the worst off first?

PM: The 2.2 million carers, widows and the disabled, those who miss out all together from this particular measure, also need help. And that's why we're being properly considered about this.

JOURNALIST: Prime Minister, is the New South Wales Labor Party doing a good job for the people of New South Wales?

PM: The people of New South Wales are saying loud and clear to the State Government of New South Wales that they have a very short time indeed to get their act together. That's my view as well.

JOURNALIST: (inaudible) will the Government be looking to make concessions with Family First Senator Steve Fielding?

PM: Senator Fielding as I understand it has requested to see the Treasurer today on the Luxury Car Tax. Remember on the Luxury Car Tax, here you have the Liberals voting for Porsches against public transport, voting for Porsches against pensioners. That's what it is.

Senator Fielding has requested to see the Treasurer today. I am sure they will have a good discussion. But as I say, if we are going to engage in long term reform for the nation on urban congestion in our major cities, on reform to the pension, it is going to cost a lot of money.

And a half a billion for Porsche drivers around the country is something we could put to that purpose.

JOURNALIST: Prime Minister, Western Australia Labor has now lost there. Is it going to make your job of cooperative federalism that much harder with the Liberals (inaudible)

PM: I had a good conversation last night with the Premier elect of Western Australia, Colin Barnett. I congratulated him as I congratulate him again today on his becoming the next Premier of Western Australia. And as I said to Mr Barnett last night on the phone, I look forward to working with him on the big challenges that we have got to make the Federation work for the good of the country and for the good of the people of Western Australia.

Can I say, fixing the Federation goes well beyond party politics. And therefore I am looking forward to working with the new WA Premier and his Government. Practical things to do, and we intend to get on with the job.

Also, we confirmed last night on the phone that the next council of Australian Governments meeting will proceed as planned in Perth for early October.


PM: What I mean by that is that the people of NSW are just fed up with any Government which seems to be more concerned about itself than it is about the future of the state. And that goes for any political party, whether it is the Federal Liberal Party or the State Branch of the Labor Party in NSW.

Very simple question here, which is, are you going to get on with the business of providing Government and services to the people who need it, or are you going to get lost in your own internal goings on?

That is a message equally clear to the State Labor Government in NSW as it is to the Federal Liberal Party of Australia.

JOURNALIST: There were reports that you wouldn't give Morris Iemma the backing that wanted on privatisation (inaudible)

PM: I think what you need to know is that many press conferences I backed in the then Premier of NSW on the question of electricity privatisation. It was my position and remained my position.

Transcript 16119