MEET THE PRESS 4 APRIL 2010 INTERVIEWS WITH MINISTER FOR HOUSING AND THE STATUS OF WOMEN TANYA PLIBERSEK AND ACOSS CHIEF EXECUTIVE CLARE MARTIN DISCUSSIONS ABOUT THE RISE OF FOREIGN INVESTORS IN THE AUSTRALIAN PROPERTY MARKET, THE AFFORDABILITY OF NEW AND RENTAL HOUSING, ESPECIALLY FOR FIRST-TIME HOME BUYERS AND THE DEMANDS OF AN INCREASING POPULATION, THE UPCOMING HENRY TAX REVIEW AND ITS IMPLICATIONS, THE PAID PARENTAL LEAVE POLICIES OF BOTH MAJOR PARTIES, AND THE SCHEMES IN PLACE TO ASSIST DISADVANTAGED COMMUNITIES IN THE NORTHERN TERRITORY AND FAR-NORTH QUEENSLAND. MEET THE PRESS PRESENTER PAUL BONGIORNO: Hello, and welcome to Meet The Press. While health and border protection have been dominating the political debate, housing affordability and the pressures of an exploding population are emerging as major issues. The government is aware of it - Kevin Rudd talking the talk early in the week. PRIME MINISTER KEVIN RUDD: Too many Australians are locked out of the housing market. Our government is taking action to turn around this particular challenge. Investing in infrastructure and reforming planning so we can build more houses and there are more affordable houses for working families. PAUL BONGIORNO: With the Reserve Bank warning interest rates are on the rise adding to would-be home owners‟ misery, the Opposition says Kevin Rudd has to wear the blame. OPPOSITION LEADER TONY ABBOTT: He wants them to think he is the economic genius who saved Australia. In fact, he saddled us with years of higher interest rates, higher taxes and higher debt. PAUL BONGIORNO: But Tony Abbott had his own reality check with the latest Newspoll showing the Coalition is back to where it was when he became leader. TONY ABBOTT: Running for government is tougher than running an ironman. PAUL BONGIORNO: Minister for Housing and the Status of Women Tanya Plibersek is a guest. And later, ACOS takes aim at welfare reforms – Clare Martin joins us. But first, what the nation's papers are reporting this Sunday April 4. The „Sunday Age‟ reports „Rudd Flips on „Big Australia‟. Just months after declaring himself in favour of growing population, the Prime Minister will consider slashing Australia‟s annual migrant intake to help tackle concerns about housing, traffic congestion and the environment. The „Sunday Telegraph‟ has „Foreign Property Buyers Probed‟. A foreign investment watchdog has started 50 investigations into suspicious residential property purchases by foreigners as part of a crackdown. The „Sunday Herald Sun‟ reports „Refugee On Smuggling Charge‟. An Afghan who worked as an interpreter at Christmas Island has been charged with illegal people smuggling from Indonesia. The „Sunday Mail‟ says „Coal Carrier Runs Aground East of Great Keppel Island‟. Maritime emergency authorities are scrambling to deal with a Chinese-registered carrier that‟s run aground off the Queensland coast. There‟s a hole in the lower hull of the vessel. And it‟s welcome to the program, Tanya Plibersek. Good morning, Minister. TANYA PLIBERSEK: Good morning, Paul. PAUL BONGIORNO: Well, that crackdown on foreign property investors - why has it become necessary now? TANYA PLIBERSEK: Well, the rules for foreign property investment essentially have not changed in recent years. The rule is that if you are a foreign investor, you can buy a new property so you‟re adding to housing stock. If you are a temporary resident, you can buy one property but you have to live in it. However, we have heard recent stories of increased activity in this area so we are interested to ensure that people are following these rules and following them properly. PAUL BONGIORNO: There is a view… TANYA PLIBERSEK: There is the capacity…sorry, go on, Paul. PAUL BONGIORNO: Well, there is a view, especially in Melbourne, that Chinese investors are pushing up prices. There was a report in yesterday's papers that a student bid $1.8 million for a house. TANYA PLIBERSEK: Well, that‟s why we have to make sure that people are following the rules properly. If they are not following the rules, the penalties are that the property can be confiscated and people can be fined and even jailed if they‟re not following the rules. We need to make sure that they are. There is not lot of statistical evidence that this is a problem but we are hearing a lot of stories, anecdotes that this is the case. So we are investigating this area to make sure that people are following the rules properly. PAUL BONGIORNO: In the figures that I saw reported in the papers, there‟s only 1.5% of property ownership is in fact owned by foreigners. This does seem to be right at the margins, doesn‟t it, despite the appearances? TANYA PLIBERSEK: Look, it is - statistically - a relatively very small amount. We think that the most recent figures in January were about 1.6%-1.7% of new property was going to foreign owners and that‟s well within the historical range. It is usually between 1.5 and 2%. So it seems that the figures aren‟t changing a lot, but, Paul, you said earlier that people are talking about overseas investors bidding up particularly high-end property prices. We need to make sure that this is within the rules and we‟re asking the Foreign Investment Review Board and Treasury to ensure that‟s happening - that people are within the rules. PAUL BONGIORNO: Minister, isn‟t it a fact that in this country, due to our tax laws, that basically property is a tax haven? For example, we have negative gearing which encourages investors into property and, of course, we exempt the principal place of residence from capital-gains tax. Until we take this head-on, we‟re going to see property prices continue to boom, aren‟t we? That is the real problem. TANTA PLIBERSEK: Well, it has been traditional in Australia that we exempt the family home from capital-gains tax because we‟ve always wanted to encourage home ownership in Australia. We see that there is an economic as well as a social benefit for ordinary people being able to afford an ordinary home in Australia. With negative gearing, we do have a shortage currently of rental properties right around Australia. A comfortable level of rental vacancy is around 3%. In most capital cities, we are well below that 3%. In plenty of places, we are below 2%. So we do have other measures in place to increase the stock of rental properties – our national Rental Affordability Scheme. 50,000 new affordable rental properties across Australia. But whenever we are talking about tax changes, as we are with Henry, we need to look at the social effects of any proposed changes and we do think encouraging home ownership, not over investment in property, but home ownership and investment in affordable rental are both good social and economic aims for the long-term. PAUL BONGIORNO: Well, the Reserve Bank governor had some timely warnings during the week. Here is what he said. RESERVE BANK GOVERNOR GLENN STEVENS: (Wednesday) We cut interest rates to what we call „emergency settings‟ when we had an emergency, when we thought we really were going to face a big downturn. I think it is a mistake to assume that a riskless, easy guaranteed way to prosperity is just to be leveraged up into property. PAUL BONGIORNO: So, Minister, do you accept that interest rates are on the way up and this will make housing even less affordable for especially first-time buyers, won‟t it? TANYA PLIBERSEK: Well, look - interest rates at the moment are the same as they were in the 1970s. They are still at those emergency lows that the governor was talking about. It is likely over time that they will increase, of course. And when people are considering buying property - or borrowing money for property - they really do need to do their sums very carefully. I am not a financial adviser but I think a common-sense approach is to leave quite a bit of fat in the family budget and anticipate interest-rate increases. I think that‟s just a common-sense approach. PAUL BONGIORNO: Are you keeping your fingers crossed for next Tuesday when the Board meets? TANYA PLIBERSEK: Oh, look, we never like to see interest rates go up because we know that every time they do, it is a bit more stress on the family budget. But it is worth remembering that interest rates are at 1970s lows right now. On a $300,000 mortgage, people are paying about $6,500 less now than they were 18 months ago - per annum, obviously. So given that they are at such low settings at the moment, people should expect over time – I‟m not saying next Tuesday – but should expect over time that they will increase and people who are thinking about buying do need to factor that into their calculations. PAUL BONGIORNO: Time for a break. When we return with the panel – we‟re struggling to house 22 million people - how about 40 million? And trouble seems to follow Barnaby Joyce, whatever portfolio he‟s in. Tony Abbott forced to mop up after this effort on Tuesday. BARNABY JOYCE: (Tuesday) Maybe that is how they‟re going to reboot the economy. If they burn down enough houses, we can reboot the economy by building them again. These people do actually read the Productivity Commission Reports. I don‟t know – I use them when I run out of toilet paper. TONY ABBOTT: (Wednesday) I think it was, er…sort of a joke. PAUL BONGIORNO: You‟re on Meet The Press with Housing Minister Tanya Plibersek. And welcome to the panel, Sandra O'Malley from Australian Associated Press, and Marius Benson from ABC News Radio. Good morning, Sandra and Marius. BOTH: Morning, Paul. PAUL BONGIORNO: Australia leads the developed world in population growth and domestically Queensland leads the way. State Premier Anna Bligh is worried enough to have held a summit on it. QUEENSLAND PREMIER ANNA BLIGH: A city the size of Darwin moves to Queensland every year and 70% of it arrives in the south-east corner. PAUL BONGIORNO: The summit was told 10,000 people equals 3,600 houses. There are other economic benefits and challenges but yesterday the Prime Minister announced a new Population Minister to devise a policy into the future – the Opposition unimpressed. TONY ABBOTT: (Saturday) And it‟s very hard to have a population policy if you haven‟t got a border-protection policy. MARIUS BENSON: Minister, does Tony Abbott have a point? It‟s one he often hammers. If you can‟t determine how many people are coming into Australia, how can you have a policy about the number here? TANYA PLIBERSEK: Well, I‟m not surprised Tony Abbott is being negative about this – he‟s pretty much negative about everything. But we do think it‟s very important to plan our population in the future. There are a number of things that we need to take into account when we‟re considering population growth. Housing – my area – is obviously one of them. But the other social and hard infrastructure that supports that population growth - roads, railway lines, new town centres and how we distribute our population across the country, whether we extend the urban-growth boundaries of our cities, whether we increase urban density in our cities, whether we develop new satellite towns – whether we concentrate our population in those growing regional centres that have so much to offer. All of these things are very important considerations - the type of immigration that we have, the skills that we focus on and whether we need increased or decreased migration over time - how our environment copes. These are all the sort of issues that Tony Burke will be discussing with State and Territory colleagues and other ministers within the Commonwealth and I‟m sure local government that deal in a lot of these distributions as well. MARIUS BENSON: On that central point of pure numbers, it‟s been reported the government‟s considering cutting the immigration intake. Is that right? TANYA PLIBERSEK: Well, the Prime Minister yesterday said that we expect lower population growth over the coming 40 years than we‟ve had over the past 40 years. But I believe – and the government position is - that migration should be determined by what is in the best interest of Australia year-on-year. And there are some years that we have needed, particularly in recent times, to see people migrating for skills-shortage reasons, particularly during the time of the mining boom when the Howard Government had invested so little in training Australians and we had emerging skills shortages. When we don't have those requirements, it makes sense to moderate immigration intake. But those decisions have to be made on a year-by-year basis determined by what is in the best interests of our nation. MARIUS BENSON: Can I just quickly return to housing just for a moment? When Paul asked you about capital gains and the negative gearing, they have always been sacrosanct. You mentioned them in the context of the Henry Review. Are they in the mix for change in the Henry tax review or are they untouchable? TANYA PLIBERSEK: Well, the Henry review is pretty broad-ranging and it does include housing, taxes… I obviously won‟t be pre-empting any release of the Henry Review or mentioning any response that the Government makes. But we understand that housing supply and they way that tax influences housing supply is the absolutely critical issue here. I mean, the key to affordability in Australia is we haven‟t been building enough houses for a decade now. We need probably around 180,000 homes each year just to keep up with demand, and we‟ve been building - in a good year -150,000- 160,000. We‟ve been falling short each year. Our measures - our National Rental Affordability Scheme to build new rental housing, our Housing Affordability Fund to bring down the cost of construction of new homes by paying for some infrastructure or helping with development-assessment times and thereby reducing holding costs. I mean, these are the measures that are going to help us contain housing affordability in Australia. It is increasing supply that‟s going to be the key to making sure that an ordinary Australian family can afford an ordinary Australian home into the future. SANDRA O‟MALLEY: Minister, a lot of these problems surrounding population have been with us for a very long time. The Prime Minister only announced the new Minister yesterday. Why has it taken so long to get to this point? Is the government just trying to keep this issue of the radar until after the election, given that a strategy will not come out until a year away? TANYA PLIBERSEK: Well, this is something that the Cabinet has been discussing for some time. You‟ve got to remember this Australian government is the first government for many years to invest in Australian cities. We have been prepared to come to the table for things like urban-rail infrastructure and other public-transport measures and other measures that make our cities more liveable places. I mean, there‟s been an indication from day one of the Rudd Government that we are interested in how people live together in this country. Not just how many people, but where they live - how they are dispersed across the country. A lot of our work in the infrastructure portfolio – a lot of Anthony Albanese‟s work in the infrastructure portfolio has gone directly to that. I know that this decision to appoint Tony Burke as Population Minister is one that‟s been considered by Cabinet for some time now and it comes out of a history of work that we have been doing in this area. PAUL BONGIORNO: Moving into the area of status of women, your other interest - Tony Abbott now believes he has brought the Coalition from behind the field to be in the box seat on work and family policy. TONY ABBOTT: The Coalition's paid and parental-leave policy disconcerted the Labor Party because they did not expect it. On this issue, at least, the Coalition is driving the political agenda from opposition. SANDRA O‟MALLEY: Minister, the Coalition is offering women 26 weeks' paid parental leave and Labor only 18. How do you sell this to women as a better option than what the Coalition is offering? And is the policy that the Government‟s currently got what it will take to the election? Is there any room to extend it when it comes to the Senate? TANYA PLIBERSEK: Well, look, I think the idea that Tony Abbott will even deliver a policy in this area is a long shot. He is the man who said during the time of the Howard Government that paid parental leave would happen over this government's dead body. I think people are rightly very sceptical. This is a policy that came just weeks after Tony Abott said no new taxes and it slugs very substantial taxes on the companies that are already most likely the ones to have their own paid parental-leave schemes. I think that there is a lot of scepticism amongst Australian women and in the business community generally that this will ever happen and happen in the form that Tony Abbott has said it will happen in. I think that the reason there has been so much support for the Labor policy is that it has comes out of a year of work of the Productivity Commission, hundreds of submissions – very considered submissions - that people have made. It is a guarantee to start next year and… SANDRA O‟MALLEY: Will the Government move to improve the Scheme if that is what it takes to get it through the Senate? TANYA PLIBERSEK: Well, we don‟t expect that there‟ll be opposition from the Liberals and the Greens and the minor parties in the Senate. This is a guaranteed laid-on-the-table… People can see a scheme that has been fought for for decades by Australian women and men. It can start on 1st January and people are making decisions right now about whether to have a family next year. That is the option that is available to the Australian Senate. Are they going to back the scheme or stand in the way of a scheme that will deliver what Australian families have been fighting for decades - a paid parental-leave scheme? PAUL BONGIORNO: OK - thank you very much for being with us today, Tanya Plibersek and have a good Easter Sunday. TANYA PLIBERSEK: Thank you. PAUL BONGIORNO: Coming up, Clare Martin from ACOSS takes issue with the Rudd Government‟s tough-love policies, while syndicated cartoonist Zanetti links the housing shortage to boat people. (READS) “Lucky for us we got into the housing market before the boom.” PAUL BONGIORNO: You‟re on Meet The Press. The Rudd Government has disappointed many of Australia‟s welfare agencies by maintaining the previous government's income-management policies and now proposing to extend them beyond the Northern Territory. But Minister Jenny Macklin says families – and especially mothers - have urged her to keep the regime which quarantines payments from alcohol. She won strong support from Cape York indigenous leader Noel Pearson. NOEL PEARSON: (Wednesday) When you see community-store sales of vegetables and food, clothing, shoes and so on – when you see those sales double and triple, you know that you are on the right path. PAUL BONGIORNO: Welcome back to the program, ACO…Chief Executive of ACOSS, Clare Martin. I‟m swallowing my tonsils today. CLARE MARTIN: Paul, good morning. Happy Easter. PAUL BONGIORNO: Well, it‟s very hard to argue with Noel Pearson, isn‟t it? CLARE MARTIN: Noel Pearson‟s talking about a quite different scheme. It‟s actually a scheme that targets those who are at risk, who may be sending their children to school and it‟s one that you work with that individual through a number of processes before anything like income management comes into place. The one that Jenny Macklin is talking about is quite different. It is a mandatory scheme and it works in a very different way from the one that Noel Pearson‟s talking about. PAUL BONGIORNO: But I understood that Mr Pearson and the Minister indeed were talking about extending the Northern Territory income- management scheme. It‟s the same scheme? CLARE MARTIN: It is a different scheme in North Queensland – it‟s a very different scheme. The one in the Northern Territory will apply if you are on youth allowance, unemployment benefit or if you‟re a single parent. It will apply regardless of whether you are considered a person-at-risk or your family‟s at risk. It applies across the board. That is the big argument that you‟re hearing from the sector that I represent. It‟s not just the sector I represent. It is a very heavy-handed and broad-brush approach and what we would support is a much, kind of, targeted approach where you identify people who are at risk and put the effort there. SANDRA O‟MALLEY: Ms Martin, as Chief Minister of the Northern Territory, you would have seen first-hand a lot of the dysfunction that goes on in some of these families - children going to school without meals because the family budget‟s going on alcohol or gambling. Isn't it impossible to argue against a program that could actually help these children? And with a voluntary scheme, isn't there a risk that the people who most need it would fall through the cracks? CLARE MARTIN: What we‟re arguing is that those who are at risk – that‟s where our effort should go. If you look at the services provided by the non- government sector by government, it is, I think, fairly easy – or it can be done - to target those who are at risk. This is a scheme that targets everybody regardless of risk, regardless of how well you‟re managing your money. If you are on unemployment benefit, do you know what you get, Paul? PAUL BOMGIORNO: Well, it is around $230 per week, isn‟t it? CLARE MARTIN: It just went up. So $230 a week - just managing on that, I think you deserve an award for managing on that. You don't need to have the Government come in on top of that to manage what you‟re going to do with the funds you have got. MARIUS BENSON: But when you look at unemployment, you say there should be an increase in unemployment. But when the Government looks at the electorate, it sees the taxpayers that are providing the money for that unemployment and they talk about a policy of „tough love‟ perhaps - and taxpayers want governments to be tough about giving out the taxes they are paying. CLARE MARTIN: Well, currently, if you look at the requirements if you are on unemployment benefits like Newstart, we have some of the toughest requirements on those who are on Newstart, Youth Allowance and single- parent allowances of the OECD. So it‟s not as though people who are getting those benefits can simply just sit around doing what they want. They have to apply for jobs, there are compliance requirements and they can be breached – they can lose those payments. If you go to the heart of what this is about, it‟s very expensive. I mean, we're talking taxpayers dollars, Marius. In the Northern Territory, when it starts to apply from July, it will cost $4,400 per head to put this in place. That compares with the $500 that is spent to help someone unemployed each year get a job. So why spend all that money? It is a waste of money to me. It is not targeted. Let‟s use those funds – is they‟re available - to really assist those Australians who are in need. MARIUS BENSON: But aren‟t you ignoring a very strong view put by Noel Pearson and others that this is the way to go? That this sort of guidance, this sort of quarantining is the best way – not just in terms of using the public purse but in terms of benefiting the communities? CLARE MARTIN: As I said, the scheme in far-north Queensland is a very different one to the one that‟s being applied in an income-management sense in the Northern Territory. And then possibly applied right throughout Australia to areas that the Minister decides are disadvantaged. So let's look at where we‟re spending money, how we‟re spending money and really target those kind of dollars to Australians who are at risk, who have families that are at risk. SANDRA O‟MALLEY: Ms Martin, as an organisation that target‟s the poorest of the poor, are you at all bothered by some of the debate around asylum seekers and refugees? Tony Abbott said he will do whatever it takes to keep them out of Australia. Are we just demonising these people who are simply seeking a better life? CLARE MARTIN: I think it is one of the most alarming debates or potentially alarming debates we have in this country. We have seen how divisive issues like this can be in the past. I think it‟s very important that we have to recognise the reality. We do have asylum seekers and I think it is very important for our political leaders to keep the debate at a reasonable level, to not be emotive. They must manage asylum seekers coming to Australia in a both effective and humane way. PAUL BONGIORNO: Just briefly before we go, do you feel that if they do lift the unemployment rate, that some people will see it as a signal that we don't mind dole bludgers any more? CLARE MARTIN: Oh, Paul, the rate has gone up from $228 to $232. And certainly, it‟s way below, if you‟re on an aged pension. And when you talk to people who are on an unemployment benefit, they are poor – they are really struggling. And if they‟re in private housing, then often two-thirds of that income will just go on a roof over their heads. They have got maybe $20 or $30 each week to spend on food. PAUL BONGIORNO: OK. Thank you very much, Clare Martin. CLARE MARTIN: Thanks, Paul. PAUL BONGIORNO: And thanks to our panel, Marius Benson and Sandra O'Malley. A transcript and a replay of this program will be on our website. Next week you will be more interested in Tiger Woods than politics, so until the following week, goodbye.