Matters of public importance
Danny O’BRIEN (Gippsland South) (16:41): I am pleased to rise to speak on this matter of public importance (MPI). Indeed I thought all my Christmases had come at once when I saw the matter of public importance come across yesterday. I thought, ‘Surely the government is not going to get up and try and brag about what wonderful things it is doing on housing.’ As the member for Polwarth has indicated, there are many, many, many failings of the government on housing. And as we heard in question time on the issue of crime, there are a lot of things that government is going to do or the government says it has done, but there are not many actual outcomes that are improving things for Victorians, particularly when it comes to housing, including in regional Victoria, where housing is just as big an issue as it is here in metropolitan areas.
I want to start with a little bit on local things and on social housing, because we hear a lot from this government about social housing and what it is doing. The member for Polwarth referenced the Big Housing Build. Five billion dollars, we were told, would build 12,000 homes. The stats from the electorate of Gippsland South cover the three local government areas in Gippsland South, which include Latrobe city, which my colleague the member for Morwell will be aware of. There are currently across those three local government areas – South Gippsland, Wellington and Latrobe city – 19 fewer homes now than there were in 2018. So for all the money being spent by this government on social housing, we have actually got less. And that is not even going to the issue of how many bedrooms there are, as the member for Polwarth highlighted. That is a serious issue.
The member for Polwarth and I were both on the Public Accounts and Estimates Committee (PAEC) for a number of years, and we heard a lot from the former Minister for Housing about the Big Housing Build – ‘12,000, 12,000, 12,000, 12,000’, we heard; 15,000 at one stage. But it took two or three years before I think the former Speaker eventually acknowledged: ‘Well, no, that’s not actually going to be all the new houses; that’s just the ones we’re going to build.’ And we have seen that in the statistics. Somewhere like Latrobe city, which actually needs additional public housing, is going backwards, and I am sure places like Mildura and Shepparton will tell you a similar story. On the private housing side of things, again in Gippsland South, there were 312 less rentals between June 2018 and June 2024, and less than half of those were considered affordable. That is the result that we are getting from this government because of the many things that it is doing or failing to do.
I pick up the specifics of the MPI – that this house supports the Labor government’s target of 800,000 homes over 10 years. We probably all support the target. It is easy to set a target; actually delivering it is the important thing. But what I want to pick up on is the next line, which says ‘the reforms underpinning it’. I would perhaps ask the member for Werribee or any future speakers which reforms they are referring to. Are they referring to the increases in land tax? Are they referring to the reduction in the threshold for land tax, from $300,000 to $50,000 – a temporary reduction, I might add, a temporary COVID debt reduction, that lasts for 10 years. I mean, your child born today will be in grade 5 before this temporary reduction is dealt with. Is it the vacant residential land tax – is that one of the reforms underpinning their growth in housing? Is it the short-stay tax? Is it the windfall gains tax? Is it one of any of 63 new or increased taxes introduced by this government, half of which are on our property?
Jade Benham interjected.
The SPEAKER: I remind members that if they are not in their place they cannot interject.
Danny O’BRIEN: That does seem to be the view of this government, member for Mildura, that landlords are evil. But we cannot call them landlords; they are rental providers. But the problem is, as I have just provided to the house, they are not providing many rentals anymore, and there is a very good reason for that – because they are feeling the pinch.
I have used this example from my electorate a couple of times before, but I got an email several years ago from some constituents, a couple who are retired teachers. They are not land barons. You would not call them landlords at all – retired teachers. They have got three or four units in Sale. Their land tax last year had gone to $2775. Two years earlier it was $385. That is the increase in land tax they had found, which is just a massive, massive increase. These are people that deliberately go out of their way to try and get tenants who are single mums or pensioners. My constituents – as I said, they are retired teachers. We desperately try and keep the cost down. They wrote to me initially about the increase in costs of being a rental provider from having to meet all the new requirements that the government brought in 2021. That year, when they had to get all their rental properties up to scratch, literally that cost half their rental income that year. So it was virtually wiped off, because of course once they factored in rates, electricity, other services and interest rates, they were not going to make any money out of that. And that is repeated across the state time and time again.
As we are travelling around, we talk to investors, we talk to real estate agents. They are just aghast at the policies that this government is taking, and they are voting with their feet and moving away. I think I am right in saying the member for Gippsland East has told the story – he might have even said it in here. He went to Queensland last year and was talking with a –
Richard Riordan interjected.
Danny O’BRIEN: He probably did go fishing, member for Polwarth. He was talking to a real estate agent who said, ‘Whatever you’re doing down there in Victoria, don’t change anything, because all the Victorians are coming to Queensland and bringing their money up here and buying investment properties.’ That is not a surprise. Why would you invest in Victoria when you are just going to get tax after tax after tax?
Of course there is another big one coming with the emergency services tax, and I say ‘coming’ because we have already got the hit now on residential properties and on commercial properties. We have had a doubling of the rate for the emergency services tax. But next year a new tax is coming in on non-principal primary residences, and that is in the budget papers. There was a jump up in the projections of what the increase would be, from around $620 million to $800 million. We asked in the other place during the debate on this what that jump up is: ‘Is that just valuation increases, Treasurer?’ And the Treasurer said, ‘No, that’s the introduction of the non-principal primary residence tax.’ So there is a new increase coming that is going to massively impact on landlords and rental providers – $500 million over the next three years. This government – these economically inept people on that side – do not understand how this has an impact on renters, because that will be passed through. For all the things that I have just said, all the things that rental providers have had to deal with over the last couple of years, this is an additional one. They do not have the capacity to absorb that anymore. They cannot just absorb that.
When we asked the then Treasurer, the former member for Werribee, about this in PAEC two years ago, I said, ‘How does this increase in the COVID debt levy land tax flow through to rents that renters are going to have to pay?’ ‘No, not an issue, Mr Previous HitO’BrienNext Document. That is not an issue at all. We believe there are other factors that influence supply, not the taxes.’ So for people like my constituents who saw their land tax in three years go from $385 to $2800, apparently that has no impact on their decision to continue to invest in rentals.
So this is not about impacting landlords – and absolutely it is, because they are walking away – but it gets passed on. Yet we hear from those opposite and we hear from the economic illiterates up the back there in the Greens that we have got to do something to reduce the cost of rent. It is just not happening. Indeed the National Shelter and SGS Economics & Planning rental affordability index released in November showed that in regional Victoria rental affordability fell to record lows last year after 10 years of this survey going out. It is just not affordable. The average rental household in regional Victoria are now paying 28 per cent of their gross income, which is rated as moderately unaffordable. Well, I am not surprised when landlords are taxed like this, when developers are taxed like this so that there is no incentive and in fact there is a disincentive to actually build new homes or put more rental properties on the market. That is why you have a failure. That is why you have unaffordable housing, and most of it can be sheeted back to these economic illiterates on this side.
The SPEAKER: I remind members that if they are not in their allocated seats it is inappropriate to speak.