Today in Parliament, Abigail called out Labor's shameless self-congratulatory motion purporting to make first homes more affordable, while actually driving up prices and making the market even more inaccessible.
Abigail said:
I contribute to debate on the motion as The Greens' Treasury spokesperson. I state at the outset that our patience is wearing thin with self-congratulatory motions. It appears tone-deaf for Government members to congratulate themselves when people across the State are doing it so tough on issues like the one the motion relates to. They should make policy decisions in order to better people's lives, not so they can move motions to congratulate themselves later. Nevertheless, let us look at the substance of the motion and what is, in The Greens' view and that of most clear-thinking economists, a wrongheaded idea of the value of first home owner grants and subsidies. First home owner grants do not improve housing affordability and never have.
Cash grants to first home buyers were first introduced by the Menzies Government in 1964. Several iterations followed at a Federal level under the Fraser Government, the Hawke Government and then finally the Howard Government. State and Territory governments have provided top-ups to the schemes over time under various models, including the current stamp duty exemptions. The basic premise of those schemes is that they lower the barrier or cost of entry into the housing market. Governments claim that the schemes increase the size of the group of people who are then able to become home owners. However, research has found that the schemes tend to accelerate the purchase of a home for those already planning to do so, rather than increasing the number of new entrants into the market.
Further, the schemes increase the purchasing power of first home buyers but tend to further inflate house prices in doing so. Demand-side policies that give more money for people to spend on housing end up increasing prices and may actually reduce the number of people able to buy a house and limit housing affordability. Finally, the research also suggests that the schemes tend to benefit existing home owners, who profit from increased property prices. That disadvantages first home owners, who are forced to pay more than they otherwise would have. I am getting sick of saying this, but nothing will actually change to make houses more affordable if we do not address the structural reasons for the housing crisis. We must make a massive and urgent investment in our stock of public housing, and we must stop helping investors to outbid first home buyers through massive tax concessions.
To recap, the evidence is that first home owner schemes, like the one the Labor Government is now patting itself on the back for, increase the price of houses for those who were already going to buy one, do little to increase the pool of those able to buy their first house, and instead make housing less affordable in the long run. I congratulate the Labor Party on doing that. I move:
That the question be amended by omitting in paragraph (3) "That the House congratulates the New South Wales Labor Government for assistance" and inserting instead "That the House notes that the New South Wales Labor Government assisted".
If amended on that basis, The Greens would support the motion.
The Greens amendment was agreed to.