Ministers for the Department of Infrastructure, Regional Development and Cities The Hon Michael McCormack MP Deputy Prime MinisterMinister for Infrastructure, Transport and Regional Development Senator the Hon Bridget McKenzie Minister for Regional ServicesMinister for SportMinister for Local Government and Decentralisation The Hon Alan Tudge MP Minister for Cities, Urban Infrastructure and Population The Hon Sussan Ley MP Assistant Minister for Regional Development and Territories The Hon Andrew Broad MP Former Assistant Minister to the Deputy Prime Minister The Hon Scott Buchholz MP Assistant Minister for Roads and Transport The Hon Barnaby Joyce MPFormer Deputy Prime MinisterFormer Minister for Infrastructure and Transport The Hon Dr John McVeigh MPFormer Minister for Regional Development, Territories and Local Government The Hon Keith Pitt MPFormer Assistant Minister to the Deputy Prime Minister The Hon Damian Drum MPFormer Assistant Minister to the Deputy Prime Minister Senator the Hon Fiona Nash Former Minister for Regional DevelopmentFormer Minister for Local Government and Territories The Hon Darren Chester MP Former Minister for Infrastructure and TransportFormer A/g Minister for Regional DevelopmentFormer A/g Minister for Local Government and Territories The Hon Warren Truss MP Former Deputy Prime Minister Former Minister for Infrastructure and Regional Development The Hon Paul Fletcher MP Former Minister for Urban Infrastructure and Cities The Hon Jamie Briggs MP Former Assistant Minister for Infrastructure and Regional Development

Transcript — 702 ABC Sydney, Drive with Richard Glover



25 October 2016

Topics: Housing affordability; US election

Richard Glover: The Monday Political Forum. Paul Fletcher is the Member for Bradfield and Minister for Urban Infrastructure in the Federal Government, Larissa Behrendt is the Professor of Indigenous Research at the University of Technology in Sydney, and Tim Williams is the CEO of the Committee for Sydney. Welcome to all three. Thank you very much. And now the Treasurer Scott Morrison calls on the states to do more to ease housing affordability, including measures to increase supply. But is supply really the problem, or is it more to do with the things the Federal Government could deal with itself, such as negative gearing and the demand from foreign nationals? And in Sydney anyway, could it be that help is already at hand with a hell of a lot of construction seemingly already underway. Tim Williams?

Tim Williams: I don't think that this error is Scott Morrison's alone. There's an international delusion that you can reduce house prices by building more of them. There's absolutely no evidence for this seemingly commonsensical proposition.

Richard Glover: Isn't it supply and demand?

Tim Williams: No, but it's the supply and demand of money. It's not just the supply and demand of bricks, and what's gone wrong with the—and it's a world problem—is that the asset price inflation arises from very cheap interest rates, number one, and the explosion of liquidity that we saw in the world system in the 1990s through liberalisation of banking. So I'm afraid it's just a wall of cash, and I can't see how any number of houses can absorb all that.

Richard Glover: Okay, I get what you were saying. If you build 10 houses, there's going to be somebody wealthy enough and with enough money that they want a park, they'll just buy all 10 of them.

Tim Williams: Inflation is always a disease of money. So I think that number one, it's about demand as much as supply. I think the second thing is we have- house prices are 13 times average salary in Sydney. What are people talking about when they talk about putting downward pressure by building more? That we get down to 12? It was five in the 1980s and ‘90s. How do you get down to that? And it’s really about dealing with this incredible liquidity that's flo- that's internationally floating around, where people are looking to cities to put international cash in, and there's never enough homes that's going to absorb that amount of money. So I don't think we look there. That's not to say we don't need more supply, but that's to house people, not to solve the affordability problem. The second thing is difference between housing affordability and affordable housing. This is where we should be putting our emphasis. We should be asking the development process and government land could be used to do submarket rental for people [indistinct] affordability. I don't think we can put the genie of housing affordability back in the bottle very easily.

Richard Glover: Okay, but you're saying if you're going to have a- if you're going to give someone a permission to do a development, you've got to say to them okay, but 20 per cent of these houses have got to be of the sort that can be afforded by our police officers and our teachers and our nurses.

Tim Williams: Yeah. I really strongly think so, but also government land. At the moment, government sells its land to get top dollar, doesn't re- doesn't even provide- offer affordable housing on its own land, so why do you expect private developers to do that? So look, this is a big civic conversation, but it starts with the understanding that house prices will rise not just because of housing supply, but because the availability of cash—there's never been so much cheap cash—in the world system.

Richard Glover: Paul Fletcher, Scott Morrison's saying if you could just release some more land and perhaps free the developers of a bit of red tape, you might have the answer or some of the answer to this problem. Do you think that's right, or do you think, as Tim says, it's part of a bigger picture?

Paul Fletcher: Well look, I think it's a terrific speech that Scott has given which really lays out some of the features of the housing market. The point that for example over the last 20 years we've seen a drop from 71 per cent to 67 per cent in the percentage of Australians who either own a home outright or have a mortgage on a home. But it also points out some of the perhaps subtleties or less expected features. For example that over the last 20 years, the home ownership rate has dropped by more in Queensland and in Victoria than in New South Wales. Now, you might think it would be the other way round, given what we always hear about affordability of houses, particularly in Sydney.

Look, Scott in his speech makes the point that there are a number of constraints on supply, and he also makes the point that it's not just about absolute supply or making more homes available, more lots available on the outskirts of the city. That's potentially part of it, but it is a more complex picture. But it's also about the availability of housing types that meet demand. Now, Rob Stokes, who's New South Wales Planning Minister, has been doing some terrific work on this issue, and of course …

Richard Glover: The terrace housing and stuff like that.

Paul Fletcher: Exactly, and he made the point that even on current zoning, there's room to retrofit 280,000 new terraces into Sydney today. So the point is as we look at supply constraints, part of it is about getting housing which better meets the different types of demand. But it is also about the Commonwealth Government, the Federal Government working with State Governments, which hold most of the levers in relation to housing supply …

Richard Glover: Well, you hold some levers. The Labor Party would say you hold the lever of that combination of negative gearing and the capital gains discount which when you put them together makes it very much more attractive for investors compared to the poor old first-time home buyer.

Paul Fletcher: Look, in his speech Scott makes the point—as the Prime Minister has made and all of us as Coalition politicians have made—that to do significant damage to a market, the housing market, in which a- many Australians hold their largest single asset would have very damaging consequences, and we don't think that the Labor Party's policy was properly thought through.

Richard Glover: Well, I think some people said it might have had an impact, like one per cent. Doesn't mean it was going to solve the problem, but it also doesn't mean it was going to be put enormous pain on people. It was just about slowing the increase, wasn't it?

Paul Fletcher: Well, I think the point that Scott Morrison was making today, that the Prime Minister has made is that what we need to do is look at the totality of this issue. Scott's speech today was about looking at some of the drivers, and particularly some of the constraints on supply, and there are some significant issues in terms of what State Governments have responsibility for. But of course the Commonwealth wants to work with State Governments on this. That's precisely why the Federal Treasurer is giving a major speech about it, and certainly one of the areas is the availability of infrastructure, because of course it's not necessarily where a home is physically located, but how quickly you can get from that home, particularly to where jobs are. So these issues need to be worked through and [indistinct].

Richard Glover: Okay, but there's also a lot of pressure, isn't there? A lot of anxiety about crowding in Sydney. So on one side there's a lot of anxiety about whether our kids can buy houses, but there's also a lot of anxiety as soon as you suggest increasing density, somewhere like your seat, Bradfield. If you said well look, let's bring terrace housing in and really get the density levels up, there'd be a part of people might say well yes, that's great, means that my fam- my kids could actually live close to me, and their second thought would be I don't want that!

Paul Fletcher: Look, clearly there's a range of issues you do need to wake up- weigh up, and certainly in the Ku-ring-gai area on the Upper North Shore, we're fortunate to have some beautiful housing, in many cases going back to Federation times, and that urban fabric is something very precious. But at the same time, what we are seeing in Sydney and our other big cities is the increasing urban density, and there is of course an appetite, a clear appetite for people to move in many cases closer to the city, and so I think having a housing mix, having supply of housing which better reflects demand is part of the issue, but some absolute constraints on supply, as Scott has mentioned in his speech today, are also significant issues.

Richard Glover: Let me give Larissa a turn first. How significant an issue is this, and are there any easy answers, or is it all just kind of to do with interest rates?

Larissa Behrendt: Look, I think there are no easy answers in it, which is why we- we're vexed to find a solution, and obviously the issue around how cheap money is makes this a very different conversation. And I think it's been complicated in terms of political solutions, because there has been an influx of small investors. You know, as you say, it's people's life savings have been put in to these- into housing now, so it's all very well to say it shouldn't be so much investment, but you do actually have small investors, their retirement funds, tied up in this.

But what I would say is that we do often look at this in terms of those monetary things, and we don't often hear about the fact that housing is actually a human right and an essential thing for people. I think a big part of it has to be the mix, and I think the point was made earlier that perhaps in some ways Governments haven't been doing enough to ensure that their own developments and their own expansions have included that mix, and we can just look here in Sydney with things around Redfern for example where there is a huge push on people in- who have lived there all their lives now who can't afford to remain in these very historic areas, particularly in the Indigenous community. I think whatever we look at in terms of how much we can deal with the issue of affordability, what has to be the big conversation is to what extent are we really investing in social housing, and acknowledging that actually the best communities we have in this country are communities where there is a mix of people living in those areas of high income and low income people.

Richard Glover: And in terms of Redfern, people have had to move really to the other side of Sydney, haven't they?

Larissa Behrendt: Yeah.

Richard Glover: And losing all that social capital that they've developed over the years of living there.

Larissa Behrendt: And it's not just the infrastructure, of course. With these ideas of having Sydney as this three city place, there's a lot of investment in infrastructure which is really important. But I think one of the things that comes into the mix there is the actual, the multiculturalness of it, the investment in the cultural life. I mean, that's something that is a big issue around quality of life and community. So it's not just putting infrastructure like rails and transport in. I think there has to be a bigger picture about what makes whole communities. No easy answers.

Richard Glover: What about this idea that- which is around today and caused almost a meltdown on Wendy's show this morning? Suggestions that it's all the fault of the baby boomers who are holding on to these houses. They should downsize once you've got spare bedrooms, once the kids have lost home- left home, you've got almost a- it seemed to be a moral suggestion, someone was saying, that you have to move!

Larissa Behrendt: Yeah, I think, you know, I think these are life choices that perhaps shouldn't be imposed on other people, but …

Tim Williams: [indistinct] baby boomer here, could you stop attacking me?

Richard Glover: Just take the pain, Tim.

Tim Williams: I mean, look, I'm interested in fact, you know. I mean, we doubled the number of houses in Sydney in the last four years and the price has gone up 25 per cent. There's no relationship between these things but are we saying that we've got the right mix of housing? No, Paul's right, we've got to diversify and make private rented even more attractive, smaller homes, all these things have to be tried but we do have to grapple with the financialisation of our economy which is leading to this. And, by the way, an increasing number of Australians own multiple units while others don't own one.

Richard Glover: In the UK, just on the downsizing thing, in the UK for, admittedly for public housing tenants, they've brought in a spare room tax.

Tim Williams: The Window Tax. Look, I think that was probably a rather draconian way of dealing with the problem of sharing over-big houses but what about this? In Seoul they've got this great idea which is that all the people with big houses go online and say do younger students and other people want to share my home. I think if we can get into the shared economy approach to house sharing, multi-generational, that's a good way to go.

Richard Glover: But others have been wai- I get this from Wendy's show this morning, others have been waiting their whole lives to finally get that music room or the knitting room or the scale electric room that they've been dreaming of since they were 20.

Paul Fletcher: Look, can I throw in a word in in defence of Rob Stokes again, Minister for Planning, because I think it was his department that put out this report.

Tim Williams: It's a great report.

Paul Fletcher: It's a terrific piece of work and- but Rob himself has been at great pains to say nobody is talking for a second about compelling people to leave their homes. It's really more about how can you provide housing choices for people who may feel that their present home is too large but sometimes there isn't the optimal choice for them to move to. And you mentioned before attitudes on the Upper North Shore, what I have noticed amongst my constituents is quite a number of people are looking for the way to stay in the area but have a smaller, more manageable home. So, with the right design …

Richard Glover: Okay, and that- but that, also, is where stamp duty is important because now prices are so high the cost of moving from one to another in terms of stamp duty might be enormous and that's where people think, oh well, you know, I'll just stay here.

Paul Fletcher: But certainly if you can- if you've got the right housing choice to move to that becomes an easier decision to make.

Richard Glover: Alright. Eleven to six is the time. Paul Fletcher is here, the Member for Bradfield, Larissa Behrendt the Professor of Indigenous Research at the University of Technology, and Tim Williams is the CEO for the Committee for Sydney.

In the US election, gender has become such an issue. The pollsters say the result would be entirely different if you restricted the vote to just one gender. Using the latest poll results, women turn the map almost entirely Democrat blue, 458 electoral colleges would go to Hillary Clinton, just 80 for Donald Trump. But with only men voting, Trump would have a landslide. How surprised are you that such a division on gender is still part of politics in 2016, how much of that is unique to this particular campaign, and in Australia do you think there are different priorities to generalise, of course, between men and women? Larissa.

Larissa Behrendt: Well, I think in this particular campaign it's not surprising and I think it's got less to do with women wanting to see a woman in the White House than it has to do with Donald Trump being a particularly unattractive candidate for women, and that's obviously come out in not just his recent disclosures of public statements but in his persona for a long time. And I do think it relates to other issues that he's picked up, given his position being very much in tune with the right-wing factions of his party where, you know, on things like abortion he would overturn Roe v. Wadeand I think women across a broader political spectrum think that that is obviously an issue that should have long been put to rest.

So, I think there are some particular on this, but I would say although that is a very stark division that you see with him, you also see in polling very strong divisions amongst white right people and African Americans, Latinos. So, it's a very divisive election on a lot of issues, I think that's why many of us just can't stop watching it more so than in previous years.

Richard Glover: Yeah, it's fascinating, isn't it, to watch it. What about in Australia? I know, I think you're right; this election in America is particularly intense around gender. In Australia it is said that Menzies would not have been Prime Minister for so long without the female vote, that in the fifties, women tended to support the conservative party, that then changed over the years and it's become less gender-specific in Australia. Do you think women do have different ideas, speaking generally, to men on politics?

Larissa Behrendt: Well, look, I'd say there obviously are issues that might be of more concern to women but I think probably now that back in those days we had a much more gendered society in terms of more people staying at home, the roles were much more … were more defined. I think women have a lot more choices now and that comes out across the political spectrum. You know, I think you see a broad range of women with views on particular issues and I don't think you can really say on a range of issues, whether it's things like housing affordability or the environment, that women are one way more inclined to another.

Richard Glover: Well, although in Vote Compass—you know, the ABC project during the last election— I think the number one thing for men was the economy and the number- said in that way probably, the economy, and number one for women was much more likely to be health and education, for instance.

Larissa Behrendt: Yeah, but you know I think in some ways I think it's the way that we would describe that interest. I think women are generally now aware that we need a community that's got a good economy and we're not so naïve as to think it's one thing or the other. I think we're much more sophisticated. We might rank things around children and family more but I think more and more men do that to. So, I don't think it would be as galvanised as we see it in the states here, I think we have a lot more spread but- and, you know, I think both parties now put forward very strong impressive women. I think of people like Marise Payne and even Julie Bishop and I think there are strong women across all of the political spectrum that know how to speak to other women.

Richard Glover: Paul Fletcher, when you look at these two maps in America, it seems weird. It's 2016 and you can produce maps that different for the American electorate.

Paul Fletcher: Well, Richard, can I start by saying as a male politician, I'll be very cautious about pontificating about what explains how women vote but I would agree with Larissa that I do suspect there are some fairly obvious causal factors as to why Donald Trump is not going down too well with women voters. I suspect too that the historical significance of having the first woman presidential candidate for a major party is also … that's not the sole factor but it's a non-trivial factor.

But I think the point you made earlier is interesting that historically in Australia, traditionally there was a slightly higher percentage of women voting for the Liberal Party, certainly over quite a number of years. That pattern hasn't been so consistent in recent years but it reflects a number of things. When Robert Menzies set up the Liberal Party, there were some structures within it in terms of formal representation for women which were pretty advanced at the time.

Richard Glover: Which is interesting, because it's a way of saying those things actually do matter. They can—if you pay attention to people, if you treat them seriously, you can get support as a result.

Paul Fletcher: Yeah, yeah.

Richard Glover: Tim?

Tim Williams: Oh, just some British fact, if women had come out in as large numbers as the men to vote in most British elections, the Labour Party would never have lost an election but they didn't.

Richard Glover: So, women … women have tended to …

Tim Williams: Women tended in the … post-Second World War to be kind of natural Labour supporters, party of the welfare system and, you know … but just an interesting fact. Your man … it's still the case that Trump has a majority of working class women voters that don't have a college degree supporting him and we must never forget it isn't just about gender, it's about class in all these discussions and the one thing Trump has done hugely [indistinct] is raise the discussion about the left behind communities that there are in the States and I don't [indistinct].

Richard Glover: And there are both … there are both genders. Alright, it is five to six here on the Political Forum. Now, in the new ABC comedy Rosehaven the lead character goes back to Tasmania and spends time working in his family's real estate business. Did you ever visit your parents in the workplace and what did you discover when you did so? Larissa.

Larissa Behrendt: Well, my mum's my PA and has been for about 15 years, so …

Richard Glover: She's a very patient woman.

Larissa Behrendt: She's very patient. So, what I've discovered is that there are some many benefits about having a close family relationship in the workplace which includes that they're very good gatekeepers, so no one gets past her if she doesn't think they should, but their ability to be able to overshare with the staff about misdeeds you may have done in your youth is definitely a disadvantage.

Richard Glover: So, if you ever quit, you'll be quitting to spend less time with your family.

Larissa Behrendt: Yes, I would. I mean, after having lost my father, I do- although people might balk at the idea of working closely with their parents, I do appreciate the fact that I do get to see her every day.

Richard Glover: Yeah, how nice. Now, Paul, did you ever visit the family workplace?

Paul Fletcher: Well, look, this question certainly provoked some interesting memories for me because my dad died earlier this year and it just reminded me of early in my high school years, my dad was an engineering professor, very interested- early user of computers—so this was the late seventies, early eighties—so I remember big reams of hole-punched computer paper and Fortran punched cards and so on. I remember I had a science project in year eight, which he assisted me with, with some rather advanced computerisation at the time and he thought we got a very disappointing mark.

Richard Glover: What, only a B? I love the way you're involved in infrastructure and you're the son of an engineer. But that bodes well for travelling on the bridges, I think. Tim.

Tim Williams: So, my dad once got me a summer job in his factory where he worked and I turned up on the first day and this bloke comes up to me and he says, look, you've got watch out for that bloke over there, he's a complete bastard, and I say, I know, it's my dad. And, so my father actually did sack me at this job because I was playing football, soccer, instead of working diligently so I have mixed memories of the family [indistinct].

Richard Glover: What was it a- what did they do in the factory, what was that?

Tim Williams: Oh, they make car filters.

Richard Glover: Okay.

Tim Williams: And so it's for Fords and [indistinct].

Richard Glover: Is in Wales?

Tim Williams: Indeed, when we used to have manufacturing in Wales, long ago and far away. But to be sacked by your dad and then to be reinstated because your mother went on strike with the rest of the factory, that is a special memory for me.

Richard Glover: That's not a bad story. We're out of time but thank you to Paul Fletcher, he's the Member for Bradfield and the Minister for Urban Infrastructure federally; Larissa Behrendt is a Professor of Indigenous Research at the University of Technology Sydney, you can visit her there if you can get past her mum; and Tim Williams is the CEO of the Committee for Sydney. Thank you very much.