Dr Bruce Flegg
Member for Moggill

Building Boost Grant

Friday, 28 October 2011 08:48

The reality is that, were the LNP to vote against this bill today, it still would not bring back thestamp duty concession for people buying their own home. If Queenslanders want—and they do—recognition that there is something different when they buy their own home to live in with their family and they want that concession restored, they will need to vote for the LNP and change the government at the next election. It will not be changed here in this debate on this bill. This bill is a fait accompli and we will be showing common sense by supporting it. Queenslanders really want recognition that there is something very important about owning their own home and having the purchase of their own home treated the same as the purchase of a beach house or an investment property when it comes to stamp duty. This is, in my view, not something that Queenslanders are going to wear. Those opposite keep talking about homes. However, this bill is nothing to do with homes. This is about properties—and newproperties at that. It will be predominantly investors who take up this opportunity. 

One thing on which there is no disagreement in this place is the fact that the Queensland building industry is struggling through some of its toughest times in a decade. Overall approvals are down from the quarterly figures of around the 41,000 to 45,000 mark a couple of years ago to around 27,000. That is about a 40 per cent decline. If you go to some parts of the state about which the government and the Treasurer never seem to talk about, such as the Gold Coast, the Hervey Bay area, Cairns, the Sunshine Coast and elsewhere, you see communities that are really hard pressed. They are places where people seek concessions on paying their school fees and where properties are difficult, if not impossible, to sell.The authorities in this industry indicate to us that, with the decline in approvals, we have lost something like 17,000 building industry jobs in this state. So the matters we are talking about are serious matters. 

Of course, this particular measure that is being debated here applies only to new property. It does not matter whether it is someone’s own home or an investment property. It does not matter if it is multiple homes. An investor sitting in Sydney or Melbourne could snap up two or three properties in the buildings that are being sold down in the Valley or elsewhere and collect $10,000, $20,000 or $30,000. 

No-one is going to say no to that. However, this state, which is purported to be run by a Labor government, taxes people who buy their own home and charges them the full fare on stamp duty, but is happy to send multiple lots of $10,000 to investors interstate to buy property. That seems to be totally inconsistent with what Labor governments like people to believe they stand for. 

Who will be applying for this grant? That is the fundamental question. The answer to the question as to whether Queenslanders will benefit from the expenditure of $140 million of taxpayers’ money depends on circumstances in the market and who takes it up. Investors who were already going to buy a property or were looking for a property will take it up, thanks very much. Of concern—and we have seen this before, particularly with the introduction of the GST federally and its impact on housing, and that was the last major downturn—is that when you put in place artificial government incentives designed to alter people’s behaviour it sometimes does that. In this case, we may find that some activity among investors who were planning to invest is brought forward so that they contract during the August to January period. We all know that if you bring forward activity by way of an incentive—and I believethat will be an effect of this and it is hard to apply any sort of intelligence to the economic equation of giving people a financial benefit to act within that certain period; it is hard to imagine that people will not—activity is removed. The activity that has been brought forward from the ongoing quarters when this will not apply will obviously drop to levels lower than it would have otherwise been. In my view and in the view of others, the majority of movement will be existing stock that has been sitting around rather than the stimulation of construction of new properties in this very short, brief window. 

Not many people buy a new property the week or the month after the incentive is removed, and we all know that. In some of the hardest hit parts of the state, particularly places like the Gold Coast, established properties that are not eligible for this benefit are frequently, if not generally, priced below replacement cost. While existing stock is being priced below replacement cost, a measure of this type is unlikely to shift demand from the purchase of existing stock to the purchase of new stock. If it does so, it may actually further depress the market for existing stock. The LNP is supporting this bill. We could hardly do otherwise. To oppose it would not restore the stamp duty concession on the first home, nor would it be realistic for us to oppose it in circumstances where people have already signed contracts. But make no mistake: this is bad policy. It is bad policy, firstly, because it is short-term. It is bad policy because it is ineffective. In their speeches today government members have not defined what the aim of this grant is. Is it to clear old stock? Is it to create jobs, in which case you have to create buildings that would otherwise not have been built? It is bad policy because it is just designed to get this government through the next election before the full anger about the increase in tax on the family home comes through. 

I think it typifies a government that has been in for too long and is devoid of ideas; a government that was not able to manage the Queensland economy, which is why parts of it are in the mess that they are in today; and whose only policy response is to slug homeowners when they buy their own home and then at the same time put in a short-term measure to get them through to the next election, that principally will either clear existing stock or bring forward investor activity into this period and result in a sharper downturn after it