Media Release by Senator the Hon Kay Patterson

States urged to make housing more affordable with stamp duty cuts

The Minister for Family and Community Services, Senator Kay Patterson, responding to a new report on housing affordability for low-income earners by the Australian Council of Social Service, today called on States and Territories to direct some of their windfall stamp duty gains to housing services for low-income Australians.

She said the Australian Government is providing $4.75 billion over the next five years for housing assistance under the 2003 Commonwealth State Housing Agreement.

The Australian Government also provides another $1.85 billion a year in rent assistance to one million Australians for affordable rental housing for low-income families.

Senator Patterson said: “For every $1 of direct Australian Government housing assistance, the States and Territories contribute less than 13 cents in Commonwealth State Housing Agreement matching funds.

“The States have profiteered through massive hikes in stamp duty revenue. The States must lower their stamp duty rates and release new land for homebuyers.

“Since 1996, the stamp duty on an average home has risen to $16,000 in Sydney and Melbourne.

“A recent Housing Industry Association study shows that in 2002 an estimated $11 billion was levied by state and local governments on new housing. State and local government taxes and charges added $67,000 to the cost of a house.”

Senator Patterson said rent assistance made a big difference to low-income earners.

It reduced the proportion of customers paying more than 30% of their income in rent from 69% to 34%. Those paying more than 50% of income on rent fell from 27% to 9%.

Senator Patterson said Howard Government has increased funding to programs to assist the homeless.

The Government has markedly increased funding for its Supported Accommodation Assistance Program (SAAP) – its major response to homelessness.

“The Australian Government has clearly shown its commitment to the program by contributing more than $830 million, an increase of 18 per cent over and above inflation or $115 million to the program, until June 2005,” she said.

“Every day this program helps more than 21,000 Australians who are homeless or at risk of homelessness in some way by one or more of the 1286 SAAP services around the country. The increased support has increased the effectiveness of the program.”

Senator Patterson said the greatest housing assistance the Howard Government had given was to manage the economy properly.

“I remind people that housing mortgage rates under Labor were 17%. Now they are about 7%,” she said. “Australians on average are $400 a month better off under our policies.”

Senator Patterson said since the introduction of the new tax system in 2000, 482,000 individuals and families had benefited from the First Home Owners Scheme with $3.8 billion in payments.

“We have the lowest interest rates since the early 1970s helping people get into the housing market,” she said.

“Under the Howard Government 1.3 million jobs have been created, inflation is below 3% and interest rates are at levels unimaginable under Labor.

“This is a long way from the days of Labor when unemployment reached crisis levels. In the recession we had to have there were nearly one million Australians unemployed.

“If Labor was serious about housing it should be knocking on the State Labor Premiers’ doors demanding that they lower their stamp duty rates and release new land for home buyers.”