Thursday, 1 June 2023

Land tax

Evan MULHOLLAND (Northern Metropolitan) (15:50): (276) My adjournment this afternoon is seeking action of the Treasurer. The action I seek is for the Treasurer to acknowledge the untold damage his new renters tax will have on Victorians already struggling with the housing crisis and have some introspection and drop this proposed new renters tax. Let us be clear about the impact of the Labor Party’s new renters tax. The cost of the average rental property is going to go up by $1300 per year every year for 10 years. That price will inevitably be paid by renters. It will be paid with higher asking prices for rents, and it will be paid with a further reduction in our rapidly diminishing supply of rentals here in Victoria.

I have been taking a very active role, as I know my colleague Mr Davis has, in the stamp duty inquiry by the Economy and Infrastructure Committee, listening to the experts and getting their views on what new land taxes will do to investments. One of the experts, the CEO of the Real Estate Institute of Victoria Quentin Kilian, said on the renters tax that supply is where we need to be focusing, not disincentivising, and that by further diminishing supply we are going to put further pressure on finding a home.

Then we saw the Treasurer saying that he is open to a new rent cap, a policy the policy experts argued against in the strongest terms. Whether it was the Urban Development Institute of Australia – Victoria, the Housing Industry Association, the Grattan Institute or the Real Estate Institute of Victoria, the message was the same: a rent cap undermines the housing market, it undermines investment and new supply and it is the biggest driver of rent increases. We simply cannot afford to have a rent cap when vacancy rates are trending south of 1 per cent.

As we have seen overseas – the Greens might want to check it out – in San Francisco, for example, Stanford economists found that in the long run rent caps drove rents up, not down, because they led to a number of landlords converting their housing to other uses and this further reduced the supply of rental units. The Grattan Institute in particular had the same astute warnings. They said supply shortages drive homelessness, with the result that people end up in caravans and tents. It is devastating, particularly in situations where there is domestic violence where people have to escape and there is nowhere to go. They basically said it would lead to a two-tier rental market, with those in rent-controlled apartments paying less but getting lower quality housing.

When the Greens show a lack of understanding of economics, it is just your average sitting day. But I am terrified that this kind of proposal has attracted the interest of the Treasurer. The action I seek from the Treasurer is to drop this ludicrous proposal, rule out a rent cap and scrap his new rental tax.