29 March 2015
Transcript - #2015018, 2015

In the role of: Parliamentary Secretary to the Treasurer [23 December 2014 - 20 September 2015]

Interview with Deb Knight, Today, Channel Nine

SUBJECTS: Foreign investment in residential real estate

KNIGHT:

Real estate records are set to be smashed right across the country today with the biggest day of auctions so far for the year. Sydney and Melbourne will see the most properties go under the hammer today – 1,100 properties are up for grabs in New South Wales, 1,500 in Victoria. The rest of the country is also getting in on the action all ahead of the Easter break. With so many properties on offer today it’s reignited this debate over just how many will end up being Australian owned. Parliamentary Secretary to the Treasurer, MP Kelly O’Dwyer, joins us this morning. Kelly, good morning to you. I guess the real estate agents are certainly happy at the moment - 3,000 auctions today alone. The economy must be going gangbusters.

O’DWYER:

Well I’m sure they are very happy and those people who are successful at auction, they’ll be happy too, but I think that it’s important to note that there are a lot of people who are looking to purchase a property right now and not everybody is able to get into the market. One of the big questions that has been on everybody’s lips is just who’s buying what in the Australian residential property market. There was an inquiry done last year and the Government has accepted a recommendation from that inquiry that says we need a national register so we can understand who’s purchased what in the residential property market so we’ve got some accurate data around how many foreign investors are purchasing, not only new properties, but also existing properties in the country.

KNIGHT:

Well the PM has promised a crackdown on illegal behaviour but how much closer are we to getting this register in place, up and running?

O’DWYER:

Well the register is going to apply from the first of July – we’re getting that in place. There are current rules in place that already prohibit non-resident foreign investors from purchasing existing homes. The question though is whether or not those rules are being properly enforced. We heard some disturbing evidence from the Foreign Investment Review Board late last year that there has been no divestment since 2006 of any illegally purchased property – despite the fact we have seen a doubling of investment, foreign investment, into residential real estate. Now that defies credibility to think that everybody is obeying the rules. We have seen the Treasurer just recently announce that he was forcing a sale on a property. And we are going to put in place a new crack enforcement team that is going to be within the Australian Taxation Office, that’s going to look at properties that have been sold on a pretty methodical basis to check whether or not they have been purchased legally or illegally and then, if they have been purchased illegally, we are going to force their sales.

KNIGHT:

We did approach the Foreign Investment Review Board to speak to this morning - no one was available unfortunately, but in terms of policing, how can you be sure that this new ‘crack team’ as you call it will do any better than what’s in place at the moment?

O’DWYER:

Well, it’s going to be properly resourced. This team is going to be properly resourced because for the first time, instead of the Australian taxpayer funding the screening process through the Foreign Investment Review Board – where every person who is a foreign purchaser who purchases a residential property has to apply for approval before they actually purchase the property whether it’s new or whether it’s existing – we are going to charge an application fee, a modest application fee. That money is going to go towards this crack enforcement team and making sure that we get the register up and running. Previously all of that’s been funded by the Australian taxpayer. We think there’s a better way of doing it and the Australian Taxation Office has got the rungs on the board in being able to track them down.

KNIGHT:

We certainly hope they can achieve it. Kelly, thank you so much for speaking to us this morning.

O’DWYER:

Great to be with you Deb.