Barbara Miller:
Has it just got easier or harder to get into the property market? The federal government’s Home Guarantee Scheme is expanding today, meaning more Australians will only need to pay a 5 per cent deposit on a property. Under the changes, there will be no income limits, meaning all first‑time buyers are eligible.
Clare O’Neil is the Minister for Housing, Homelessness and Cities and she joins us now. Welcome back to Radio National Breakfast.
Clare O’Neil:
So, great to be with you, Barbara. Thanks for having me on the show.
Miller:
Now we’re hearing that home prices have risen for the eighth month in a row. What’s the risk that this new scheme will just drive them up even further?
O’Neil:
Well, today we’re slashing the time it will take young people around the country to get into the housing market. From today, every single first home buyer in the country will be eligible to get into a home of their own with just a 5 per cent deposit and with our government’s backing.
Now you ask about how housing affordability. Our government absolutely understands that the main game here is supply. And that’s why we’ve got a $43 billion agenda which is focused principally on building more homes from the country. But we’re not going to make young people and a whole generation wait to get the support they need. Young people need our help right now and that’s exactly what they’re getting today.
Miller:
But will it raise prices?
O’Neil:
So, we’ve got analysis from the Department of Treasury which shows that this may have an impact of around 0.5 per cent over a 6‑year period, so that’s an impact that will be absolutely dwarfed by the movement of things like interest rate or construction costs.
But ultimately, I just remind your listeners, you’ve got a government in Canberra that is tackling this crisis from every single angle. $43 billion, we’re building more homes, we’re helping renters get a better deal and we are quite unashamedly supporting that younger generation to get into home ownership.
Miller:
As you know, a number of other studies have suggested that it will raise prices by a lot more than those Treasury figures suggest. Have they got it wrong?
O’Neil:
Well, I’ve shared the Treasury numbers with you. We’re talking here about a 0.5 per cent increase in house prices over a 6‑year period. Now this will help tens of thousands of young people into the housing market each year. And what we hear really clearly from young people around the country, is that the biggest barrier they face is actually getting together a deposit.
So, you and I are broadcasting from Sydney this morning. On average, it’s taking a young couple here 11 years or more to save for their first home, we’re bringing that back to 2 or 3 years. This is really meaningful support for young people and it’s available to them from today.
Miller:
When you took on the portfolio last year, you said you wanted to focus on things that will bring down the cost of housing. Has that changed?
O’Neil:
Not at all. And again, you know, a $43 billion agenda that’s been amassed by our government and the principal focus of that agenda is on building more homes for the country. Now, since we’ve been in office, about half a million homes have been built. We’re building 55,000 desperately needed social and affordable homes around the country that will be particularly targeted at people who are doing it toughest. And we’re making a lot of strides working with the state governments and with industry to try to build the capacity of construction.
But this is, you know, really challenging and very challenging for young people around the country. And again, I’m not going to say to a generation, we’re not going to do anything to help you until we’ve addressed the supply issues facing the country. We need to be able to support those young people and build more homes at the same time, and that’s what we’re doing.
Miller:
Just back to the deposit scheme for the moment. The Shadow Minister for Housing, Andrew Bragg, has previously raised concerns that this scheme is open to everyone, regardless of income.
[Excerpt]
Andrew Bragg:
This is an uncapped scheme which is available to billionaires or the children of billionaires if they want to use a government program. And I think we’re getting to a point where Australia is becoming a ridiculous nation, where the taxpayer is underwriting mortgage insurance schemes for extremely wealthy people. I think it’s bizarre and ridiculous.
[End of excerpt]
Miller:
‘Bizarre and ridiculous.’ Does he have a point? Should you have put an income cap on this?
O’Neil:
I thought those comments were extraordinarily out of touch and it just shows us that the Liberal Party hasn’t learned anything.
Miller:
Why out of touch?
O’Neil:
Remember, 9 years – for most of the period that they were last in office, they didn’t even bother to have a Housing Minister. And they’ve spent the last 3 years trying to slow our government down and stop us from providing supports to Australians who are struggling.
Now, I say ‘out of touch’ because if you think firstly that billionaires’ children are going to be using this scheme, then you haven’t looked very hard at it. I don’t think Gina Rinehart’s children need government support to get into housing, but just more broadly, we’ve got housing issues facing our country that are affecting Australians in every single demographic. And we’ve got probably people listening right now who are on reasonable incomes but are paying high rents and are not in a position to save for a home deposit. This is for them. This is for every single young person around the country who’s struggling to get those savings together. And we’re saying we’re going to back you in and we’re going to give you a hand to just get you that bit closer to getting into a home of your own.
Miller:
Let’s not worry about Gina Rinehart’s children. But there is a risk, isn’t there, that people who have a bit more money, are able to get money through family, will be able to go a little bit higher and that that’s going to really put pressure on that market, let’s say in Sydney, of around say 1.4 to 1.6 million.
O’Neil:
Look, Barbara, I’ve made this point a few times now. We understand that the issues facing the country around housing affordability are solved by building more homes more quickly. And that’s why that is exactly what our government is doing. But I’d say again, we can today provide really meaningful support to help that younger generation get better housing opportunities.
It is just manifestly unfair what is happening today. Just in my lifetime we’ve seen home ownership rates for low‑income young people cut by, you know, from around 60 per cent to just over 20 per cent. That’s happened just in my lifetime. Now we cannot allow that to continue. And as of today, young people are going to be getting extra support from government that they absolutely deserve.
Miller:
How many of those new homes of the 1.2 million target have you built?
O’Neil:
So, we only have data for the first 3 quarters of the first year and we’re at about 135,000 homes off the back of those first 3 quarters. We’re doing a lot of work at the moment to try to expand the capacity of our construction sector to get closer to that number.
You know, the 1.2 million target is not just an Albanese government target. This is something shared by all state and territory premiers and the private sector. And you know, before you get into the questions of are you doing enough? Let me be really clear. We do need to do more. We are going to need to lift to get near that target. And that’s the work that I’m focused on every day.
Miller:
Is it time to revise that pledge? We’re already more than one year into that 5‑year goal.
O’Neil:
Look, what’s really important is that we’ve got a government that’s showing some guts and ambition here and, you know, there’s plenty of people that have got comments to say about whether we’re going to hit the 1.2 million. No one who is serious about housing says that we shouldn’t have a target or that we should reduce our national ambition here.
One of the problems we’ve had is that Commonwealth governments, you know, especially under the Liberals, have just tapped out of housing altogether. We take a different approach. Everyone, whether it’s the Property Council, the community housing sector or others, says, ‘Well done government for having the boldness and ambition, now let’s work together to get closer to that target.’ And that’s the work that we’re doing every day.
Miller:
But targets must be realistic also to give market certainty. It seems very unlikely at this point that you’re going to reach that 1.2 million.
O’Neil:
Well, it’s going to be really difficult to get to 1.2 million. We’ve got to build more houses than our country ever has before in the first year and then do it 4 years following that. So, it is going to be a challenge.
But what, you know, people who are experts commenting on our actions consistently say is that this target is already making a difference. It is a coalescing goal for the country to work around to make sure that the Commonwealth is focused on building more homes and so are the states and local government. So, again, you know, what we’ve seen around planning reform, for example, that’s been really driven and galvanised by that big target is so important, Barbara.
You know, in Melbourne, in Sydney, in Perth, we’re seeing state governments do things on planning that would have been absolutely unimaginable 5 years ago. And that has partly come because we’ve got this big difficult target facing the country and we’re all at all levels of government striving hard to meet it.
Miller:
You’ve said it’s going to be hard to meet the target. What do you think something more realistic would be?
O’Neil:
I’m still focused on trying to get to 1.2 million. But I say again, that is a target that is shared between the Commonwealth, state and local government and the private sector. We are all going to need to lift. The Commonwealth will need to do more, the states will need to do more, local government will need to do more, and so will the private sector.
But I certainly won’t be contemplating lowering the national ambition. I don’t think that’s the answer here. What we need is every level of government focused in a laser‑like manner on housing and building more homes. And that is what Anthony Albanese is driving around the nation.
Miller:
Just briefly, on another issue, is the government disappointed that the Reserve Bank chose to leave interest rates on hold?
O’Neil:
Look, I think millions of mortgage, mortgages around the country are concerned about that. And that’s, you know, the Reserve Bank makes their independent decisions. You know, we’ll cross our fingers and hope for a rate cut down the track. Certainly the government is doing its bit here: really careful budget management and making sure that we’re supporting Australians with cost‑of‑living measures, whether that be tax cuts, cheaper medicines, cheaper care and the like. And we’ll look and see what the Reserve Bank has to say over the coming months.
Miller:
Clare O’Neil, Housing Minister, thank you so much for joining us.
O’Neil:
Thanks for having me on this morning.