James Glenday:
Well, let’s get some more on our top story this morning, and that is the revamped House Guarantee Scheme which comes into effect today. And the federal Housing Minister, Clare O’Neil, joins us now from Sydney. Minister, welcome back to News Breakfast.
Clare O’Neil:
So, great to be with you. Thanks so much.
Glenday:
So, today is the day. How many young Australians are you expecting to take advantage of this scheme over the next 3 months?
O’Neil:
Well, what we expect is that over the year, we’ll have tens of thousands of additional young people who are getting that extraordinary opportunity to own a home of their own. What the government’s doing today will slash the time it takes people to save for a home deposit.
As of today, every single first home buyer around the country will be eligible to get into the market with just a 5 per cent deposit and our government’s backing. So, I’m here in Sydney today where the housing market’s particularly difficult. Young people here can save 11 years or more before they’re able to pull together that 20 per cent. This will bring that time frame back to 2 or 3 years. This is meaningful, real difference that we can make to that younger generation who are facing very different housing opportunities than their parents and grandparents.
Glenday:
Now, multiple housing analysts, we had one on our show a short time ago, say that this addresses a real problem, and that is Lenders Mortgage Insurance, which of course is expensive, doesn’t really give you very much at all. That won’t be required now for a 5 per cent deposit. But on the flip side, the same analysts say that this effectively is going to push up house prices, particularly at the lower end of the market. Do you share their concerns?
O’Neil:
Well, we know that the answer to the housing affordability issues facing the country is that we’ve got to build more homes more quickly. And that’s exactly what our government is doing. The 5 per cent deposit expansion that we’re announcing that we’re opening up today is just one of many things our government is doing about this housing crisis per cent in the country, $43 billion where we’re building more homes, helping renters get a better deal and getting more Australians into their first home.
So, this is definitely support that’s needed. And I’m very respectful of the experts in this debate. The people I listen to most of all, though, are the generation of young people around the country who tell us very clearly that the main barrier that they have to getting into the market is that time it takes to save a deposit, especially when they might be paying rent at the same time as they’re trying to save. This is a real meaningful difference that we can make and we’re very proud to be backing in that next generation to get into a home of their own.
Glenday:
Just back to my question though. Will this program push up house prices?
O’Neil:
Well, I think your, your viewers would probably be aware that the Treasury has modelled the impact of this and their analysis shows that there will be about a half a per cent change to house prices over a 6‑year period.
Glenday:
And a lot of analysts said that they were very skeptical of those figures and say that it could be as high as 10 per cent. Are you worried it could be that high?
O’Neil:
Well, the Treasury is the analysis that I trust and I’ve shared that data with you here. Ultimately, we know that the housing affordability answer is to build more homes more quickly. But James, I’m not going to look a generation of young people in the eye and tell them that they have to wait until we’ve addressed the supply issues before they get any help and support. People around the country need help with housing right now and that is exactly what they’re getting from our government today.
Glenday:
We’ve had a lot of people write in this morning who are also fearful that house prices are going to go up. You’ve been talking about supply a lot. The RBA Governor yesterday gave a press conference and she said despite all the work the governments are doing on boosting supply, she wasn’t confident that that would have any impact over the next 2 years on prices putting downward pressure. Do you agree with that?
O’Neil:
Well, what I see is the impact that our government’s policies are already having on the housing market. Remember, James, I’m sure I’ve talked to you about these figures before. Half a million homes built since we came to government. We’re building 55,000 social and affordable homes over a 5 year period. We’re helping a million renters with a 50 per cent increase in Commonwealth Rent Assistance. Every renter around the country –
Glenday:
You have been very generous sharing those figures a number of times. Sorry to interrupt. You have repeated those figures a lot. I just want to take you back to the RBA Governor. Is she wrong? Is everything that’s been done at a state level and a federal level going to make any difference on prices over the next 2 years?
O’Neil:
Well, what I can see is that we’re turning a corner in housing construction in our country. So, if I look at the year on year numbers, I see that we’re starting to build 17 per cent more homes this time this year than we were at the same time last year. I see that construction costs have come down from – increasing by 17.6 per cent when we came to government to increasing by about 1.6 per cent. Today I see the skills shortage that we inherited that was absolutely chronic and acute, subsiding to a degree in housing construction.
But James, you’ll never find me saying that enough’s being done and we’ve got no problems anymore. We’ve got a housing focus in Canberra that we haven’t seen in this country since the postwar period. And every day I get out of bed and the Prime Minister gets out of bed thinking about what more we can do about this. Now we’ve got $43 billion on the table tackling the crisis from every angle. And remember that we’re following a government that was so disinterested in housing that for most of their time in office they didn’t even have a housing minister. We’re throwing everything we can at this, but by God, is there more work to do? Absolutely.
Glenday:
I probably know the answer to this. When you think about all the things you can do about getting downward pressure on house prices, have you thought anything about changing capital gains tax or negative gearing?
O’Neil:
Well, we have touched on this before in previous interviews and our government’s tax policy is really clear. We want to give a tax cut to every single taxpayer, as we did in the last term. And our housing policy is really clear. We are focused on building more homes more quickly, and that’s the work our government’s undertaking.
Glenday:
Essentially that’s a no. Just finally, on a different issue, would you personally be relying on Optus, given the failings we’ve seen in triple zero coverage?
O’Neil:
Well, the government’s deeply concerned about the conduct of Optus in recent weeks. And you saw the Communications Minister strongly expressing the rage that Australians fear about their failure to exercise their legal responsibilities. Optus makes hundreds of millions of dollars in profits off Australians each year. They’ve got a legal obligation to provide us with secure emergency services access and they’ve failed to do that. Now, I’m sure you’ve heard the minister talk about the actions that she’s taking on this, but Optus have got to address this. This is an urgent issue for them and if they want to continue to operate in Australia, they need to comply with the law and they’ve not done so here.
Glenday:
Clare O’Neil, we do appreciate your time as always on News Breakfast. Thanks for coming on.
O’Neil:
Thanks so much.