Patricia Karvelas:
Clare O’Neil, welcome to the program.
Clare O’Neil:
Thank you for having me. Really appreciate it.
Karvelas:
Last time we spoke, you said that it was all about supply. Now housing taxes are on the agenda. So, it’s not just about supply anymore?
O’Neil:
Well, we’ve got a housing crisis confronting the country that’s been building for 40 years for one principal reason, and that is we have not been building enough homes. So, we do have a big supply challenge and if we can do one thing about this problem, it’s build more homes more quickly, because more housing means more affordable housing for Australians. It doesn’t mean, though, that that’s the only problem confronting the country. We have got serious intergenerational issues in Australia with regard to housing. A younger generation who are confronting very different housing challenges than their parents and grandparents. Our government wants to see those young people get ahead and we want to see them preferably in their own homes.
Karvelas:
So, is changing taxation on housing, negative gearing, capital gains tax concession about making housing more affordable for young people?
O’Neil:
So, I won’t foreshadow what’s in the Budget tomorrow, but I can say that a big focus of our government is trying to make sure that housing is more affordable and that young people are in a position to get access to it. For too long, we’ve had governments ignore this problem altogether and put it in the too‑hard basket. That all changed when our government was elected in 2022. There is now no question we’ve got the most ambitious housing agenda the Commonwealth government has had in this country for 70 years. Our main focus, yes, is on supply, but we’ve also gotta think about the equity here and making sure that young people have got an opportunity to get into a home of their own.
Karvelas:
So, if you change the taxation around housing, is it your view that it then becomes easier for young people to enter the housing market?
O’Neil:
Well, again, I’m not going to get into what’s in the Budget tomorrow but there is a discussion happening, of course, about housing taxation. What we believe is really important is making sure that young people have got a fair opportunity to get into a home of their own. The bigger affordability issues facing the country are principally about supply, and that’s why the...you know, the main focus of what is now a $47 billion package on housing is focused on building more homes. But there’s an equity piece. We want young people to get ahead, we want them to have the chance to get into their first home, and our government has already acted on that. The 5 per cent Deposit Program has got 240,000 Australians into a home of their own but we believe we can do more, and we will.
Karvelas:
You’re spending $2 billion that you’ve announced on new infrastructure measures to unlock 65,000 homes. How do you know it will help 65,000 homes?
O’Neil:
This is the work that we do, just modelling out the impacts of our investments, and $2 billion for 65,000 homes is actually a fairly conservative estimate on what we will get up, but we want to be confident in the numbers that we use.
Karvelas:
So, it could be more homes?
O’Neil:
It could be more homes, yes. So, the $2 billion, to explain to your viewers, it’s funding the boring but important essential work that has to happen before anyone can lay a brick to start building a home. It’s things that we don’t normally think about – water, sewerage, energy, roads and footpaths – the things that must happen. And someone’s gotta pay the bill.
Now, one of the main reasons we’re not getting the homes out of the ground that we need to as a country is because this incredible expense can’t be borne by anyone who’s trying to build a home. So, we’re coming forward and saying $2 billion. We’re gonna work with states, territories, and local government to deliver that. Importantly, that $2 billion comes with strings attached. So, we’ve said to the states, ‘We’re gonna help you with this funding but, if you want to get access to it, you need to keep making pro‑supply housing reforms in your state,’ and that will give us even further benefits.
Karvelas:
OK, Peter Dutton took a similar idea to the election. At the time, Labor said, I remember well, ‘We’re already doing it, we don’t need to do that,’ and yet now you are. So, that was a bit disingenuous at the time, right?
O’Neil:
Well, we already invested almost $1.5 billion in our first term in housing infrastructure. Our total investments now on housing infrastructure come up to $6.3 billion. And if you’re wondering if that’s a lot or a little, it’s 50 times what Peter Dutton and his colleagues spent in the 9 years they were in office. 50 times, PK. So, we are making massive investments in that.
But it’s not just in housing infrastructure. Think about our massive social and affordable housing programs, our support for Commonwealth Rent Assistance that’s helping a million of the most unfortunate...the most, you know, the houses that...the households that most need our help get additional support to pay their rent. And then that massive support for home ownership. We’ve got a big plan here and this Budget will be about breaking off the next set of problems.
Karvelas:
One of the arguments for bigger reforms to housing taxation is that circumstances have changed and that’s why you’re breaking what obviously was a promise at the last election. But have circumstances really changed that much in the last year? I mean, we’ve had this housing crisis, as you say, for a long time...
O’Neil:
Sure.
Karvelas:
There isn’t some brand‑new one...you’ve never heard of these ideas before.
O’Neil:
Yep.
Karvelas:
They were first taken by Labor, particularly negative gearing, 10 years ago, in 2016, to an election.
O’Neil:
Well, there’s certainly nothing new about the housing problem. This has been building in our country for 40 years and the data absolutely lays that clear. And if I just remind people at home, the people I’m most worried about are young people on ordinary incomes, who are half as likely to own their own home in Australia today than in the year that I was born.
Your question about this is very, very fair. I think what Australians need to kind of look at when they look at what’s in the Budget is, ‘Is this the right reform and is this the right time?’ And I fiercely believe that the answer to those questions is yes.
Karvelas:
But do you accept, though, that things haven’t changed dramatically in the last year, really? The housing crisis is the same as it was?
O’Neil:
Well, I would say that the housing crisis is as it was, in the sense that it is urgent and causing great pain to the lives of Australians. We made it really clear at the election that housing was going to be a principal focus of this term, and that will be laid out in the Budget tomorrow.
Karvelas:
And was it your view, then, as a Cabinet – because the PM has all but confirmed the tax changes, all the detail, of course, we want to find out – but the concept, was it your view as a Cabinet that the supply‑side changes you were making weren’t shifting the dial fast enough?
O’Neil:
Well, I’d say we’re still to have a Budget tomorrow night, so I don’t want to foreshadow any decisions. There is a very clear understanding at the Cabinet table, number one, that we’ve got urgent housing challenges confronting the country and that, as a Labor government that cares deeply about equality, fairness, opportunity and helping people realise their aspirations, that this is core business for us.
But the second important point is this is a housing challenge that doesn’t have just one answer. Yes, supply is the main game, but there are lots of different problems here that we are trying to solve all at the same time. What you’ve seen our government do is every budget, every MYEFO, every election, we crack off the next set of problems and we solve them for the country. Now, we’re making a lot of progress on that but we’ve still got a long way to go, and tomorrow’s Budget is gonna be a big step forward for the country on housing.
Karvelas:
And will we get any projections about how many extra young Australians you want owning their own homes as a result of your changes? Like, for instance, by 2030?
O’Neil:
Sure.
Karvelas:
Will you outline how your policy change will shift the dial on that?
O’Neil:
So, any time the government would make a big change like this in a budget, typically there would be modelling which would demonstrate impacts.
Karvelas:
Okay, so we’ll be able to see – you’re not gonna reveal that, I wish you could...
O’Neil:
I’m not gonna reveal, I’m sorry. It’s only 24 hours more.
Karvelas:
But this many extra Australians might be able to access their first home as a result of big changes?
O’Neil:
Yeah, so, again, don’t want to consider what’s in the Budget. Just for the policy nerds of Australia – you and me included, PK – just one more sleep. But typically, in a significant change that’s being made to a system, we would model the impacts.
Karvelas:
There was a big by‑election on the weekend. The Coalition got smashed. One Nation did incredibly well, even the primary vote. It wasn’t just on preferences.
O’Neil:
Yep.
Karvelas:
Their primary vote was thumping. That must worry you too, rather than, you know, it just being a Liberal National Party problem?
O’Neil:
Well, of course it does, because my principal concern in everything I do is not political, it’s for my country that I deeply love. And I am absolutely horrified at the fact that this political space has been opened up by the total chaos and dysfunction in the Liberal and the National Party. It is – you know, the fact that we’ve got voters who are saying that One Nation is a real option for them, I think that’s incredibly sad. And Angus Taylor and Matt Canavan have got to stand up and work out how they can get their act together so this problem doesn’t continue.
Karvelas:
It might continue and hurt Labor.
O’Neil:
Yeah.
Karvelas:
I mean, people are really upset.
O’Neil:
Absolutely, and we don’t take a single vote of any person in this country for granted any day that we are in government. Gone are the days where you thought about safe seats and marginal seats. Every seat is a marginal seat. We take the vote of every person around this country incredibly seriously and we’ll fight for those votes.
Karvelas:
So, do you think you could lose a seat to One Nation, potentially?
O’Neil:
Look, I mean, I’m not gonna get into speculation about things that might happen 2 years down the track. All I can tell you is that we are so laser‑focused on trying to address the real problems in people’s lives, and housing is a great place to start, PK.
Karvelas:
Do you think that’s one of the reasons we’re seeing so much grievance in the electorate?
O’Neil:
Look, I think people are, you know... I’ll let the voters speak for themselves, but I think people are feeling, you know, some pessimism about what mainstream politics can offer them. And as a politician who’s a part of a government, you know, I feel responsibility for making sure I show that governments can actually deliver. But one important thing here that can’t be missed is these numbers show us that it will not be possible for a future Liberal or National to govern without One Nation. And I have to say that absolutely terrifies me. When we’ve got a Liberal Party on 12 per cent and One Nation on 40 per cent, it doesn’t matter what Liberals say about whether they’d like to be in coalition with One Nation or not, it is the simple arithmetic of what is going to have to happen here.
Karvelas:
But also the simple arithmetic is, even if Labor is in power, you could have a One Nation Senate, where they have the balance of power potentially. So, actually, you might have to deal with these guys too.
O’Neil:
Well, we’re already having to deal with it because we’re responsible for, you know, the whole country, not just people who elect Labor Members of Parliament. And the fact that we’re seeing Australians feel that, you know, Labor and mainstream politics can’t answer their problems and going to what I regard as an incredibly divisive political party in One Nation – remembering that Pauline Hanson said there’s no good Muslims in this country, that we’re being swamped by Asians, and likes to blame everything that’s going on here on migrants...
Karvelas:
And yet ordinary Australians are happy to vote them in.
O’Neil:
Yep. Yep.
Karvelas:
So, I mean, they are making a legitimate democratic choice.
O’Neil:
Absolutely, absolutely. Well, I mean, the first thing is we listen and we respect the democratic choice that they make, and we try to address what’s the root concern here. And I do think one of the things that people are saying, they are looking around at politics and saying, ‘Can this system solve the fundamental problems in my life?’ and we have to show that we can.
Karvelas:
Thank you so much for joining us.
O’Neil:
Thanks, PK.