Sally Sara:
Well, the construction industry has been under mounting pressure to deliver more than 1 million homes needed under the National Housing Accord. That’s been made even harder by the conflict in the Middle East as the sector grapples with rising costs and supply chain issues. Clare O’Neil is the Minister for Housing, Homelessness and Cities and joins me now. Minister, welcome back to Breakfast.
Clare O’Neil:
Good morning, Sally. Great to be with you.
Sara:
What effect is the conflict in the Middle East having on housing construction? Is the government expecting the number of homes constructed to fall as a result of the economic fallout of the conflict?
O’Neil:
Fuel is absolutely essential to housing construction, so the impacts on the sector were virtually immediate, and we’ve been working very closely with them since the conflict began. Residential construction is really sensitive to cost increases. It’s a sector that’s really dominated by small businesses and they’re working on thin margins. So, the effects have been meaningful on the sector so far, but manageable.
What the sector says to me is they’re alert but not alarmed. The most important thing our government can do to support them is to make sure that we find fuel for the country. And you’ve seen the work that we’ve been doing on that front. The PM meeting with global leaders to make sure that we’re at the front of the queue to get the fuel that we need.
Sara:
Last week, Productivity Commission Chair Danielle Wood said it is already clear that the government’s target of building 1.2 million homes over the second half of this decade is, quote, ‘not going to be met’. How many homes then can you realistically now expect to deliver in that time period?
O’Neil:
Sure. Just to refresh your listeners, one of the most important things our government has done on housing since coming to office is work together with states, territories and local government and the housing sector to build a hugely ambitious national program of building more homes for our country. The reason for almost all the housing issues that are being experienced by Australians is that for 40 years our country has not been building enough homes, and we need to tackle that problem.
Now, the 1.2 million is a big, ambitious target. To get there, we’d have to build more homes than we’ve built in any year and do it over a 5‑year period. We don’t shy away from ambition. We are without question the most bold and ambitious Australian Government on housing since the post‑war period, and that’s why we’ve set that target. Now, in terms of your question about progress, we’ve built about 260,000 homes in the first 6 quarters of that 5‑year period. The experts who advise us tell us that we are close to getting to a million of the 1.2 million.
And what I’d say to your listeners is 2 really important things. First, we’re making huge progress here. Before the conflict in Iran, we were seeing really strong improvements on housing building numbers. The work the government is doing building homes with the states is going very well. So, we’re making progress, but more needs to be done, there’s no question about that. And if we want to know, how to get out of the –
Sara:
So why set targets if they’re not achievable?
O’Neil:
Pardon?
Sara:
Why set targets that may not be achievable?
O’Neil:
Because we need to make a step change in housing in our country. We didn’t come to government saying we’re going to make small incremental improvements to this situation. We’ve got a generation of young people growing up in our country who have virtually given up on home ownership, and that has to change. Things like the 5 per cent deposit program have brought 240,000 Australians into first home ownership with our government’s backing. These are really big, meaningful differences, and we intend to make more of them. We want to be bold and ambitious about housing because this is one of the biggest challenges facing the country, and just business as usual isn’t going to get us where we want to go.
Sara:
You’ve announced a deal with governments of the ACT to build new homes reserved for first home buyers. You’ve also signed deals with SA and Tasmania, but not with the 4 largest states. Will you be able to reach the 100,000 new homes you promised at the election under that scheme?
O’Neil:
So, just stepping back again quickly, one of the critical election pledges that we made is to build 100,000 homes working with state and territory governments, and to reserve those homes for sale just for first home buyers. If you look across the suite of housing policies we have, the single common thread is we are focused on getting more Australians into home ownership and this is part of that plan. We effectively have made enormous progress on this. I’m in Tasmania today signing a deal with the state government there. I did the ACT yesterday and South Australia a few weeks before that. We’ve got really good discussions happening with other states and territories, and we’ll have a lot more to say about that.
If I could just say one more thing before we move on from these important topics though, Sally, just remember that for the 9 years, the Coalition government, they built 373 homes around our country. We’re building 100,000 homes with the states and territories, and 55,000 homes that are social and affordable. So, the federal government is back in the game of building homes for Australians, and that’s a big, important change.
Sara:
We’re speaking with your Coalition counterpart, Shadow Housing Minister Andrew Bragg, a little later this morning. He says that changing the capital gains tax discount won’t fix the housing crisis and risks making it worse. Will you need to ensure that any capital gains tax changes in the Budget boost housing supply rather than contain it?
O’Neil:
Sure. Really important question. So, first, to say our tax policies haven’t changed. There is a conversation going on about housing taxation, but the tax policies remain as they were. There’s 2 big guiding principles that guide our work in housing. The first is we’ve got a 40‑year‑old problem with housing because we haven’t been building enough homes for 40 years. And the answer to that is that we’ve got to build more homes for Australians. Our government is fiercely pro‑supply, and if there’s one thing we can do about this problem, it’s that.
The second thing, though, is that we recognise there is a manifest injustice today facing young people in our country. They are facing wildly different housing opportunities than their parents and grandparents, and my strong view is we need to step up and give them a hand. Now, we have done that through the 5 per cent deposit program. Again, almost a quarter of a million people have gotten into their first home now with our government’s backing. But there’s no question we need to do more to help them. This is a long‑running problem for the country, and we have a fierce commitment to address it in the interests of young people.
Sara:
Clare O’ Neil, we’ll need to leave it there. Thank you for your time this morning.
O’Neil:
Great. Thanks so much, Sally.