VIRGINIA TRIOLI:
Mr Frydenberg.
JOSH FRYDENBERG:
Nice to be with you Virginia.
VIRGINIA TRIOLI:
Are you on a building site?
JOSH FRYDENBERG:
I’m off a building site and approaching Parliament House.
VIRGINIA TRIOLI:
Let me give the first question this morning to Alistair who called us straight off the bat when we announced the HomeBuilder Program that your government has announced to.
CALLER:
Why the hell should I go off and borrow $100,000 to merely get $25,000, the $100,000 that I don’t have at the moment whilst my job is insecure?
VIRGINIA TRIOLI:
It’s a good question; it goes to job insecurity and also whether you’ve got that balance right between the income cap and the borrowing requirement ratio. Can you answer Alistair’s question there Mr Frydenberg?
JOSH FRYDENBERG:
Well we have put in an income test there so you have to earn less than $125,000 as a single or less than $200,000 as a couple, and your new property has to be built for less than $750,000 and your renovation has to be more than $150,000. And what we have tried to do there Virginia is to target substantial economic activity to fill the void that is going to open up in the housing sector in the back half of this year as people put their hands in their pockets after the coronavirus pandemic height has eased. But we do recognise people will borrow, they’ve always borrowed, they will continue to borrow to buy their home, whether it’s their first home or a new home as well as to undertake substantial renovations.
VIRGINIA TRIOLI:
If you’re earning a maximum of $200,000 as a couple, can you really afford to spend a minimum of $150,000 either if you’ve got that they’ve saved, or to borrow it?
JOSH FRYDENBERG:
Well some people will and others won’t, but what we’re seeking to do here is a temporary and targeted way and not forgetting that this program will only run until the 31st of December is to spark continued activity in a sector that employs hundreds of thousands of Australians.
VIRGINIA TRIOLI:
I’ll jump in there, not to be rude but I get all that and we’ve explained that ourselves this morning what your thinking is, but it’s about whether you’ve got that ratio right. I’ve got a full board of calls of people saying I can’t afford that. If you’re putting a cap on my income of $200,000, then well let me quote one of my listeners this morning, Greg from Lalor who says “this is not middle class welfare, it’s more like upper class welfare for those poor millionaires in Toorak and Vaucluse.” $200,000 maximum as a couple, but you’ve got to spend a minimum of $150,000. How many people does that catch?
JOSH FRYDENBERG:
Well we estimate that between 25,000 and 30,000 dwellings will either be built or substantially renovated. We’ve costed the program at just under $700 million, you have to use an accredited builder, and having just been on a new build worksite in Eden Monaro, I can see that the number of people that such an investment will support through employment and what we are trying to do here is support a sector that contributes about $100 billion a year into our economy and construction overall employs more than a million Australians and we can’t have JobKeeper and JobSeeker payments if the current rates go forever. We need to transition people off those income supports back into work. The easing of restrictions as agreed by the National Cabinet is one way to do that, but also specific sector targeted approaches like the one we announced today will also achieve that purpose.
VIRGINIA TRIOLI:
I still don’t think we have an answer there about the modelling that will show how many people will be able to afford that and what sector of the community but look let’s move on-
JOSH FRYDENBERG:
Well I just said to you between 25,000 and 30,000 new dwellings, and that’s what our estimates estimate.
VIRGINIA TRIOLI:
Yeah my question went to the substantial renovation apart from the new dwellings and which part of the economy that might pick up.
JOSH FRYDENBERG:
Well just to answer you very directly, up 7,000 substantial renovations and about 20,000 new buildings so that’s a pretty definitive answer for you.
VIRGINIA TRIOLI:
Why nothing for social housing?
JOSH FRYDENBERG:
Well we continue to support social housing. When Scott Morrison was the Treasurer, he set up a program called NHFIC which is about $1 billion of loans that is made available to support social housing. About 1,000 new dwellings are being supported under that…
VIRGINIA TRIOLI:
But nothing specific during Covid-19, as so many policy makers have pointed out; that this is an optimal time to actually stimulate the economy, but to get one big social problem in this country solved. That you actually might be able to, in all the money that you’re splashing around, find some new money for that.
JOSH FRYDENBERG:
Well Virginia firstly we are supporting social housing. But also the States have a role here to play as well. I note that Victoria made some announcements recently about social housing and we welcome that. This program is to complement state programs that are available for first home buyers and our existing social housing initiatives complement what the States are doing as well.
VIRGINIA TRIOLI:
This country has relied on, and it’s success has relied on the backs of skilled temporary migration here. These people move here, live here, pay taxes here and educate their children here, and yet in the hospitality industry in particular your government has completely abandoned them and I have spent the weekend speaking to people who have basically fed their employees and fed their employees children because they fall through the cracks of JobKeeker and JobSeeker, why have you done that?
JOSH FRYDENBERG:
Well we set out a program with JobSeeker to effectively double the safety net and with JobKeeper to maintain that formal connection between employers and employees…
VIRGINIA TRIOLI:
Not for these employees, let’s get to the point, why not for these employees?
JOSH FRYDENBERG:
Well we made it available to Australian citizens and that was one of the parameters we put into the program…
VIRGINIA TRIOLI:
So why are these lesser workers when they pay their taxes too?
JOSH FRYDENBERG:
Well we also gave them access to their superannuation as temporary migrants and that was an important initiative to give them access to their money.
VIRGINIA TRIOLI:
I know we have to let you go because you have another appointment. We will talk a little bit longer next time Treasurer, there’s a lot to get through but thanks for your time.
JOSH FRYDENBERG:
Thank you.