Nick Chandler (Rawson Homes):
Minister, thank you very much for joining us today. Rawson Homes is a forty-year-old builder in New South Wales. We’ve been in the ACT for about twenty years. These types of projects are our bread and butter and first home buyers are absolutely the engine room of our business. We are a business that is built on lots and lots and lots of small businesses. Our tradies and the people that they employ. There are hundreds of people engaged in building our homes right across the state and so the announcement today is absolutely fundamental to the livelihoods and keeping that engine room working. So, Minister, we welcome you to a Rawson Home and we’re delighted that you can be here.
Minister Sukkar:
Thank you. Well, Nick and Gary from Rawson Homes, thank you so much for having us here today. It’s been wonderful to visit this site in this beautiful part of our country. Of course can I also thank Denita Wawn from the Master Builders Association for being here today and Graham Wolfe from the Housing Industry Association, for what is another very important step in the Morrison Government’s plan and long-term objective to help first home buyers in our country, get into their first home and also, during these extraordinary times, to help our residential construction industry, an industry that employs hundreds of thousands of Australians.
Today we’ve announced an additional 10,000 places under the First Home Loan Deposit Scheme. You will all know and Australians will all know, the First Home Loan Deposit Scheme – a scheme to allow Australians to get into their first home with a deposit of as little as 5 per cent – was a key election commitment at last year’s election. We’ve delivered on that commitment at the beginning of this year and the First Home Loan Deposit Scheme has been a raging success since.
We’ve seen nearly 20,000 Australians take-up or access a First Home Loan Deposit Scheme guarantee. We, at the moment, have thousands of Australians who are still looking for that home, nearly 10,000 Australians who have already settled on or purchased a property thanks to the First Home Loan Deposit Scheme and today, we’re of course announcing an additional 10,000 places from budget night until the end of the financial year, for first home buyers who purchase a new home. This is an extension to the First Home Loan Deposit Scheme to do two things. Yes, of course, to continue the great work of the First Home Loan Deposit Scheme in helping Australians get into their first home but importantly, to encourage more purchases of new homes, to support – as I said – the residential construction industry which employs so many Australians.
This of course goes further to a range of other policies that we’ve put in place. Whether it’s the First Home Super Saver Scheme, helping Australians through a salary sacrificed tax cut to save for a deposit more quickly, or of course the very successful HomeBuilder program, a program that offers a $25,000 grant to people who purchase a new home. We’ve seen the HomeBuilder program support, again, hundreds of thousands of jobs. The HIA have indicated through their chief economist, that it’s supporting nearly a quarter of a million jobs in the residential construction industry. The Master Builders Association, I have Denita here with me today who has said that it’s the most successful stimulus program for their industry in a very long time.
This is another step in that plan to support a very important industry in our country, to support the up to one million people who work in the residential construction industry, and of course, with the First Home Loan Deposit Scheme, to encourage more Australians and to help more Australians into their first home because the Morrison Government is a government committed to helping people get into their own home.
So I might invite Denita Wawn from the Master Builders Association, just to say a couple of words.
Denita Wawn (Master Builders Association):
Thanks, Michael. Good morning. From a Master Builders Australia perspective we commend the Morrison Government with this initiative today. This builds on the successful HomeBuilder that has been an absolute lifeline for the housing industry in Australia. It came at the right time, but we are obviously concerned that we need to maintain that pipeline of work for hundreds of thousands of small to medium sized businesses around the country. And so the decision today to announce an additional 10,000 new homes but on the basis that it is a new home, is broadly welcomed by the industry.
We have the largest economic multiplier effect of any industry so this is not just about helping the residential building market but the supply chain and more importantly, the economy as a whole. We also think that it is fantastic for first home buyers. It is critically important that they get that step and that they resolve those deposit gap problems and so this enables them to get into home ownership which we know is so incredibly important for all Australians. Thank you.
Minister Sukkar:
Thank you, Denita. And Graham, I might ask you to come up and say a few words. Thanks Graham from HIA.
Graham Wolfe (Housing Industry Association):
Thank you, Minister. Over the past twelve months, the First Home Loan Deposit Scheme has proven to be a very successful initiative and has helped thousands of first home buyers achieve their dream of home ownership sooner. But for the First Home Loan Deposit Scheme, it would take an aspirational first home buyer up to ten years and longer to save for a deposit. This scheme halves that time and better.
The focus of the extension of the First Home Loan Deposit Scheme exclusively on new homes is also a very strong boost for the residential building industry and will support tens of thousands of jobs in the residential building game. It will also support thousands of other jobs – workers who are engaged in providing the goods the products and the systems that go into a new home. This first home buyer scheme and its extension, ticks all the boxes and I look forward to working with the Government further to make the First Home Loan Deposit Scheme a permanent feature of the first home lending landscape.
Minister Sukkar:
Great, thank you, Graham. Okay well I think that’s all so happy to take questions.
Journalist:
Minister, you say that this program works in conjunction with HomeBuilder but HomeBuilder, the application will run out at the end of the year but this program will go well into next year so will you extend HomeBuilder so that they can continue to work together?
Minister Sukkar:
Well look there’s no doubt that under this scheme, if people want to combine it with HomeBuilder is an option for them. They’ll need to get their skates on which is an absolute deliberate design feature of HomeBuilder. As the PM said about a week ago, we’re keeping a very close eye on HomeBuilder. It’s been an extraordinary successful scheme. That goes in its favour as far as everybody who is advocating for its extension and I’m here with Graham and Denita who have been very forceful advocates saying that HomeBuilder has been so successful that it should be continued. We’ll keep a close eye on it where, as I said, we’re looking at it very closely and we’ll make a decision once the program roles out closer to that deadline.
Journalist:
Right so that’s not an announcement for this budget?
Minister Sukkar:
Well you’ll see everything that’s in the budget on Tuesday night. What we’re announcing today is an extension to the First Home Loan Deposit Scheme. As the PM has said, with HomeBuilder which of course runs to 31 December, we’ll keep a very close eye on it between now and then.
Journalist:
Would you consider increasing the cap on house prices to qualify for HomeBuilder, as you have with this, at least for Sydney?
Minister Sukkar:
Well, Jennifer, again the scheme as its set in place now with a flat $750,000 house price cap and income caps that are comparable to the First Home Loan Deposit Scheme, have been very deliberately designed for the market and, again, any decisions around HomeBuilder – whether it would be extended – of course, are things that we’ll keep a very close eye on between now and its end date on 31 December.
Journalist:
With the loan deposit scheme, the first version of it, was that fully subscribed?
Minister Sukkar:
There’s been two tranches of First Home Loan Deposit Scheme guarantees released to the market. There was 10,000 released on the 1st January – that was fully subscribed. Of those full subscriptions, those 10,000, about 8,000 have led to people actually purchasing a property and there’s about 1,500 to 2,000 people who have got their guarantees and they’re still looking for a home. Then we had a second 10,000 which were release on 1st July and of those, nearly all – over 9,000 of them – have been accessed and of those, most of them are still looking for their property.
Journalist:
Do you know how many new homes were built as a result of that?
Minister Sukkar:
It was a touch over ten per cent. Part of today’s decision making was ‘how do we use the First Home Loan Deposit Scheme to support new jobs?’ That was one of the reasons that we really decided that we would ensure that for this tranche of First Home Loan Deposit Scheme guarantees, that it was open to new homes only. That’s part of the reason why we’ve lifted the caps too because we know that the median price for new homes is higher than the median price for established dwellings. So this is a really deliberate decision to get the best of both worlds – to help first home buyers but also support tradies jobs in the construction industry.
Journalist:
Do you have concerns though that given that we are in a recession, that people are going to be reluctant to borrow large amounts of money at this point in time?
Minister Sukkar:
That’s a very fair question. The evidence that we’ve seen over the course of this year, when we think about the pandemic hitting really hard in about March, it has not slowed the uptake of the First Home Loan Deposit Scheme at all. The first two tranches have been fully subscribed, there’s obviously resilience in the market, there are people who feel confident enough to do it and we’re facilitating that. So I’d expect for this 10,000 tranche of First Home Loan Deposit Scheme guarantees, that we’ll have no problems with people wanting to take them up very enthusiastically.
Journalist:
Do you agree with advocates who say that an investment in social housing is a key to economic recovery?
Minister Sukkar:
Well we, of course, make significant investments into social housing each and every year. We established the National Housing Finance Investment Corporation which has funnelled 1.5 billion to the community housing sector which has led to thousands of new homes being supported. We recently announced $100 million with the New South Wales State Government, to support a range of social housing projects in New South Wales. $16 million with the Western Australian Government. So of course there’s a role for us to facilitate and assist with social housing. It’s the primary responsibility of states but we have stepped-up more than any other Federal Government before us, to support social housing. But these sorts of announcements are really important for the tradies who work on a site like this. One of the great successes of HomeBuilder has been the absolute uptake in regional Australia. In every town in every major centre around this country, we are hearing stories of builders saying that it’s never been busier. Now, converting those to sales has been, of course, the challenge and just talking to the Rawson Homes team now, they’ve said that they’ve had more enquires in the last two months than they have had in the last three years. I think that a great success of what we’ve done has been evident, but of course, investments in social housing are things that we do each and every year and on top of all that, we spend $4.6 billion every single year supporting people in social housing through Commonwealth Rent Assistance.
Journalist:
Are you expecting some kind of rush to the market or correction on housing prices in March, particularly when JobKeeper and JobSeeker end?
Minister Sukkar:
I try to avoid looking into the crystal ball of the housing market. I know that it’s an Australian pass time, we all love looking into the future on housing prices. I think that what I can say, Jennifer, is that there’s great resilience in the market and I think that if I look at some of the doomsayers and the predictions that were being made in February and March when the pandemic hit, those quite catastrophic situations certainly haven’t eventuated. My general position – without wanting to ever provide too much commentary on these things – is that there is great resilience in the market and that of course, with the economic plan that Australians will see on Tuesday night, I think that the confidence that that will engender throughout our country and community and in businesses and in this sector, that that resilience will continue in the market.
Journalist:
What are your thoughts on President Trump being taken to hospital?
Minister Sukkar:
I must say that I was talking to my wife about this last night. It does shock you a bit because the unpredictable nature of this virus is really highlighted when you see a world leader get it whether it was Boris Johnson or now of course, the President and the First Lady. So that sense of the unpredictable nature of this virus I think really comes home when you see that. Of course myself and the Government and the Prime Minister – who made contact with President Trump – just pass on our absolute best wishes and we hope that they have a speedy recovery. Look of course there’s a political overlay here with a Presidential election so the sooner that the President and the First Lady are able to recover, I think the better for everybody and we just send them our best wishes.
Journalist:
How concerned are you about population growth given the pandemic and are you close to the point where you would consider cash incentives for Australians to have babies?
Minister Sukkar:
Population growth has been a cornerstone of our way of life, a cornerstone of our society and quite frankly – as you rightly point out – essentially a cornerstone of our economy for many decades. There’s no doubt that – not through choice and not through design but through circumstance – population growth from net overseas migration is going to be significantly impacted. You will see and Australians will see, on Tuesday night, really the full consequences of that, it will be outlined in the budget papers. As for our longer term strategy, I think back to the Howard and Costello days – ‘one for mum, one for dad and one for the country’. You’d never want to rule anything like that in or out but wouldn’t be my responsibility to make that decision.
Journalist:
Just on aged care, the Prime Minister has acknowledged that it’s a broken system. It’s all well and good to throw money into the sector but is that really the right option when there needs to be major structural reform to better allocate that money?
Minister Sukkar:
Well I don’t think that there’s been any leader of our country that has recognised so swiftly, the issues in aged care. One of the first things that the Prime Minister did was to establish the Royal Commission. We have, to the greatest extent possible, tried to address and attend to issues that have been raised even throughout the process of the Royal Commission. We’ve invested $1.6 billion, we are on our way to responding to four of the six recommendations that were ultimately made. I think that shows to you, Jennifer, that there’s an acknowledgement and a desire for our Government to make sure that, perhaps one of the legacies of the Morrison Government is that we value and care for senior Australians, the Australians who have made this country what it is, the Australians who have endowed us with what is the best country in the world, the dignity in their later life that they deserve. I’m very committed, the Government is and there’s no doubt about our Prime Minister’s commitment to addressing those systemic issues, as you say, addressing the recommendations from the Royal Commission and doing it with everything that we’ve got.
Journalist:
Home care is a real issue. 10,000 Australians died last year waiting for home care, there’s still 100,000 on the waiting list. Will there be more investment in home care in next week’s budget?
Minister Sukkar:
Well it’s always important to note with waiting lists in home care that often its people who have some form of home care but are waiting for a higher package so it’s not people who necessarily don’t have any home care, that’s I think a first point to note. We have, in every recent budget, in every recent budget and in every recent MYEFO, put in place additional home care places. I think that’s a recognition that we need to eat into that and make sure that we keep making steps in the right direction. I would acknowledge your basic point and say, look at our track record. We have invested more into home care packages than any Government in recent times and that’s a record that I’m sure will continue.
Journalist:
Denita, can you just give us an overview of how the construction industry is tracking at the moment?
Denita Wawn:
Thank you. Building and construction is a bit of mixed bag at the moment. The residential industry is doing extraordinarily well because of HomeBuilder. There’s a couple of caveats to that particularly in Victoria where they are locked down and have limited opportunities, the renovations market is not able to work at all in Victoria. But nevertheless HomeBuilder has been an absolute boon for the industry. Likewise civil infrastructure – the support by federal and state governments on civil infrastructure has been particularly good and bringing forward expenditure in that space.
The area that we have got some concerns about is commercial building. We’re seeing a large amount of tenders and contracts being closed off and obviously, who wants to build at the moment, a significant hotel or high rises in the middle of the CBD. Investors are concerned. But we do think that there are opportunities going forward. Certainly we can see from this announcement today, there’ll be opportunities to access this for high rise development. We also hopefully will see a greater confidence from the budget on Tuesday where people will start re-investing but we’re also encouraging institutional investors to look at longer term opportunities given that they invest against the cycle. Things like hospitals, education facilities that we can build for the future, post this pandemic.
Journalist:
So what specifically can the Government do to help with the commercial side of things?
Denita Wawn:
We’ve actually put a proposal to the Government called Community Builder, which is building on the HomeBuilder initiative and certainly to see whether or not we can encourage investment by community groups, into commercial building. Obviously we’ll have to wait and see what the Government has made a decision on, on Tuesday night, but certainly we understand that the investment into the industry should primarily be private investment, not direct government investment and therefore we need to activate private investment. So it’s not just about direct stimulus but it’s also ‘how can we rebuild confidence in the economy so that people are returning to investing in property in the economy as a whole?’
Journalist:
And what would an extension to HomeBuilder do?
Denita Wawn:
HomeBuilder would ensure that we continue that pipeline of work post-March. Obviously the big issue will be to ensure that we keep people in jobs, that we employ apprentices while the economy is going through this rebound from the pandemic. That will be the critically important thing for us. We employ overall in the industry, 1.1 million people direct but there is a massive multiplier effect throughout the economy and we think that there is value in the Government maintaining that pipeline of work so that we can maintain those apprentices and we can maintain those jobs.