4 June 2020

Interview with Kieran Gilbert, Sky News

Kieran Gilbert:

Let's return now to our top story, the Government's housing grants. Joining me is the Minister for Housing and Assistant Treasurer, Michael Sukkar. Minister, thanks so much for your time. The Housing Industry Association said that they didn't want a means test put in as part of their consultations with the Government; you've decided to go with the means test. Can you explain your reasons?

Minister Sukkar:

Yeah, Kieran. Look we're very keen to support the half a million jobs in the residential construction industry that the Housing Industry Association have identified are at risk in the second half of this year, due to the slowdown in demand for new housing. But at the same time, we want to target that, make sure that it's going to the places where it will make the most difference. We've aligned the income caps with those that we've put in place for the First Home Loan Deposit Scheme. That's $125,000 for singles and $200,000 for couples. So we think it targets it in the right place and as the HIA, that you noted, and indeed the Master Builders Association have said, this Home Builder program put in place by the Morrison Government will unlock, on their estimates, anywhere from 10 to 15 billion dollars of construction activity and that is crucial for supporting the half a million jobs that they've said are at risk in the second half of this year, due to the slowdown in residential construction.

Gilbert:

Are you sure, though that you haven't means-tested it too narrowly, particularly when you're saying there needs to be a threshold of say renovation of say $150,000, but people have to be earning a maximum of $200,000 in order to apply.

Sukkar:

Well the new home buyer grant applies to all homes with a value up to $750,000 nationally. So you'll get a $25,000 grant if you are otherwise eligible but purchase a property up to $750,000. With respect to substantial renovations, there will no doubt be a number of people who don't want to move, don't want to purchase a new home, but they want to make a substantial renovation to their own home – if they've got a growing family, they’ve got teenage children, they want to put a second storey on, they want to do something substantial. We thought it was fair that they got access to that because ultimately, Kieran, this is a program about jobs – the half a million jobs in the residential construction industry, which isn't just the plumbers and the carpenters and the tradies on site, but it's the timber mill workers who make the frames and trusses, it’s the manufacturing workers who make the glass and the brick and the tiles, and ultimately a job on a new home site or a tradie’s job on a renovation is still a job. A job is a job and ultimately if it's a job on a renovation project or a job on a new home site, we wanted to support both. This is a very important jobs’ program to support those half a million people who work in the residential construction industry, who the industry have said are at risk of losing their job in the second half of this year – and I might add, both the HIA and MBA have said that this program, the Home Builder Program, is a lifeline for them and those 500,000 workers that were at risk.

Gilbert:

Obviously, you want to, have a sense of urgency here, to get people investing now by having the deadline set for contract sign by the end of the year. If it works, if it's fully subscribed and it works and the industry’s still struggling, would you consider extending it beyond December 31?

Sukkar:

Well Kieran, it's a demand driven scheme, so ultimately it's Australians who are making that decision to buy a new home. Whether it's a first time buyer making the decision to buy their first new home or whether it's somebody looking to upgrade their family home. They will be the ones that make that decision. Again, we expect that'll add about 30,000 new homes and substantial renovations to the pipeline of work for the second half of the year. Again, the HIA and MBA, and many other industry groups, the Property Council, have said that they think that will do the job to fill the pipeline. So we, at this stage, want to ensure that that demand fills the hole, the hole that's going to be there for the second half of this year. We want to create…interrupted…

Gilbert:

Would you consider extending it, if need be?

Sukkar:

…and for people to make those decisions. Well Kieran, we'll see how the scheme goes. We think the scheme is going to be popular. We think it'll be taken up – that’s certainly the feedback that we've received already today, as a number of people who were teetering on the edge of whether they took that big decision to buy their first home or to buy a new home. They now, with a $25,000 grant under the Home Builder Program, have enough to make that decision, to get them over the line, to sign that contract. So we think it's going to do the job and it's a significant program, again that's going to release $10 to $15 billion dollars of construction activity based on advice from HIA and MBA.

Gilbert:

So it's a chance? If, I mean, we are in recession, we're facing this global pandemic, the economy is absolutely copping it.  If things don't turn around by the end of the year, you might keep the lifeline going a bit longer?

Sukkar:

Well Kieran, it's speculative. What we have done with timing is something very important though; we announced it today and it's effective from today because we don't want people holding off for a start date. We wanted to make sure that it was available from the day that we announced it, so my message to all of those Australians – whether they're first-time buyers looking to purchase their first new home, someone looking to upgrade, someone who was thinking about putting on that second storey or undertaking that major renovation to their home – we hope that this will be the catalyst for you to make that call, to sign that contract, to get those tradies on-site to support those half a million jobs in the residential construction industry that are at risk. Because ultimately, Kieran, this is a jobs program and through this investment, through the HomeBuilder, it will unleash just a huge economic flow-on effect through the entire industry.

Gilbert:

Minister, anyone that's done a renovation know sometimes it can be really tough getting the approvals through Council and so on. Are you sure they'll have enough time to get it all done and the approvals ticked by the various councils around the country?

Sukkar:

There are significant issues and anyone that's been involved in the property space knows that planning approvals are an issue. There are a number of renovations, often which are within the existing footprint of a home, that don't require those sorts of approval. So that's one of the reasons for including substantial renovations in this scheme – it adds to the ability to get those jobs created in a short period of time. No doubt, there will be some instances where approvals are an issue, but again, I think part of the broader work of the National Cabinet going forward, and indeed my role as Housing Minister, will be to encourage States, and through States, their local governments, to speed-up those approval processes because it's not just a handbrake potentially on schemes like this, Kieran – slow approval processes are a handbrake on the entire housing construction industry and sadly have been that way for a very long time.

Gilbert:

Are you looking at the idea of a package just for social housing, because there are more people homeless now than ever before in this country? 140,000 homeless are on waiting lists for public housing. Are you looking at this as an area where you could also have a stimulus and do two things – you have the social good of providing public housing but also an unequivocal economic support for the industry?

Sukkar:

Well, Kieran, we make ongoing investments into social and affordable housing and affordable rents, some $6 billion a year, which is just the annual expenditure of Government. We also set up the National Housing Finance Investment Corporation, which is funnelling funds to community housing providers and which has led to many hundreds of new affordable housing dwellings being built. In fact, I'd think we can fairly say the Morrison Government has stepped into this space more than any Federal Government before. But ultimately, that is the province of states and territories. We will do our bit, we’ll do more than our bit, and we've already shown that to date…interrupted.

Gilbert:

Can you bring some of that money forward? Because if you put tradies out of work now, can you bring it forward and get them doing that work now? Because as I understand it, the funding for the states is five years – a program, $1.5 billion a year. Why not bring the out-years forward and say okay, let's get it done now, given we've got this demand, this need, now?

Sukkar:

Well, we make much greater investments than that through, as I said, the National Housing Finance Investment Corporation, which has a $1 billion infrastructure facility that's available today to those community housing providers to access. So we've engaged very heavily in this space. We funded it significantly, but at the same time, the announcement today of the HomeBuilder program means we can bring forward a great deal of demand. We can encourage those Australians to make a decision to buy their first home, buy a new home, undertake a substantial renovation, because the jobs are at risk over the next few months, Kieran, and we need a mechanism to be able to create those jobs, create an environment where those jobs are secure for the second half of this year. That is what the HomeBuilder does.  Every industry group has applauded it, because it absolutely achieves that goal of supporting their half a million workforce who are, by their estimates, at risk of losing their jobs in the second half of this year without the HomeBuilder program. So that's why this mechanism is so important for those jobs.

Gilbert:

Minister, just finally, I know you've got to get going, but a quick one to finish. If you look at the various support initiatives, like JobKeeper wrapping up in September, JobSeeker again at the end of September with the doubling of the rate, you've got this support at the end of December. With all of that support being removed at the same time, is there a concern that you've got as Assistant Treasurer that essentially the economy falls off a cliff at that point?

Sukkar:

Well, Kieran, we’ll appropriately manage these things. As I've said many times to you over the last few months, there's no such thing as a set and forget in politics and in public policy and there’s certainly no set and forget that you can undertake in unprecedented times like what we're dealing with at the moment. And I think if you look at our track record, we have appropriately met the mark in supporting Australians, supporting small businesses, and now with the HomeBuilder program, supporting jobs coming out of it. And that will continue, Kieran and as I said, we watch these things literally on an hourly, daily basis to make sure that the Government's doing all we can. In the end, with the economy now reopening in a staged way as set out by the National Cabinet, we're encouraged to see, hopefully, the economy getting back to some semblance of business as usual. But you're right to say that that's not going to be the case in every sector of the economy and that's why interventions like this where we support one of the largest single employers, the residential construction industry – over a million employees nationally – that that is a sign that we are looking at how we can continue encouraging economic activity and support into the future.

Gilbert:

Minister for Housing and Assistant Treasurer, Michael Sukkar, as always, thanks for your time – appreciate it.

Sukkar:

Kieran, thanks so much.