Nicole Chvastek:
Michael Sukkar is the Assistant Treasurer, Minister for Housing and the Member for Deakin. Michael Sukkar, good afternoon.
Minister Sukkar:
Good afternoon, Nicole. Great to be with you.
Nicole Chvastek:
How will this work?
Minister Sukkar:
So Nicole this is a program, HomeBuilder, that will provide $25,000 for people within certain income ranges to purchase a new home up to the value of $750,000 and also a $25,000 grant for eligible people who undertake a substantial renovation, where, as has been pointed out, the renovation value is at least $150,000. This is in response to widespread industry concern that about half a million jobs in the residential construction industry are at risk in the latter half of this year because demand for new housing has dropped significantly as a result of COVID-19. So to protect those half a million jobs, it’s just not the tradies on a building site, whether it be a carpenter or a brick layer, or an electrician but it is also the timber mill workers who make the frames and trusses or the manufacturing workers who produce the brick and the glass and the tiles. That is a very large supply chain, supporting their jobs and, as I said, we wanted to make sure that we were able to leverage that additional investment from people by encouraging them further with that $25,000 grant.
Nicole Chvastek:
Why are you giving money to people on $125,000 who own their own home? I mean if you are on $60,000 a year and you’re renting and you’re struggling to put food on the table, you can understand how you would be a little bit unhappy that your taxes are going to assist somebody who is earning $125,000 and has the resources to buy their own home?
Minister Sukkar:
Well, Nicole, those caps are the same caps that we’ve applied for the Government’s First Home Loan Deposit Scheme which has seen 10,000 Australians get into their first home. Many of which, with that grant, are able to transition from being renters to purchasing. So, this is an additional incentive to help many people get into the housing market but importantly, at the same time, it encourages their additional investments. For example, the HIA has said this morning that this scheme from the Federal Government will unlock about $15 billion of economic activity which is keeping hundreds of thousands of people employed. Let’s not forget we have seen the worst pandemic in 100 years, we don’t want to see half a million people in the residential construction industry in Centrelink lines. So, to encourage those people to take that step to buy their first home or to upgrade their home, we think it’s a very worthwhile investment, again, to unlock up to $15 billion of economic activity in one of the country’s largest employment sectors.
Nicole Chvastek:
Why are you giving money to high income earners? Surely you can do that by sending tradies, by providing subsidies to tradies who perhaps go into bushfire zones to help people reconstruct their homes. Perhaps you could build some social housing, perhaps you could upgrade schools and hospitals. Why are you giving a subsidy to somebody who is on $125,000 who already owns their own home?
Minister Sukkar:
Because, Nicole, that group of people, and it’s up to – so we are talking about people who are up to that level there will be many people far below that income threshold who are perhaps buying their first home or upgrading from a unit to a larger family home because they have…interrupted.
Nicole Chvastek:
They’re not the ones where the consternation arises though.
Minister Sukkar:
But those people are exactly where this scheme is targeted. So, the house price caps at $750,000 mean that this is very targeted to those individuals who are going to need the support but importantly are going to also be able to co-invest, again, to keep those half a million employees, employed. So, I reject the assertion of your question, Nicole, quite frankly. As I said, the First Home Loan Deposit Scheme, a widely popular and successful scheme, has the exact same house price caps and that applies to first home buyers.
Nicole Chvastek:
There is a lot of criticism of people on welfare. The Sunday Herald Sun often receives drops in which they talk about dole bludgers, bleeding the country dry, being on welfare. They’re painted as sort of villains who are taking off with the hard-earned money of everyday Australians, yet it is okay for everyday Australians to funnel their money into somebody that is earning $125,000 or a couple who is earning up to $200,000. Why is it not okay to assist people who are low income earners and who are struggling, but it’s fine to shovel money towards somebody who’s on $125,000?
Minister Sukkar:
Well, Nicole, again you’ve asked a very loaded question. Every single state and territory in Australia offer first homeowner grants…interrupted.
Nicole Chvastek:
But I’m not talking about first homeowner grants, I’m talking about the optics.
Minster Sukkar:
Well, Nicole you’ve asked a question that is very loaded and ill-informed, and I am trying to answer your question. The income caps that apply to this scheme are the same as the Federal Government’s First Home Loan Deposit Scheme, that applies to first home buyers, it has been deliberately aligned in that way and again, if we want to support half a million jobs in the construction industry you have to find a way to encourage people to purchase new homes. If not, it’s not my statistic, the Master Builders Association, HIA, the Property Council are saying that up to half a million Australians will lose jobs, many of those Australians – low income earners. So, if you’re suggesting that it’s fine for those half a million Australians to lose their job without some co-investment form the Federal Government – and I might add, that will be supported by many states and territories, as well – then I think you are very wrong. It is very important that we support these half a million jobs in the Australian residential construction industry and if this can help some people get into their first home or upgrade their home and create those jobs, we think it’s a very worthy investment on behalf of the Government.
Nicole Chvastek:
Wouldn’t the money be better targeted elsewhere though, Minister? Building units for homeless people, building accommodation for people who don’t have a home, who can only dream of having a home, let alone doing $150,000 worth of renovation?
Minster Sukkar:
Well, Nicole, I’d encourage you to look at the expenditure the Federal Government undertakes in that space every single year. I think it is fair to say, each year we spend $6 billion in that space. We’ve setup the National Housing Finance Investment Corporation which has led to hundreds of new affordable social housing dwellings…interrupted.
Nicole Chvastek:
We’ve got 4,500 homeless people sleeping rough tonight in Victoria.
Minister Sukkar:
Nicole, I’d ask you to inform yourself on those first and secondly, this is also a partnership. So, the states have a role to play here, a big role to play. We’re doing our bit in protecting half a million jobs. We’re very certain the states and territories will step up to the plate and do their bit. But we have ongoing investments into social and affordable housing every year into the many billions of dollars and in fact many would say that the Morrison Government has stepped more into this space than any federal government before us.
Nicole Chvastek:
I am speaking to Michael Sukkar who is the Assistant Treasurer and Minister for Housing. Minister, I am seeing reported that mortgage stress levels among Australians have continued to soar amid the global outbreak of COVID-19, with data showing that more than 1.4 million Australian households are now in mortgage stress and almost 100,000 could soon default on their loans. Isn’t it a bit dangerous for you to encourage people to go into further debt so that they can do renovations and claim a $25,000 subsidy, at this point, when analysts are predicting a spike in unemployment which could trigger debt servicing problems and forced sales?
Minister Sukkar:
Well, Nicole, obviously people will make decisions that are in their best financial interests and that they can maintain themselves. There is no doubt that one of the consequences of COVID-19 has been much greater mortgage stress for lots of people, particularly those that have seen a significant drop in their income, but at the same time, there will be people that do want to take those decisions who feel they’re financially able to do so, and again, those people making those decisions to buy their first home or to upgrade their home, they are the people who underpin many hundreds of thousands of jobs in the residential construction industry. So, we want to support those people to make those decisions, we trust that people will make those decisions, and of course we have responsible lending laws in place, Nicole, as I am sure that you’re aware, which ensure that people are able to manage their debts but ultimately, there will be a number of people who are, no doubt, in mortgage stress who will not be looking to upgrade or buy a new home and that’s part of the reason why there are many hundreds of thousands of jobs in the residential construction industry at risk and I don’t think we can ignore those hundreds of thousands of people who are the life-blood of many communities around our country.
Nicole Chvastek:
The Canberra Times is reporting that just four per cent of Australians in areas impacted directly or indirectly from the 2019 bushfires have received government aid. Do you think this will stick in their crawl, Minister, that you are going to give $25,000 to somebody on $125,000 to do their renos’?
Minister Sukkar:
Well I think there will be many people in regional areas who have the capacity, and this might be the catalyst for them to take the decision to do that, which will be wonderful for their local communities because they will be injecting economic stimulus into those local communities, will be keeping local tradies employed. So, again I think like every community around our country, this will ensure that we support many hundreds of thousands of jobs. A small investment from the Government can unlock a massive economic follow-through and I think that regional communities will benefit as much as any other.
Nicole Chvastek:
But where’s the clamour to assist the regional communities as much as you are assisting those who are earning $125,000?
Minister Sukkar:
Well, Nicole, because the scheme applies equally throughout the country. So, $750,000, as I’ve said, is the house price cap nationally…interrupted.
Nicole Chvastek:
Just four per cent of Australians in areas directly or indirectly impacted by the 2019 bushfires have received government aid and there is this clamour to give money to people who are earning a $125,000?
Minister Sukkar:
Nicole, that’s false. The Government has put in place the JobKeeper program, the JobSeeker program, are you seriously suggesting that only four per cent of regional Australia have tapped into those programs? I think you need to check your statistics because they are clearly wrong…interrupted.
Nicole Chvastek:
The national bushfire recovery agency deputy-co-ordinator…interrupted.
Minister Sukkar:
But that’s bushfire support. I am talking about government support as a result of COVID-19. The JobKeeper program, the JobSeeker program.
Nicole Chvastek:
Well bushfire support or government support?
Minister Sukkar:
It’s one component, it’s not all of government support, Nicole. I’m surprised you’re suggesting that the entirety of government support is paid through that. We’ve got the JobKeeper program, we’ve got the JobSeeker program, we’ve got cash-flow boost for small business. Now we are looking at the next stage, and we are encouraging jobs in the residential construction industry, and regional communities will be as big a beneficiary as any part of the country and I’m very surprised that you are confused about those statistics.
Nicole Chvastek:
Regional Victoria have lower average incomes. Earning $125,000 in regional Victoria is not a pay packet which is thick on the ground in this neck of the woods, Minister.
Minister Sukkar:
But house prices are lower too, Nicole. So, the point I was making before you interrupted me was we have a national program, it applies nationally. Now, the house price cap of $750,000 means that you can get a lot more for your money in a regional area for that amount that you can perhaps in a suburban or inner-city area. So, there are swings and roundabouts to these programs but, for example, you can certainly get a lot more bang for your buck, in a property sense, in a regional area than you can in some urban and inner-city areas.
Nicole Chvastek:
Minister, thank you for your time.
Minister Sukkar:
Thanks so much, Nicole.