PATRICIA KARVELAS
The Assistant Treasurer and Minister for Housing joins us tonight. Michael Sukkar, welcome.
MINISTER SUKKAR
Patricia, good to be with you.
PATRICIA KARVELAS
The moratorium on evictions was agreed on by National Cabinet. Do you think it should be extended if the economy hasn't recovered?
MINISTER SUKKAR
Well, in the end, Patricia these will be matters for the National Cabinet and as you know, each state and territory is then required to legislate in their own circumstances, and we've seen a number of jurisdictions do that already. Importantly, in order to buy so many businesses that lifeline, the decision of the National Cabinet, led by the PM, was extraordinarily important. The moratorium on evictions, we also made the point, very clearly, that the pain had to be shared between tenants and landlords and it couldn't disproportionally fall on one or the other. That also meant that if a business could pay it, they should pay it. Now overwhelmingly, Patricia, we've seen landlords and tenants come together and work cooperatively. There are obviously commercial reasons for that too. It would hardly be good business practice in this environment for a landlord to evict a tenant. There's not like there'd be a whole host of people lining up to take the lease. So that sort of cooperation, I think has really been widespread. Again, when we get to the end of the pandemic and end of this period, I think, like all of these policies, there's no set-and-forget, we'll need to keep a very close eye on it.
PATRICIA KARVELAS
Are you worried we could suddenly see people becoming homeless in large numbers later this year when those financial supports are turned off and debts are called in?
MINISTER SUKKAR
Well, Patricia, again, I think you've got to separate residential tenancies from commercial tenancies. On the residential side, again, there's been significant additional social safety supports put in place. We do operate a very strong social safety-net permanently, let alone the additional pieces that have been put in place by particularly the Federal Government in response to COVID-19. All of this highlight – whether you're looking at commercial tenancies, whether you're looking at residential tenancies – the importance of getting the economy moving as soon as we possibly can and obviously consistent with the health advice. That starts with easing restrictions, which the states and territories are doing, consistent with the staging set out by the National Cabinet but in the end, all of these questions, I think lead to one ultimate answer and that is getting the economy moving is going to be the antidote to so many of these problems.
PATRICIA KARVELAS
You suggested there could be additional economic stimulus from the Government beyond September. What could that look like?
MINISTER SUKKAR
Well, Patricia, all I said on that topic, is that there's no set-and-forget. I've used that term already once in this interview and…interrupted.
PATRICIA KARVELAS
So that means that you think that there is a case perhaps for, I mean, okay, let's get one scenario - social housing. There's a big campaign as you know now, saying 'what happens to homeless people who've been put into motels and other places across the country to try and avoid an outbreak of COVID, after they're let out essentially or are, they back on the streets?’ How do you deal with it then? Is there a case for co-funding more social housing?
MINISTER SUKKAR
Well, just on the broader point, Patricia. Obviously, we've made it abundantly clear that the unprecedented support that we put in place – whether it's JobKeeper, JobSeeker, stimulus payments to households to provide additional support, the wage subsidy for apprentices – all of these measures by their very nature have to be temporary but of course we will continue to evaluate the economic situation. In the housing space, again, we make permanent and ongoing commitments in this space. So, each and every year, the Commonwealth writes, a cheque of over $1.3 billion to our states and territories to co-invest in getting...interrupted.
PATRICIA KARVELAS
That might be right but is there a case, perhaps, for more given what we're seeing?
MINISTER SUKKAR
Well, but it's even more than that. We fund more than $4.5 billion in Commonwealth Rental Assistance. So, these are ongoing programs and for example, Commonwealth Rental Assistance has grown exponentially in recent years as more and more dwellings are being moved out of the public sector and into community housing providers, which essentially brings them into that Commonwealth net. So those sorts of supports, Patricia, are ongoing. They flex up and down and just as with unemployment benefits, they flex up and down with the unemployment rate. So many of the supports that are in-built into the system, naturally increase as there's a bigger core in difficult economic times and they reduce, that core reduces in brighter economic times.
PATRICIA KARVELAS
The Commonwealth Bank says house process could fall by as much as 32 per cent in the event of a sustained recession. How realistic do you think those projections are?
MINISTER SUKKAR
Look, I saw that report and that referred to a long-term recession. There's not a huge amount of actual data that is available to us seven or eight weeks into the pandemic. There's some tail-end data that came through for the March quarter, which I don't think tells the full story, which certainly doesn't point to that. I think we need to wait and see. I'm always one to temper my views on these things, I don't think the Australian housing market has seen the sorts of drastic rises and falls. In some cases, we've seen drastic rises, but we haven't seen the drastic falls that have been predicted in the past. The health of the housing market will largely rest on the health of the broader economy and there's two broad factors that impact house prices in Australia. The first being the health of the economy and the unemployment rate and secondly, the supply and demand for housing. Typically, the demand has, in recent years, exceeded supply because there's so many supply constraints – as you know, Patricia – to getting new housing projects done in Australia.
So, I think it's a very complex picture. I wouldn't want to call it at this stage, and I think there's, no doubt, organisations and individuals who will be making projections and predictions. I'm probably going to temper my views on that and wait to see the data. One thing I would add to that long answer though is that the First Home Loan Deposit Scheme, which we put in place on the 1st of January, saw a significant drop in the number of people seeking to access a guarantee when the pandemic really just first hit, when restrictions were put in place. Since that time, and that was the weeks in March, since that time it's actually picked up and in fact in the last data that I saw from last week, it's picked up quite strongly. Now, I'm not suggesting that's a proxy for the broader housing market, I just think that it's quite an interesting...interrupted.
PATRICIA KARVELAS
Does it reveal something about the fact that house prices have reduced and maybe the people who were struggling to get in think that it's a good time – if they’re still, of course, in employment?
MINISTER SUKKAR
It could be a factor of that. I suspect though, in such a short period of time, Patricia, it's probably more a factor of confidence. Again, I think if you look at some of the contemporaneous data, I don't think we've seen massive drops in house prices in major centres just yet. Now, the question is, is that a possibility? Again, as I said, I think it will depend on how we come out of restrictions, how quickly they are lifted, how quickly the economy gets moving and if all that happens, I suspect we're not looking at the sorts of reductions that have been mooted. In the end I don't have a crystal ball and neither does anybody else but if we look back at the history of the Australian property market, I think there is some cause for optimism.
PATRICIA KARVELAS
Thanks so much for joining us tonight.
MINISTER SUKKAR
Thanks, Patricia.
PATRICIA KARVELAS
Michael Sukkar is Assistant Treasurer and the Minister for Housing.