Patricia Karvelas:
Michael Sukkar is the Assistant Treasurer and the Minister for Housing and he joins us now. Michael Sukkar, welcome.
Minister Sukkar:
Patricia, good to be with you.
Patricia Karvelas:
The grants cover renovations or builds valued between $150,000 and $750,000. What sort of work is eligible and what isn’t?
Minister Sukkar:
So, in essence, there are two aspects to this scheme. There are new builds and that’s your typical house and land package, Patricia, or an apartment that you might buy off the plan, so that is $25,000 for the purchase of a new home which generates that construction activity. Alternatively, $25,000 to renovate an existing home where that is a major renovation or a substantial renovation, as we described today, which is worth at least $150,000 and the rationale, Patricia, is this is really a program to encourage economic activity in the residential construction industry to support jobs. Whether those jobs are on a house and land package site or an apartment project or indeed a major renovation to an existing home, a job is a job and we’re supporting – according to HIA and Master Builders and the Property Council – about half a million jobs in the residential construction industry that are at risk of being lost in the second half of this year. So, it is a program to support those many of hundreds of thousands of jobs, Patricia, not just the tradies on-site, but the plumbers, the brick layers, the electricians but also the timber mill workers who make the trusses and the frames…interrupted.
Patricia Karvelas:
So, the whole pipeline?
Minister Sukkar:
Yeah.
Patricia Karvelas:
Why was the decision made to exclude lower value renovations? Wouldn’t that have allowed more people to access the scheme? People that couldn’t really afford really fancy renovations but maybe wanted to do something smaller?
Minister Sukkar:
Well, Patricia there are a couple of things. We wanted to include large, labour-intensive projects that require employing Australians to undertake the work. We want people to have skin in the game, we wanted to unlock private investments. So, the HIA has said today that this program will unlock $15 billion of investment in the residential construction industry. So, requiring people to put their own money on the table in order to access the grants is the best way of having a major multiplier through the industry which obviously supports more jobs.
Patricia Karvelas:
If someone has a $150,000, at least, for a home renovation, do they really need $25,000 from the taxpayer? Aren’t they going to do it anyway if they’ve got that kind of access?
Minister Sukkar:
Well, Patricia, it’s a bit like the first homeowner grants. There are people who are teetering on the edge who are just unable to do it but that little kick will give them the ability to make the decision to press the button on either the purchase of a new home or the renovation project. Really, this sort of program is targeted at them. They are, in many cases, are people who have either been thinking about purchasing their first home or a new home or undertaking that renovation but have been somewhat frightened by the economic realities of COVID. This is a time limited grant available until 31 December and we think for many of them, it will be the catalyst for them to say ‘you know what? I’ll take advantage of this grant and go forward with purchasing that new home as a fist home buyer or renovating my home…interrupted.
Patricia Karvelas:
Is that based on a guess or have you done some research?
Minister Sukkar:
There has been significant consultation with industry. Analysis shows there is 14,000 major renovations every year that employ thousands of Australians and we know that one of the consequences of COVID-19 was that many of those were not going to go ahead. Similarly, the residential construction industry was seeing that the sales of new homes have been significantly down. So, again, these are funds to be the catalyst for people to make those decisions, to make those big investments which, not my analysis but HIA, MBA and the Property Council all support. There are half a million jobs in the second half of this year which could be at risk of being lost.
Patricia Karvelas:
So, if I’ve got three investment properties – full disclosure, I don’t – but they are negatively geared which brings my taxable income down to less than $125,000, would I be eligible for one of these grants for my primary home?
Minister Sukkar:
Well one of the important aspects of this scheme is that it is there for people who are using it for their primary place of residence, and it is based on your income as stated in your notice of assessment. So, we ultimately want to encourage people to make the decision to purchase a new home because that employs hundreds of thousands of Australians and that is the objective of this scheme…interrupted.
Patricia Karvelas:
Whether they’ve got houses that they’re negatively gearing, that’s irrelevant?
Minister Sukkar:
Well, Patricia, the point is it must be your primary place of residence, you must have a taxable income as a single below $125,000 or as a couple of $200,000 and importantly, the house price cap for the purchase is $750,000. So, there’s a range of integrity measures that have been put in place to make sure this is really well-targeted but that also, importantly, unlocks that additional private investment.
Patricia Karvelas:
You’re expecting 27,000 people to take up these grants in the next six months. I’ve spoken to others who say that you’re not going to get that level. What makes you so confident?
Minister Sukkar:
Well again, we have consulted very widely with industry on this. If anything, I think, we have been conservative and cautious in the way that we’ve looked at this scheme. The proof, ultimately – as you always know, Patricia – is in the pudding with these sorts of programs but I must say, the anecdotal feedback I’ve received today – and it is just anecdotal but it’s been widespread from many in the industry – is that this is exactly what so many Australians – first home buyers, new home buyers – were, in a sense, waiting for to be that catalyst for them to have the confidence to make that decision. I suppose that gives me a lot of confidence just seeing the reaction that we’ve had to the scheme today and the activity that a number of the residential construction industries are seeing just on the day that it’s been announced.
Patricia Karvelas:
Of course, integrity matters. Which department will be responsible for administering the scheme and verifying that applicants meet the eligibility criteria?
Minister Sukkar:
Consistent with the PM’s statement through the National Cabinet, we are going to use established systems. So we are working with all of the states and territories – as it has been done in the past with grants of this kind from the Federal Government – to have them administered through state and territory revenue offices who undertake this work in relation to a range of their own schemes whether they be first homeowner grants or stamp duty exemptions. So, they have great experience doing this, they administered the last round of federal grants of this kind which occurred during the Global Financial Crisis. So, we’ll utilise their know-how, their ability, their knowledge and there will be a large cohort of people, for example, a first home buyer who will access the $25,000 grant under the HomeBuilder Scheme as well as a state-based first homeowner grant, so, they’ll couple them together or a stamp duty exemption. So, we don’t want those people having to go to two or three different places, they’ll be able to do it through one place at a state or territory revenue office.
Patricia Karvelas:
I just want to talk about social housing, because I’ve spoken to so many people who say – the union movement today, independent people like the Grattan Institute, they’re a think tank or Labor as well – you should spend more on social housing and that not only is it good for the people who would benefit but also good for construction as well. Are you still looking at that?
Minister Sukkar:
Well I don’t disagree with that basic premise, Patricia, because we do put a huge amount of money into community housing…interrupted.
Patricia Karvelas:
I know you already do, are you looking to do more?
Minister Sukkar:
We have ongoing existing commitments…
Patricia Karvelas:
I’m asking if you’re looking to do more?
…through the National Housing Financial Investment Corporation, Patricia, I’ve got a billion dollars that’s looking to be deployed, that’s money that’s available there now…interrupted.
Patricia Karvelas:
I know about the now, but might there be more?
Minister Sukkar:
But, Patricia, if there’s unspent funds, we are, of course, looking to use those, but I will just add one thing. In addition to the $6 billion or more we spend each year on social and affordable housing, the importance of a program like HomeBuilder is that it unlocks private investment, so you get a huge multiple of investment throughout the industry and, in the end, this is about construction jobs. There’s no set-and-forget in this space, Patricia. We watch it on a daily and hourly basis, and I would say that we have made huge investments into social and affordable housing…interrupted.
Patricia Karvelas:
Okay that’s what you’ve done already but might there be more?
Minister Sukkar:
…And we are very proud. Well, I just need to say – look at our track record.
Patricia Karvelas:
I am so not into track records, I’m into what you’re doing next, right? I’m all about the next, you know that. Are you looking to do more?
Minister Sukkar:
I know you are, Patricia. We’ve announced a policy today that’s going to unlock between $10 - $15 billion of residential construction activity, I think that’s worthy of speaking about.
Patricia Karvelas:
I know and we’ve talked about it extensively. I’m asking what you might do next?
Minister Sukkar:
I’ll tell you what I’ve got? I’ve got $1 billion in a National Housing Finance Investment Corporation which is ear marked for social and affordable housing, partnering with community housing providers and we are working very hard to try make sure we can spend that money to get new dwellings built, not just for the economic activity but, of course, for the social good it does in the end.
Patricia Karvelas:
All right, just a couple of quick ones and these ones are actually from listeners. Someone has written in and said “why can’t this money be targeted at rebuilding fire-ravaged communities?
Minister Sukkar:
Well there’s been significant commitments that have been made to the infrastructure that’s been damaged in fire-ravaged communities and that work has already commenced. But equally, this program is open to regional Australia and, in some respects, Patricia, the income caps and house price caps mean that you can get much more for your money in regional Australia than you can in, say, a major capital city. So, to some degree, this a scheme that has a sweet spot for people in regional Australia.
Patricia Karvelas:
Okay and just one more. Someone has tweeted a question saying, “can I ask the Minister where the stimulus for feminised jobs are? 55 per cent of COVID unemployed are women”. And that’s true, we know this, the Government has talked about this too. Will there be more stimulus to more feminised industries?
Minister Sukkar:
Well look, Patricia, we are trying to ensure that we can have as many people either not lose their job at first instance or if they have to get back into employment and I would say that the JobKeeper package, to some degree, has supported some industries that you would describe as feminised. Clearly, the construction industry is predominantly male-dominated, of course there’s no doubt about it, but my focus is saving those 500,000 jobs, that’s what this program does, and I think again, that will inform our thinking for all jobs, including in feminised industries. If you look at what we did in childcare, significant funding into childcare. I don’t think anyone particularly looked at that through a gender lens but about saving really important jobs and that’s the same with what I’ve done with the residential construction industry.
Patricia Karvelas:
I am going to have to end it there but thank you so much for joining us.
Minister Sukkar:
Thanks for your great interest in housing, Patricia.