Peter Stefanovic:
The Government has announced another shot in the arm for Australia’s construction industry. The HomeBuilder program – originally due to finish at the end of the year – will been extended until March 31 at a lower rate of $15,000. Joining me now is Michael Sukkar, the Minister for Housing. Minister, good to see you, thanks for joining us this morning.
Minister Sukkar:
G’day, Pete.
Peter Stefanovic:
So I’ve spoken to quite a few people about this program, and you’ve got widespread appeal when it comes to this program. Are you extending it because it wasn’t big enough initially or because you just want to keep the good times rolling?
Minister Sukkar:
Pete, we extended it because obviously it’s been a huge success and it’s ensured that the valley of death, as the industry put it that was looking like occurring at the beginning of the pandemic, hasn’t happened. It’s meant that we’ve seen new home sales rising by over 30 per cent, we’ve seen new home sales higher than they were at pre-pandemic levels. So it’s been a huge success. What we want to do though is to ensure that the pipeline of construction projects, the pipeline of new residential developments, continues all the way through 2021 and the best way to achieve that was to extend what has been a phenomenally successful scheme, until 31st March. As you rightly pointed out, from the 1st January, the payment, rather than being $25,000, will be $15,000 which is still a significant shot in the arm that we estimate is going to bring forward an additional 15,000 projects. In the end, Pete, this whole program is primarily about keeping the up to one million Australians who work in the residential construction industry, employed. It has done that and it also ensures that first home buyers in particular, but also many Australian families, get an opportunity to purchase a home or their first home.
Peter Stefanovic:
Is it your expectation though that the sector is still going to contract this year?
Minister Sukkar:
Yeah, Pete, there’s a couple of different ways of looking at it. If you look at the detached housing market, we think that that’s going to be very buoyant but clearly with travel restrictions on overseas migration, in the high density market, there’s going to be some pressure. What we’re trying to do through this program, is ensure that to the greatest extent possible, we fill that pipeline with Australian purchases, Australian first home buyers in particular. Whether it’s the First Home Loan Deposit Scheme, the First Home Super Saver Scheme, the Morrison Government thinks that now is a great time to incentivise and assist Australians to purchase their first home and obviously what that does is that it supports the residential construction industry which, as I said, supports up to one million employees. So we think that next year is going to be a year of recovery, of increased confidence, but no doubt, Pete, there’ll be pressure on the market. But things are looking pretty good and as the industry, whether it’s the Master Builders Association, the Housing Industry Association, the Property Council who represent all those small businesses, those tradies, they have said that this has been the most effective stimulus in the industry for decades and in that respect, it was a no-brainer to continue the scheme until 31st March.
Peter Stefanovic:
Well even your opponent, Jason Clare, mentioned yesterday that the current news, that the extension is good news as well. If you are…interrupted.
Minister Sukkar:
Sorry, Pete. Labor has got there very reluctantly. They didn’t support the scheme at the beginning. I’m very pleased to see that they belatedly support the scheme now at the eleventh hour. I suppose that it was very hard for them to hold their position in the face of so much support from the everyday businesses and the mums and dads and families who are getting into their new homes. So I appreciate you making that point.
Peter Stefanovic:
But if the sector is going to contact, why not just keep the grants where they were?
Minister Sukkar:
Well, Pete, we put in place the $25,000 grant at the height of the pandemic. Yes it was June, we really did not know at that point in time what the recovery – if anything – looked like. We were in the heat of battle – so to speak – with the pandemic. What we see now is I think a strong pathway to recovery, we’ve seen that in the JobKeeper numbers today. A $15,000 grant, particularly when you couple that with a state-based grant – in Tasmania, $20,000, in Western Australia, $20,000 or stamp duty exemptions and first home buyers grants in Victoria and New South Wales – all of a sudden you actually start putting together a really significant proposition for Australian first home buyers often, but more broadly than that, people trying to purchase a new property. So we think that the $15,000 grant in addition to those, is a significant incentive and indeed Treasury modelling and our own figures of the uptake of this program shows that it will be enough to get people to make that decision and I think it’s a big enough incentive to make that decision to purchase that new home. I think that it makes sense that as the recovery is underway, that that payment tappers down somewhat.
Peter Stefanovic:
Will you extend again?
Minister Sukkar:
There’s obviously no intension to do so. The scheme has been put in place now until the 31st March but like all these things, we keep an eye on these programs, there’s no set-and-forget in any form of policy, but it’s certainly not our intension to do so. What I’m hoping is that the HomeBuilder program – nearly $1 billion in total – will mean that the residential construction industry will remain buoyant and busy until really mid-2022. Hopefully by that stage, Pete, we’re looking at overseas migration returning, the full economic recovery being well and truly underway which will mean that at that point that the industry should be able to stand on its own two feet. But of course, we keep an eye on these things on a daily basis.
Peter Stefanovic:
Yeah and one of the issues going ahead is going to be apartment sales which has come off – like you mentioned there – because of migration as well. What if those people who are applying for grants when it comes to apartments, should there be special exemptions for them bearing in mind that when it comes to the building of apartments, that can take in excess of six months?
Minister Sukkar:
Yeah, Pete, we put in place at the Budget, the First Home Loan Deposit Scheme extension. 10,000 places – and the First Home Loan Deposit Scheme, for your viewers, allows people to purchase a property with a deposit of as little as 5 per cent. We put an additional allocation of 10,000 places, provided you purchased a new home. In those rules, we have specifically ensured that people who are buying off the plan apartments and other projects that have a long lead time, are able to get their guarantee and they have up to two years to settle on that property. That’s 10,000 new homes between now and 30 June. So that specially caters for those projects that have longer lead times. But I can tell you already under the HomeBuilder program that there are lots of people who have purchased apartments and town houses who are getting access to HomeBuilder. But if they do fall out of that timeframe which is an extended timeframe – it’s a longer timeframe obviously, under the announcement – there will be many people to fill that vacuum through the First Home Loan Deposit Scheme. So the Morrison Government is a Government of first home buyers and home ownership. We pride ourselves on that. HomeBuilder is a very important program but it’s one part of a broader suite of measures to encourage home ownership. That’s why, under the Morrison Government, we’ve seen first home buyers at their highest levels in over a decade and we want to continue that work and HomeBuilder works in conjunction with the First Home Loan Deposit Scheme and a range of other initiatives that we’ve put in place.
Peter Stefanovic:
Okay, just a couple of quick ones before you go. I just want to get your comments on superannuation at the moment. Tim Wilson, your colleague, made some comments last week about people taking money out of super to buy their first homes. Is it an official position of the Government to allow people to take money out of their super to be able to buy a home?
Minister Sukkar:
Well no, it’s not the official position but I think that it’s really healthy for backbenchers – whether it’s Tim Wilson or Andrew Bragg – to be having these discussions publicly and to be putting forward their forceful and well-thought out positions. I think that that’s a really healthy thing for us. As I said, we’ve put in place the First Home Super Saver Scheme which allows people to accelerate their savings for a deposit for a first home through their superannuation, it effectively gives them a tax cut, a salary-sacrificed tax cut. So to some extent we’ve tried to address the challenge of saving that deposit but I think that it’s a really healthy thing, Pete, for these sorts of discussions to be taking place and as I said, Tim Wilson and Andrew Bragg…interrupted.
Peter Stefanovic:
Would you like to see that though?
Minister Sukkar:
…Tim Wilson and Andrew Bragg I think make very strong arguments and I think that they should be free to do so.
Peter Stefanovic:
Would you like to see that though? Do you think that people should be allowed to do that?
Minister Sukkar:
Well, Pete, it’s not Government policy but like all these things, we are very happy to have the discussions and to see everybody putting their arguments forward very forcefully. As I said, housing policy and the objectives of this Government is to facilitate people into purchasing their first home. We are unashamed in that being one of our primary obligations and one of our primary things that we’d like to do as part of this portfolio. So I’m very happy to see the discussion taking place. Obviously we’re putting in place a range of measures to assist first home buyers and I think that it’s a healthy thing to have these sorts of discussions.
Peter Stefanovic:
Okay. Michael Sukkar, appreciate your time this morning. Thanks for joining us here.
Minister Sukkar:
Good to have you back in Australia, Pete.
Peter Stefanovic:
Good to be back, let me tell you.