Sharri Markson:
My next guest is the Minister for Housing and Assistant Treasurer, Michael Sukkar, who also joins us from Melbourne tonight. Thank you for your time, Minister.
Minister Sukkar:
Hi Sharri. Nice to be with you.
Sharri Markson:
Michael, you’re busy working on the budget which, for the first time this year, will be released in October. How big of an impact is Victoria’s second wave going to have on our economy and on the budget that you’re preparing?
Minister Sukkar:
Well Sharri, it’s a bit early to tell with respect to this second lockdown and its full impact on the budget but I think that it’s fair to say that Victoria is an economic engine room of Australia. It’s worth 25 per cent of our economy, in many respects, it’s still the manufacturing heart of Australia so there’s no doubt that this is going to have some pretty devastating consequences for the economy more broadly and of course, the budget that we’ll be handing down in October but we won’t know the full impact, Sharri, for a little while yet.
Sharri Markson:
We’ve just heard from the Health Minister, Greg Hunt, about what he assesses has gone wrong, in terms of Victoria, and why they’re experiencing an increase in the rate of infections. Who do you blame for what’s going on there? You’re living there, what do you think has happened?
Minister Sukkar:
It’s not a matter of blaming anybody. I think that it seems fairly clear and certainly there’s obviously been admission from the Victorian State Government that there’s been some quite catastrophic issues with the hotel quarantine arrangements which have had devastating consequences and, to some degree, have led to this outbreak of COVID-19. So, I think that it seems pretty clear that hotel quarantine arrangements here in Victoria have been a significant issue. I note that the State Government here has put in place an inquiry to get to the bottom of it but that would seem to me, is the prevailing view as to what has caused this particular issue and is really the difference between where Victoria finds itself and where the rest of the country finds itself.
Sharri Markson:
In terms of the impact on the economy and on the budget, how long are you planning on extending JobKeeper and JobSeeker for nationally and could they be extended in Victoria specifically, for longer than in other states?
Minister Sukkar:
Well, Sharri, you’re doing your job by asking but I won’t be announcing those details tonight. I thin that it’s fair to say – and the PM has made clear and so has the Treasurer, Josh Frydenberg – that we will continue to keep in place the sort of supports that the economy needs. The PM was very clear at the beginning of the pandemic, that he viewed this as a six-month exercise, a six-month issue at the very least and that is certainly coming true. The JobKeeper program, which is the single largest form of support – although I’d note is note the only support that we’ve put in place but the single largest support that we’ve put in place for businesses and workers throughout the economy obviously runs until the end of September so that gets us through to well-past this second lock down period in Victoria so that, I think, is worth noting. And I think that, just generally speaking – as far as supports that the economy needs – we would be more included to put in place supports that operate across a national basis and if there are some parts of the country, like Victoria at the moment, whose businesses and individuals are suffering more, then they would be more likely to be able to access those broader schemes. So, I think that’s, generally speaking, the way that we would approach it.
Sharri Markson:
In terms of the HomeBuilder Scheme which is one of the schemes that you’ve announced to try and stimulate the economy. Anthony Albanese said this morning in an interview on Sky News that not one dollar has been spent from HomeBuilder. Here’s what he had to say:
Anthony Albanese – We have slogans like HomeBuilder, Tom, that was announced, you might recall, more than a month ago now, during the Eden-Monaro byelection…the famous ‘get off my lawn’ scene that we saw from a constituent. You know how much money’s gone out in terms of HomeBuilder or applications have been approved? Zero. Not one dollar from that program.
Can you respond to this? How many families do you expect will take up the program?
Minister Sukkar:
Well the Opposition Leader is really developing a reputation for not being across detail and that is a significant problem and a significant reputational risk that he now has. He should know, and I suspect that he doesn’t know, but he should know that the HomeBuilder scheme is being implemented under national partnership agreements with the states and territories. The reason that we’ve designed it that way, I think, is logical because on the one hand, all states and territories implement their own first buyer grants. In some of them they actually have grants that match our HomeBuilder grants so they are implementing those schemes and to date, it has been a phenomenal success. We’ve seen the large land developers – whether that’s the Stocklands’ or the Lendleases’ of the world, the large volume builders like Metricon, Symonds, Henley Homes – have all said that since HomeBuilder was announced on 1st June, they have seen their house sales increasing above pre-Covid levels which means that they’re selling more now than when Covid hit. Now, what does that mean? That means that there are hundreds of thousands of people who are employed in the residential construction industry, supporting the economy, supporting all of the people who manufacture the supplies for those houses – whether it’s the bricks or the timber mill workers who put together the frames. To date, Sharri, at a federal level, we’ve had over 40,000 people register their interest. It is now with the states and territories, who are implementing the scheme, and they will report, on a progressive basis, how many applications they are putting through. South Australia, for example, opened up a register of interest after they signed the national partnership agreement with the Federal Government, and within three days, they’d had 7,000 registrations of interest on their revenue website. So, these will be progressively reported by the states and territories and I don’t think that it’s fair for the Opposition Leader to criticise them…interrupted.
Sharri Markson:
So, Minister, if 40,000 people have registered, why hasn’t one dollar been spent yet?
Minister Sukkar:
Well again, this is where the Opposition Leader really struggles with detail. The HomeBuilder scheme will mirror the, for example, first home buyer grants that are already administered by the states and territories. Why are we doing that? Because as we said at the beginning of the COVID-19 pandemic, we would use established systems. Now under those grants, you don’t receive the grants until you’ve either settled on a property or you’ve made a progress payment under a contract on a property. So, the timing of HomeBuilder payments will match the first home owner grant or other payment timing that applies in a particular state or territory. What we would expect to see is that people who bought a home four weeks ago, once HomeBuilder was announced and we know that there’s been many thousands of people around the country – whether it’s in Melbourne or whether it’s in Brisbane or Townsville or Wodonga or wherever – many thousands of people have bought a home because of the HomeBuilder scheme. We will start seeing the states and territories progressively updating us on how those payments have been made, but remember, the payments are not made up front before you’ve settled on a property or have made a progress payment on a property. These things will happen over the next few months and that’s how it should be. We wouldn’t hand people a cheque before they have themselves put down any money for a property. So that in that sense, will mirror the existing state and territory schemes. I might say, REA last week – the largest real estate website in Australia – said that they have seen a 70 per cent increase in hits on their website for new properties and they are saying that that is singularly as a result of HomeBuilder, which is supporting, again, hundreds of thousands of jobs.
Sharri Markson:
Well Minister, turning to the housing market, how is it holding up at the moment and are you anticipating that prices will begin to fall quite dramatically?
Minister Sukkar:
My expectation is consistent with what CoreLogic have said. CoreLogic have reported some modest decreases in house prices to the month to June. It was a 0.8 per cent drop for the June month and a 1.3 per cent drop for the proceeding two months to June. But I note that was still – in the capital cities – 9 per cent higher than they were a year ago. So, what’s my expectation? I expect that a catastrophic economic impact of a pandemic like this is certainly going to have an impact on the housing market. I think that what we’re seeing to date, and the data to date, shows us that we’re seeing a moderation, a slight drop in house prices, but certainly none of the doom and gloom numbers that we saw at the beginning of the pandemic or that some people were speculating on at the beginning of the pandemic and, in the end, we won’t know until we see how people react once they have to, in the end, start paying back a loan. There’s over 100,000 people who’ve been given relief from their bank, that has been extended by another four months. So, I think that we’re not going to know, Sharri, what the full impact on the Australian housing market will be for at least twelve months but my expectation is that it will be of a more moderate impact than some have said.
Sharri Markson:
When that additional four months of relief from the banks is finished, do you expect that banks will start to repossess homes, in extreme cases, at a greater rate or is there any wriggle room, have they indicated to you that there might be some other measure?
Minister Sukkar:
I think that the banks have really come to the fore here. They have put in place special arrangements, hardship arrangements, for over 100,000 Australians and then they’ve extended them for four months. I would expect that that kind of ethos continues. Banks really have no interest in foreclosing on anybody. It will be an inevitable consequence for some as it ordinarily is but I don’t think that we’re going to see it at a widespread level given the way that these things have been able to be managed thus far. But again, all of these things depend on how long our economy suffers from the pandemic, how long we have restrictions – severe restrictions as we have in place here in Victoria – and those are all things that are very hard for me to predict.
Sharri Markson:
Michael Sukkar, thank you very much for your time tonight.
Minister Sukkar:
Thanks so much, Sharri.