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First home buyers were the focus of housing ministers’ debate, hosted yesterday (16 April) at the National Press Club of Australia.
Clare O’Neil, Minister for Housing and Minister for Homelessness, and Michael Sukkar, shadow minister for housing and shadow minister for homelessness, took centre stage to debate housing-related policy from their respective governments.
Each poked jabs at their counterpart. Sukkar said that the Labor Party was “tinkering around the edges, fiddling while Rome burns,” while O’Neil claimed the Coalition “sat on their butts and did nothing for a decade.”
Tax deductions on mortgage payments
The recently announced policy from the Coalition will allow access to tax deductions on mortgage interest payments for first home buyers on new-build homes for the first five years of the mortgage.
Sukkar said this scheme will save a typical couple $55,000 over the five-year period.
“This won’t be capped. We’re not going to cap it. We will be delighted if as many Australians as possible are able to avail themselves of the first home buyer mortgage deductibility [scheme],” Sukkar said.
“One thing that I don’t think many Australians are aware of is that in Australia, we don’t typically have new homes built unless someone’s willing to pre commit to that home. So whether it’s a first home buyer wanting to buy an off the plan apartment, whether it’s someone willing to put a deposit down on a house or land package, what unlocks that home being built is often a young first home buyer, having the confidence and having the financial ability to actually make that purchase, that’s what unlocks the home.”
Labor criticises superannuation policy
O’Neil labelled the reforms a “dud” that she said would raise house prices by $92,000 and result in no homes being built.
“What Michael and his colleagues are wildly saying is that they are going to give millions of people around our country access to roughly the same amount of superannuation on a single day,” said O’Neil.
“So, what are we going to have the result of that? What we’re going to see is that young people around the country are going to go along to an auction. They’re going to bid up against each other, trashing their retirement savings, but because no new houses will be built, they’re basically taking and ransacking that generation’s retirement savings, and they are gifting it to the older property only generation.
“If I was trying to cook up a way to make this worse, then I would start with super for housing. Forget about all the other things a coalition are saying on housing, this is the thing that has got to make the most impact on the housing market, and it will be a terrible thing for the nation’s young people.”
Sukkar responded by saying this scheme isn’t intended to pay for the entire deposit but help contribute.
“Young first home buyers under our policy, will get access to up to 50,000 or 40 per cent of their super balance. It won’t represent the entire deposit. It will represent a portion. It will accelerate it,” he said.
O’Neil further said that the superannuation policy would disadvantage women.
“We have a real problem with superannuation balances across the country, where women routinely have less amounts in their super. The numbers are something like in your late 30s, women are about 30 per cent down on men, and in [their] 50s, it’s 45 per cent,” O’Neil said.
“So, what we know about this policy is, not only will it jack up house prices instantly by giving millions of people the ability to ransack their retirement savings, but it’s also going to significantly disadvantage women when they’re at auction, bidding against a man. That can’t be a good thing, surely, for gender equality across the country.”
Would a 5% deposit push up prices?
One of the major housing-related polices announced by Labor was the intention to allow all young Australians to access 5 per cent deposits for home loans.
When asked if this would push up prices, O’Neil said “there will not be significant impact.”
At the moment, there are 50,000 places available for that policy right now, she said. Through this new policy, O’Neil said there would be 80,000 people accessing the scheme annually.
Targets must be ambitious
O’Neil defended the housing targets set by the Labor government, saying it needed to be “bold and ambitious” in order to drive change.
Industry bodies have criticised the plan as figures consistently fall short. However, O’Neil believes that without a high bar set, progress would be stalled.
Sukkar disagreed and said that falling short of plans is insulting peoples’ intelligence.
When asked how many homes a Coalition government would build, he said “we will get to as many as we possibly can,” not willing to set a figure.
Both O’Neil and Sukkar agreed that federal and state governments need to work co-operatively to tackle housing shortages.
Coalition backs migration reform
Sukkar took aim at the migration policy, saying it “must be planned.” He reiterated the proposed policy that would significantly reduce permanent migration to free up homes.
This includes a two-year ban on foreign investors and temporary residents purchasing homes.
The Coalition would also place caps on international students to reduce numbers by a minimum of 30,000 each year.
He also said the Coalition would “reorient” the program to bring in the trades the country needs to build homes.
Sustainable price growth
An area where the two ministers agreed was that sustainable house price growth is necessary.
Both said that decreasing house prices would disadvantage those who already own property and that wage growth needs to rise alongside home prices, albeit at a faster pace.
Striking this balance appears to be the problem each party is dealing with, as finding a happy medium will help protect those in homes and those looking to buy.
