Dai Le (Fowler, Independent) Share this | Hansard source

I rise to speak on the Help to Buy Bill 2023. I have to say that this bill sounds great. It's a really headline-grabbing name—'help to buy'. It's what I would call clickbait. At a time when everyone is talking about the affordability of owning a home, to have our government putting up a bill that says 'help to buy' sounds like our government is really helping people to buy a home. But is it really going to help more Australians buy a home?

I understand it was the Prime Minister's election promise when he launched his federal campaign in 2022 to help more 'hardworking Australians' to 'achieve the great Australian dream of home ownership'. That's quoted from the bill digest.

With a federal election looming, this Help to Buy Bill would no doubt have appealed to voters, just with its name. But, as a relative newbie in this House, listening to all these policy announcements, I can't help but wonder: what is truth, what's campaign messaging and what's reality?

At a time when people are feeling the pain of the rising cost of petrol, continuing rises to the cost of energy, soaring food costs, rent, insurance—you name it—having a bill that's supposed to deliver 10,000 homes each financial year, with a total of 40,000 places, you could be fooled into believing that the government has thought through this piece of policy to increase home ownership.

When my family first arrived in Australia from refugee camps, we knew that if we worked hard and saved we'd eventually be able to own our first home. Back in those days cost of living wasn't an issue. My sisters and I eventually did, moving out of our public housing in Western Sydney to own our own homes.

However, successive governments' policies have now brought us to this juncture, where the cost-of-living and housing crises are forcing the government of the day to come up with policies that are so disconnected from reality.

A recent 9News article revealed that one in six people are depending on credit cards for daily expenses, just so that they can survive cost increases. There's barely any equity for them to even consider saving for their own property. Saving is no longer an easy feat.

This reality is nowhere more acute than in my community in Fowler in Western Sydney. Fowler is one of the lowest socioeconomic electorates in the country. Every dollar that's spent counts. My constituents often have to choose between paying for bills and groceries or saving for a house. The rental market is another conundrum, with Fowler recorded as the fourth-worst for rental affordability in Australia.

This proposed Help to Buy Bill is reportedly designed to alleviate stress on low- to middle-income earning Australians to purchase a home through a national shared equity scheme. Under this proposed scheme, eligible Australians can enter into a shared equity scheme arrangement with Housing Australia on behalf of the Commonwealth, whereby the Commonwealth will provide an equity contribution of up to 30 to 40 per cent of the purchase price. I understand that the states would need to opt into the scheme by referral under the Constitution or adoption of the Commonwealth legislation.

Other crossbench members have spoken on this bill, with support for this initiative based on the concept that is intended to help middle working Australians own a home.

It is my understanding that such an initiative operated in New South Wales, whereby the government could contribute up to 40 per cent of the purchase price for a new home or 30 per cent for an existing dwelling. Where this scheme fell short was with its limited take-up. Not everyone had a fair go at accessing the scheme. It was almost like a lottery draw where only lucky individuals could pluck a spot, while others looked on with anxiety, wondering when it was their turn.

While the idea sounds altruistic, with Help to Buy providing equity of access to ownership, it doesn't really address the most critical issue—the shortage of supply and the affordability of buying—making it out of reach for many working Australians.

The pain points of the housing crisis can be reduced to two key words: supply and demand. It's therefore imperative for the government to address concerns with any potential supply imbalance. The government must commit to coordinating further supply-boosting measures with states and territories such as tax incentives—taking off the layers of taxes that are burdening the building of new homes, to assist first home buyers.

Whilst there is significant demand, there are not enough incentives to massage the streams of housing supply.

Fowler has settled nearly 10,000 refugees in the past few years, and the number will continue to rise. As such, the demand for housing will grow exponentially. It is inevitable that the proposed 10,000 positions available across the nation will fail to satisfy the ever-growing demand for housing. If the government has a stake in the property via the scheme, there is a bigger incentive for prices to increase.

I also call into question the accessibility of this equity scheme. Irrespective of the minimal spots open, the income and property price caps further impose barriers that narrowly restrict access and increase the difficulty of earning a place in the scheme. Irrespective of the minimal spots open, the income and property price caps further impose barriers that narrowly restrict access and increase the difficulty of earning a place in the scheme. It is my understanding that a single Australian citizen must earn $90,000 or less in order to qualify for the scheme. A large number of my constituents fall under this threshold. According to the ABS data from 2021, the median weekly income of an individual in our electorate was reported to be about $521 a week, as I mentioned earlier. This amounts to about $27,092 annually, a stark difference from the national median annual income of $41,860. If this scheme were to be implemented, many constituents in Fowler would be vying for a loan, and there's no way the demand will be met. On the other hand, for a single individual earning $90,000 in income, with a monthly net income of approximately $5,707, after paying for the necessities of rent, utilities, insurance, groceries, a car and likely servicing a HECS debt, there is little left over. How would this measure allow for an individual to put a roof over their head when the numbers just don't add up?

Co-owning a property with the government is a very interesting concept, according to one of the local brokers in Fowler, but she questioned whether mums, dads and the older generations would allow the government to have a hand on their property. Even if they did, who's going to be responsible for maintenance? How will that be managed? But, even before we go to who's going to be responsible for maintaining the property, based on my simple calculations above, an individual earning $90,000 can only get a loan of around $410,000. If the government is to provide 40 per cent of the support, 60 per cent of $950,000 is $575,000, yet a person on an income of $90,000 can only get a loan of $410,000.

What about their ability to repay the debt after taking out all the costs that an individual on $90,000 has, such as food, petrol, car loan, car registration, health insurance and phone bills? I did a rough estimate and calculation, and all these costs amounted to about $4,855 a month, including for those who have HECS debt. This individual would be left with about $852 a month, so how would they be able to take to take out a loan and manage the mortgage?

Just from those simple calculations and that example, the thresholds are too low. For example, an experienced teacher's income exceeds the cap for a single person, and they cannot apply. This is why the proposed salary threshold should allow for a 10 per cent increase to accommodate critical first-home buyers who are key workers, single parents with dependent children, singles aged 50-plus and domestic violence victims. Alternatively, the thresholds should be upped by 10 per cent for everyone.

The price cap imposed on properties—$950,000 for capital cities and regional centres and $750,000 for the rest of the state—is surely not sufficient. In one of the areas in my electorate, Canley Vale, the median house price was reported to be over a million—$1,069,000—and this is expected to increase by 11.2 per cent. This is just one example of a region in my area that would be barred from the scheme despite the constituents in my area needing additional support for affordable housing the most.

We have yet to address how young people can even get a loan when their HECS debt is accruing at 7.1 per cent indexation and possibly rising. Lenders don't like young people with HECS debts, which means the road to getting a loan is a tedious one. Again, why can't we freeze indexation for these HECS students? I call on the government to take this into consideration and listen to the next generation, who are crying out as home buyers are facing the worse mortgage affordability in more than three decades.

Although affordability of property is the desired outcome, this may not be the case. Additional demand for houses under this scheme may place pressure on prices, which ultimately benefits sellers and not buyers. Furthermore, the implementation of this scheme may encourage those in financially vulnerable situations to take on undue financial risk. There are still grey areas on what happens if someone were to default on their Help to Buy agreement. It is also worrying that the scheme does not accommodate or clearly define what happens if someone on the scheme exceeds the annual income threshold. It is my understanding that the Help to Buy scheme allows for the eligible person to buy back the government's equity stake five percent at a time. I question why ownership needs to be limited to a percentage at all.

I appreciate the government's incentive to reduce the burden and relieve the financial stress for homebuyers to purchase their dream home. However, we are still faced with the issue of limited spots for the scheme, thus the housing crisis and supply crisis will continue. Let's move beyond the headline-grabbing policies into real policies to show that this government is connected with working Australians and understands the crippling challenge that the majority are facing with the cost-of-living and housing crisis.

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