Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

Today we're talking about more than just the intricacies of policy and legislation. The Help to Buy Bill 2023 and the Help to Buy (Consequential Provisions) Bill 2023 we have before the House are about a commitment to transform lives and empower the return of the Aussie dream of home ownership to a new generation of Australians. It hails from a promise made and a commitment now kept.

The Albanese Labor government understands safe and affordable housing is central to the security and dignity of all Australians. Sadly, too many Australians cannot find an affordable place to buy. Rising interest rates have been difficult for those with a mortgage, and the rental market remains very tight, with low vacancy rates and high rents across Australia. That's why our government has committed to an ambitious housing reform agenda to boost the supply of all housing, more public and social housing, more affordable housing, more homes to rent and more homes to buy. Help to Buy is an initiative to get more Australians into home ownership, bridging the gap between aspiration and reality.

At the 2022 election, the Australian Labor Party made a vow to confront the hurdles faced by many people working hard to own their own homes, and every day since we have sought to honour that vow. Help to Buy is simple and elegant. At its heart is shared equity between the Commonwealth and mortgagee, bringing down what can be crippling upfront costs, including what can be crippling mortgage insurance.

In simple terms, lenders mortgage insurance protects banks from financial loss if the home owner can't afford to meet their home loan repayments. However, it doesn't protect the mortgagee. Generally, a lender will take out LMI when a home loan deposit is less than 20 per cent of the total value of the property. This is an upfront cost that potential home buyers need to save for on top of their deposit and it can run into the tens of thousands of dollars. On a $450,000 property, for example, if you've saved $45,000 for a 10 per cent deposit, you're still looking at needing another $8,000 for the LMI. If you've saved just a five per cent deposit, the LMI cost is closer to $15,000. Help to Buy will bring down these upfront costs, supporting up to 40,000 low- and middle-income Australian households to purchase a home of their own. Forty-thousand people is a population about twice the size of Burnie in Tasmania. This will bring homeownership back into reach for thousands of Australians, including renters who have been locked out of the housing market. Under this legislation, the Commonwealth will contribute up to 40 per cent in equity for new homes and 30 per cent for existing homes, allowing people to get their foot in the door of homeownership. It unlocks doors that have previously been slammed shut, particularly for young people. This shared-equity initiative ensures participants can enter the realm of homeownership with perhaps as little as a two per cent deposit. We know that saving for a deposit at a time when house prices are at record highs is a never-ending cycle with always-moving goal posts. By sharing ownership with the Commonwealth, participants will have lower ongoing repayments.

The commitment to Help to Buy from all states at the National Cabinet last August signifies a collective Australian effort amongst the federal government, the states and the territories to progress this legislation. I must acknowledge here my colleague the Minister for Housing—who is from Tasmania—Julie Collins. Her tireless work to deliver significant housing reforms is ensuring more Australians have a safe and affordable place to call home. Under the member for Franklin's leadership, our government is developing a new National Housing and Homelessness Plan, a 10-year strategy to help more Australians access safe and affordable housing. This plan will set out a national vision across the responsibilities of different levels of government to help guide future housing and homelessness policy, considering the full spectrum of housing and homelessness challenges, from homelessness to homeownership.

Importantly, Help to Buy is just one element of the government's commitment to improving housing affordability, including, of course, the $10 billion Housing Australia Future Fund, the $3 billion Social Housing Accelerator Payment and the largest increase to Commonwealth Rent Assistance in 30 years. Further, the Labor government's expanded and improved Home Guarantee Scheme has now passed the milestone of 100,000 people helped into homeownership. The Home Guarantee Scheme gives eligible first-home buyers and single parents support to purchase a home sooner by reducing the deposit they need to save to buy a house. Income thresholds for this scheme are $125,000 for singles and $200,000 for joint applicants. Through this initiative, the Albanese government has helped more than 1,300 Tasmanians into homeownership since the Labor government came to power.

Our government understands the housing challenges that we are facing did not happen overnight, and they cannot be solved overnight nor by one level of government alone. The Albanese government is working with states, territories and local governments to deliver better housing outcomes all across the country. This includes work being delivered through National Cabinet to provide a more secure and affordable housing supply. For example, the National Housing Accord Facility supports planning and zoning reforms and is investing $350 million in additional federal funding to deliver 10,000 affordable rental homes over five years from 2024, matched by the states and territories. There is federal funding of $2 billion through the Social Housing Accelerator to deliver around 4,000 new social rental homes across Australia. And there is a $500 million housing support program for initiatives to help kickstart housing supply, including by connecting essential services and amenities to support new housing development or by building planning capability.

Help to Buy is about taking the stress and difficulty out of homeownership as much as possible. Ten thousand places will be available each year for four years. Places will be allocated to participating states and territories initially on a per capita basis. This initiative is aimed at supporting low- to middle-income households into homeownership, with income caps at $90,000 for singles and $120,000 for joint applicants. In Tassie's capital city, Help to Buy participants will be able to purchase a property up to $600,000 and, for Tasmanians outside Hobart, participants will be able to purchase a property up to $450,000. Let's look at this in practical terms for a moment. In my electorate, 15 per cent of workers are employed in the healthcare industry. Under Help to Buy, a nurse on the median weekly household income of around $1,200 a week looking to buy a $450,000 home will need only a two per cent deposit of $9,000. It's not insignificant, but it is vastly more achievable than aiming to save a 20 per cent deposit of $90,000 or even a 10 per cent deposit of $45,000. This means Help to Buy participants, whether a nurse from New Norfolk, a truckie from Triabunna, builder from Brighton or a machine operator from Maydena, can buy a home with a smaller deposit, a smaller mortgage and smaller mortgage repayments. I know critics of the scheme say, 'If you allow people to buy homes with less of a deposit, will they really be able to afford the home?' I ask those critics to look at the rent that people are paying. People are paying rent sometimes well in excess of what these mortgage repayments would be.

Most people will one day want to own their own property without government as an equity partner. We understand that. When the time comes, it will be as simple as buying the government out of its share or one day selling that property and repaying the government for its equity percentage and then using the proceeds for a standalone deposit. This is not the only answer to homeownership but it is one of the answers to increasing homeownership and helping people, particularly young people and low- and middle-income people, get on the rung of the ladder of homeownership.

Despite the support for Help to Buy nationally, the coalition is sadly opposing it and the Greens, as usual, want to use it as a hostage for their own agenda. The respective positions of the Liberals and the Greens unfortunately put political gains before the interests of 40,000 aspiring Australian homeowners. The member for Deakin spouted his usual negativity a fortnight ago, starting a fear campaign that this bill is unnecessary or that we will force people to sell their homes if their circumstances change. The government offered the member for Deakin a meeting to discuss his concerns, but I'm advised we received no response. We've had silence from the member for Deakin, which is not what we are usually subjected to in question time, I must say!

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

It's true!

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I know. It would be helpful if he were. The Greens and the Liberals need to stop standing in the way of first home buyers getting on that first step of the homeownership ladder. I implore them to do the right thing and get behind this bill.

Our government is committed to putting more Australians into their own homes. Help to Buy will bring homeownership back into reach for 40,000 Australians, providing a pathway for those who have so far been locked out. Australia's housing challenges are serious. They haven't built up overnight. It's taken some time. But we have to face the reality of where we are now. For too many Australians—too many young Australians and too many Australians on low and middle incomes—that Aussie dream is just that, a dream. We want to change that. We want to change the dream into reality. We are serious about addressing this. The Albanese Labor government has a laser focus on delivering more homes for more Australians. In 2024 we will be delivering more—more help for homebuyers, more help for renters and more help for Australians needing a safe place to call home. I commend the bill to the House.

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

The crisis in housing affordability is one of the biggest challenges facing Australia today. Since I was elected, there has been no issue that has been raised with me by more people more often. Young people worry about whether they will ever own a home, older people worry that they are one rent hike away from homelessness and many, many parents worry that their children will never have stable homes either as owners or as renters and that this will be an obstacle to them having families of their own as well.

Wentworth is a very expensive part of the country. It puts huge pressure on people in the area who might be well off by national standards but struggle with the local cost of living. I think of one young man from Wentworth who recently approached me to say that he'd done everything he thought he was meant to do. He'd worked hard at school, he went to university, he worked hard at university and he got a good job. He now has a $50,000 HECS debt and is struggling to make his rent and has no vision at all of his own ability to ever have home security or own a home. He's not alone. Too many struggle to secure an affordable home close to their families, their friends, their support networks, where they grew up and where they want to raise their kids. Many residents worry that rising prices mean our communities are becoming less diverse and there are fewer opportunities for people on moderate or low incomes, key workers or migrants to make their homes in Wentworth.

But it's not just Wentworth where people are struggling. This is a national issue, and it requires a national solution. According to Demographia, the typical Sydney property costs 11 times the median wage. Ours is the second most expensive property market in the world. In the time it takes a young person to purchase a property in Sydney, they could have purchased two properties in Canada or the UK. This is why the proportion of young people renting has increased by more than 10 per cent in the last two decades. It is no wonder that affordability has gone from being a concern to an absolute crisis. Real action is long overdue.

I welcome the government's actions with this bill, the Help to Buy Bill 2023, and other policies to try and address the crisis. Help to Buy is a shared-equity scheme that will enable governments to support low-income workers, particularly those who struggle to save for a deposit, into homeownership. It could be a very valuable source of support for those who are in desperate need of assistance and so I will be supporting the bill. But I have concerns: the first relates to eligibility, the second to parliamentary oversight and the third to housing policy more broadly.

On eligibility, the government has not formally released the income thresholds or price caps which will apply to the scheme. The policy which they took to the 2022 election included an annual income threshold of $90,000 for individuals and $120,000 for couples. It is appropriate for the scheme to include income caps, but these thresholds will mean that some of the support will go to middle-income earners when I believe it could be better targeted to where the affordability crisis is most acute. In contrast, the Grattan Institute recommended income thresholds of $60,000 for individuals and $90,000 for couples. The Grattan model explicitly targeted support to low-income earners, particularly older single women who would otherwise not be able to afford a home and run the risk of retiring in poverty. The government's position is that the property price caps will be set low enough to deter those on high incomes from taking advantage of the scheme. I'm not sure if I share that optimism. It is likely the program will be oversubscribed, but nothing in the government's materials explains how they will choose between eligible applicants. Who will get priority? We have no idea.

On oversight, this is a broader issue. This legislation is, frankly, just an implementation framework which enables the government to engage with state governments. I appreciate the legal and constitutional necessity for this, but I am very concerned that the legislation will circumvent the proper role of parliament. We are being asked to support a scheme without any detail of how it will operate, who will benefit, how it will be managed or what information will be published about how the scheme is working. This, of course, provides the minister with the flexibility to negotiate with the states as she sees fit, but it also provides the minister with a substantial degree of freedom without parliamentary oversight. It is particularly concerning that the minister is able to issue directions to the board which could include income thresholds, investment amounts, property price caps, the number of properties, reporting obligations and virtually anything else without parliament's approval or the ability of parliament to disallow any directions which are unreasonable, unfair or excessive. The only limitation placed on these directions is that the minister cannot direct the board to enter into particular arrangements or support particular properties or individuals. I feel this is absolutely and grossly inadequate for a scheme which will invest, potentially, more than $20 billion worth of public money. No minister should have such broad discretion over such a huge sum of money. It is not clear why the bill explicitly removes the ability of parliament to disallow the minister's directions.

I note that, in opposition, Labor repeatedly raised concerns over the finance minister's discretion to spend billions of dollars during COVID. In response to this pressure, the previous government agreed to weekly reporting, opposition approval for significant expenditure, a rolling Senate inquiry and an independent review by the Auditor-General. Those controls are not suitable for this scheme, but it does demonstrate Labor's par support for the principles of oversight and transparency, as does Labor's voting to disallow similar instruments when in opposition, such as the former energy minister's changes to the Clean Energy Finance Corporation's investment mandate in 2021. I will therefore be moving a consideration-in-detail amendment which restores the disallowability of the minister's directions. I hope members will seriously think about whether any minister should have so much power over so much money without parliamentary oversight.

Finally, my third concern is with housing policy in general. I broadly support the direction of where the government has been going on housing supply—increased rental assistance, shared equity, social housing and tenant rights. These actions will make a difference to the lives of people who are struggling with housing affordability, but I am absolutely frustrated with the speed of reform and the refusal to consider other areas which are really critical as well. Housing affordability is not an abstract, long-term challenge that requires action today to avert a crisis tomorrow; it already is a crisis. We should have acted in the last two decades to deal with these problems, and every federal government and every state government in this land, and also the local governments, bear some responsibility for the situation that we are in right now.

This is why we need to act quickly now, particularly in implementing planning and zoning reforms that would improve housing supply and therefore affordability. This is because of the long lead times associated with housing development and construction. Reforms today may not deliver more supply for years to come, and we can't afford to waste weeks or months working through bureaucratic processes. Until we can deliver those changes, we should be really focused on renters and how we can give renters what they need, which right now is more security in maintaining their tenancies, protection against unreasonable or frequent rent hikes, and providing opportunities to enter into secure, long-term leases.

Renting has changed in this country. Previously, this was something that young people did for a period of time before they started in homeownership. As I've already indicated, 10 per cent more young people under the age of 35, and now also young people under the age of 45, are renting because they cannot get into homeownership. Fifty per cent of single-parent families rent. That's 50 per cent of single-parent families who need that certainty about whether they're going to be near schools, whether they're going to be near child care and whether they're going to be near the parent they're trying to share the care of their children with. Currently, tenants do not have the protections that they need. We need significant changes at the state level to enable long-term leases to give renters security, so that they know where they're going to be for those critical, primary-school years and so their kids have that same sense of security. I know the government is taking action and talking to the states on this, and I'm here to urge the government to move much faster and to put more pressure on the states on these issues, because they are absolutely critical.

I'm also frustrated that the government has shown so little interest in supporting a reform that would make a real difference to housing affordability: replacing stamp duty with land tax. It is a reform which needs to be carefully designed so it does not disadvantage low-income people or those who have recently paid huge sums in stamp duty, but the economic benefits of abolishing stamp duty are abundantly clear. It's not just economics; it's the lives of Australians who want to get into homeownership and are absolutely locked out because of the current regime.

Stamp duty is an enormous barrier to homeownership. According to e61, stamp duty now accounts for five months of a purchaser's after-tax income. That's five months of pay that they must give to the government if they want to buy a home. Abolishing stamp duty would remove a significant barrier to homeownership. It would also remove a barrier to people moving home, either to a property which better suits their circumstances—such as young people getting into a larger home as they start having children, or older people moving into a smaller home as their children move out and start their own lives—or to pursue new career opportunities.

It's also unfair. If you are someone who has to move for work and so you have to sell one house to move to another area and buy another house there, you might be paying twice or three times the amount of tax paid by somebody who gets to stay in one place. Is that fair? You haven't had more homes. You've had to move, and so you're being taxed for that desire to move and to move around. When we think of issues such as the lack of key skills in regional areas—doctors and nurses, for example—the disincentives are huge because, if they want to move to a regional area and buy a house in a regional area, they will have to pay the stamp duty. It just creates more and more barriers for people to move where they need to.

The high level of stamp duty also means that it's harder for young people who are buying their first or second home to buy the right home. Because they're so conscious of stamp duty, they can overextend themselves, saying, 'I don't need three bedrooms now, but, if I buy a two-bedroom now and in four years time I need another bedroom, I'll have to pay more stamp duty, so let's go further now.' It means they are putting more pressure on themselves financially, when they can't necessarily afford it, just because of the tax system—the tax system that is not working.

If we could transition from stamp duty to land tax, it would complement planning reforms and it would create incentives to get more properties onto the market which can be bettered matched with residents or redeveloped to produce more supply. New South Wales Treasury estimates that replacing stamp duty with land tax would lead to a 6.6 per cent increase in homeownership in that state. That is moving more than 300,000 people from rented properties into their own homes. It is huge. There are few other policies in the country which would have such a large impact on housing affordability or improving the quality of people's lives.

The challenge for state governments is that the transition entails a temporary deferral of revenue—billions of dollars which are put off to future years—which needs to be borrowed to continue financing state government functions. Given that this reform would create significant fiscal benefits for the Commonwealth through increased economic activity, raising personal income and company tax receipts, and, given the Commonwealth's lower borrowing costs, it is appropriate for the Commonwealth to underwrite the states in making this transition. It would remove one of the key barriers to state governments embracing a reform that will benefit their residents and their own budgets. It is something I hope the government embraces in this year's budget.

Notwithstanding my concerns, I am a supporter of the Help to Buy scheme and the government's housing agenda more broadly, and I look forward to voting in favour of it and similar legislation in the future.

Sally Sitou (Reid, Australian Labor Party) Share this | Link to this | Hansard source

When my parents purchased their first home in south-west Sydney four decades ago, they had only been in Australia for five years. They both worked in factories and didn't earn much, but they worked hard and were able to save up to buy a three-bedroom townhouse that they still live in today. I think it's testament to the egalitarian spirit of the eighties in Australia that, if you worked hard, you could build a life here—that two new migrants who had little formal education and spoke very little English could set down roots and buy a home to raise their children.

In the early 1980s, when my parents were buying their first home, the median house price in Sydney was just under $79,000, equating to about four times a typical full-time salary. Three decades later, when my husband and I were buying our first home, the median house price in Sydney had risen to $700,000, equating to about nine times the typical full-time salary. The first home my husband and I purchased was nowhere near the median house price. It was a tiny one-bedroom shoebox apartment in Homebush West. It was all we could afford at the time, but even that purchase was a stretch for us. We had saved and saved but still fell short of the 20 per cent deposit. Thankfully, our parents were able to lend us the rest. We, like so many other Sydneysiders looking to buy their first home, had to dip into the bank of mum and dad.

Around 15 years later, the median house price in Sydney is now around $1.5 million, equating to 12 times the average wage. In the four decades since my parents bought their first home, the same house in Sydney has gone from costing four times the average wage to costing 12 times the average wage. Because of the meteoric rise in property prices, we are having to work harder and earn more than our parents' generation in order to purchase a home. For some, it means that the idea of owning a home is not an aspirational goal but an unattainable pipedream.

Housing affordability is an issue I care deeply about. Having a place to call home provided me a sense of security and community when I was growing up. It's what my husband and I hope to build for our son, and it's what so many households want in my electorate of Reid. Unfortunately, for nine years we had a government that refused to make the substantial policy changes needed to address housing affordability. I'm proud to be part of an Albanese Labor government that is tackling the issue of housing head on. It was a key election commitment for us in 2022, and now we are delivering on those commitments.

The Help to Buy policy is an important step towards helping homebuyers, but it isn't the only thing we're doing. We came to office in 2022 with a broad housing agenda. We want to provide more safe and affordable homes for more Australians. After nine years of neglect from those opposite, this is a government that is finally showing leadership when it comes to housing, and we are tackling it from four different angles. Firstly, we are providing direct assistance to help the most vulnerable by increasing rent assistance by 15 per cent, the largest increase in more than 30 years. We've also established the Housing Australia Future Fund to build the social and affordable housing Australia needs. That $10 billion fund is now set up and taking applications. Through the National Housing Accord, we are supporting 10,000 affordable rental homes over five years.

The other way we are tackling housing affordability is by increasing housing supply. We are working with state governments through the housing accord to set a national target to build 1.2 million more homes over the next five years. We've committed $3 billion to the new homes bonus and $500 million to the Housing Support Program to incentivise local and state governments to build more homes more quickly. We are investing an additional $1 billion in the National Housing Infrastructure Facility to support building more homes. I'm pleased to see up to $575 million in funding has already been unlocked, with homes under construction across the country. To help renters, we've introduced new incentives to boost the supply of rental housing by changing arrangements for investments in build-to-rent accommodation.

Part of the reason housing affordability has remained an intractable problem for nine years is that it's a wicked challenge that requires three levels of government to work together. Yet those opposite showed a complete disinterest in taking national leadership when it comes to housing policy. For the past nine years housing policy and funding has been fragmented, piecemeal and woefully inadequate, and generations of Australians are paying the price. This is the third area in which the Albanese Labor government is bringing in reform: at last we have a federal government that is showing leadership on housing.

Minister for Housing, Julie Collins, convened the first National Housing Supply and Affordability Council to provide evidence based recommendations to inform all governments on how to improve housing supply and affordability. She also convened the first housing ministers meeting in five years, bringing together federal, state and territory housing ministers. It's extraordinary to think that the previous Minister for Housing, the member for Deakin, in all his time as housing minister, did not convene a meeting of state and territory housing ministers. The issue of housing affordability has been brewing for years and years. It's complex, involving local council development approvals, state and territory planning policies and supporting infrastructure projects, and yet the member for Deakin could not bring himself to get everyone together to establish a national housing plan.

Finally, the fourth angle from which we are tackling the housing crisis is our assistance for first-home buyers. We have expanded the Home Guarantee Scheme, which has already helped 86,000 people across Australia into homeownership. Under this scheme, eligible homebuyers are able to buy a home with as little as a five per cent deposit rather than the standard 20 per cent deposit.

We are also providing assistance to first-home buyers through the Help to Buy scheme, which is the bill before the parliament today. Help to Buy is the first national shared-equity scheme of its kind. It helps Australians get their feet on the housing ladder by reducing the amount required for both the saving of a deposit and the servicing of a mortgage. The government will loan applicants part of the upfront purchase price of a new home—either 30 per cent for an existing property or 40 per cent for a new build. Participants will require a two per cent deposit to access the scheme, making it significantly more affordable for participants. Forty thousand eligible participants will be able to access the scheme alongside a standard mortgage. This equity contribution ensures the sustainability of the program while offering lower ongoing mortgage repayments for individual participants. This scheme will be targeted at middle- and low-income Australians who might not otherwise be able to get a foot on the housing ladder.

Now, there's been some disappointing opposition to this bill. From those opposite we get their one big idea for housing affordability: to get a generation of young people to sacrifice their future by accessing superannuation early. This is yet another step in their ideological obsession with opposing superannuation. They have never supported superannuation and have never quite got their head around the fact that it is a retirement income, not a bank that you can dip into whenever you need. It's a system that is the envy of the world, and yet those opposite are obsessed with undermining it. To make things worse, the coalition's plan has been uniformly canned by housing, finance and economics experts. In fact, they say, the coalition's solution will make housing affordability worse by driving up demand.

In Australia we like big nation-building projects: Snowy Hydro, the Sydney Harbour Bridge, projects that define and shape our nation for decades to come. I think housing should be our next nation-building project. Unlike those opposite, this is a government with an ambitious plan to do just that. We are tackling housing affordability head on by increasing supply, providing direct assistance to vulnerable groups and first-home buyers and providing the institutional reform so sorely needed. These are the changes that are needed to shape our country to ensure more Australians have a place to call home.

Kate Chaney (Curtin, Independent) Share this | Link to this | Hansard source

It goes without saying that access to housing is one of the most concerning issues for Australians today. Every day, we hear about the rising cost of property, the impossibility of finding affordable rentals and the fear of never being able to afford to own a home. It's affecting our kids and grandkids disproportionately. It was raised with me last week at UWA O-day by uni students who lament the fact that they can't see a pathway to homeownership for themselves personally. I hear from parents and grandparents who can see that their children and grandchildren will not have the security of homeownership that they enjoyed without their financial support, and even then they won't be able to live anywhere near them.

Put simply: housing prices are too high. Housing prices have increased from three to four times the average income to seven to eight times the average income since 2000. Australian is the third-least populated country on earth but contains second-most expensive housing. These exorbitant costs exacerbate inequality and undermine social cohesion. This phenomenon redistributes rather than creates wealth. Australians' wealth is now tied up in an unproductive asset, making it bad for intergenerational fairness and bad for the productivity of our economy.

A 2023 Australian Housing and Urban Research Institute report notes that some young people simply will not attain homeownership over their life cycle, particularly if they're first home buyers who are unable to clear the ever-growing hurdle of saving for a deposit. It will keep getting worse for every generation unless government policies change. Alan Kohler recently summarised the Australian housing situation as high demand which is impacted by interest rates; immigration; tax breaks for investors and homeowners; grants to first home buyers; and suppressed supply by social housing, underinvestment, sprawl and planning.

I acknowledge that the government is making some attempts to address housing issues at a national level. In attempts to boost supply, last year this parliament passed the Housing Australia Future Fund, which I supported while noting that a lot of work still needs to be done. The government has also increased funding for the National Housing Accord and the Social Housing Accelerator and has introduced incentives to boost the supply of rental housing by changing arrangements for investors in build-to-rent accommodation. Increasing housing supply is essential and more needs to be done to achieve it.

Acknowledging the magnitude of this crisis and the number of people affected, last year I held two community housing forums, attended by a total of 180 Curtin constituents. The first housing forum, in October 2023, was about listening to a fairly representative mix of renters, homeowners and mortgage holders from across the Curtin community. Together we identified the top three issues and top three goals for housing in Curtin. I then called on the community to submit their policy ideas towards these goals. We had a huge range of suggestions from simple ideas that have been around for years to detailed and nuanced policy proposals. Our second Curtin housing forum in November 2023 involved a panel of experts evaluating these community policy ideas and assessing other proposed policy suggestions as well.

Through this process, the Curtin community identified our top three housing issues as a lack of affordable housing to rent and buy, a lack of diverse housing options and a tax system with the wrong incentives. Our top three long-term goals for housing were identified as secure long-term housing available for all, policies to incentivise appropriate homes and integration of social and affordable housing into our communities. So my community has identified supply as the main issue and, in particular, noted the need for more housing options for social affordable housing.

Is this bill the right action? It's broadly accepted that the current housing problem is a supply problem and needs to be addressed with supply levers. This Help to Buy scheme is not about supply. It's about demand. It's about helping eligible low- to middle-income owners to purchase new or existing homes with as little as a two per cent deposit by accessing equity from the government. Housing Australia will contribute to part of the purchase price of a house or apartment, and the Commonwealth will become a part owner of the property. Help to Buy would be open to 10,000 Australian applicants each financial year and would be administered by the states, which would receive an allocation according to population. For WA, I would imagine this means approximately a thousand shared equity loans per year. The Help to Buy program will run alongside the home guarantee scheme and is intended to support Australians who would otherwise not be able to purchase a home.

So is it a good scheme? Are shared equity home loans a good approach? Let's be clear. It doesn't create more homes. But it does make a particular target group of potential buyers more competitive in the fight for the limited homes available. I believe there is a place for shared equity schemes as long as we're very clear that they're addressing equity, not a housing shortage. They reshuffle the priority of different people in the line, rather than reducing the number in the line or increasing the houses available.

I'm fortunate in my previous career to have worked on an innovation project with the excellent team at WA's Keystart. Keystart is one of three state organisations, along with New South Wales and Victoria, that currently administer shared equity home loans. Keystart is an established part of WA social and affordable housing scene. It was established in 1989 and administers shared equity home loans on behalf of the WA Housing Authority as well as provides low deposit home loans, access home loans, Aboriginal home loans and rural home loans. I understand that the Help to Buy scheme was in part modelled on Keystart's shared-equity scheme, with some updates made in response to their lessons learnt. My conclusion, from discussions and interactions with Keystart, is that shared-equity schemes are an important part of a national housing assistance package, but I understand that a number of concerns have been raised about these types of schemes. There seem to be four main issues. Firstly, shared-equity schemes may contribute to further growth in house prices if they're of sufficient scale. Secondly, they're expensive and so have limited scalability. Thirdly, they may encourage those for whom homeownership may not be the most suitable option to take on undue financial risk. Lastly, they may divert resources from supporting people who are homeless or at risk of homelessness. I want to consider how these concerns might apply to Help to Buy.

First is increased house prices. The Productivity Commission has said that, unless it's well targeted, assistance to prospective homebuyers presents too great a risk of increasing housing demand and, consequently, house prices. We've seen this with previous homebuyer schemes, like first home owner grants. Last year about 62,000 houses were sold in WA, and the median Perth house sale price was $590,000. If, as assumed, WA would receive an allocation of a thousand shared-equity opportunities per year, that would only constitute about six per cent of WA house sales. It seems unlikely that increasing the buying power of a thousand potential buyers would have a material impact on house prices, but it's worth noting that this is not a zero impact. It will provide some upward pressure, but the scheme will make a significant difference to the life of targeted recipients. While the exact thresholds are not being set in legislation, we expect it to be targeted to people with an income of $90,000—or a couple with $120,000—buying a home that costs less than $600,000, which is close to the median Perth house price. While I'm genuinely concerned about the inflationary impacts of injecting more grants into the economy, if this is well targeted it should be unlikely to cause material inflation.

The second concern is about cost. Because shared-equity schemes are capital intensive, they're not scalable. Obviously, you can't complain about both these things at the same time. A scheme will either be inflationary, if it involves a significant number of buyers, or too small and not scalable. But this is an expensive way to weight the scales in the race for limited available homes. The thousand lucky Western Australian recipients will benefit, but there are lots of people affected by the current housing shortage who will not benefit, and the capital tied up in the program—nearly $2 billion—is significant. The Commonwealth government will continue to own part of these people's homes until they sell or refinance. Keystart's experience shows that about half of the shared-equity borrowers buy out the government share within nine years, meaning that half don't, so this is a long-term commitment from the government.

Thirdly, some commentators have suggested a shared-equity scheme might encourage people to take on undue risk. Obviously we haven't yet seen all the details of how the Help to Buy program will start, but state equivalent schemes like Keystart show that about half of the borrowers buy out the government by the nine-year mark. They might sell the home or refinance. It seems that in a time of increasing property prices this is fairly low risk, but if prices were to fall it's quite possible that the government could be seen to be responsible for committing people to a negative equity situation. But there's always this risk in investing, and that risk is being borne by the government as well as the borrower. One advantage of a shared-equity scheme over a low-deposit scheme is that it addresses the deposit and serviceability barriers, while a low-deposit scheme only addresses the deposit barrier. It also worth noting that shared ownership disproportionately helps women own their own homes, with 66 per cent of Keystart shared-equity participants being women. This is important given that older women are one of the fastest-growing groups represented in the national homelessness population, with a rise of more than 30 per cent in the last five years. Research based on the most recent census has found that close to a quarter of a million Australian women aged 55 and older are at risk of homelessness.

Finally, concern has been raised that investments in shared-equity schemes will divert resources from homelessness services. As I said at the outset, this Help to Buy scheme is not a silver bullet or a solution to the housing crisis; it's part of a web of what needs to be a comprehensive and well-resourced national housing plan. Resources should absolutely continue to be allocated to housing and homelessness services. The government's currently consulting on a national housing plan—the first plan since 1946—but the issues paper for the consultation focuses solely on a social security perspective. It doesn't refer to any tax reform. I urge the government to be bold and brave and include an economic perspective, not just a welfare perspective, in the national housing plan.

On balance, I'll be supporting this bill. It will give relief to a small number of targeted low- to middle-income homebuyers. It will not, however, solve Australia's housing crisis. It's a small puzzle piece in a much larger problem which needs longer term systemic reform.

I want to speak a bit about the need for review and oversight. I note the bill has a three-year review clause. This is an important inclusion in order to understand the impact the scheme has on the housing market and the economy. I'm also concerned about the amount of ministerial discretion in this bill. The eligibility thresholds are not being set in legislation, and it's a large amount of money—nearly $2 billion—to allocate within this broad discretion. I would prefer to see these eligibility criteria overseen by parliament, while I also recognise that flexibility may be needed to adjust how it is working. So I would support that threshold being made a disallowable instrument so it does have that parliamentary oversight.

I would also urge the government to ensure that the panel of lenders are carefully chosen and care's taken to ensure that they have requisite skills and capacity to deliver this scheme well. Evidence shows that the highest risk time for falling into arrears is between three and five years after taking on a loan. This is often triggered by life changes—a break-up, loss of job or illness. Lenders need to be equipped to respond to this risk of financial hardship with support structures to identify those most at risk of defaulting on their share of the loan, to communicate clearly how shared equity works and to help borrowers take timely action if they find themselves in financial hardship. It's essential that the panel of lenders have well-understood standards for delivering these shared-equity loans and clearly articulated roles for a potentially more vulnerable cohort.

While this bill will not create more homes or fix the housing crisis, I commend it to the House and look forward to seeing at least 1,000 Western Australian recipients helped to realise their goal of homeownership.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the motion moved by the Hon. Minister for Housing and member for Franklin. The Help to Buy policy was a key election commitment that we took to the Australian people in 2022, and the Help to Buy Bill 2023 is honouring that commitment. This will support up to 40,000 Australians purchase a home of their own. Despite the coalition's attempts to discredit this policy during the election, the Help to Buy scheme is a solid, no-nonsense policy squarely aimed at giving those on low and middle incomes the opportunity to purchase a home by helping participants overcome the hurdles of saving for a deposit and servicing a mortgage.

The scheme is one element of the government's commitment to improving housing affordability, including—I remind you—the $10 billion Housing Australia Future Fund, the $3 billion Social Housing Accelerator payment and the largest increase to Commonwealth rent assistance in 30 years. Who would have thought that a prime minister that grew up in social housing would be so focused on making sure that Australians have a roof over their head? Affordable housing is critical to the economic wellbeing of all Australians, and that's why the Albanese government is taking action.

Despite a 'no-alition' attempt to cast doubt and discredit this scheme, the Albanese government has been working carefully on the design with states, territories and lenders. It's a shame that, when the member for Deakin was offered a meeting to discuss the issues that he's raised in parliament, the shadow minister for housing did not respond. If the member for Deakin had attended that meeting, he would have found that our scheme is very much like the Home Guarantee Scheme, which the former Liberal and National government designed. Its criteria are set out in delegated legislation. The shadow minister for housing would also have discovered, if he'd accepted the opportunity to meet, that our scheme is nothing like the HomeBuilder scheme, which blew the housing market and was criticised by state, territories and many others.

We made it very clear in our election campaign what the key criteria would be for Help to Buy. In fact, my campaign had fact sheets setting out very clearly what the criteria would be. What Australians need at this time is a government that's going to act on what it says in terms of putting a roof over Australians, and I'm glad that we are committed to doing that. I'll have a more to say on this down the track.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43 and may be resumed at a later hour. Given the interruption of the member for Moreton's speech he'll be granted leave to continue when the debate is resumed.