Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

The question is that the bill stand as printed.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2) on sheet 8778 together:

(1) Schedule 1, page 3 (after line 20), after item 4, insert:

4A At the end of section 8

Add:

(4) In performing its function under paragraph (1) (ca), the number of guarantees issued by the NHFIC in a year must not be greater than the number (if any) specified in the rules for the purposes of this subsection.

(5) In relation to the NHFIC's function under paragraph (1) (ca), the rules may provide that the NHFIC must not issue a guarantee in relation to a property if:

(a) the property is in a specified class of properties; and

(b) the value of the property is above the amount of value specified in, or worked out in accordance with, the rules for a property in that class.

(2) Schedule 1, page 4 (after line 18), after item 11, insert:

11A After paragraph 14(a)

Insert:

(aa) that relates to a matter mentioned in subsections 8(4) and (5); or

11B At the end of paragraph 14(b)

Add "or the rules".

These amendments are to ensure there is parliamentary oversight over key aspects of the First Home Loan Deposit Scheme. The scheme is designed to help first home buyers save the initial deposit they need to get a mortgage and purchase a home. Eligible households that wish to buy their first home can apply to have the government provide a loan guarantee worth up to 15 per cent of the property's value. Eligible households would only have to save five per cent on the deposit, and they wouldn't have to pay lenders mortgage insurance.

The government have announced some of the details about how this policy will operate. They've said that there will only be 10,000 guarantees provided a year. They also stated that there will be price gaps on the housing that can be purchased under the scheme. The Senate inquiry on this bill noted that these guarantees have not been worked through. Treasury and NHFIC, the body that will provide the guarantees, told the committee that they are continuing to consult with stakeholders to refine the details of the scheme. A close read of the bill shows many of these key details will be formally set at a later date through a ministerial direction that is not disallowable by parliament.

I'm sorry, but that's just not good enough. I have to be honest with you people. It looks like only a quarter of the job has been done here and you haven't done anything else. It seems that this is starting to become a habit for the coalition—putting bills up and changing things, and the bills actually have very little substance. It's starting to get to the point of being shameful. It shows me you haven't done your homework. That's not good enough when you're making major decisions like this, especially when there are many people out there who would like to purchase their first home, but this is unavailable and so they cannot. I'll have questions at the end of this. I'm sure you'll look forward to answering them. I wouldn't be doing my job if I didn't ask those questions.

These amendments will ensure the parliament retains the ability to disallow important provisions which determine how this will work. They provide parliamentary scrutiny over the number of guarantees provided and the eligibility criteria for the housing that can be purchased under the scheme. I'm not asking for the policy details to change from what the government has already announced, and I'm not trying to slow down the proper process of getting these policy settings right. All I'm asking is that parliament gets a say over how the government spends the millions of dollars that are earmarked for this so-called scheme. Retaining parliamentary scrutiny over key aspects of this scheme is important. Some economists have raised concerns about whether providing deposit guarantees will actually help improve housing outcomes for first home buyers. While I have some reservations about this particular bill, the government is right to put housing reform on the agenda. We need broad housing reform to ensure all Australians can afford to keep a roof over their heads.

Housing affordability is a problem across the nation that is growing by the day. The steady rise in the cost of housing has increasingly eaten away at the typical Australian household's budget since the 1980s. Too many families can't afford to live while they raise their children or start their careers. Poorer households are struggling the most. They've been spending more and more of their take-home incomes on housing, especially in recent years. Today more than a quarter of the household budget goes toward putting a roof over their heads. Buying a home is very difficult. House prices have grown much faster than incomes in both cities and the regions. It's hard for young people to get a foothold in the housing market, and the lucky ones can rely on the bank of mum and dad. Let's be honest: that's exactly what they're relying on. Those who can't will have to save for eight years or more before they save their deposit to get a mortgage—and that's if they ever manage to buy a house at all. Home ownership has become a pipe dream for many Australians. Sixty per cent of younger households owned their home in 1981. Today only 45 per cent do. Older households are also increasingly less likely to own their own home, and ownership is going to become less common amongst retirees over time. As a result, renting is becoming the new norm for many families.

Back in the 1990s, around one-fifth of Australians rented privately from landlords. Today, over a quarter do. That means that renting isn't just a phase people are going through anymore. Renting isn't just for people in their 20s who are waiting until they can afford to buy a home. These days, it's a reality for the young and old. While plenty of Australians rent because they want to, most will tell you that renting can make life pretty difficult, let alone putting away money for a house. For one thing, renters are more likely to have to move than people who own their own home. A survey of renters in 2017 found that over 80 per cent of households who rent are on a fixed-term lease of 12 months or less or aren't on one at all. That makes renting insecure. Fifty-five per cent of long-term renters have moved five times or more in their adult lives. Every time they move, they risk losing their connection to their community, having to put their kids into a new school or having to switch jobs. Because moving can be so disruptive, renters will avoid requesting repairs for mould, broken locks or pests because they're worried that they might get blacklisted if they make trouble for their landlord.

Despite everything they put up with, renting is still not particularly affordable for many households. People on welfare are especially likely to have trouble. ABS data shows that over 40 per cent of renters who are on working-age payments have had to turn off their heating, skip a meal or put off paying their bills to be able to make rent. That's much worse than for those who manage to own their own home. Modelling from SGS Economics and Planning shows that there isn't a single rental property in Sydney, Melbourne or inner Hobart that will be affordable for a lone person on Newstart. Part of the problem is that the Commonwealth rental assistance hasn't kept pace with the rising costs of rents, so people on welfare are spending a rising share of their household budget on housing. The low rate of Commonwealth rental assistance is affecting pensioners who rent as well. They also are struggling to find a rental property that's affordable, and they're much more likely to be in financial stress than pensioners who do own their own homes.

With all the pressure on the household budget, it will come as no surprise to anyone that homelessness is on the rise. More than 116,000 people were homeless in Australia on census night in 2016—up from 105,000 in 2011 and 90,000 in 2006. Many more are falling through the cracks. Around 300,000 people access specialist homelessness services every year. With a little help some are able to find a suitable home, but for thousands they find themselves sleeping rough.

We need broad housing reform to solve the problems we face. Providing loan guarantees for first home buyers is just a drop in the ocean compared to the scale of the challenge. Social housing must be a top priority. The best evidence shows that social housing is the most effective way to combat homelessness. Securing a stable home is often the first step for vulnerable people to tackle other problems that they've had during their life. It's not that surprising, really. Beating addiction and finding work is much easier if you have a fixed address and a safe place to rest. Social housing also comes along with wraparound support services which help people to re-integrate with their neighbourhood or into their local community and find a way to rebuild after they have hit rock bottom.

But even though the benefits of social housing are well known, state and federal governments have underinvested in the sector in the past decade. We haven't built enough social housing to keep up with the growing population. Two decades ago, five per cent of all dwellings in Australia were social housing. Today, just four per cent are. Maintenance is also very poor, and that is putting it politely. Many of the units are in terrible shape. Infrastructure Australia reports that one in four Australians believe our social housing is of poor quality and expected to worsen. One in three people told Infrastructure Australia that public housing is too hard to access, and they're right. There are over 140,000 applicants on waiting lists for public housing nationally. If recent experience is anything to go by, only about 20,000 will be allocated to housing. Five thousand will wait for two years before they secure a place—and that's on a good day. They're the lucky ones. How many more people give up or end up on the streets or live out of their cars?

Social housing will help, but it is expensive. We can't possibly afford to house everyone. The government should also consider raising Commonwealth rental assistance or Newstart to make it easier for families to find a home in the private rental market. Policies to make it easier for households to buy housing, like this one, must be subject to proper scrutiny and evaluation. Unfortunately, it's easy for my peers on both sides of the aisle to make big promises about how they plan to help young householders buy their first home and realise the great Australian dream. Grand ideas are a good start. They're the basis of any brave policy. But the housing affordability problem faced by Australian households is complex, and simple solutions to complex problems don't end up solving anything.

I'm concerned that economists have questioned the efficiency of this scheme and I'm concerned that key aspects of the policy haven't been figured out yet. I'm concerned that this bill, in its current form, will prevent elected representatives from doing their job and holding the government to account on housing policy that will cost millions of dollars every year. I call on the chamber to support the suggested amendments.

I do have some questions. I was wondering if the minister may be able to give me just a little bit more information. It just seems like a very grand plan here and it doesn't have much substance to it. I am terribly concerned you've got no cap. Can someone with a million bucks out there come and get their first home? That's my first question: what's your cap on how much you can spend on a house? Certainly you would have to have a cap in place. If you can afford to go and get a million bucks out, surely you don't need that money?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

Thank you, Senator Lambie. Can I say thank you for those genuinely considered and salient points about housing affordability and its complexity. You are right to say that there is officially no cap that is included in the investment mandate.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

If there's no cap—

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

In the legislation.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

So there's no cap?

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Order! It would assist if the question is put and then an answer is given rather than interjections through the chamber. For the benefit of Senator Lambie, the interjection was that there is no cap in the legislation.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

When do you propose that you'll be putting in amendments or doing whatever you need to do to this bill to put a cap in here? Obviously, this is a massive problem. You're telling me, if I've got a million bucks I can lend this money and do what I need to do. If there's no cap, how do you expect this to work?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

The core elements of the scheme will be articulated in the investment mandate, which will be issued by the government, which will sit alongside the legislation. The matters that will be covered in that investment mandate including the decision-making criteria for the guarantees, limits on the guarantees and the risks of returns relating to the guarantees. The scheme will commence in January 2020 and a public consultation process is planned for the proposed amendments to the investment mandate, which will detail those core elements of the scheme and also of the research function.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Is there a reason you didn't figure all this out in the scheme before you brought this through the chamber? It's a fair question. Come on.

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

When this bill was taken to committee, the Senate committee report, which was released on 10 October 2019, recommended the bill be passed as is. The committee acknowledged the need for flexibility to modify the scheme to suit the circumstances of the sector. The committee noted that it was particularly comfortable with the scheme's specific details being included in the NHFIC investment mandate. The government needs to retain the flexibility to amend the parameters of the scheme as necessary. Price caps that are subject to the disallowance will create uncertainty and confusion for lenders and for borrowers.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Is that with your 10,000 guarantees? There will be 10,000 guarantees given out each year. Is that part of your committee process too? How do you intend to work out which lucky 10,000 Australians are going to have a go at this?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

The government, through Treasury and through NHFIC, is consulting with stakeholders on how to best ensure the allocation process is efficient and accessible to first home buyers across the country.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Economists have questioned whether this scheme will work. They've warned that the guarantees might end up going to first home buyers who would have been able to purchase a home anyway. Some experts have suggested that this scheme could push house prices up if it were expanded. Does the government disagree with this view? Why is the government ignoring this advice from economists?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

Just to recap, the scheme will provide 10,000 guarantees to first home buyers every year. Those first home buyers will have a deposit of at least five per cent of the property price. They'll have a taxable income in the prior financial year of below $125,000 per annum for singles and $200,000 for couples. It will only involve owner-occupied principle and interest loans, and they have to be Australian citizens purchasing that property. It is expected that the usual competitive principles will apply to lenders offering these loans, and interest rates will reflect the competition in the market. Any costs associated with providing the loans will be absorbed by the participating lenders. There are such limitations on the scheme that it is not believed that it will have any significant effect on property markets.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Has it been taken into account that some states already have first home buyer schemes? Where does all this come into it? Does this move them down the list of the 10,000 guarantees, or are they going to get a top-up with this and be able to get their first home buyers—the state government of Tasmania has $20,000 for a first home buyer. Is this going to affect what they're already getting? Can they get this on top as well?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

The objective of this scheme is that it will be complementary to existing schemes out there.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Housing affordability is a huge issue for many Australian families. Not being able to buy their home is part of the problem, but renters are also struggling, especially if they're on welfare. Modelling from SGS Economics shows that there isn't a single property in inner Hobart, Sydney or Melbourne that is affordable for a person on Newstart. Loan guarantees for first home buyers aren't nearly enough. What is the government going to do to make a difference for Australians who are struggling to keep their heads above water?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

That's probably outside the scope of the details of this particular bill.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

The Treasury and NHFIC told the Senate inquiry that they are still figuring out how these loan guarantees will be delivered. Why is the government putting forward this bill when the policy hasn't been finalised? I think it's a fair question.

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

That's actually why we have the NHFIC, the National Housing Finance and Investment Corporation. That is why we're making this amendment—to enable NHFIC to make those decisions.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

Economists have questioned whether this scheme will work. They've warned that the guarantees might end up going to first home buyers who would have been able to purchase a home anyway. Some experts have suggested that this scheme could push house prices up if it were expanded. Does the government disagree with this view? Once again, why are you ignoring this advice? What has the government actually done to guarantee that this will not push house prices up? What modelling has been done to make sure that this is not going to occur?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

The aim of the scheme is to provide 10,000 guarantees per year, so the scheme is in fact quite modest in size and is unlikely to have a significant effect on house prices. On average, there are around 100,000 first home buyer loan commitments every year, so 10,000 guarantees would be modest in size.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

So, basically, this isn't going to do anything to help housing affordability, is it? You're not reducing anything. We're not giving people extra money. How is this going to help with housing affordability?

Jane Hume (Victoria, Liberal Party, Assistant Minister for Superannuation, Financial Services and Financial Technology) Share this | Link to this | Hansard source

The aim of this legislation is not to bring the price of houses down overall. The aim of this scheme is to allow first home buyers to enter the market with only a five per cent deposit.

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

I thought I'd let Senator Lambie have the call for a bit and follow her issues through, but I thought I should put on the record Labor's position on Senator Lambie's amendments. Labor senators will not be supporting these amendments. This legislation provides guarantees in a similar manner to how the Commonwealth provides off-budget financing across a number of portfolio areas. These matters are normally managed through the statement of expectation and the investment mandate.

Whilst the committee heard evidence during the legislative inquiry that caps could be introduced via legislation or regulation, Labor senators emphasised that an early review of the scheme was the best way to ensure the scheme was meeting its objectives. That's why Labor will not be supporting these amendments at this time. While I'm on my feet, I might remind you, Mr Acting Deputy President Bernardi, that in my second reading speech I foreshadowed some other amendments that Labor is making to this bill as well, but I won't go into that again.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Thank you, Senator Watt. We'll come to those in a moment. Right now the question is that amendments (1) and (2) on sheet 8778 moved by Senator Lambie be agreed to.

Question negatived.

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

I move the amendment that has been circulated in my name:

(1) Schedule 1, page 5 (after line 7), after item 15, insert:

15A After section 57

Insert:

57A Review of assistance to first home buyers

(1) The Minister must cause a review of the National Housing Finance and Investment Corporation's activities assisting additional first home buyers to enter the housing market to be commenced within 3 months after the end of:

(a) the period beginning on the date when the first guarantee is issued and ending 12 months after that date; and

(b) each subsequent 12 month period.

(2) The persons undertaking the review must give the Minister a written report of the review within 3 months of the commencement of the review.

(3) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Would you like to speak on the amendment?

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | Link to this | Hansard source

Not particularly, because I foreshadowed it earlier.

Question agreed to.

Bill, as amended, agreed to.

Bill reported with an amendment; report adopted.