ABC RN BREAKFAST
MONDAY, 28 OCTOBER 2019
SUBJECT: First Home Buyers Deposit Scheme.
GERALDINE DOOGUE, HOST: Joining me now is Jason Clare who's the Shadow Housing Minister who's joining us from a moving car I understand. Welcome back to breakfast.
JASON CLARE: Thanks Geraldine.
DOOGUE: You're not driving are you?
CLARE: No no, I’m in the passenger seat.
DOOGUE: The Government first announced this scheme before the election and Labor was pretty fast in favour of it. So what's concerning you now?
CLARE: Well we backed it before the election as you said and we backed it into the Parliament as well and we hope it works. We want more people to get their own home. We got some details yesterday which were very useful because it’s only a few months before the scheme starts. But there's more detail we need to get. We want to know which banks you can go through to get access to the scheme. It’s important that it’s not just the big four banks that will benefit from this scheme. And it's important we understand whether you’re going to need a five per cent deposit, a ten per cent deposit or a fifteen per cent deposit.
DOOGUE: I thought it was clear, what are you getting at then?
CLARE: Well unless you’ve got a 20 per cent deposit then you're liable to have to pay mortgage insurance, this is designed to avoid that. But it's not clear yet whether the Government is going to select amongst the 10,000 lucky few that will get access to the scheme whether they'll need or whether they'll select people that have only got five per cent or ten per cent or fifteen. I'm hoping we'll get more of that detail over the next few months. And also the Government said that it will be first in first served. I'm hoping that it's not just people in Sydney and Melbourne and Brisbane that benefit from the scheme but we see people benefit right across the country.
DOOGUE: Again have you had some insight into the way it will be chosen, because at the moment it's sort of very much up in the air isn't it?
CLARE: That's right. And all of the different organisations who gave evidence to the Senate inquiry into this legislation asked the same questions. There's a lot of goodwill out there. We share that. We want people to be able to get a roof over their head. To be able to get into the housing market. The percentage of people that own their own home or have a mortgage today is at its lowest level since Menzies was Prime Minister in the 60s. Everything that's been tried in the past hasn't worked. If this works then terrific but we just need to get more details as the scheme rolls out over the next few months.
DOOGUE: I mean this isn't the first time we've seen a scheme like this. Governments throughout Australia's history including your own past governments have tried similar things and they're not always hugely effective. [Inaudible].
CLARE: That’s a good point Geraldine. If you’re in Victoria or New South Wales there are schemes that provide help for first home buyers that are buying homes around this price range, as well as stamp duty exemptions. What this tells you is that it is not going to solve every problem. But if it can help in a little way then that's a good thing.
DOOGUE: Well what would you like to see tried instead? Clearly you believe it has real possibilities and you sort of indicate that very fast with your bipartisan approval, lovely to hear those words. But something's bothering you, I think beyond these details you've outlined.
CLARE: Well our job is to hold the Government to account. To make sure that when we pass laws or allocate money to certain things that we do it in the best possible way. We suggested in Parliament that this should be reviewed after 12 months rather than three years and to the Government's credit they agreed to that. So that means that by this time next year we'll be gearing up to look at how effective this scheme has been.
What I'm hoping is that this is a scheme that helps people who've been struggling for a long time to save up a deposit but haven't been able to save a lot. It will avoid them having to pay the extra cost of mortgage insurance. A first come, first serve system means that some people might benefit who aren’t as deserving as they are for example. That aren’t as quick off the mark. There are a few things there that I hope the Government will look at as the program is developed.
DOOGUE: Look this line is getting worse, but do you fear it might drive up prices, counterintuitively and not help people?
CLARE: What people like the Grattan Institute have said, and you know they'll be proved right or wrong as the scheme rolls out, is that it'll bring forward the number of first home buyers in the short term into the market. So they might be able to buy sooner than they otherwise would. But I'm also conscious Geraldine that you know in many parts of the country there are other incentives that already exist that are helping first home buyers get into the market. The bottom line here is that 700 grand is still a lot of money and it's a massive disincentive for people to get into the market and buy their first home. But as my old man said to me it's important to buy a home, not to get rich but to make sure that you don't retire poor. Paying rent when you're on the pension is really really hard. And so it's incumbent on politicians at the state and federal level and local to look at what we can do in housing to make it more affordable and help more young people to get their first home.
DOOGUE: Thank you. I'll let you go back to that moving car.
CLARE: Thanks Geraldine.
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