Minister Collins interview on ABC Afternoon Briefing

E&OE

GREG JENNETT, HOST: Well, cost of living relief remains a constant demand in these very high inflationary times, and we know the Treasurer’s working on his first Budget, and his options to deliver hip pocket relief are somewhat limited precisely because of inflation. Nowhere is the pain more acute than for those trying to crack into the housing market with their first ever purchase. Now, Housing Minister Julie Collins has fast tracked first home buyers’ assistance for those living in the regions, and she joins us in the studio this today.

JULIE COLLINS, MINISTER FOR HOUSING, HOMELESSNESS AND SMALL BUSINESS: Good afternoon.

JENNETT: Welcome, Minister. Great to have you on the program. So, this is a pull forward of a scheme that was promised at the election. Just run us through the basics – who’s eligible and when will it start?

COLLINS: It’s for those Australians that have been living regional Australia for the last 12 months. So you can apply to purchase your first home in the region in which you’re living or an adjacent living with as little as five per cent deposit. So that is the Government guarantees the other 15 per cent, to get to the 20 per cent usual deposit. There’s no lenders mortgage insurance, so it can save people in regional Australia up to $36,000. So it’s quite a significant saving for those first home buyers in regional Australia.

JENNETT: There are caps on it though.

COLLINS: There are caps, yes.

JENNETT: Particularly in the context of a rising real estate market – well, I suppose that’s debatable in some markets. But what are the limits?

COLLINS: Well, it does vary. It varies from around $400,000 to $900,000, depending on where you live in Australia. So, what will happen is when the system goes live, which is this weekend – so we’re bringing it forward from a 1 January start date to 1 October – on the government website, you’ll be able to put in your postcode and see if your area’s eligible and what the caps are.

JENNETT: What’s the reason for bringing it forward? Because as I alluded to in that last question, the market is patchy in different parts of the country at present – some continuing to grow in capital value; others actually shedding a bit – so is this a response to that patchiness?

COLLINS: Well, what we know is that a lot of people, particularly first home buyers, have been renting and rents are going up. So they could service a mortgage similar to the type of rent that they’re paying, but the big barrier for them of course is the home deposit. We know that for an average home buyer to purchase an average home in regional Australia it takes about 11 years of savings, so it’s quite a significant period of time. So, what this does is allow them to get into their first home sooner and allows them to move out of the rental market which frees that up for other Australians.

JENNETT: That 11 year feature you mentioned was the subject of an op ed piece you’ve written today, in fact. Is that a function of low wages in regional areas more than high real estate values?

COLLINS: I think what we’ve seen after nine years of the former government was a deliberate design to suppress wages. We’ve had low wages growth. Of course, we know that real wages have been going backwards. What we also know is, of course, is that housing pricing have increased and that rents have increased. I’ve been getting more ordinary Australians coming into my electorate office, even before I was the Housing Minister, particularly two income families saying to me that they can’t find anywhere to rent at the end of their lease because there’s nothing available, because the rental market is so tight and rental affordability is increasing in terms of the price of rent is increasing. So, everything we can do to get more people into their home sooner is what we’re looking at. And, obviously, we went to the election with a really broad spectrum of housing policies, and I’ve been busy trying to implement that. And, of course, understanding that some of this will take some time and there’s no silver bullet, we’ve also made an announcement that we’re unlocking up to $575 million of the National Housing Infrastructure Fund to be able to invest in more social and affordable housing and try and unlock more private capital.

JENNETT: Yes, because it can be contradictory, can’t it, policy in this area? It can sometimes, if not handled sensitively, actually exacerbate the affordability problem.

COLLINS: That’s why we’ve also got limited spaces. So it’s 10,000 places a year for this Regional First Home Buyer Guarantee. And, of course, we’ve got the suite of other policies to actually increase stock in terms of affordable and social housing right across the country. And the effort we’re doing with the Housing Australia Future Fund is 20,000 social houses and 10,000 affordable houses, and that will be on top of what states and territories are doing.

JENNETT: Since you mentioned it, why don’t we go to rental markets now. Much of our discussion around your initiatives today are about buying. What is under consideration to help ease the pressure that renters are feeling? That’s not just regional, is it, that’s really high stress in Sydney and Melbourne at the moment?

COLLINS: We do know that housing affordability is an issue right across the country. We know that rental affordability has been a significant issue in many capital cities. We’re doing everything we can do to implement the election commitments that we took. It was a very broad suite, a very ambitious housing reform agenda. So, it includes the Housing Australia Future Fund, with 30,000 social and affordable homes. It includes the Regional First Home Buyer Guarantee that we’ve brought forward. It will also include the Government equity scheme, the Help to Buy Scheme, whereby we can support people into a home with Government equity of up to 40 per cent for new homes and 30 per cent for existing homes. We hope to get that up and operating sometime next year. We’ve got our Housing Australia Future Fund that I’ve talked about, but also we’ve got an Affordability and Supply Council that we’re going to introduce to actually look at innovations and interventions that work, and the interactions between them to try and make sure that we can unlock more land supply. I think the issue here, Greg, is that no tier of government can solve this it alone. What we need is local governments, state governments, Federal Government all working together. So, we’ve had two Housing Ministers meetings. The first one that we had in July was the first in almost five years, which I know many Australians will find quite unbelievable given the housing challenges that we’ve had.

JENNETT: And then out of that will come this national plan?

COLLINS: The National Plan for Housing and Homelessness, yes. So, what we want to do is also work with the social housing providers, with homelessness services, but also importantly with the construction and property industries, about a national housing and homelessness plan so that everybody is heading in the same direction with a national plan.

JENNETT: Sure thing. Alright. Well, look, for this scheme, at least for regional buyers, first home buyers, up and running very shortly. Julie Collins, thanks for bringing us the details.

COLLINS: Thanks, Greg.