House debates

Wednesday, 28 February 2024


Help to Buy Bill 2023, Help to Buy (Consequential Provisions) Bill 2023; Second Reading

12:36 pm

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | Hansard source

There is an essence of truth within this Help to Buy Bill, which is that it is the Australian dream to own your own home. Menzies knew that and he drove policies which led to record levels of homeownership in Australia. Owning your own home is the best superannuation investment you will ever make. It is an investment in your family and your business security. It is the launching pad for success. I can't tell you how pleased I was when the last of my three children signed on the dotted line for a housing loan, because I knew they were on the sticky paper, that pathway to success. I knew they would make that commitment to make the payments on their home and that would give them the leverage in later life to do a whole host of things which, if they'd had to pay rent for their entire life, would likely be beyond their reach.

But how do you get there? How you get into ownership in this increasingly challenging world of the rising cost of construction and, even more so, the rising cost of land around our urban centres, which can constitute more than half the price of the home, is a difficult and vexing question indeed. Just to go off on a little bit of a tangent, I often debate with friends about whether we should be having urban infill and people living in higher density—it's better for your transport options and that kind of thing—or whether we should continue this sprawl outside our capital cities. In my case, they're coming into my electorate in the southern reaches of Grey onto the Adelaide Plains, where previously high-value farming lands are now being covered up with what we would have once said were quarter-acre suburban blocks, but of course they're not anymore. They're 450 square metres, and the house takes up the whole block. How do you trade that off?

I think back to my own childhood and upbringing. My own children actually had the run of a farm, but even the kids in the town had the run of the streets. Now, of course, parents in this modern world aren't prepared to let their children go out unaccompanied on the streets. So they come home from work and they pick the kids up from child care and they all but put them on a leash and take them down to the park. They don't put them on a leash, obviously, but you understand what I mean. This is a problem. How we get people into their own homes and onto this pathway for success is a moot point.

I can't see the punters taking up this scheme. I just can't see them signing up. It is full of uncertainty, like other programs the government has put forward in recent times. There's a big announcement and then we'll sort the detail out on the way. Of course that was the pathway of the Voice: 'We'll sort it out. Don't you worry about that. We'll sort it out later.'

I was fortunate enough, quite some time ago now, to have been in a position to purchase a unit in the city when my kids reached the age of attending university. I figured it would be better off to keep the rent internal than it would be to pay it to someone else, and it's proved to be a good investment, and I'm certainly mindful of the fact that not everyone is in a position to do that. I have to say: it's a nice little place, but it sits on a strata title. And when I say 'but' it's a soft 'but'. I have six other very good residents or owners. We are able to sit down and negotiate whatever needs to be done, whether the units need to be painted or whatever it might be at that particular time, whether we have the white ants specialists in. But I can tell you what, it comes as a bit of an awakening to me, who was raised on a farm, that you actually have to consult with someone else before you make alterations to your own place.

And that is at the basis of this proposal of the government—there is somebody else that has an interest in your home. In this case it's the government, and, because there is no detail in the bill, we don't know what that exactly means. We do know that there are a number of state schemes already that offer shared ownership—New South Wales, Victoria, South Australia and Tasmania—and they're all undersubscribed. That's why I think this one will be undersubscribed. I think it'll be drastically undersubscribed.

We assume that the 60 per cent owner of the home is responsible for 100 per cent of repairs, but we're not too sure. We certainly assume that they will be responsible for 100 per cent of the rates and 100 per cent of the insurance. What will the government say if you're underinsured? Will there be somebody vetting the level of insurance on your property? Repairs are one thing, but there are not many people that own a residence, let's say, for a period of 20 years and don't improve it. You might put in a pergola, a garage out the back, another bedroom or an upgraded kitchen. You might even put a swimming pool out the back if you've got enough room. Who the hell owns that? And is somebody else going to chip in? Are you going to extend your loan or whatever to make this happen? All those things. Anything that is this murky is pretty hard to sell, and that's why I think the punters will hold back. Then, of course, there are the income thresholds which aren't included in the bill but were part of the now government's spiel leading into the last election, the $90,000 for the single income earner and the $120,000 for a combined household.

One of the great things, of course, about seeing my kids line up and sign their documents for their housing loans is that all of them have had increases in their wages because their skill level has risen since the time they signed those documents. It's one of the things about buying homes in Australia: what looks to be a difficult task early, if things go right for you—if things go as they normally would—it actually becomes an easier task as your life progresses. It makes sense that somebody who is 35 would be earning on a higher wage level than someone who is 25, and that someone that is 45 would be earning more than they were when they were 35. That's not just because they've been on the job longer: it's because they've gotten better at the job and taken a promotion. They've moved their way up the steps. Not everyone will do that, and I understand that, but it is certainly the case for most people.

So it seems almost inevitable, even though this $120,000 mark would, presumably, be indexed, but we don't know that either. Presumably, the government would seek to index it. But even at that rate it is almost certain—$120,000, let's face it, for a couple is a modest income in the current world—that they will break that point at some stage. So they'd be living in a house where there's a disincentive to earn more money and a disincentive to improve your property. I would have thought that is a pretty negative position to put yourself in when you are signing up for what is the biggest investment in your life that's going to have the greatest outcome on your quality of life as you age.

The next question is, of course: what happens when the purchase is complete? I've looked at the numbers and done a back-of-the-envelope calculation on this, and it looks like the government is allowing for $5½ billion over four years for 40,000 homes. I think that equates to a loan of about $350,000. It would be fair to say that's not going to buy many places in Sydney—or in Adelaide, for that matter. Consequently, these are unlikely to be new builds. They're likely to be older builds. But what happens when you have reached this point of paying off your portion of the loan? One would presume that you would then be able to purchase the other 40 per cent from the government if you choose to. The house would have to undergo some kind of evaluation. But what happens after that point? Do you pay interest on the outstanding amount, and what will that be calculated at? There will be the RBA interest rates and the market interest rates. All these are just completely unknown. I am and think everyone should be reluctant to sign a piece of paper when they don't know what the answer is, at the end of the day. Markets can go up and down. Mainly, they seem to go up. But, in real terms, they can take a bad turn on you, and everyone needs to allow for that possibility.

Surely the better way forward here is the pathway we've trodden before, which is low-interest loans. In fact, there are a number of options still available in the NHFIC, which we established. It has a terrific track record. The thing, of course, is that, with a low-interest loan, it should be the second mortgage after the initial loan that you take out, presumably with a bank or some sort of home loan corporation. You pay down the liability as you go along, but it's your place, and it's your incentive to pay the loan off quicker. It's been successful. I don't really see why government is trying to abandon this pathway and come up with one which I think will be pretty unpopular. As I said, your investment in your house will be the best investment in superannuation and your future that you are ever likely to make. Of course, the coalition took a policy to the last election—which was opposed by those opposite and by the superannuation industry, unsurprisingly—which would have allowed people to draw down on their super accounts for the deposit on their first home. This is not the super saver account that you actually have set aside within your superannuation savings.

Given that this is, as I said, the best investment you are ever likely to have and that, should you sell the home at some future date, the indexed amount would be paid back into your superannuation fund, it effectively is your superannuation saving. In fact, people in better conditions are able to buy property and put it into their self-managed superannuation fund. I don't think they can do that with their house, incidentally, but they can with other properties. Actually owning your own superannuation investment is not anathema. It's not an untrodden pathway. It is a way to success. The fact that your super is tied up in your house will give as good a return as anything else—I'm absolutely very confident of that—and it gives you the ability to do other things along the way, like establish your business and whatever. I think the proposal as it stands won't do any harm, but it won't do any good. It's likely to be underspent some way down the path. We'll say, 'Well, that one didn't work.' I guess you could say that at least the money wasn't wasted, but, if it it's not going to do any good, I wonder what on earth we're standing here debating for today.


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