Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

The government has pushed through what are radical changes under the Housing Australia Act through some bizarre, administrative ministerial direction so that we will not properly debate, in this place, this proposal. Instead, we are left with what I feel is an inferior take-note motion. The government is, in my view, circumventing the purpose of this parliament in what is feeling like a rather dictatorial and deeply concerning practice. If the government are so intent that what they want to deliver is good public policy, then they should debate this legislation properly. This legislative instrument builds on the government's initial Help to Buy scheme, where taxpayers are on the hook for the remaining 15 per cent of a deposit to relieve buyers of mortgage insurance.

Mortgage insurance is a lot of money. For many of us in this room, when we were buying our first homes, or perhaps even subsequent homes, we needed to pay mortgage insurance of some amount. It is designed to protect the mortgagor in the case of the mortgagee defaulting on the loan. Twenty per cent is calculated as the maximum expected decline on a property price, and, ultimately, it just safeguards the bank from losing money. Now, taxpayers will pick up the bill and will bear the burden of any loss from defaulted loans. Initially, this program was set for 50,000 homes. Initially, this program was capped, with a focus on assisting working Australians who were earning up to $125,000 as an individual or $200,000 as a couple. Initially, they were modest, 'first-home-buyer house value' caps on what you could purchase. You could say that they also limited the risk for us as taxpayers if a person or family defaulted.

Now, the government's throwing caution to the wind on this. In my nine years in this place, I think that this is the most populist, reckless and inflationary public policy program I have seen, and I've seen a few. It is dangerous. It is going to drive up house prices like never before, and here is why. The scheme is now open to anyone who's a first home buyer, no matter their income. The scheme has been lifted to the most astronomical house prices, and all that's going to do is lift the default house price in each state to set the bar at whatever that threshold is. The government has lifted the cap for properties in all areas. In New South Wales, it's now going to be based at $1.5 million, so there's an increase of $600,000 on the top price that this program applies to. It's really open slather, as I said.

In effect, a couple could get mortgage for $1.2 million, put down a five per cent deposit of $75,000 and the taxpayer is on the hook for $225,000. What could possibly go wrong? They only need to get sick or not be able to earn for a short period and, very quickly, those mortgage payments and that family's life or that individual's life would fall apart. At a rate of six per cent, monthly payments on a $1.2 million loan over 40 years are approximately $7,193 a month, with total interest paid of roughly $2.25 million. Who really pays when it falls apart? It's going to be the taxpayer. As taxpayers, people right across the nation with homes of much lesser value are going to be picking up the pieces.

The kicker is that this is not going to make homes more affordable at all. All it will do is set the new base house price at the top level of this scheme for each state, because the demand for this scheme will be so high that it's going to artificially inflate house prices. Part of the reason why the demand will be so high is that we've had record net migration in this nation. Over one million people have moved here just in this government's last term, and they're all going to be wanting to partake in this proposal. I understand that. It's simple economics that this program, coupled with record migration, is going to add to the demand side of this equation. It's like pouring kerosene on an already lit bonfire. Inflation is real. There were further inflation figures out yesterday which should cause everyone concern. They were higher than expected.

In South Australia, the cap has been lifted from a house price of $600,000 to $900,000. This will just make the base price $900,000 for an entry level home in South Australia, because the artificial demand will create that as the default price. The minister said:

Right now, we need to lean in and help those first home buyers get their foothold in the market.

Quite frankly, I'm not sure what the 'lean in' vernacular means, but I can tell you what the outcome will be. It will be inflationary. It will not lower house prices, and it will catch young people and first home buyers desperately wanting to own their own home into a trap, and they will not be able to get out of it.

There is a name for loans that are given to people who can't afford them. They're called subprime mortgages, and they caused the global financial crisis back in 2007-08. I remember it very well. This is government sanctioned taxpayer-supported subprime lending. Many people have short memories, but, back in 2007-08 in the financial crisis, Fannie Mae and Freddie Mac loans collapsed under the weight of risky mortgage backed securities that they acquired and guaranteed fuelling a housing bubble in the US, in particular. When that burst, it sent shockwaves right across the world. Whole neighbourhoods collapsed. Whole neighbourhoods were boarded up with homes unsellable. Who is giving the government this economic advice? Surely the Reserve Bank wouldn't have supported this proposal?

As I've said before, we have taken away the Australian dream in just one generation, and I feel for young people. My three children are all desperately saving. One just got their block poured for a very modest home. It's their first dream home. But they saved for years and had second jobs to make it work. It's quite clear how we have done this. We've done it by inflating demand and through record migration. I have looked at the data of migration levels since Federation. Whenever we have exponentially lifted migration, we've caused inflation. It's just the way it is. It's a simple demand-supply proposal. It's Economics 101. I'm not sure if it's to create growth in the economy, but all it has done is price our kids out of homeownership.

For rental properties, increased temporary migration and student visas have contributed to unbelievable rental increases. Back in 1990-91, Australia offered just over 35,000 student visas. In 2022-23, we offered 577,000 student visas. Last year, we offered 371,000, and the government has announced they're going to increase that by a further 25,000. The majority of student visas transition to permanent visas, and we've created an expectation that will occur. If the government meaningfully and tangibly wants to help Australians into a home, the most responsible and efficient way to do this is to reduce migration because you're then managing the demand side, and that's the area we haven't tackled. We haven't tackled the demand side for a decade.

So we're simply not building enough quality homes, and I would say that most of us don't want to continue the constant carve-up of farmland on the edge of suburbia, putting more pressure on the environment, to expand our suburbs in order for everyone to own a home. As I said, we need to tackle that demand side. I've got to say, it's just heartbreaking to watch in my community 200- and 300-year-old gum trees getting felled and those areas turning into 250 square metre blocks. That's the thing with the houses at these ridiculous prices we're selling to our children—there's no backyard. Then we wonder why children are obese. There's nowhere for the kids to play but the street.

If you go back to the mid-90s when housing was affordable—when I bought my first home as a single woman—migration in 1994 was 46,000 people a year. Then it went up to 100,000. Then, under Rudd, it exploded under his 'big Australia' policy, and that is where the problem is. As I said, we've had a combined influx in just two years of a million permanent migrants, and we don't want to talk about it in this place, but that is creating a demand that we can't control. Then you have the government come in here with irresponsible policies like this as a way to try and address that housing demand. I predict interest rates will not fall with this program in place. What the government has put forward here is a dangerous, populist thought bubble that will have real-world consequences for all of us.

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