Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

My question is to the Minister for Housing. Has the government properly thought through the impact of the significant increase of the first home owners grant on young families buying their first home? What are the risks to those families of borrowing money that they may not be able to repay when more than 200,000 Australians are expected to lose their jobs in the next 12 months?

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

I thank the member for Cook for his question. The member for Cook has in the past been a little equivocal about his support for the boost to the first home owners grant, so I take it that today his question implies that he is not in favour of the doubling of the grant for existing homes and the tripling of the grant for new homes. I would like to remind the member for Cook that one of the largest barriers to entering the first-home market for young Australian families and individuals is the difficulty in saving a deposit for most young people, particularly at the moment, when rents are so very high because of very low vacancy rates.

Scott Morrison (Cook, Liberal Party, Shadow Minister for Housing and Local Government) Share this | Link to this | Hansard source

Why’s that?

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

The member for Cook asks why vacancy rates are very low. They are very low because in your 12 years of government you did not do a single thing to support the construction of new homes in this country. That is why vacancy rates are low.

It is very important that when people are making a decision about whether to enter the housing market they give very careful consideration to their ability to service a loan. Of course it is very important that they give consideration not just to their ability to service a loan today but to their ability to service a loan in the future, because circumstances change. Perhaps someone loses some hours at work; perhaps they lose a job; perhaps someone becomes pregnant earlier than they had thought and even a happy event like that affects the earning capacity of a family. It is a very important when people are making a decision to take out a loan that they give careful consideration to what that loan will mean for them in the future.

This is something that the government is also very well aware of. In fact, the government is taking steps to strengthen the regulation of mortgage providers and earlier this month COAG agreed to transfer all consumer credit regulation to the Commonwealth. This means that by mid-2009 the Commonwealth will assume responsibility for the Uniform Consumer Credit Code and will extend it to include a requirement for lenders to lend responsibly and establish a licensing system that will license all credit providers, brokers and advisers, imposing comprehensive standards on market participants. So, as well as urging both new homebuyers and lending institutions to carefully consider people’s ability to repay, the measures that we are taking through the COAG process will strengthen the impetus on lenders to be cautious in their lending.

The reason that we have increased the first home owners grant—we have doubled it on existing properties and tripled it on new homes—is that we are in very difficult financial and economic circumstance. We are in a once-in-a-lifetime situation in Australia. This measure is one that, frankly, I would not have supported a year ago, but the circumstances that we find ourselves in today, with very low construction rates in an area that is critical to the economic strength of our economy, are very much changed. Some young homebuyers feel that they have given up on the idea of ever owning their own home. For the sake of those young homebuyers, for the sake of the building and construction sector in Australia—an important sector in our economy and a big employer in our economy—and for the strength of the Australian economy, this is a very important measure in very difficult economic circumstances.