Senate debates
Monday, 15 June 2020
Questions without Notice: Take Note of Answers
HomeBuilder Scheme
3:04 pm
Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source
I move:
That the Senate take note of the answers given by the Minister representing the Prime Minister (Senator Cormann) to questions without notice asked today by Senators Gallacher and Green.
The question asked by Credit Suisse is: 'Is the HomeBuilder scheme big enough to really move the needle?' Credit Suisse of course answered that question in their briefing note, because they say no; they say it's disappointingly small. They say, 'We doubt the incentives are large enough or the eligibility criteria wide enough to really move the needle.'
Senator Cormann has explained that this program is going to directly support 140,000 jobs. Well, we'll see whether or not that comes about, because it is telling that, even in providing that answer, Senator Cormann was very careful to say that these are estimates only, and we've learnt quite a lot about estimates in recent months haven't we? We've learnt quite a lot about the government's capacity to accurately estimate the take-up of their programs, the cost to the budget and the impact on the economy, because it was a pretty big failure in estimating when it came to JobKeeper, and I have very little confidence in the answer provided today by the minister.
The truth is: that's true for his colleagues as well. That's why the member for Herbert has gone on the record raising concerns about the program; that's why the member for Leichhardt has raised concerns about the program, and it's why Senator Canavan, representing the National Party in this chamber, is raising concerns about the program, because anyone who looks at it closely, who looks at the fundamentals, at the architecture, of this program, knows that it all looks pretty improbable. Australians who earn less than $125,000 a year are expected to spend more than $150,000 on a renovation. Not only that—they are expected to enter into the contract now, with no certainty about whether they qualify for the grant.
More broadly, people are generally concerned about their economic position, and nowhere more so than in regional Australia. It is one thing to cap a program at an individual income of $125,000 or a household income of $200,000. What do people think the actual median household income is? What does the coalition actually believe is going on in normal households in regional Australia? Well, I can tell you that, in New South Wales, the median income for a household outside of the Sydney metropolitan area is $45,000. That's the median in a regional area like the seat of Page, an area I spent quite a bit of time in. Does the government really think that people whose disposable income at a household level each year is $45,000 are going to be able to stump up the cash to meet the $150,000 threshold that is necessary to even qualify for a program of this kind? Is that really what they think? Certainly members of your own government don't believe so, because the member for Herbert is raising concerns that renovations of houses in his electorate won't get anywhere near the $150,000 threshold. That's what the member for Leichhardt is raising. Clearly, those people understand that, in their areas, people do not earn these vast amounts of money that are assumed by the people sitting around on the government benches.
Perhaps they haven't saved the money. Perhaps, on their $45,000 disposable income a year, they haven't been able to save, to put aside in the bank, $150,000. Perhaps they could borrow it. Well, what is one thing that has been raised over and over and over again by the RBA over the last 18 months? It is the vulnerability of the economy, produced exactly by indebtedness—by rising debt to income ratios. Perhaps that is what the member for New England was talking about. Perhaps that was his concern when he said, 'I'm concerned about the complexity of trying to pay back that debt.' Perhaps that was what Senator Canavan was concerned about when he said, 'I'm worried we are putting ourselves in a weaker position if asset prices in Australia were to fall.'
People are not sitting on $150,000 waiting to splash it on a home renovation, and they're not in a position to borrow it. The government's program is not going to produce a much-needed boost for the construction sector. It's not going to help Australian families, it's poorly targeted and, as the Grattan Institute has said, it is classic retail politics but lousy economics—which is exactly what you'd expect from Scotty from marketing.
3:10 pm
Claire Chandler (Tasmania, Liberal Party) Share this | Link to this | Hansard source
In taking note of answers today, I want to pick up on a couple of comments that Senator McAllister just made regarding the concern that Australians have for their economic position. To be honest, I agree with Senator McAllister: I think Australians are certainly concerned about their current economic position and their livelihoods, as you would only expect during a pandemic that has had catastrophic impacts upon our economy. But also—and here is where I think the views of Senator McAllister and I might start to diverge—I think most Australians are confident that the plan the Morrison coalition government has to handle the economy coming out of the coronavirus crisis is a good one, and that's because the government have been able to demonstrate to the Australian people that we are capable of injecting jobs into the economy; we are capable of strong, responsible budgetary management; and, most importantly, we are capable of doing both of those things concurrently, which is more than my friends on the opposition benches did when they were in government.
As Senator Cormann said in his answer today, 'This government is about jobs, jobs and jobs,' and that is something that we delivered on leading into the coronavirus crisis. We injected 1.5 million jobs into the Australian economy, and I am incredibly proud to be part of a government that successfully did that. As I have said in this place many times, the reason I nominated to be a candidate as a senator for Tasmania is that I have seen too many young Tasmanians have to leave home because they can't get jobs locally. Being a young Australian, I know that, coming out of the coronavirus crisis, many young Australians are concerned about their livelihoods and they are concerned about being able to get a job or keep a job. That's why the plan that this government has to ensure that the Australian job market can recover from the coronavirus crisis is so important. I don't want to see us lose the momentum that we have, particularly in my own state of Tasmania, where, as we know, with state and federal Liberal governments, our state has come a very long way in the last five or six years, and I don't want to see us go back to the dark old economic days.
Obviously, the government's focus at the moment is on the health and wellbeing of Australians, and we are seeing great success on the health front. But, as I said, we know that the impacts of coronavirus across the economy have been severe. Businesses and households are facing increased uncertainty, and economic activity has slowed. That's why we have put an economic support package in place to provide timely support to affected workers, businesses and the broader community, and this has helped to keep Australians in work and businesses in business. We have put a floor under the economy and we will lay the foundation for a strong economic recovery coming out of the coronavirus crisis. We are focused on reopening and rebuilding. We need to get businesses back open, enable Australians to go back to work and ensure consumers and businesses have the confidence to return to normal activities. That is why the HomeBuilder policy is so important. It was why our JobKeeper package was so important. These are the measures that the Australian government, the Morrison coalition government, have put in place to ensure that we can rebound from the coronavirus crisis into just as prosperous and successful a nation and successful an economy as we were in prior to this.
I turned 30 years old just a couple of weeks ago. When I was thinking about this significant birthday, I did reflect on the fact that so many Australians of my age will most likely experience a recession for the first time at some point over the next six months. It's been 29 years since Australia last had a recession. That is incredibly hard, and it will be hard on young Australians to navigate their way through that and the stresses that that will put on their work prospects. But young Australians also know that this government has a strong economic policy in place to help us recover from the coronavirus, and that is built on the trust that we have with the Australian people—the trust that is built on our record of creating 1.5 million jobs in just over five years. That is the record of this government, and it is because of that record that the Australian people have faith in us as a government to rebuild following the coronavirus crisis, to make sure that more young Australians can keep themselves in jobs for now and into the foreseeable future.
3:15 pm
Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source
As we speak, I am just concluding the build of a house, so I've had the great experience of interacting with subcontractors, tradies and small businesses in the building industry, and they are looking at a cliff of unemployment. The pipeline is definitely drying up. I think that they were all quite excited with the announcement of HomeBuilder, but, as has been pointed out in this chamber today, the tailoring of this scheme means that it doesn't do what its intended purpose is, and that is to get people continuing to work. The builders and tradespeople I've spoken to say that, come December of this year, all the new builds that commenced 12 months ago will be finished, the pipeline has diminished and this scheme just doesn't do it. The Age experts panned the scheme. The Financial Review: 'Flaws highlighted'. The Weekend Australian: 'HomeBuilder doesn't do enough for tradies'. The Guardian: 'A blunder'. Mr Harry Triguboff: 'It doesn't address units; they're excluded.' And The Canberra Times points out, very presciently, that people who were victims of the bushfires are also excluded.
When you look at this scheme and you see who the architect is—the Assistant Treasurer, Mr Sukkar—your mind goes back to an earlier scheme where, when we asked, 'Was there any Treasury expertise used in designing this type of scheme? Did you get any rationale?' the answer was no. That was the first home buyers scheme that was announced during the election. It is very clear, when you go into these sorts of policies, that there is always agreement among economists that it is exceedingly difficult to work out the economic rationale for them.
If you have ever built your own house or gone into a contract with the builder, you will know that they are businesspeople and they will try and get you to put in a fancy heater or fancy floors and borrow the money to do that. If this $25,000 goes into a new build and the end result is that a first home buyer says, 'I can now put in a $12,000 floor,' or 'I can put in a fancy heater,' the reality is that that's an awful economic decision, because you shouldn't be borrowing that over 25 years. For bricks and mortar it's fair enough, but not for the furnishings and fixtures and fittings. I've actually heard stories of builders saying: 'Don't worry about that contract you signed last month. We'll tear it up and do a new one, because you'll get 25 grand. Aren't we looking after you!' So the economic evaluation of these schemes is that they're really not as economically good as they're purported to be.
This is exceedingly bad timing. It's quick. You've got to do it by, I think, 4 December. One hundred and fifty thousand for a renovation? I chose to knock down a house because it was going to cost me $60,000 to do a renovation. Why would I spend $150,000—in most areas outside of Melbourne and Sydney—on a renovation? You can get a house-and-land package in the outskirts of Adelaide for $300,000. As you move in 10, 15 or eight kays from the city, that package is more likely to be $600,000, but these figures don't stand up. So is it another case of Mr Sukkar getting some very targeted policy to go where he thinks there are a few votes? It doesn't seem to be broad enough to do what he's intending, which is to keep people employed, to build the pipeline of work. It's tightly constrained. It appears to be targeted, but we don't see the underpinning economic rationale for that. It may well be that, when we ask for that sort of rationale at estimates and the like, the standard answer comes back: 'It was a decision of government; we didn't give advice on it.' Hopefully that is not the case, because I would really like to see the underpinning economic evaluation of this policy as to why it is targeted in such a way.
The opposition has rightfully put up the task or the challenge to the government: why have you not done any public housing? Why is there no public housing policy for this government? Why wouldn't you use this as a time to prime that pump and to get some building in that vital sector where there is a desperate need for it? Clearly, the government has gone missing.
3:20 pm
Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source
I don't know about you, but there seems to be a smell wafting through this place. At first I thought it might have been a leaked septic tank but, no, it turns out it is the Australian Labor Party. We have found out that not only are they trying to get into the coffers of hardworking Australians by ripping out their union fees and by dipping into their superannuation funds but they are also branch stacking. The worst things about these allegations is the tawdry language—
Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source
I am getting there.
Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source
There is a point of order. Please resume your seat.
Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source
Madam Deputy President, in taking note of answers, the senator opposite seems to be off the topic.
Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source
This is a broad-ranging debate, and I was waiting to see if Senator Rennick was getting to the questions.
Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source
Thank you, Madam Deputy President. I was. This side of the chamber wants to stack people and families into homes, and that is why we are very proud of the HomeBuilder program, because it will support up to a million jobs indirectly and 140,000 jobs directly. Homes are in the DNA of the Liberal Party. How do we know that? Because in our party's opening speech from our founder, Robert Menzies, he mentioned the word no fewer than 23 times. I am going to quote this because it is worth remembering. As Robert Menzies said:
I do not believe that the real life of this nation is to be found either in great luxury hotels and the petty gossip of so-called fashionable suburbs, or in the officialdom of the organised masses. It is to be found in the homes of people who are nameless and unadvertised, and who, whatever their individual religious conviction or dogma, see in their children their greatest contribution to the immortality of their race. The home is the foundation of sanity and sobriety; it is the indispensable condition of continuity; its health determines the health of society as a whole.
This party is proud to support jobs and it is proud to support our building industry, which will help our carpenters, our builders, our brickies, our electricians and our small traders. It will help architects, it will help home designers and it will help engineers.
The Morrison government has also helped this year with the First Home Loan Deposit Scheme to help eligible first home buyers purchase a modest home with a deposit of as little as five per cent, allowing them to get into the market earlier. Australian first home buyers have now reserved all of this year's First Home Loan Deposit Scheme guarantees, and that is a good indication of how our younger people want to get into housing because, as I have said previously, housing is where the home is, it is where the heart is and it is where the family is. There is no greater indication of our support of the Australian people than supporting people into homes. This side of the chamber is about supporting people into homes; that side of the chamber is about homelessness. This side of the chamber is about lower taxes; that side of the chamber is about higher taxes. This side of the chamber is about jobs; that side of the chamber is about no jobs. Most of all, this side of the chamber is the party of free choice, whereas that side of the chamber is the party or the side of total control.
I'll pick up Senator Gallacher here. We on this side do support community housing. We have over $1.3 billion in the National Housing Finance and Investment Corporation program to support the delivery of 1,500 new social and affordable dwellings and the refinancing of a further 5,000 existing dwellings. On top of that, we also provide rent assistance on top of the Newstart allowance, which is another way we support housing in this country. We will work with the states and territories on HomeBuilder. They are expected to be well placed to administer the HomeBuilder program, as most already administer similar first home buyer schemes, including the First Home Owner Grant and stamp duty concessions, through their respective state or territory revenue office.
The government's focus on the health and wellbeing of Australians is why it supports homeownership. We are seeing success on that. This is the party that will increase the level of homeownership. By doing that, we will improve the health of Australians. When we were going through the COVID crisis it was great to have a home to go back to and have support. It's interesting, actually, that we get feedback from people about how much they enjoyed spending time at home with their children—heaven forbid! Anyway, I'll leave it at that.
3:25 pm
Tim Ayres (NSW, Australian Labor Party) Share this | Link to this | Hansard source
It's always a special experience following Senator Rennick in one of these debates. I think the feeling that one gets listening to Senator Rennick's lofty tones going through a debate should be illegal—
Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source
Senator Ayres, please resume your seat. Senator Rennick?
Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source
On a point of order: could he please deal with the question on notice?
Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source
This a broad-ranging debate and I am giving Senator Ayres the opportunity to get there. He's only put 20-odd seconds in.
Tim Ayres (NSW, Australian Labor Party) Share this | Link to this | Hansard source
I certainly intend to get to the substance of the debate, but I did want to reflect on the previous contribution. It is a transcendental experience listening to Senator Rennick. He is the beat poet of the Senate; it's a series of odd allusions brought together that make very little sense—almost as much sense as the policy justification for HomeBuilder that has been made here and in other places.
I understand that Mr Sukkar said HomeBuilder would support 140,000 jobs and 27,000 building projects. Just combining those two numbers for a minute makes you realise how fundamentally ill-conceived the policy foundations of this scheme are. It has all of the hallmarks of a Morrison government policy announcement. It will increase inequality. It will provide negligible stimulus. There is a very big number attached to the program: $688 million—so a very big number. By not being a round number, it conveys the impression that it is somehow precise.
So the number is big and conveys the impression of precision, but there will of course be, as with all of these schemes, zero delivery. Very little money will go out the door. It's all about the announcement, not about the delivery. No doubt there is a television ad coming our way soon to make sure that people understand how precisely large the amount of money is, how precisely precise it is and what enormous stimulus it will provide. No doubt there will be people in high-vis jackets—maybe they could borrow Senator Canavan's high-vis jacket; it doesn't get much use! No doubt there will be earnest expressions of support for the tradespeople of Australia. But there will be zero delivery.
It's a scheme that will pay people a small amount of money in the context of an overall building project to do building projects or renovations that they were going to do anyway. You can't find a serious person in the building industry who supports this proposition. You certainly can't find a sensible economist—one with a degree and a bit of postgraduate learning—who is prepared to go out and publicly advocate for this scheme. It is all spin and no substance, big announcement and no delivery.
Some people—sceptical people—believe that this announcement is all about the politics. I'm not sure that that's true. I think you would struggle to find a household in Eden-Monaro that would benefit from the HomeBuilder scheme. All of the focus group work, all of the data work, all of the clever work that is done in the Liberal Party national secretariat, has produced this policy as somehow a policy that will provide some advantage. But the problem is, when it meets the real world there won't be too many people. Senator Cormann said 22,000 had registered interest already, which just establishes that the people who are registering interest for this project are people who had already decided to build. It is just like a vacuum, sucking forward projects that people were proposing to do, dragging them into this side of Christmas. That means no extra work will actually be done. It will just shift when small building projects were going to be done.
What an extraordinary claim, that this program will support 140,000 additional jobs. If you look at median house prices in Cooma—$317,500—it's very hard to imagine that a $150,000 renovation's going to be done to one of those homes. It's a program that will overcapitalise a very small number of people's properties. It won't deliver a single extra job. It will be just one more policy— (Time expired)
Question agreed to.