Doorstop 10 August 2026

‍Subjects: 5% deposit scheme, negative equity, housing supply, SMSF property investment ban, widow tax, mortgage applications, housing density, rental affordability

E&OE.........

Senator Bragg

Well, extraordinary developments over the weekend where we see that the government knew for many months that there were real problems with their 5% deposit scheme. They knew there was a risk of negative equity, and they also knew that there was a risk of their 5% deposits inflating prices beyond what they needed to be. This is a scheme that has made people's lives harder, not better, because the persistent price pressures have meant that people have higher mortgages than they needed to have. But it also means that there are now Australians that are in negative equity, which means that your loan is worth more than your house. In the case of Matt Thistlethwaite, he didn't know what negative equity was, that's just a little primer. But I make the point that the government knew about these risks for many months. But perhaps we shouldn't be surprised because the government has completely failed on housing. They have built 30,000 fewer houses a year since they've been in government. And in the last session of Parliament when we were here in Canberra, the government legislated to stop SMSF owners from borrowing to invest in new housing. So the government have policies to restrain housing by their new tax policy, but also by their SMSF policy. So we have a government that wants fewer houses. We have a government that's run an unregulated migration scheme, so you have lower levels of supply, higher levels of demand, and then you have a reckless 5% deposit scheme which has pushed people into negative equity, but it has also meant that people are paying more money than they should have for their first house.

Reporter

Just on the negative equity side of things, it kind of gets cancelled out if you hold onto it for long enough. Are you thinking that the government should be doing more to protect people if they want to sell their houses in the first two to three years?

Senator Bragg

The government have peddled these products like they are free and riskless. They are not riskless. There is a risk you go into negative equity, especially when the government have unleashed their tax policies, which their design is clear about, that it will reduce dwellings by 35,000. Now they have a further 4,000 reduction on their own numbers because of the SMSF policy, but it's actually 16,000 according to industry data. So the government is actually... I'm not sure you could come up with a worse set of housing policies for the nation. So the answer to your question is yes, it can hurt people because if their loan is worth more than their house, it's very bad for them. It's actually very bad for their mental health.

Reporter

But we've also seen some of the latest data that the entry-level houses are still going up in value at a faster rate than the higher end. So is this really something, like is this immediately a problem with negative equity or are you talking longer term?

Senator Bragg

Look, it can be, depending on which market you're looking at. Some of the markets are holding up, some of the markets are going down. It depends whether you're looking at the higher end of the market or the lower end. The entry level has remained in most markets persistently high, but there are cases where people are going to be in negative equity.

Reporter

I understand that. You've always said that you think that entry-level homes should be potentially cheaper than what they are. How will the Coalition achieve that?

Senator Bragg

By building more houses. I mean, we want to unleash a housing boom in this country by ensuring that we can get any house that is possible on Australian land. And we'll be looking at innovative ways in coming months to cut taxes and to unleash that housing boom. Because we don't care who the investor is. Unlike Labor, we'd like individuals investing to provide housing for other Australians. We think it's a good idea for the renter because renters will pay lower rates of rent, but also people will have an opportunity to build wealth. Labor's view, almost their obsession, is to funnel every dollar you have into superannuation. But we also think that housing can be a good way for people to build wealth.

Reporter

Understand David Pocock is talking to non-government parties, and maybe talking to colleagues about the widow tax and trying to get that resolved in the Senate this week. Would you like to see that dealt with tomorrow?

Senator Bragg

Well, they should be dealt with as soon as possible because there are many Australians that are now facing adverse tax consequences just because of a quirk in the tax law, particularly if they are actually dealing with a bereavement, I think it's very unfair. We also want them to deal with the SMSF issue, and we'll have more to say about that in coming days. But the SMSF ban, which means that people can't provide more housing for other Australians, seems to be crazy and also, frankly, inconsistent with their main legislation. I mean, the government made a distinction between new housing and existing housing in its tax hike. But when it came to the SMSFs, it banned all new housing, which seems insane in a country which is so thirsty for more housing.

Reporter

Just new Westpac data released today showed that new applications for mortgages have slumped 17 per cent since the Budget. What's that...

Senator Bragg

Well, I'm not surprised that the banks are issuing fewer loans, and I've asked the banks to provide the detail on how many first home loans they've issued since the Budget. I suspect it's much lower than it was before, because no one wants to buy housing in Australia. No one wants to buy anything in this country. It almost feels like the country is going out of business, because we are in a very sick economic model now with a high-tax, high-regulation economy. And I think we have to find a way to beat this anaemia. The way to beat it is with lower taxes, and we need to also change our culture, that the idea that you can pass laws and more regulation will help people. I mean, the evidence is quite clear that more rules and more regulations have made the country less competitive, less dynamic. We have lower levels of employment and lower levels of investment as a result.

Reporter

When you're talking about boosting supply for first home buyers, are you talking about increasing density in our cities or are you talking more urban sprawl?

Senator Bragg

We want more of everything. Because to some Australians, they want to buy a house and land package on the outskirts of Melbourne, Sydney, or Brisbane. But other people would like to live in the missing middle. Other people want to live in the inner city. So we need to find ways to build on top of old buildings, we need to find ways to release more land, we need to find ways to be more efficient with the land that we have. We have many ideas here, I look forward to talking about them in more detail this week. But ultimately, we've got to be clear that we can build more houses where people already live, but we can release more land on the outskirts of the major cities as well.

Reporter

Do you reckon we'll get that policy by the end of this year? And the Coalition's first home buyer policy generally?

Senator Bragg

Well, we certainly hope so. That's certainly the intention. The intention is to release policy in a number of tranches, because there are many housing policies that we will have, and I hope to start doing that soon.

Reporter

Is there a chance the Greens are backing the rent policies and any other ideas hanging around the Senate at the moment?

Senator Bragg

Uh, there are always discussions happening with the crossbench, because we have the numbers with the Greens to effect good change. We have worked with the Greens on process in the past, including standing up inquiries and the like. In relation to the SMSF issue, it's an ongoing matter of debate. The Greens actually put forward that amendment which banned SMSFs from borrowing. It's unclear to me whether it's been understood that that was going to take out all new housing as well. And so that's a discussion we need to have with the Greens. I'm hopeful that we can improve that, at least make the government's internal policy consistent.

Reporter

So what does it mean to just ban...

Senator Bragg

Well, it seems insane to me that a government would pass a tax reform which says that new housing, you can still get tax benefits for, but existing housing you can't. And then two weeks later say, actually, if you're borrowing, you can't invest in any new housing to provide that for other Australians. Because don't forget, if an SMSF is borrowing to provide more housing stock off the plan, the person who owns the SMSF can't live in it. So by definition you're providing more housing, which I would have thought everyone, regardless of their political persuasion, wants more of. The fact that the government have gone along with this amendment and got the numbers so wrong... as I say, 4,000 houses was Jim Chalmers' number, the real number is 16,000 a year. This is a big problem, I think we should try and fix it.

Reporter

Just on renting, because you brought it up before. It is generally in this space renting is treated as a state issue. Do you think that the federal level of politics needs to take more responsibility for the renters, considering the Coalition's after policies featuring them more now?

Senator Bragg

Well, obviously rents will go up because there will be fewer houses. So we now have a deliberate design feature to have fewer houses in this country. 35,000 fewer houses because of the government's tax policy, but obviously even fewer houses because of the SMSF amendment. And so the best way to get lower rents is to have more houses. That will be the core of our policy. Okay? Thanks guys.

[Ends] - Media Contact | David Nouri | 0401 392 624

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