Housing Press Conference

Senator Bragg

Look, if people out there are able to understand what's going on with this government and housing, then they're going better than me because in the last couple of days, Clare O'Neil, the Housing Minister, has shown that she's really not fit to be the Housing Minister because she doesn't know anything about housing. Now, we saw yesterday in the House her stumbling over this question around granny flats. Now, if you look at one page of the legislation, it says that tiny homes are not okay to be new dwellings, but then if you look at another part of the Bill, it appears that maybe granny flats areactually part of the system. But you really wouldn't know because the Minister, in this case the Treasurer, has granted himselfgod-like powers here to set what exactly is going to be the definition of a newdwelling. And so, the fact that the Housing Minister didn't know the answer to this question really shows that she is battling in this role. She should have just said, "Look, I don't know the answer. I'll find out and get back to you," rather than trying to fudge it. So there is that issue. Then there is the issue of Senate estimates over the next couple of days where we will be looking to try and get to the bottom of a very basic question, which is why does the government now have, as a deliberate design feature, a plan for fewer houses? Because when you're running a large migration program and you've got a5% deposit scheme, which is pump-priming demand, you want to be building more houses, not fewer. So this nation needs more houses, not fewer. It seems incredibly strange to me that the government thinks that we need fewer. And then we get to the issue of house prices. And again, I say, Clare O'Neil just should have said the truth that everyone knows, that house prices for young people in this country are too high. They've been too high for too long and she should have said, "Look, house prices are too high." The fact that she doesn't know whether they should be higher or lower shows again that I think she is struggling in this role. It is very clear that the 5% deposit scheme has pump-primed demand at the bottom end. If you look at the Cotality data, you can see in the last month, yes, there was areduction in house prices in certain quarters, but if you look at theentry-level prices for houses in most markets, they still went up. And that isbecause of, in part, the 5% deposit scheme. So, I think Australians are lookingfor authentic leadership. They're over the bullshit. What they want to hearfrom their politicians are honest answers. And the honest truth is that houseprices in this country are too high for young people and they should go down.

Journalist

So just to clarify,Senator, you want housing prices to go down.

Senator Bragg

I think for, at theentry-level, certainly, that's the case. And the fact that Canberra has adeliberate design feature to pump-prime prices at the bottom end, at theentry-level, I think is is wrong. I mean, the reason that the 5% deposit schemehas become such a wrecking ball is because it's not means-tested, it's notplace-capped, and it's been put into an environment where supply isconstrained. Now, you have to remember that this government is building 30,000fewer houses than the last government each year. Now they have a deliberatedesign feature to build fewer, 35,000. So, fewer houses into that environmentis going to mean higher prices for people, and it's just not fair.

Journalist

If house prices atthe entry-level drop, though, wouldn't that raise concerns for recently newbuyers in terms of negative equity?

Senator Bragg

We wouldn't have hadthis non-means...

Journalist

Yeah, but we're nottalking about what could or couldn't happen, we're talking about the current...

Senator Bragg

I understand that,but I think in general, we've got to be more open and honest about the problemhere. I mean, trying to pretend that we're going to be all things to all peopleis why I think the two-party system is under so much pressure in this country. The fact is that a young person knows theprices have been too high for too long. Now, if you look at the government's Budget papers, you'll see a lengthy discussion about housingpolicy but virtually no discussion about supply. These guys have crashed supplyby 30,000 houses a year, and we need to be building vastly more houses to solvethis problem. So like, you can't have it both ways. They have pump-primeddemand, they've pushed up prices. They should be honest that their 5% depositscheme has been a stinker, and this is why they've been so desperate to coverup the modelling which, despite several orders of the Senate, they still won'tgive us.

Journalist

Isn't there an argument, though, that if the changes to Capital Gains Tax and negative gearing incentivise investors to sell their properties, that that in turn can also increase the supply for people trying to get into the market, so...

Senator Bragg

That's theirargument, but like, at the end of the day, it also reduces the overall supply,and you're still running a large MigrationProgram. So, you need to be doing everythingyou can to bring in more housing supply. Now, the government thinks that it's agood idea to kick mum and dad investors out of the market and bring in theirmates at the super funds to be landlords. Apparently there's some goodinvestment and some bad investment. I mean, no wonder the economy's in such badshape.

Journalist

Just one morequestion around what actually counts as adding to supply. Isn't that a statedefinition? Like, the states define whether a granny flat is a separatedwelling or is part of, you know, just an extra room on the house or in thebackyard.

Senator Bragg

The planning codesgenerally do deal with granny flats, that's right. But if you look at thislegislation, on one page it says a boat and a tiny home is not part of thissystem, but on the next page it gives the minister, of course, significantdiscretion to grant what in fact would be applicable. So, I think ClareO'Neil's answer yesterday was granny flats were in. I'd say that you can arguethat they're in and they're out.

Journalist

Just to clarify, sodo you think young home owners should be concerned about negative equity, orare you sort of of the same view as Jim Chalmers, where they hold onto it forthe long term?

Senator Bragg

Of course I worry that the government have peddled these products in an environment which is supply-constrained. And now with these changes, like, potentially making it harder for young people. If they do go into negative equity, that would be very difficult. Of course, it's only if you sell that you realise the loss. But I'm just making the point that the government have brought this on themselves by changing this... this was a scheme that was available to low-income earners. It was place-capped. The government have announced a radically different policy, which involves uncapping the places, and it involves no means-testing, and they have peddled these products like financial advisers, okay? Like dodgy financial advisers, only they don't receive commissions. Meanwhile, you've got the prudential regulator, APRA, saying we've got too many risky loans. Now, a risky loan under APRA's rules is an 80% LVR. A 5% deposit by definition is a 95% LVR. And so, you've got the regulator saying let's have fewer of these, you've gotthe government peddling them. I just think they've acted recklessly becausethey're desperate for sticker politics. They are desperate to be, uh, you know,shiny, kind of sticky politicians with answers to every solution. But like,these are very short-term fixes that actually make the problem worse.

Journalist

And just on anotherthing, the Solomon Islands Prime Minister, Jeremiah Manele, is in Beijing, andreflecting on the relationship with Australia in the past, he's saying ithasn't been good in recent years and hasn't improved. What do you make of thosecomments?

Senator Bragg

Well, we want to bevery good friends with the Solomon Islands, as we do with all our friends inthe Pacific, but we recognise that the environment has changed markedly overthese last few years, the last decade. And we have to work harder. Australiahas huge cultural power in the Pacific, huge cultural power, which we should beproud of. And we should back that in with whatever we can do in terms ofeconomic and security initiatives, because it's our backyard.

Journalist

In November last year, you flagged that you were very open to politicians only owning one home. Um, have you raised that with any of your colleagues? Is that a policy that'sunder, um, sort of consideration?

Senator Bragg

No, but it wasn'tsomething I was recommending as a hard and fast rule. I just think peopleshould be mindful when they're in public office not to do stupid things. Goodadvice for you, as well. And anyone else who wants to, you know, say anything.I mean, it's just people should be always be aware of perception. Uh, and ifpoliticians want to be massive landlords, maybe that's not the best look forthem.

Journalist

Thank you, Senator.

Senator Bragg Okay.

Thanks a lot. Thankyou.

[Ends]

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