Interview with Dave Marchese on Triple J Hack

‍Subjects: Housing policy, Climate policy

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

Dave Marchese
Shadow Housing Minister, Andrew Bragg. Senator, thank you very much for joining us.

Senator Bragg
Hi, Dave. How are you doing?

Dave Marchese
Yeah, I'm well, thank you. I want to clear this up, though. Do you want to see house prices drop?

Senator Bragg
Well, I think in relation to first home, entry level properties, the growth in prices has been way too high, and particularly where the government has effectively forced the prices up because they've failed to build houses and they've opened up this 5% deposit scheme to everyone. I think it's only reasonable that the prices should go down to reflect that Canberra is making people's lives harder.

Dave Marchese
By how much? How much do you reckon prices need to go down?

Senator Bragg
Well, I mean, at least the amount that the government has forced them up. Now, the Prime Minister said that the prices would only go up by 0.5% on an annualised basis, we assume. Now, in the first month of the 5% deposit scheme having been changed by Labor, the prices have already gone up by 1.2%, in one month. So, at least that amount. But let's see where we get to after a year of this.

Dave Marchese
Okay. I mean, you're saying entry level prices. Can you explain exactly what you mean by that? Because people might be confused. One person's entry level is another person's forever home.

Senator Bragg
I understand that. I guess what I'm saying is for a property in, as you know, the prices for houses change a lot across Australia. I mean, a first home property in Sydney is different to what you're going to get in Darwin or Launceston in terms of the price, right? I guess what I'm saying is for someone who's going to buy their first house, that's an entry level house. It might be an apartment in many cases. The government in Canberra has massively inflated the cost of that first house by failing to get the houses built and then by playing around with this demand side measure. That's the point I'm making, because if you look at the Cotality data, it shows that for the wealthiest people, their house prices aren't changing in this month. It's jumping up at the entry level point. That's really the problem.

Dave Marchese
I guess the question, though, is how do you make sure those entry level properties, as you put it, those prices are falling and allowing people to access the housing market? What's the solution here? Do you have a plan to allow that to happen?

Senator Bragg
Very hard, as you know, but the idea is you need to get more houses built. More supply will help, but also winding back some of the reckless crazy stuff like this 5% deposit scheme, which is available to anyone without even an income or means test.

Dave Marchese
I mean, to be clear, a similar scheme was introduced by the Morrison Government in 2020...

Senator Bragg
No, but it wasn't. It was capped and it had a means test. This one could be available to the children of billionaires. The Labor Party have done a terrible job on housing. They've failed to build houses, and now they've got this 5% deposit scheme, which is open to anyone. It's really cooking housing. We're seeing it in the data. This is not my data, it's not even Treasury data. By the way, we tried in the Senate today to get to the bottom of the Treasury modelling that was produced for Mr Albanese, but the government is blocking our access to it. We can't even see what they were told. I suspect they were told before the election that, hey, if you do this, it's going to be really bad.

Dave Marchese
I guess the problem here is, Senator, that there is no quick fix, it appears. You're talking about supply, but that's going to take a while. The government's saying, well, look, this is something that will allow young people potentially to access the housing market who ordinarily would not have had access to the housing market. The super to buy housing scheme, the Coalition's idea that they went to the election with, many experts were saying that that would also increase house prices. The government is saying that that would have dramatically increased house prices. Wouldn't we be seeing the same thing if you were in government?

Senator Bragg
Well, you've got to be very careful with demand side measures. If you're going to have them, they've got to be targeted. Now, in this case, the 5% deposit scheme is open to anyone, including the wealthiest Australians. I just don't understand why the taxpayer is funding a scheme for the wealthiest Australians. I get the principle that if you're a lower income worker, there should be taxpayer support for you in particular cases. But I don't see why people are paying taxes to fund the wealthiest people to get access to a government mortgage insurance scheme. It just seems crazy to me. I don't understand it.

Dave Marchese
Do you concede that this problem has been decades in the making?

Senator Bragg
Well, the biggest problem we've had in the last few years is we've had a big growth in our population...

Dave Marchese
But what about before that? What about what led up to this? Because we can look at previous Coalition governments as well and previous Labor governments on both sides. I mean, it was a decade ago that Joe Hockey, the Treasurer, was telling people to just get a good job if they wanted to get a house. That was really not admitting that there was a crisis.

Senator Bragg
As you probably know, under the last Liberal Government, we built over 200,000 houses a year on average. Now we're down to 170,000 houses a year on average. If you want to measure supply, we're heading backwards, and the government has wasted about $60 billion on building up bureaucracies in these programmes. Of course, yes, there is a shared responsibility for the overall position. But I'm pointing out to you that some of the schemes that are in the here and now are making the problem really bad. We're seeing it in the monthly data. The data that I'm talking about today in terms of 1.2% growth in one month is the biggest jump in years. This is hurting people now. Sure, we can go back and talk about what people said 12 to 15 years ago. But this is crazy stuff that's happening now, which we want to try and stop because if this continues, it's going to push first time ownership even further out of reach.

Dave Marchese
We've got messages coming through. Someone says, nobody wants house prices to go down. Investors want to make a profit, and owners want to make money on a sale. There is zero incentive anywhere to bring house prices down. Another person says, super unclear what an entry level house is. Another person also saying, Senator Bragg needs to clarify and articulate what entry level housing is and how this can be achieved. It does seem like there is a lot of confusion there, Senator.

Senator Bragg
I'm talking about a first home. For most people who live in a city, if you're living in Melbourne or Sydney or Brisbane, your entry level house is going to be a flat, might be a one, might be a two bedroom flat, that's what I'm talking about.

Dave Marchese
Okay. What about other tax concessions that are in place now? Changes to negative gearing. There are also issues people often point to. Do you think we need to be seeing some reform there?

Senator Bragg
They point to them, but the problem with that is it only has a very small impact on overall price. You can increase taxes on housing, you can hit investors, but it's not going to make much of a difference in terms of the overall position. The most important thing here is...

Dave Marchese
But is a small difference enough of a difference? Should we be doing a whole bunch of things?

Senator Bragg
I think you're going to focus on the big things. You want to try and get the houses built, right? You've got to work with builders, tradies, developers to get the supply side moving. Then I think you should be able to look at demand side measures on a very targeted basis. But the main game here is supply. Now, the government has housing targets for the States. Every State and Territory is failing to meet their supply target. We have all these weird systems in Australia where, for example, the federal government promises all this infrastructure spending for States, but they don't tie that to any housing outcome, for example. I think there's some smart stuff we can do around making sure that the States are pulling their weight, making sure we're getting some movement, because we need to be getting about a quarter of a million new houses a year in Australia. Right now, we're down to about 170,000. That is really hurting us.

Dave Marchese
Alright, this is Hack, Dave Marchese. I'm speaking with the Shadow Housing Minister Andrew Bragg about the housing crisis, house prices specifically. On the text line, someone says, every politician should only be allowed to own one property. Any politician that's a landlord has a conflict of interest. I mean, you're laughing, but what do you think of that idea?

Senator Bragg
Yeah, that's probably a fair rule.

Dave Marchese
Okay, so there we go. A bit of agreement there. Someone says they have not...

Senator Bragg
I think if you're in public office, you've got to be mindful that everything you do could be perceived as a conflict of interest. I just think it's good for people to have simple arrangements if they can.

Dave Marchese
Are you happy to admit how many houses you own, Senator?

Senator Bragg
Well, I own one, but I don't own the house. It's got mortgages.

Dave Marchese
Okay, all right. Just checking because it's a question we always get asked when we interview politicians. Someone else says the Senator seems to forget that they held power for a long time and did nothing. What are you going to do differently?

Senator Bragg
We built more houses than the government...

Dave Marchese
It's not enough, I guess. That's the issue. We don't have enough houses in Australia. No one's built enough.

Senator Bragg
Well, I agree. Look, I'm the first to admit that the former Liberal governments, in many cases, don't have a great legacy on a number of things. I would say on housing that we built a lot more houses than the current Labor Party has been able to build despite them bragging about how great their job is.

Dave Marchese
Senator, can I ask you a couple of other things just quickly? Do you back a net zero commitment?

Senator Bragg
Well, I don't see how Australia can leave the Paris Agreement.

Dave Marchese
What if we don't leave the Paris Agreement, but there is some change that's made to remove net zero as Australia's formal target, as the Nationals have put forward?

Senator Bragg
Well, that's not how it works. I mean, Australia is not a pariah state. We have to remain in the Paris Agreement because we believe in emissions reduction. We are worried about pollution. We're worried about the future. We think it's very important that we cut emissions.

Dave Marchese
So, is this going to divide the Coalition? Is it going to tear the Coalition apart?

Senator Bragg
I don't know. There's always these open debates, aren't there? We talk about them endlessly, but we're having a debate at the moment because we've had a very heavy election defeat and we're reviewing our policies. Now, my view is that you've got to pull your weight, but you've also got to make sure that you get power prices down and keep industry on shore. But I don't think the two things are necessarily in conflict. I think you can cut emissions and you can also cut power prices and hopefully keep industry on shore.

Dave Marchese
Would you like to see Opposition Leader Sussan Ley stay on as leader?

Senator Bragg
For sure. I definitely support Sussan.

Dave Marchese
Are you worried that the Coalition maybe is doing itself a bit of damage in the minds of younger voters at the moment with all this infighting?

Senator Bragg
Well, Dave, I can tell you that I'm trying very hard to hold the government to account. I'm sure your listeners would agree, that setting any political or individual interest aside, my job in the opposition is to hold the government to account to make sure that public money is spent properly and the programmes are administered properly. Now, I'm finding that harder to do because there is this ongoing, very loud debate, and so that is making it harder to hold the government to account. I think it is important that we get on with this and resolve it sooner rather than later.

Dave Marchese
Okay. Well, thank you very much for joining us on Hack and answering all those questions from me, from the audience as well. Shadow Housing Minister, Andrew Bragg. I appreciate your time.

Senator Bragg
No worries, Dave. Thanks very much.

[Ends]

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