Interview with David Speers on 7.30

David Speers

Well, Andrew Bragg is the Shadow Housing Minister. Welcome to the program.

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Senator Bragg

David, how are you?

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David Speers

Very well. Let's embrace your spirit there of politicians giving honest answers. How far would you like to see house prices fall?

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Senator Bragg

Well, we want to see more affordability, which is why I've made those statements. Because I think people want to see honesty that, if you are a young person and you're looking at house prices being 10 or 15 times a multiple of your salary, then you're never going to be able to afford a house. So, the fact that the government have pump-primed house prices at the entry level with their 5% deposit scheme, I think has been outrageous. They've made the problem worse, not better.

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David Speers

Well, it's not just what the government's done with that home deposit scheme, is it? I mean, you look at the nearly 10 years the Coalition was in power, entry-level house prices went up far more than that 5% or 6%.

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Senator Bragg

Well, the supply piece is essential here, and as you know, the Government have spent $80 billion on housing to build 30,000 fewer houses a year, plus they've had a large migration program. So, the combination of those factors of having a larger than usual Migration Program, a collapse in supply, and the 5% deposits have pump-primed prices particularly at the entry level.

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David Speers

But do you accept this has been a long-run story? Those entry-level house prices have been going up for a very long time, and indeed much faster when the Coalition was in office.

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Senator Bragg

Well, we haven't built enough houses, which has pushed up the prices. And that is, of course, one of the great problems that we see. I mean, cities like Melbourne and Sydney are some of the most unaffordable cities in the world. And the people who live in those cities know that, they feel that. So, I think we have to be honest about these problems. It's, of course, a very difficult problem to solve, but there are some levers that the Federal Government has at its disposal.

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David Speers

Well, I'll come to those, but just back to the original question. You want prices now to fall by how much?

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Senator Bragg

Well, I think by at least as much as the Labor Party have pump-primed them. I think they should give that money back to people…

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David Speers

Which is what?

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Senator Bragg

Well, as you know, they've pushed up prices by 6% over six months...

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David Speers

Okay, so you want a 6% fall in property prices?

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Senator Bragg

Well, for the entry-level properties, David, we're talking about here. I'm not worried about people who, you know, have great wealth and already have terrific opportunities. I'm worried about the people who can't get an access can't get access to the Australian dream. I think this is a great shame that a person on an average wage, can't get access to a house. I mean, in decades gone by...

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David Speers

Does Angus Taylor agree with you then on the need for a fall of around 6% in the price of entry-level homes?

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Senator Bragg

Well, I'm giving you an example. Our point is that we want to see affordability improve, which, of course, you do by building more houses and not having crazy ideas like having a 5% deposit scheme which is not means-tested, which is not capped, and then not having migration calibrated with house building. So, there are a lot of factors here that you can deploy to stabilise and improve affordability. That's our focus: affordability.

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David Speers

Well, indeed. And so what the Government's now doing with negative gearing and Capital Gains Tax changes is aimed at rebalancing the market. One Nation also supports changes to negative gearing. You're saying keep the status quo. Do you accept that the market does need some rebalancing away from investors to owner-occupiers?

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Senator Bragg

No, I don't, because I think we need to be building like crazy. We need to build more houses, and the idea that there's some forms of bad investment like mums and dads, Labor think mums and dads are bad investors, but there are good investors like super funds and governments. I think that's insane. It's intellectually dishonest. We need to be building more houses. The government have a deliberate design feature to reduce supply by 35,000, according to their own Budget papers. I think that that is crazy, and we don't support that. We support trying to get the country...

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David Speers

Well, to be clear though they said they'd make up for that with infrastructure spending. But just back on the point there, you've just said you don't think there is any need for rebalancing. You don't think there are too many investors in the market compared to owner-occupiers.

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Senator Bragg

But we want more investment to get more houses, that's how things work.

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David Speers

You want more investors in the market?

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Senator Bragg

We want more investment in the housing system to create more houses for Australians. And as and as you know, we've been a proud migrant nation for 250 years, probably the greatest and most successful migrant nation ever. And if we want to house Australians and new Australians, we need to be building more like a quarter of a million houses each year. This Government will be lucky to give us 170,000 houses this year, and under the last Liberal Government, we used to have 200,000 on average.

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David Speers

Okay, accept your point about the need for more supply.

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Senator Bragg

Yeah, it’s key.

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David Speers

But can I just can I just be clear about this? You're saying you like more property investors owning homes than owner-occupiers?

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Senator Bragg

I want more investment in housing. I don't care who the investors are. The idea that there's good investment and bad investment is just stupid.

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David Speers

You don't you don't think there's any it's out of whack at the moment, with too many investors owning properties compared to owner-occupiers?

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Senator Bragg

I want to grow the pie. I want to improve the number of houses that are available for people to live in in this country.

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David Speers

Understand that point, but you're saying there's no problem with the balance?

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Senator Bragg

I'm not interested in recalibration. I'm not interested in communism or socialism, no.

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David Speers

So you're fine with the number of property investors compared to owner-occupiers?

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Senator Bragg

I want to improve the number of first home owners, and you do that by building more houses. It's very clear that you need to build more homes, you need to have a proper Migration Program, and you need to find creative ways to help first home buyers. There are different ways you can do this. The Government have gone for the politically expedient process, which is just giving away these 5% deposits to everyone and anyone into a supply-constrained market, one which they have deliberately reduced. I mean, who could believe…

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David Speers

And so what is your solution then, what's your solution to boost supply and fix the whole problem?

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Senator Bragg

Well, we've already announced that we would invest heavily in infrastructure. We've announced that we would recalibrate migration. We have announced that we would freeze and change the National Construction Code, to get it down to a more reasonable size. But we also need to keep looking at other ideas to improve the viability of home building. Now, I know this is not politically sexy, but one of the main issues in housing is that it's very hard to make a buck out of it. So we need to look at all the taxes and all the regulatory charges that actually mean it's very hard to get the houses built in this country. So a big part of our policy development process will be looking at this supply side, and taxation, and regulation.

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David Speers

You did mention migration in a list…

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Senator Bragg

Yep.

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David Speers

It's the main thing that Angus Taylor talks about as the solution to this, getting migration down. Whereas you have said even if you cut migration to zero, you'd still have a whopping housing crisis. So going back to that that spirit of politicians giving honest answers. Andrew Bragg, would cutting migration really make a big difference?

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Senator Bragg

I've been very clear that it is one of the factors in the housing system and, in fact, the RBA this week has said, and today at Senate Estimates, that migration is one of those factors. So, of course...

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David Speers

But not a big factor?

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Senator Bragg

Well, it's a significant factor. It is one of the factors that you need to resolve to get the housing system back under control. I mean, the fact that people can't afford to buy a house on an average salary is one of our great challenges that we have to resolve in our generation. Otherwise, the millennial generation will give up, I think, on Australia as a democracy as we know it.

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David Speers

Senator Bragg, thanks for joining us tonight.

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Senator Bragg

Thanks David.

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