Transcripts

ABC ADELAIDE: 2/5/22

May 02, 2022

E&OE TRANSCRIPT
RADIO INTERVIEW 
ABC ADELAIDE
MONDAY, 2 MAY 2022



 

DAVID BEVAN, HOST: Mark Butler joins us, senior member of the Shadow Cabinet and South Australian MP. Good morning, Mark Butler.

 

MARK BUTLER, SHADOW MINISTER HEALTH AND AGEING: Good morning, David. I have to say, what a jewel John Williams is for South Australian politics, and I love the way he acknowledges he's only ever called when things have gone to custard. He's like the Mr Wolf in Reservoir Dogs of South Australian state politics, isn't he?

 

BEVAN: He's a very nice guy and he's so knowledgeable.

 

BUTLER: He’s a clever guy too.

 

BEVAN: He’s a clever guy. Okay, now you'd like your lot to be elected, form a government, and you promised that if you do, you'll introduce something called a shared-equity scheme for home buyers. What does that mean?

 

BUTLER: South Australians are probably more familiar than some other parts of the country with something like this, because we've had HomeStart for many years. Essentially, it's a scheme that sees government come to the table and help people, particularly on low to moderate incomes, buy a house. And we know this is more important now than it's ever been. House prices soared by 25 per cent on average across the country just last year, and in some parts of the country the price rises were even higher and that's hitting everyone. But we know it's hitting young Australians on low to moderate incomes more than any other group in the community. 40 years ago, 60 per cent of that group owned a house and it's less than half of that now, and they can just see that dream of homeownership disappearing over the horizon as you get the sort of price increases we got last year and the prospect, maybe as early as tomorrow, of interest rates going up as well.

 

BEVAN: So can you run those figures by us again? How many people do you say are excluded from buying a home because of the way the markets working?

 

BUTLER: It depends where you live, obviously, but house prices across the country have skyrocketed. Last year they were up by 25 per cent just in one year, and that's particularly hitting young Australians, particularly on low to moderate incomes, say up to $90,000 a year, who are finding the deposit they have to save just to get a mortgage is completely out of reach.

Unless you've got mum and dad able to help you, you're increasingly finding that is out of reach and it's out of reach on current interest rates and everyone in the newspapers are saying interest rates are going to start rising tomorrow and probably keep rising for a while.

 

BEVAN: How many people do you think fall into this category? You must have some idea, otherwise you wouldn't think it was worthy of a policy response, so how many individuals would be earning less than 90,000 or couples earning less than 120,000 that can't get into the home buying market?

 

BUTLER: We think many, many 10s of thousands. HomeStart here already provides maybe a little over 1,500 of these types of loans, so where the government effectively shares in the equity in the house. We have similar programmes in WA that have operated for many, many years. They're starting up in other states as well and we want to provide a national scheme to provide that which would see the government effectively take on up to 30 per cent of the equity in a house, if it was an established house, it's already built, or up to 40 per cent of the equity if it's a newly constructed house, so that means the mortgage you would have to take on to buy the house would be some hundreds of thousands of dollars lower than it otherwise would be.

 

BEVAN: But if it's many, many 10s of thousands of people in this situation, and your scheme is for 10,000 spots nationally, this isn't going to make much of a difference.

 

BUTLER: We think it will. There's about 100,000 first homebuyers across the country every year, and we've calibrated this number really carefully because we want to make a real difference to people who are just seeing that dream of homeowner homeownership slip away. But we're also being advised that we can't put too much grease into an already overheated system without just maybe driving prices even higher, and the advice we've taken is that 10,000, which is about 10 per cent of the first home buyer market, is about right. Now a lot of those first home buyers are fine, yes prices are going up, but they might be on good incomes, they might be getting some help from mum and dad with their deposit, but we think that this will make a real difference every single year, so it's 10,000 every single year, of young people, couples who want to get that first foothold into the housing market. We're also making it clear though David, it's not just for first home buyers, although that will largely be the group who's really attracted to this scheme.

What we also know is that people who are coming out of a divorce or separation who might have been in the housing market for a couple of decades but their marriage has broken down, find it very hard to get back into that housing market, so this scheme will be open to them as well.

 

BEVAN: But you say you've got to be careful and you recognise that you can't put too much, you called it “grease”, into an overheated system, that's the risk with this –

 

BUTLER: And we think we've got the number right.

 

BEVAN: These people are being disadvantaged by a market that is way, way, way too hot. 25 per cent growth is just crazy.

 

BUTLER: Yeah, and it's not just those groups that are talking to me, and I'm sure MPs across the political spectrum about this almost at every community meeting we have, at street corner meetings, it's their parents, it's their grandparents who are lucky enough like you and me David to grow up at a time on house prices weren't this hot and see that home ownership is a really core part of our social fabric and it’s slipping away from young Australians.

 

BEVAN: Don't we need policies that will actually suppress prices?

 

BUTLER: The difficulty with that is we've got a free market in housing and the further difficulty is a whole lot of people are now mortgaged according to the state of the housing market right now. So we think we think this is a really clever policy. The UK operates it, Canada, a number of states in the Commonwealth do, and it makes a real difference to a group in the community who are suffering the most under the overheated housing market.

 

BEVAN: But what policy have you got in place that will bring down the housing market so that the growth is only somewhere between zero and say 2 per cent so that it cools off. You don't want it to crash because a lot of people are mortgaged to the hilt to get that first home, and you don't want them with mortgages that are worth more than the actual value of the property, so you don't want the market to crash, but you don't want it to be growing at 25 per cent. This won't affect the growth rate, will it?

 

BUTLER: No, this won't in and of itself and a Labor Government doesn't propose to come in and put in any sort of price control mechanisms or anything like that. But what we also did announce over the course of the weekend is that we would re-establish a body that we think Tony Abbott was unwise to abolish, which is the Housing Supply Council that brings state governments, the housing industry, other experts together to address some of those issues that are constraining housing supply and as you have a constrained supply, inevitably prices rise. That might be questions of land release, very difficult red tape around planning regulations and things like that, we want to set up that Council so that there is a national body of advice that can start to present some of the solutions to the constrained housing market that's a big driver of the price rise.

 

BEVAN: Mark Butler, thank you very much for your time.

 

BUTLER: Thanks David.

 

BEVAN: Mark Butler, Shadow Minister for Health and Ageing, but one of South Australia's most senior Labor MPs, explaining Labor’s shared equity scheme for homebuyers.

 

ENDS

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