28 February 2024

Government's home ownership plan held to ransom by the Greens

| Chris Johnson
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toy house and money

The Federal Government’s proposed Help to Buy scheme would see the government co-own up to 40 per cent of a house until the homeowner could afford to pay it out. Photo: File.

The Federal Government’s dream for Australian homeowners is becoming a nightmare as the Greens threaten to vote down legislation that would see the government co-own houses to help people break into the real estate market.

The proposed Help to Buy scheme would see the government buy in with up to 40 per cent of the cost of a new house and 30 per cent for an existing one until the homeowner could afford to pay it out.

Housing Minister Julie Collins described the plan as “life-changing” for thousands of Australians locked out of home ownership.

It aims to help 40,000 households over four years.

Individuals earning less than $90,000 a year and couples earning less than $120,000 a year could pay as little as 2 per cent as a home deposit under the proposed scheme.

The homeowners’ repayments would also be lower while they remain in the scheme.

However, the Greens are not on board, saying the government must also introduce rent caps into legislation, wind down negative gearing tax benefits for property investors and build more public housing.

The government insists it won’t do a deal with the Greens to ensure the successful passage of the scheme.

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In the Senate, the Greens will have the numbers to sink the bill if they join the Coalition, which has already expressed its distaste for it.

Greens housing spokesman Max Chandler-Mather said the legislation was not good enough.

The limit of 10,000 applicants a year and capping prices on eligible properties weakens the bill.

He said the scheme would only help about 0.2 per cent of buyers each year.

“You can tinker around the edges on this bill, but you will not fix the housing crisis unless you deal with the billions of dollars in tax handouts for property investors,” Mr Chandler-Mather said.

“It should not be the case that a first-time buyer at an auction loses to a property investor who gets massive tax handouts from this Labor government.

“The ball is in Labor’s court. Unless we see movement on the things that are pushing house prices out of the reach of millions of renters across the country and a fix to negative gearing and capital gains tax handouts, capping of rents and building public housing, we will vote against it.”

He said house prices could also feasibly be artificially inflated because of the scheme as it stands.

The Greens’ opposition to the bill in the House of Representatives won’t impact the outcome as Labor has a majority.

It is in the Senate where it could all come unstuck for the government.

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However, it was question time in the House of Representatives on Tuesday (27 February) when Ms Collins accused the Greens and the Coalition of joining forces to sabotage the bill at the expense of Australians who need the help the scheme would provide.

“These are real people who need real assistance to get into home ownership,” the Minister said.

“[The Greens and the Coalition] are joining forces to keep people out of home ownership. They should be supporting the 40,000 Australians who are depending on it.”

The Coalition says the scheme won’t work because house prices are already spiralling above its eligibility thresholds.

In some parts of Australia, battlers wouldn’t be able to apply because of the cost of houses.

While the Help to Buy scheme is intended to support Australians who otherwise would not be able to purchase a home, states will still need to pass their own legislation for it to operate in their jurisdictions.

The states agreed in National Cabinet to progress legislation so the scheme could run nationally this year.

In the territories, the scheme would operate immediately following passage of Commonwealth legislation. If it passes.

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Labor politicians are handing government money to first home buyers to bid up the price of their investment properties. Many reports have for years have criticized these first home buyer cash handouts as a waste of tax payer funds that is simply captured by existing land owners. Disgraceful & blatant misuse of public office. Labors credibility on housing is a bin fire.

HiddenDragon9:03 pm 29 Feb 24

This scheme, much like the Morrison government’s home loan guarantee scheme, is essentially a Hunger Games housing initiative which holds out a glimmer of hope to a relative handful of people in a toxically rigged housing market.

Schemes of this sort are essentially window dressing, designed to show that the government of the day truly cares, and is doing what it can to help, when the reality is that bipartisan policy for at least the last few decades has been to prop up and push up housing prices because ever rising housing prices keep the home owning majority happy and spending/overspending in a lazy economy which has become increasingly reliant on domestic consumption to create an illusion of growth.

A powerful illustration of the true motivations of the major parties came in the Reps Question Time today, when the Housing Minister deployed the usual blather about “supply, supply, supply” to bat away a question from Andrew Gee which asked why the government (with Coalition support) had voted against his proposed ban on foreign purchases of Australian homes –


EVERY time the government gets involved, throwing money at first home buyers, all it achieves is to push up demand and housing prices.

How many times do both sides of politics need to attempt the same thing, with the same negative results before they acknowledge that it’s a stupid idea?

Also, 10k a year in a population of 28 million people? It seems like people’s chances of being accepted into the scheme are like winning the lottery.

devils_advocate6:01 pm 01 Mar 24

The individuals at whom these policies are targeted by definition do not understand basic economics.

GrumpyGrandpa11:10 pm 28 Feb 24

You never make things cheaper, by throwing more money at it. That is what the Bill proposes. It increases demand, because Albo is throwing some of our money and become a part-owner. Prices increase with extra demand.

While the Libs are correct in that prices already exclude many would be applicants, their argument really needs to be about how to increase supply.

Sadly, The Greens, once again have no idea. If you remove tax deductibility for expenses incurred in generating rental income, investors will simply choose alternative investments. Sure, an exist of investors from the market, might in the short-term, make it easier for homebuyers to enter the market, but the consequences would be that with a reduction in landlords, comes a reduction in rental properties, pushing up rents even further. Of course, The Greens propose to solve that by freezing rents. Landlords with increasing expenses, but frozen rental incomes, isn’t a good recipe for new landlords entering the market.

Oh, and Wayne Swan’s thought that Super funds should be doing more of the heavy lifting and investing in rental properties; seriously Wayne? Aren’t Super funds supposed to invest in the best interest of their members?

“with a reduction in landlords, comes a reduction in rental properties”

Near 80% of investor loans are for existing properties, where price effects are deleterious for would-be home buyers. It is a fantasy to believe current tax settings and consequent investor behaviour are in some manner beneficial for either of the purchase or rental markets rather than for capital investors alone.

Do you have any particular reason for supporting tax distortions in favour of assets and capital gains?

In case of doubt, rent freezes also hold no merit for me.

Help to buy is yet another demand-side proposal to solve what is a supply-side problem. The only ones to benefit will be sellers.

Incidental Tourist2:41 pm 28 Feb 24

Greens fight hard to ensure people keep renting for life.

Thats how democracy works.

devils_advocate11:18 pm 28 Feb 24

True, but it’s not how it’s supposed to work. In theory we elect the leaders to make the best possible decisions on behalf of the people, informed by the best possible advice from a professional and independent public sector.

Instead, we get this…

Stephen Saunders11:53 am 28 Feb 24

Politicians have deliberately created all-time housing un-affordability and rental distress, through decades of humungous immigration and lush tax incentives. There is no sigh whatsoever that they will undo either. Help to Buy is nonsense, and the Greens-Labor “differences” are a cruel farce, just laughing at voters.

Margaret Freemantle6:40 pm 28 Feb 24

Help to buy works all over the world and worked here after World War two. It is the proven way to go, but eligibility needs to be expanded.

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