Help to Buy Bill 2023, Help to Buy (Consequential Provisions) Bill 2023

Owning your own home is still the great Australian dream. At the moment, for many people, their great Australian dream is to first find a rental property and then a rental property that they can actually afford. In my electorate, in the south-west of WA, realestate.com.au lists current vacancy rates in the Bunbury region at 0.45 per cent. It’s the nation’s lowest vacancy rate for the seventh consecutive month.

Since Labor came to government, rents in Australia, as we know, have increased by 26 per cent on average, and Perth has been ranked Australia’s second-worst city for rental affordability. Australia-wide, first home buyers and new home approvals remain at their lowest levels in more than a decade. At the same time, ASIC data shows that, between July 2022 and April 2023, 1,709 construction companies across the country went in to administration. But there was also a recent news.com.au article that put the figure at 2,349 construction companies across Australia that have collapsed in the last year alone under the Labor government’s watch. So it’s no wonder we’ve recently seen the weakest quarter of construction in more than a decade.

When you see the Labor government’s immigration policy of increasing overseas immigration to over 500,000 over the past 12 months and, in the same time frame, the number of new dwelling approvals at only 162,000, there’s clearly a discrepancy in these numbers. They don’t add up, and that’s what you’re hearing from people on the ground. It’s adding to both housing and rental pressures for those living here and those migrating to Australia. Labor is going to add to this shortage by increasing migration by 1.6 million people over the next five years.

The dream of owning your own home is a dream shared by those who were born in Australia as well as those who’ve come here to live. For so many of our historical migrants who’ve chosen to come to this great country, Australia, they came because the opportunity was there to work hard and save money, and to buy, pay off and own their own home. Often that was their No. 1 priority and the opportunity they saw in Australia—one they didn’t have in the country that they originated from. Owning their own home actually set them up for life and gave them the security they were so desperate for.

I saw this firsthand living in Brunswick Junction and Harvey with our early, mostly Italian, migrant families. Their absolute priority was to put a roof over their family’s head, pay it off and own that home so no-one could take it away from them. Of course, some of these people had come from areas where they simply lived in a landlord’s property and they didn’t own any of it, so this was a golden opportunity that they took advantage of. But they’ve also drummed this into each subsequent generation, their sons and their daughters, and said: ‘You need to work. You need to save your money and you need to buy a house.’ I’ve heard this myself more than once.

But, when I look at this bill, what I don’t want to see is this great Australian dream of homeownership turn into a nightmare for the people who sign up for this Labor government scheme. There is no detail of what people will actually be signing up to. What we do know is that, when you finish paying off your house, if it’s a new home you build, the government will actually own 40 per cent of your home and will be entitled to 40 per cent of what you sell it for, whatever the increased value of that home is at the time that it’s sold. If it’s an existing home you buy, the government will own 30 per cent of that home and will be entitled to 30 per cent of the increased value of that home when you sell it. You won’t own your home 100 per cent outright, which is the Australian dream. But there’s actually no detail about what happens if your home decreases in value over that time. I’ve seen that in my own electorate and dealt with people who owed more than the house was worth.

For anyone considering signing up to one of these deals, please do your homework. Get sound advice. What upfront costs over and above the actual house price will you still have to pay for and factor into your calculations before you say ‘yes’? There are several states already, as we know, running these types of government and private homeownership schemes. New South Wales runs a shared-equity scheme that is so attractive to the market that 94 per cent of the places are still available. I’m concerned about who will take advantage of this one. WA runs the Keystart program—another shared-equity scheme. In 2022-23, there were 90 loan approvals under the scheme. As at 30 June, 2023, 149 of these equity loans were in default, with eight loans deemed mortgagee in possession in 2022-23. Neither of these figures is really surprising, given the 12 interest rate rises under the Labor government and what those have done for people’s mortgage repayments.

But what will happen to those who are in default under Labor’s Help to Buy scheme and whose houses are deemed to be mortgagee in possession like those in the Keystart scheme? Do you know what that will be if you take it on? Who will the lenders be, and what arrangements will they have with the government and the homeowners themselves? How will the homeowners repay the loans? Can the owner refinance if they need to? None of it’s explained in this bill. Will they lose their home? Given the state government owns 30 per cent of each of these homes and the federal government will as well, what happens next? What will happen to the people in these same circumstances under Labor’s Help to Buy? At a state level, the government owns 30 per cent of that home. What happens when there is a decrease in value? At a federal level, it could be 30 or 40 per cent on an existing home. What happens if those housing prices fall, and you’re behind on your mortgage payments? Will the government force you to sell your house for less than you paid for it? There’s nothing in this bill explaining this or even who will be eligible. What’s the criteria? What happens if your home is damaged or needs repairs? Who pays and when? Who bears the cost and the value of that? What happens if your income increases, you earn some more money and you’re above the threshold, so you no longer qualify under the rules? What happens?

Before people sign up, please find out. This is what you need to know. You will need to know all of this. Which agency will monitor and manage this side of things—your incomes? Who will monitor and manage that? Will it be the ATO or another entity? If so, how will that work? Will you have to buy back the government’s share of your property, and if so on what terms and what time frames? Will the price caps be adjusted over time? Should property prices continue to escalate? Will those actual price caps be adjusted to match what you can and can’t buy? This will be on a state-by-state basis. I just wonder how many of these 10,000 a year for four years will be available not only state by state but for those of us who, like the member for Durack and me, live in regional and remote parts of states like Western Australia. Do the price caps reflect the actual cost of building a home in a major capital like perhaps Sydney? There are some significant costs in trying to build a home in a place like Sydney. I wonder whether people with a HECS-HELP debt will actually qualify for a housing loan. That will depend, I think, on the lender and their criteria, but nothing’s explained in this bill. If participants buy in popular areas, will this scheme increase the price of housing in that area more broadly? Would that provide a barrier to even more people who are not in the scheme to be able to buy into that area?

That’s just a snapshot of the reasons. I’m actually asking people to please do your homework before you sign up. What don’t you know that you’ll need to know before you take this step? The government will own either 30 per cent or 40 per cent of the home that you buy or build. Primarily, people need to get full details—absolutely. They’ll need to know what they will have to pay upfront outside of that actual home’s costs. What are the other costs involved before you even get to building or buying the home?

There is no doubt that there is a severe shortage of housing. It’s no different in my electorate of Forrest in the south-west of Western Australia. A number of my local governments have been actively calling for our state government in WA to assist them in being able to install basic services and basic utilities such as connecting electricity, sewerage, water, telecommunications and access roads. Some of them have got projects like that ready to go. We also need to speed up local and state government approval processes. The red and green tape is a nightmare and just so costly. It’s adding to the cost of building a home at all. In WA, we saw the Aboriginal cultural heritage act that would have added to this and worsened the process, as would the original proposed changes to the water act in Western Australia that have since been taken off the table. All of that has simply made local governments even more hesitant in this space. It’s further increasing the costs for local governments, developers and even those just trying to build their own homes.

In my patch, Albemarle, a lithium producer with the only lithium hydroxide plant in Australia, is having to build its own village to accommodate its workforce because there are no other options. When you look at the caravan parks and anything else that’s available, often they’re now populated by people needing permanent accommodation. In Dunsborough the local Rotary Club actually did a project providing lightweight swags for people who are living rough, living in the bush because they can’t get affordable accommodation. They were surprised at the age of who came out of the bush to take advantage of these lightweight swags.

We’ve also got significant problems in WA with delays in Western Power approvals and the cost. The Help to Buy scheme will not meet the needs of Australians in the circumstances that I’m talking about. But, again, I want to warn those who are considering taking up this option to please do your homework. Do your own due diligence so you are fully aware of all of the costs from the beginning to the end of this process. This will depend on the criteria the government sets, because they’re not there now.

The median house price in Bunbury is currently $718,000. Will this qualify people under the Help to Buy scheme? In Busselton, that amount is $685,000. Will this qualify? In Capel it’s $469,000, according to realestate.com. We have a significant number of people right around Australia but even in my part of the world who are homeless. In the census of 2021, there were 809 homeless people in Bunbury, and I suspect that’s a much greater number now. I hear about it when I talk to my agencies that are working in this space and doing everything they can to help people. The combination of homelessness and high rents is forcing more people into this space, people they’ve never, ever seen before, people seeking help with food and accommodation that have never had to seek it before. I’ll end where I started. If anyone is considering this scheme, please make sure you get all of the information, know exactly what you’re signing up for, and know that you are going into a shared-equity scheme where the government will own either 30 or 40 per cent of your property when it’s time to sell.