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Minister discusses first home owners' grant; national rental affordability scheme; and paid maternity leave.



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The Hon Tanya Plibersek MP Minister for Housing Minister for the Status of Women

TRANSCRIPT: 2GB BREAKFAST WITH ALAN JONES - 28/11/2008.

INTERVIEWEES: TANYA PLIBERSEK, FEDERAL MINISTER FOR HOUSING AND THE STATUS OF WOMEN.

TOPICS: FIRST HOME OWNERS BOOST, NATIONAL RENTAL AFFORDABILITY SCHEME, PAID MATERNITY LEAVE.

ALAN JONES: Just away from the international field. I received from you a lot of letters about these First Home Owner's Grants. There were concerns about which people would get the grant, how does the First Home Owner's Grant operate, stamp duty

exemption, do you have to live in the property, is it encouraging investment or discouraging investment?

The reason it's important, of course, is that

the investment market is in a mess, the housing markets in a mess and the building industry's in a mess.

Have we got enough encouragement in the

market for people to want to build homes? This is an encouragement to buy them, but are the homes priced in a way which is affordable? And is there adequate time in

which people can take advantage of what is being offered? What are the rules before you qualify for the $21,000 that the Rudd Government is talking about, and the $3,000 that the Reece Government is talking about? And if there are no homes, well there'll be no takers. So, how

significant is the promise?

One of the quiet achievers of the Rudd

Government is the member for the federal seat of Sydney, Tanya Plibersek. I think she's got ability. She's the Federal Minister for Housing as well. And she's in charge of these initiatives. She's on the line.

Tanya, good morning.

TANYA PLIBERSEK: Good morning, Alan.

ALAN JONES: You've got to get people to build houses firstly haven't you? I mean you would know that your colleagues in New South Wales aren't helping with massive

developmental charges being imposed on the cost of building a home.

TANYA PLIBERSEK: Well we're very short on the number of houses that we're building every year, not just in New South Wales, but around the country. In fact, some estimates would have at least 30,000 homes short every year, so it is absolutely critical that we get the number of new homes being built up. And we're doing a number of things to do that.

ALAN JONES: Just before you say that though, I mean the problem is in New South Wales last year, there were 16,000 homes built, in

Queensland, 31,000. So, you know, that's what makes it difficult, no matter... the initiatives for the buyer, if they're not there it makes it difficult doesn't it?

TANYA PLIBERSEK: Absolutely, Alan. We really do need to get the numbers up. There is no question about that.

ALAN JONES: Now, I'll be giving out the website and the number for this scheme here. The first thing we should establish should we not is that the Commonwealth and your portfolio provides the money to the states, but the states administer this.

TANYA PLIBERSEK: Yes, that's right. Well, we're providing the money for the boost, so the extra money to double the first home owner's grant to $14,000 and triple it to $21,000 to newly built homes. So, it's $14,000 if you buy an existing home and...

ALAN JONES: For the first time? It's for the first home buyers.

TANYA PLIBERSEK: It's for the first home... absolutely, just for first home buyers.

ALAN JONES: And not for investors?

TANYA PLIBERSEK: Not for investors. We've got other measures that help investors, but this is - for first home buyers. It's important to help young people into the housing market. It's that initial step that's very difficult. A lot of them are paying quite rent. It's not the month to month mortgage that's the

problem, it's actually saving a bit of a deposit for getting their first home.

ALAN JONES: The deposit. Now, that being the case, can the $14,000, if it's not new, and the $21,000 if the home is new, can that be used to augment the deposit?

TANYA PLIBERSEK: Well, yes it can. And indeed, some housing builders and developers and some banks are saying they'll take that as part of your deposit. So, it's always good to say, have more saved up. I mean, the bigger the deposit, the safer the investment and I would certainly encourage people to do their very best to have some money saved up. But there are builders...

ALAN JONES: Hard to do that when you're paying rent isn't it?

TANYA PLIBERSEK: It is really hard. And there's another thing that we're doing as well, Alan. For those people who aren't going to buy, this is a time limited measure if you note.

ALAN JONES: Yeah, now that's a point isn't it? Lets make that point. It starts, what on October 14, so it's already in place.

TANYA PLIBERSEK: Yeah, it's started already. It started on the day we announced it and it finishes at the end of financial year, which of course is the middle of next calendar year, 30 June 2009. The reason that we've time limited it is we've got a real downturn potentially in the building industry now. We want to bring forward a lot of activity. So, for people who are thinking that they might build next year or the year after, we'd like them to make that decision a little bit sooner and we want to help them to do that.

But for people who aren't in a position to

buy...

ALAN JONES: And do you have any evidence - I mean this has been going on a while now, we're nearly into December - is there any evidence that the building industry has responded by building new property where buyers could take advantage of these benefits?

TANYA PLIBERSEK: Yes, there is Alan. I don't know want to, you know, I don't want to over-emphasise things, but the latest figures that come from the Housing Industry Association suggests that overall, sales have gone up about four per cent. And of the newly built market, so new homes that have been built, around six

per cent. So, we are seeing increased activity and particularly...

ALAN JONES: And will they have them though finished? Sorry to interrupt you Tanya, but will they have them finished in time for the buyer to take advantage of all this before June 30 next year? I mean, you know, nothing much happens, Christmas, New Year and so on, June 390's nearly here in a way, isn't it?

TANYA PLIBERSEK: Oh absolutely. But you don't have to have the house completed by then. You just have to have entered the contract by 30 June next year. So, as long as people have signed the contract before the middle of next year, even if it takes some time to complete the house after that, that will still be fine.

ALAN JONES: Okay, so this has been administered by the Office of State Revenue. I'll give out some numbers, but for now, if you've got a piece of paper with you, it's 1300 130 624, they'll provide you with information on all of this, 1300 130 624, and there's an email address as well,

first.home.benefits@osr.nsw.gov.au. So, it's 1300 130 624 of the website,

first.home.benefits@osr.nsw.gov.au.

Tanya, just coming back to you, this thing

about a National Rental Affordability Scheme,. You've stuck a part $620-odd million in that. Over what period?

TANYA PLIBERSEK: Over the next four years Alan, to 2012. And the scheme is $620 million as you say, and what it's designed to do is to encourage the construction of affordable rental properties. So again, as you said earlier, we're not building enough. The

Government wanted to introduce a scheme that would encourage new building in the area of affordable rental. And the idea is we provide a $6,000 tax credit or grant every year for 10 years, and the states provide $2,000 in cash or kind every year for 10 years, so it's an $8,000 benefit every year for 10 years for newly built affordable rental properties.

ALAN JONES: And they have to be rented out?

TANYA PLIBERSEK: They have to be rented out at 20 per cent below the market rate for a particular area.

ALAN JONES: I'll come to that in a minute. This is not a program though for individuals? You're saying, this has targeted institutional investors, super funds, developers,

community housing and so on.

TANYA PLIBERSEK: Yes. But we - individuals may be able to get involved if there's a sort of unit trust that becomes involved, but...

ALAN JONES: Yeah, if you put your money in a property trust or something?

TANYA PLIBERSEK: Exactly. For the moment we're concentrating on institutional investors, because we want large scale development fast, not necessarily all in the one place. This is the other thing I need to emphasise. A lot of the -a lot of the applications that we've had spread the properties across a state or even have properties in several states that they're looking to build. So, we're not talking about huge towers of low cost rental, we're talking about portfolios of property.

ALAN JONES: Now, you're saying the property is to be rented out at 20 per cent below the market rate for the area. Who decides the market rate?

TANYA PLIBERSEK: Professional valuers will value the property three times during that 10 year period, just to make sure that we've got the right rates there.

ALAN JONES: And then eligible families and individuals. Who decides the criteria as to who is eligible for this discounted rental property?

TANYA PLIBERSEK: Well we've got income cut off, Alan. But they're relatively generous, so obviously anyone who's on an aged pension, for example, would qualify. But we go further up the income scale. So, a family with a couple of kids, you know, maybe dad's an entry level police officer or mum's a nurse...

ALAN JONES: Because this varies from locality to locality.

TANYA PLIBERSEK: Yes.

ALAN JONES: I mean policeman and nurses have great difficulty in New South Wales, perhaps not so much difficulty at Ballarat.

TANYA PLIBERSEK: And indeed, Alan, that's why we've actually gone a little bit further up the income scale, because for people on very low incomes, they - they're eligible for public housing. For people on higher incomes, they're probably doing all right in the private income - in the private rental market. But there are a lot of people who are ordinary working families for whom, you know, the $300, $400, $500 a week rent is a big effort, you know, it's taking a big part of their...

ALAN JONES: Absolutely.

TANYA PLIBERSEK: ...take home pay.

ALAN JONES: So, now this national - we're talking about the National Rental Affordability Scheme. Just a couple of things. How quickly are these properties coming on stream? What's been the take-up rate?

TANYA PLIBERSEK: Well, we've had applications for 13,000 properties, or 13,000 incentives in the first tender round that we put out, so I'm very happy with the response, both from

institutional investors and from, as you said before, community housing organisations.

We've been assessing those applications over

the last few months. The final piece of legislation has just passed through the parliament and it'll receive the governor-General's ascent today. So, we'll be able to write out very shortly to the successful tenderers over the coming days, and I hope we'll be able to move some families in before Christmas.

Some of the properties are built already.

Some of them still need to be built, and we'll have a second tender round go out for more of these incentives very shortly as well.

ALAN JONES: And does the market think that the $6,000 tax credit, or the grant from the

Commonwealth and the $2,000 from the states each year every year for 10 years, is equal to what the builder loses via the lower return they'll get in rent?

TANYA PLIBERSEK: Well certainly, I think the level of interest that we've had, about half of it has been from the private sector, builders,

developers, financial institutions like superannuation funds and so on. I'd say the level of interest that we've had shows that they have done their calculations, and they believe it is a good investment for them. You've got to remember also, it's the rental

investment that you get, the rental flow, but it's also the capital growth that people invest in housing for, so I think people are making some calculations and they're deciding that indeed for them and for their organisation it does stack up.

ALAN JONES: Okay, just a quick one before you go, you are a working mother with two children. There's been a lot of debate about mater... paid maternity leave. I noticed that you said the other day that it may no longer be possible to deliver it.

TANYA PLIBERSEK: Well I'm a very strong supporter of paid maternity leave Alan. I think it's something that this country needs, most of all for babies. I think babies need a little bit of time, particularly if they're being breast fed, and for mothers that period's very

important. But we are - as with all of these things, the Productivity Commission's looking at it, it's costing it, it's consulting with the community. When they

make a final proposal for us, this proposal

will go through the same rigorous budget process as any other proposal. I think it's a terrific idea. I think we should do it if we can afford it, but it has to go through all the same budget processes as any other policy proposal.

ALAN JONES: Okay, thanks for your time.

TANYA PLIBERSEK: It's lovely to talk to you, Alan.

ALAN JONES: That's Tanya Plibersek, the Federal Minister for Housing, answering many of the questions that you raise in correspondence with me.