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Mon 25 Aug

Australia Institute Live: Labor sets stage for Coalition's climate folly; the day in parliament, as it happened.

Amy Remeikis – Chief Political Analyst

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The Day's News

And the debate on Barnaby Joyce’s bill has been adjourned! Andrew Wilkie is now up putting up the bill to try and stop robodebt from happening again.

The Barnaby bill isn’t over though – the debate will pick up again (the government will let as many speakers on it as the LNP can muster because it wants that point of difference. That being said, there are not too many speaker in the LNP which is it own self limit.)

First up to speak on Barnaby Joyce’s scrap net zero bill is LNP MP Llew O’Brien. He says on the outset that “climate change is real” but he doesn’t think the settings are right under net zero and the rest of the world isn’t doing its bit.

This is going to be a long debate.

Government 5% house deposit scheme won’t make housing more affordable

Matt Grudnoff
Senior Economist

The government is keen to talk about housing affordability… hooray.

This is one of the most important issues Australia faces at the moment.

So, let’s take a look at the policies they have on offer.

They are bringing forward their 5% deposit scheme where a first home buyers and single parents who can’t put together a full deposit, won’t have to pay for mortgage lenders insurance as the government will go guarantor. It will now start in October.

This will mean more people will show up to the auction as demand for houses will go up. Higher demand means higher prices.

This scheme will not make housing more affordable. It will just push up prices. And it will come at a time when interest rates are coming down, which will also push up house prices.

After an election where one of the main battlegrounds was housing affordability, it looks like we’re about to enter a period with rapidly increasing house prices. You can see why the Housing Minister Claire O’Neill has declined to suggest that by the next election housing will be more affordable.

Coming out of the productivity roundtable, they have also frozen the National Construction Code. The code sets out all the building standards. The government is claiming that it has become too bloated and full of red tape.

Of course nothing reduces red tape like freezing the code so you can’t remove red tape.

But the construction code includes minimum standards on housing builds. Things that determine how easy it will be to keep your home warm in the winter and cool in the summer. You might think that if your main concern was productivity, building a home right the first time was more productive than pouring energy into keeping in warm and cool year after year. But apparently that’s not what the round table thought.

Regulation is something that all governments should always be reviewing. But that’s not the same as freezing any new changes to regulations.

So, how can the federal government make housing more affordable?

They need to get speculators out of the market by reforms to negative gearing and the capital gains tax discount. Housing should be about a safe and secure place to live, not about building an investment nest egg.

The federal government has a real opportunity to make a big difference to housing affordability, but only if they have the courage to act.

The bells are ringing, meaning the parliament session is just about to begin.

First bit of business: allowing the Coalition to tear itself apart over scraping net zero.

I am going to make a prediction that there will be a lot of misinformation put forward in that debate. We won’t amplify it – and I’ll do my best to fact check what is absolutely necessary.

Stepping outside parliament for a moment to look at what research is happening more widely and Dr Blair Williams, a lecturer in Australian politics at Monash University has taken a look at the Liberal party’s ‘woman problem’ and found the culprit:

John Howard.

Shock. Me. Shock. Me. Shock. Me. I mean smash me down and call me avocado that John Howard of all people would be responsible for a generational screw up!

Williams said of her research:

Howard completely remodelled the Liberal Party in his own image, abandoning many socially-liberal traditions of former leaders Robert Menzies and Malcolm Fraser,” Dr Williams said. 

In doing so, he sidelined many of the party’s moderates, especially its liberal feminists like Dame Beryl Beaurepaire who had lamented the Party’s increasing conservatism and the exclusion of women from policy input. 

More recent leaders, like Abbott, Morrison and Dutton, have channelled Howard’s leadership style and approach to gender equality policy, women voters and women in the party, to its detriment.”

You can read the doctor’s research, here.

Maiy Azize from Everybody’s Home has spoken to ABC News Breakfast about the changes to the 5% deposit scheme (bringing it forward three months, lifting the house price threshold and changing some of the eligibility requirements to broaden it slightly) and said without actual government action on affordability, the scheme won’t make much difference:

The issue is, you know, there’s still limits on how much you can spend on the home, you know, depending on the city where you live, that could be quite a big deal. The issue is, though, that housing is extremely expensive. That’s why we’re seeing people are struggling to get together deposits. What we really need to see is action to make affordability better. Not just action to get people into mortgages.

…The big thing that we would make a big difference to people trying to buy their first home is actually tax reform. We’ve got a system at the moment where people who are investing in housing, people buying their third, fourth, or fist home, are getting a lot more support from the government than people buying their first home. If you’re going out to an auction or trying to bid for a home, there’s investors competing with you and they’re being subsidised by the government, by the taxpayer, and that’s pushing up the cost of housing. If we want to make housing more affordable, we would be winding back the tax breaks.

Anthony Albanese was in the Canberra suburb of Lawson this morning announcing the changes. Mike Bowers from The New Daily was there where Albanese was given every politician’s dream – the chance to hold a baby in front of the cameras:

The Prime Minister Anthony Albanese meets 11 week old Charlotte Chi-Tan and her mum Yvette Wooff in the Canberra suburb of Lawson while visiting first home owners this morning. Monday 25th August 2025. Photograph by Mike Bowers.

A reminder for everyone who wants sport stars to stay out of politics, sport IS politics.

And Australian cricket captain Pat Cummins is in Canberra today to speak to Anthony Albanese about the government providing $100m in funding to help local sporting teams and grounds future proof against climate change.

Because what do you know – climate change impacts everything. Including your local grounds. Cummins is part of an all-star athlete push to help sporting clubs survive – the call is for help with lowering energy costs by helping clubs transition to renewable power, help with protection against flooding, as well as other climate measures. Because even if you’re uncle who voted for John Howard doesn’t believe in climate change, your insurance company sure does, and that is putting the local games in doubt.

On private members’ bills that might actually make a difference, independent MP Andrew Wilkie has announced he will be introducing legislation to address elements of the Robodebt Royal Commission, to ensure it doesn’t happen again:

The Bill proposes higher standards and duties which must be adhered to in the provision of social security services to ensure policies and processes are designed and administered with an emphasis on service, rather than punishment. It also introduces changes to the social security law relating to oversight of automated decision making, as well as more compassionate debt recovery and collection practices, and compliance activities.

Which is not just the right thing to do, it is legally necessary. As the Antipoverty Centre reported last week:

Late yesterday the Department of Employment and Workplace Relations quietly released an independent report triggered in 2024 by revelations of unlawful Centrelink payment cancellations. This comes just a week after the Commonwealth Ombudsman released the first report of his investigation into administration of the compulsory activities known as “mutual” obligations.

There was also a second Deloitte report in the same area, which the AFR’s Paul Karp reported was ‘littered with citation errors’. That report claimed there were not grounds to stop the use of mutual obligation penalties, which the Antipoverty Centre has argued is incoherent, given the penalties are unlawful.

Wilkie says it is time to legislate to ensure that the government responds before even more harm is done:

Robodebt was a catastrophic failure of government administration that destroyed the lives of thousands of Australians,” Mr Wilkie said in a statement.

“It’s been two years since the Royal Commission and, shamefully, we are yet to see any meaningful legislative change from this Federal Government. Well, I’ve now done the work for them, and so I urge them to come to the table on these legislative reforms to ensure such catastrophic failures of social services administration can never occur again.”

Here is the official announcement from the government on the changes to the 5% deposit scheme:

Through the expanded 5 per cent deposit scheme, the Albanese Government will guarantee a portion of a first home buyer’s home loan, so they can purchase with a lower deposit and not pay Lenders Mortgage Insurance.
 
Under the changes, all first home buyers will have access, with no caps on places or income limits. Property price caps will also be set higher in line with average house prices, providing access to a greater variety of homes.
 
For the average first home buyer, access to the scheme cuts years off the time it takes to save for a deposit and saves tens of thousands of dollars on Lenders Mortgage Insurance. In just the first year alone, first home buyers using the scheme are expected to avoid around $1.5 billion in potential mortgage insurance costs.
 
The median home price in Australia today is $844,000 and 5 per cent of that is $42,200. The last time $42,200 covered the 20 per cent deposit for a median home was 2002, which shows the generational scale of this change.

 

Which again – will do nothing for housing affordability. As senior economist Matt Grudnoff wrote for the New Daily last week:

To be very clear, increasing supply will make housing more affordable, but that is not the easiest and simplest way to fix the housing crisis.

House prices have rapidly increased. They have increased by 75% over the last 10 years.

Over those 10 years, the population has increased by 16%. To house all those extra people, we would need to increase the number of dwellings by 16%. But over that same 10 years, the number of dwellings has increased by 19%. We have been building dwellings at a faster rate than the growth in population.

The massive growth in house prices has not been caused by a lack of housing supply.

If it’s not a supply problem, then what has caused the increase in house prices? It has been caused by a big increase in demand. Specifically, an increase in investor demand. Lots of investors have flooded into the market, outbidding owner occupiers, particularly first home buyers, and pushing up prices.

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