As Parliament resumes for 2024 and policies are being debated by Australia’s elected officials, Anthony Albanese‘s Labor government will have to negotiate with the Greens if the proposed “Help To Buy” housing scheme has any chance of getting through. So what is the policy, and why are politicians like Max Chandler-Mather opposing it?
There’s no aphrodisiac like the intricacies of economics, politics, and the housing market. This is one incredibly sexy story, unlike whatever Barnaby Joyce antics you’ve read about from Canberra this week. Now let’s quit the foreplay and talk housing!
What is the “Help To Buy” housing scheme?
As part of its election-winning campaign, Labor promised to create a “Help To Buy” scheme which would assist first-home-buyers in getting their own piece of that sweet sweet housing market pie.
How did it propose to do that? Easy!
Instead of getting a massive chunk of money from their parents — like you see in those “this young person just bought a house all by themselves” articles on news.com — the prospective first-home-buyers will instead have the government make an equity stake in the property to make it more affordable.
Up to 40,000 families over four years would receive an equity stake of 30% for existing homes, or 40% for new ones, so long as they cover a minimum deposit of two per cent.
Upon the sale of the house the government would receive it’s profits back, seemingly making the policy a savvy win-win for the budget of wannabe homeowners AND the government.
EXCEPT, the “Help To Buy” scheme needs the support of the Greens and two cross-benchers to pass through.
And currently the Greens are giving it a big no-no. But why?
Why aren’t the Greens supporting the “Help To Buy” scheme?
You know how when you print more money, that whole “inflation” thing happens?
Well the Greens have stated that the second the government start chipping in 30-40% of a bunch of houses, then the price of houses is also going to rise by 30-40%.
According to the Greens, its current form this policy would further inflate the cost of houses — unless some extra details are thrown in to stop those from selling the properties from artificially inflating the cost.
Additionally, leader of the Greens Adam Bandt slammed the policy as a “housing lottery” as it only benefits 10,000 people a year for four years.
Labor’s answer is a housing lottery for 0.2% of renters and higher rents and house prices for everyone else.
— Adam Bandt (@AdamBandt) February 12, 2024
“The housing system is stacked against renters and first home buyers,” tweeted Bandt.
“Labor’s answer is a housing lottery for 0.2% of renters and higher rents and house prices for everyone else.”
The Greens’ spokesperson for housing Max Chandler-Mather has said the policy also fails to recognise another key group in need of help in the housing market: renters.
“We have a property investor prime minister who is refusing to phase out billions of dollars in tax concessions for property investors that are denying millions of renters the chance of ever buying a home,” said Chander-Mather on Sky News.
The Greens are calling for changes to the policy, and are also calling for Labor to abolish negative gearing — a practice that people who own rental properties can use to get massive tax deductions.
Peep here for a further explainer on negative gearing, or watch the below video by comedian Sammy J for a silly one.
However the idea of abolishing negative gearing has also been Labor’s election Kryptonite, causing them to lose both the 2016 and 2019 federal elections (among other reasons) when they ran it as a key promise.
It’s also unpopular even just amongst the 151 federal MPs, with 103 of them owning multiple homes, and 88 owning at least one investment property.
So what’s gonna happen? Will the “Help To Buy” scheme make it through? Will the Greens cave first, or Labor? And will I ever win the housing lottery???
When will the “Help To Buy” scheme pass?
Well, if we look at history, and even recent history, politics is all about negotiation.
Last year the big housing debate in Parliament was around the Housing Australia Future Fund (HAFF) Bill.
Initially the government only wanted to spend $500 million on the policy, but the Greens didn’t agree to that and pressured for more. After months of fighting, eventually the pressure resulted in the HAFF policy adding an extra $3 BILLION for better housing in Australia — six times the initial amount.
If Labor wants its sexy housing policy to make it through, they need to make sure it’s also offering things the Greens might want in future. And currently, the big requests from Bandt’s Greens are 1) abolishing negative gearing, 2) pushing for a rent freeze and 3) adding rent caps.
While it’s likely that the “Help To Buy” scheme does pass soon this year due to the Greens being able to provide more support than the Coalition, it’s not going to be without changes to its current form.
And hopefully those changes are ones that benefit those who actually need the help to buy housing.
