Television Interview with Patricia Karvelas – ABC Afternoon Briefing – Wednesday 7 October 2020

SUBJECTS: Labor’s plan to invest in the repair of social housing; The Budget; First Home Loan Deposit Scheme.
PATRICIA KARVELAS, HOST: My first guest this afternoon is the Shadow Minister for Housing and Homelessness, Jason Clare. Jason Clare, welcome.

KARVELAS: There’s no big new investment in social housing but there is actually a billion dollars in low cost financing for affordable housing. Do you welcome that?
CLARE: We do welcome that. But let’s not confuse that with government funding for social housing. This is underwriting or guaranteeing a loan. It’ll help but it’s not really going to shift the needle, it’s not going to create a lot of construction in the next 12 months to keep tradies working in a sector which is really in crisis at the moment. The community housing organisations that I spoke to last night, said that this is not going to lead to the substantial new construction of new social housing that we really need, and that we particularly need now in the depths of a recession, where tradies are running out of work and it’s the perfect time when we really should be investing in more social housing.
KARVELAS: So how many social housing homes with a Labor government construct?
CLARE: We said today, the focus now, right now, in the depths of a recession should be repairing existing social housing. It’s what we did during the GFC, we repaired about 80,000 social housing dwellings. And this is the sort of thing we could do really quickly. You could have people on the tools repairing social housing dwellings in the next two or three weeks. That’s what I was told last week, everything from mould to leaks, to rot. So, you could do it quickly and PK, it’d be the sort of work that could be done in almost every suburb, and every town big and small, right across the country. That’s why we said today to the Government, you should do this. It’s not just us, though, the Master Builders Association, the Property Council, the HIA, all the housing groups have said this is what we should be doing, not because they’re desperate to end homelessness, but because they’re worried about their members and tradies across the country running out of work. We had economists say the same thing last week – 49 where it was surveyed and said the top thing we should do is invest in social housing, because you can do it quickly, it can have a massive effect on the economy – every dollar you spend on building or repairing a house creates $3 in the economy – and that means a lot to a sector of the economy that employs a million people and is struggling at the moment.
KARVELAS: So, this issue that Labor has been raising, this backlog of social housing maintenance, what would a Labor Government commit to in this space? You say that should be the focus, what is the kind of sum of money you’re willing to put on the table in terms of trying to fix that situation?
CLARE: We said that the government should be investing half a billion dollars now, and they should work in partnership with the states. It’s not right when the Government says this is the state government’s responsibility. It’s the Commonwealth and the state government’s responsibility and we should work together here. So if the Commonwealth puts half a billion on the table and the states match that, that’s potentially a billion dollars to help to break the back of that hundred thousand homes right across the country that are full of mould or have got broken roofs, or have problems in these homes. I visited one in Riverwood in Sydney two weeks ago. It’s got mould throughout it. In one bedroom, I pulled back the wardrobe and it was just black with mould. Now this is a bedroom, PK, with three little kids sleep – one four, one three and one less than 12 months. The clothes in the wardrobe had mould growing on them, I could only think what was happening in in the lungs of those little kids. These things are a bloody health hazard but there are things that could be fixed here and tradies who need the work. That’s why we’ve said today, this is the sort of thing you could do right now and fix it almost instantly.
KARVELAS: Okay, zooming out, Labor’s focus today has been to say: okay, this is alright, everything that’s going on in the Budget, but you need to be doing more, right? The Government’s already going, the sum is like staggering, eye watering, stuff in terms of the sort of debt and deficit this nation is about to go into. If you think what they’re already doing is good, but you want to add all this on, how much debt you willing to go into?
CLARE: The point I’m trying to make is, it’s about the maximum bang for your buck. Of the 140-odd different industries in Australia, the housing industry, in terms of the multiplier effect it creates for the economy, beats every other industry bar one. For every dollar, three dollars goes into the economy. So, if you’ve got an economy that’s in the teeth of a recession, where unemployment is still going up – we’re told another 140,000 people are going to lose their jobs between now and Christmas and a sector where we know the number of homes that are going to be built over the course of the next 12 months is going to drop, then it makes sense to invest where you’re going to get the biggest bang for your buck. And this is one of them.
KARVELAS: I get your point but I’m saying you see that as additional spending that should be added on rather than giving me an alternative for something you’d pull out of the Budget.
CLARE: You’ve got a Government now, well, we got lectured about debt and deficit for a decade. I don’t think they can ever lecture us about that ever again. We got told in Parliament today the gross debt is going to reach $1.7 trillion. What we’re proposing here is something which is half a billion dollars, in the scheme of a Budget, we’re not talking about billions of dollars, but will make a heck of a difference. It would help to keep tradies working, and it would create work in almost every suburb, every town, big cities, small country towns. It would have the sort of effect that you want when you’re in the depths of a recession, which we are now.
KARVELAS: Are you worried that the focus on younger workers in the Budget could lead to more older Australians becoming homeless?
CLARE: We support wage subsidies. We called for the JobKeeper program and it’s obvious that the economy needs more help. As I pointed out a minute ago, you’ve got unemployment still going up, we got told in the Budget that unemployment is still going to be higher in four years’ time than it was at the start of this year. But it’s important that whenever you’ve got a wage subsidy, you build it correctly, so we want to look at the details. I am worried, for example, that if you’re in your 40s, or your 50s, and you’re on JobKeeper now, come March, you lose that, you might lose your job, you might end up back on JobSeeker and back on $40 a day, and then you’re competing for jobs with people who are under 35 who have got a subsidy there. So, it’s the sort of thing that we want to look carefully at.
KARVELAS: Labor wants subsidies extended to older workers. Of course, that costs more, right? The Government’s is targeted to people under 35. Have you modelled the cost of extending it to all workers?
CLARE: PK, be clear about what I said: we want to get more detail on what this means. History tells us we should be careful here. My old man lost his job in the recession in the 90s. I still remember his eyes, walking in the door, telling me and my mum and my younger brother that he lost his job. I was cleaning dishes at Sizzler back then, I became the main breadwinner for about six weeks. He was lucky, he got another job but a lot of his mates in the manufacturing plant that he worked at for over 40 years in Western Sydney didn’t get another full-time job again. So, let’s just make sure here that we look after all Australians. Young Australians have been hit hard, women have been affected by what’s happened over the last six months, extraordinarily hard. But we’ve also got to make sure that we don’t forget people in their 40s and their 50s and their 60s and their 70s.
KARVELAS: Okay, so, you’re saying that this is something you’re concerned about but you’re not making a commitment about wage subsidies across the economy for those cohorts of workers?
CLARE: We said we want to look at the details. I think Jim Chalmers has made the point to you previously, that we think it’s too early to be tapering down the JobKeeper payment. But on this new subsidy, we got it last night, we’ll have a look at the details over the next few days.
KARVELAS: Would you support the Government going further into debt to make the changes that you talked about?
CLARE: We’ve been consistent on this, whether it was in Government or in Opposition. We recognise that government has to make the decisions necessary to keep people from losing their jobs and from plunging an economy into a deeper and longer recession. The key here is about making sure the Government makes the right decisions along the way. And we’ve seen unfortunately over the last six months, the government has made a number of different mistakes. We want this government to succeed because we want to get out of recession. We want to get people back to work. But the key is getting those decisions, right and what we’ve proposed today is one of those ways to keep people working. And it’s a win-win. It would keep tradies working, and it would fix the homes of people who really need it.
KARVELAS: Do you welcome the decision to allow an additional 10,000 first homebuyers to access the home loan deposit guarantee scheme?
CLARE: PK, I called for this back in May. I did a press conference with Albo and said if you’ve got the housing construction industry going like this, 170,000 homes built last year down to as low as 125,000 this year, then you need to look at a suite of measures that are going to help to support that industry. It employs about a million people. If it goes down, jobs are lost. So back in May, Albo and I said uncap the scheme for first home buyers who are going to build a new home subject to the existing elements of the scheme. And the Government tut-tut and said no, no, we’re not going to do that. Turns out, they are going to do that except they’re going to cap it at 10,000. What I said on the weekend is scrap the cap. You got an industry in trouble. You should uncap this and provide it to any first home buyer who’s going to build a new home as long as they meet the other elements of the scheme.
KARVELAS: Is the government right to be limiting access to the scheme to new builds as opposed to existing homes?
CLARE: I definitely think it’s the right approach to be focusing on new builds. In the existing scheme 90% of people who access the scheme are buying an existing home. That’s not surprising. Most first-time buyers will buy something that already has been built. But at a time of recession where we’re trying to stimulate the economy, multiply the benefits of homebuilding – $1 spent equals $3 in the economy, then it makes sense to try to do everything we can to keep this industry afloat. So, focusing on newbuilds is the right approach, I just think they could scrap the cap.
KARVELAS: Okay, scrapping the cap. So, let’s talk about some other areas Labor might need to outline some details on. We know that Anthony Albanese outlined to the caucus and no doubt you as the Shadow Cabinet as well would have heard too first, that Labor is now entering a new phase where Labor will be outlining policy right after, you know, holding your cards close to your chest which I think most people kind of got. So, in terms of that new policy, what’s your view now? Do you think negative gearing needs to be reformed?
CLARE: PK I think I’ve answered this question 1000 times. We got flogged at the last election. It was one of a multitude of policies that we’ve said we’re going to review. And I think it’s stating the bleeding obvious, we’re not going to take the same policies to the next election that we took to the last.
KARVELAS: Do you still think negative gearing needs to be changed?
CLARE: What I do think is there’s still a challenge there, there’s still a problem for people getting access to the housing market. We’ve definitely got to try to do everything we can to make it easier for people to buy their first home. That’s why we support the program we just talked about, the First Home Loan Deposit Scheme, but there’s a there’s a lot more that we can do there.
KARVELAS: So, I just want to clarify, I know you’ve been asked but not by me and not like this. Are you saying that you think there are other ways to incentivise people to buy their first homes rather than touching negative gearing?
CLARE: I think there’s a lot of different ways to make it easier for Australians to buy their first home. The great Australian dream can’t be lost.
KARVELAS: Do you think there’s still a case for changing negative gearing?
CLARE: Well, let me give you the answer I gave you before.
KARVELAS: No, no, no. Give me a new one because I don’t think that answered it. Do you think there’s a case to change it?
CLARE: We will make clear what our policy is about negative gearing, whether we’re going to make any changes or not, closer to the next election.
KARVELAS: Do you think there’s a case to change it?
CLARE: What I’m telling you PK is there is more that needs to be done to help young Aussies and older Aussies to get into their first time. But this is a small part of a bigger problem. There are more and more Australians that are renting today in renting for longer, and lots of people that don’t have the security of knowing that they’re going to be in that place for more than 12 months. Think about mums and kids with families who might have to move and change schools. Think about older Australians, that if they get kicked out because the landlord wants to move back in, then they’re no longer close to their doctor. There are things that we can do to provide more security for tenants and there’s a lot more that we need to do to help Australians who don’t have a roof over their head at all.
We’ve been fortunate in the last six months that state governments have brought in people who have been homeless, put them in motels, put them in hotel rooms, but I worry that as the pandemic recedes, as hopefully it will, that those homeless Aussies are going to get thrown back out on the street. It should be a priority for national cabinet, we’ve got to make sure that if you could fix rough sleeping in the middle of a pandemic, you can you can do something about it in the longer term. And remember, PK, the greatest group, the biggest group of homeless Australians, are mums and kids, the fastest growing group of homeless Australians are older the women in their 50s and their 60s. There’s a lot more work that needs to be done there, too.
KARVELAS: Just another question on some of the detail. What about the decision to lift the purchase cap from $750,000 to $950,000? Do you think that’s a wise change?
CLARE: That’s the change for Sydney in that scheme that was announced on the weekend, PK. I think it does. It reflects reality that Sydney prices in particular, and it’s true in Melbourne as well, are high. It’s very, very hard to be able to buy a house, a home and land package for example, in Sydney for under $750,000. It’s one of the problems with the HomeBuilder Scheme. Remember the scheme that they announced back in June? In order to be able to get that $25,000 grant to help you with building a new home, you’ve got to buy a home for less than $750,000. Now that works well in WA, particularly with an extra grant from the state Labor Government, but it doesn’t work very well in Sydney, where it’s very hard to buy a home and land package for less than $750,000.
KARVELAS: Jason Clare, thank you so much for joining us.
CLARE: Thanks PK.
KARVELAS: Jason Clare is the Shadow Minister for Housing and Homelessness.