Interview with James Glenday, News Breakfast, ABC

James Glenday: Minister, welcome back to News Breakfast. Clare O’Neil: Good morning, James. So, good to be with you and your viewers.

Now off the back of the Budget, there are some analysts out there predicting falls in the Australian housing market. After years of increases, would falling house prices for a bit be a good thing for the country? Well, James, the impact on house prices of the tax changes in the Budget is in the Budget papers.

What it says is that this will have a modest, affordable affordability effect on house prices in Australia. But at the end of the day, the thing that is driving house prices is actually not our tax settings. It’s a fundamental mismatch between how many homes we’re building and how many homes we need.

But if I just step back for a quick second, I think your viewers can see we’ve got a broken housing market in this country. Our budget is all about making sure that young people can get ahead and preferably do so in a home of their own. So these changes are difficult but incredibly important for addressing the housing challenges the country faces.

They’ll mean about 75,000 rental households become first home owning households. And don’t forget, too, that we’ve got budget measures that will help us build more desperately needed homes for our country. Yes, thank you for reminding us of that.

I just want to take you back to this price question, though. In the Budget papers, as you alluded to, Treasury saying that this will lead to slower growth by a couple of per cent. But with the greatest respect to Treasury, they don’t always get it right.

Some other people are predicting this could be much more severe, maybe up to 10 per cent lower this time next year. Would that be okay as far as you’re concerned? Would that be the price that we need to pay as a country to get more younger people into homes?

So, James, that’s not what most economists are saying. Most economists are in the same ballpark as the Treasury numbers. And I don’t want to just repeat myself for your viewers, but just understand the tax settings are one of a very large range of complex things that go into house prices in our country.

One of the things that is most decisive on house prices is what our interest rates are doing as a nation. But the fundamental issue and the reason we have a 40 year affordability challenge in housing in our country is because we haven’t been building enough homes. So, the government is tackling this from every angle – building more homes, getting renters a better deal and getting many more Australians into home ownership.

We have had you on this show multiple times over the past year and until pretty recently you were defending these property tax breaks, negative gearing and capital gains tax. At what point did you change your mind? Not trying to get a gotcha question here, I’m just curious, at what point did you go, we’ve got to break a promise here, we have to change direction?

Yeah, look, I think it’s becoming increasingly evident, James, when we look at home ownership rates for young people. I often get asked what keeps me up at night as Housing Minister and it’s this – a young low income couple in our country is half as likely to own their own home in Australia today than they were in the year that I was born. And that tells us that this is not just about the families out there that are seeking financial security, this is actually changing Australia in ways that are very negative.

We don’t want to live in a country where the only way you can get into your own home is because you inherited wealth from your parents. That’s not Australia. So, I think it became increasingly clear that we’re going to have to make some big bold moves on housing to actually change the system.

Now we’re doing that in a whole range of ways. This is part of a plan that we started in 2022. But one thing I do hope your viewers see from this is we are dead serious getting on top of this.

We’ve had for decades in this country, Australian Governments shirk their responsibilities for housing, which reached its absolute nadir under the Abbott, Turnbull, Morrison governments. We’ve come in and said we are going to actually tackle this properly. And part of that’s been the big changes that were foreshadowed in the Budget just a few weeks ago.

Part of the reason, undoubtedly, that negative gearing and capital gains tax have been so popular among investors, among people who have spare money to put away, is that income tax rates in this country are pretty high. Now I’m sure you’re going to mention the fact that you are trimming income taxes just slightly in the Budget, but that does nothing to address the broader issue of bracket creep.

Are you looking at bigger income tax cuts to address this issue of bracket creep in the near future, would that help improve intergenerational inequity and make it easier for you to sell these changes to the public? Look, there’s a lot that you’ve said there that I agree with, James. And one of the big issues that we’re tackling in this Budget is that we’ve got a tax system which taxes workers too heavily and capital too lightly.

And we are trying to rebalance that. That is why the changes to negative gearing and CGT that we’re making in the Budget that will make housing fairer for Australians are going straight back to the Australian people in tax cuts. 13 million Australians will get a tax cut in this Budget. That is the fifth time that our government has cut taxes.

And I think the Treasurer has been pretty clear and direct with Australians, James, that we’re not done on this yet. We do want to rebalance this tax system because if you are at home right now and you’re a wage earner, we do believe that you’ve been treated unfairly by the tax system and we are moving to change it. Just on the issue of supply.

Building more homes, most economists agree, is the best thing that we can do to put downward pressure on house prices, get more younger people into homes. At the moment, that project is being hit from all sides. You’ve got the conflict in the Middle East which is driving up construction costs.

You’ve also got a big surge in interest rates as well. How at risk are your government’s targets for homebuilding in this country? Because at the moment, most people think we’re not going to get anywhere close.

So, it’s a really important question and you’ve got right to the heart of the matter here, James. The reason we’ve got a 40 year old housing crisis in our country is because for that entire period we haven’t been building enough homes. And that’s a problem that’s been getting worse over time, not better.

You’ll know that Australian Governments didn’t really do much about this for a long time and our government changed that. In 2022, the Prime Minister set this hugely ambitious target with states and territories and the housing sector to try to build 1.2 million homes across the country. Now that is a hugely bold target.

It would require us to build more homes than we’ve ever built in a year and to do it for 5 years running. But we believe that boldness and ambition is exactly what is required here. We’ve got millions of people around our country who are hurting because of a long running housing crisis and they need a government that’s going to actually be ambitious.

Now we’ve got some really good news in recent months on what’s going on in housing construction. New home starts in Australia are up 26 per cent on where they were a year ago. But we have got a long way to go on this and I want people at home to see that every budget, every election, our government is cracking off the next set of housing problems facing the country and trying to resolve them.

Because we can’t just stand back and let this run on forever. You know, it’s not going to get better if we do nothing as Angus Taylor wants us to do, it’s actually going to get worse and I don’t want that to happen. Yeah, it is probably the big issue for Australians, certainly under the age of 45.

Just before I let you go, Minister, I’ll take you back to an issue that you would have dealt with in your previous portfolio of Home Affairs. Authorities have been planning for, I think about 12 years for the return of the so‑called Islamic State brides and children. There is wall‑to‑wall coverage you will have seen again today as the second group returns home to Australia.

What’s your message to Australians watching this morning who might feel just a little bit worried about their return? Look, the Prime Minister has been really clear about this. We did not want these people to return to Australia.

They made a decision to join a death cult which had as its primary aim the destruction of our way of life in this country and they do need to be accountable for that. That being said, our national security agencies, as you mentioned, have been observing this group for a very long period of time. In fact, well before they ever, you know, thought to return to Australia.

And I do have a lot of confidence in our national security agencies. We have some of the best intelligence and police agencies around the world who work for us here in Australia and get out of bed every morning and try to keep us safe. And I’m confident in the work that they do.

Housing Minister Clare O’Neil, we do appreciate your time from Canberra today. Great. Thanks, James.