Interview with Sally Sara, RN Breakfast, ABC Radio

Subjects: tax reform, housing, multiculturalism, Coalition, One Nation, migration Sally Sara: Well the federal government’s capital gains tax and negative gearing changes are expected to pass parliament this week, after Labor announced a deal with the Greens yesterday. As part of the agreement the government will end an exemption that allowed self‑managed superannuation funds to borrow money to invest in residential property, while the proposed overhaul of the National Disability Insurance Scheme has been delayed until at least August.

Clare O’Neil is the federal Minister for Housing, Homelessness and Cities and joins me in our Parliament House studio. Minister, welcome back to Breakfast. Clare O’Neil: Good morning, so good to be with you and your listeners.

Changes to the capital gains tax and negative gearing will now pass the parliament, adding to your suite of housing policies. Will Australians notice an improvement to housing affordability by the time of the next election or is that too soon? Well, it’s a pretty important day because the government has made an agreement to pass the biggest reform to housing and taxation that our country has seen for a generation.

You mentioned housing, this is not just about housing, this is about a tax cut for every single Australian worker. It’s about more fairness in the housing market, 75,000 rental households becoming first homeowners, and it’s about a fairer tax system for Australia. What I hope your listeners see and hear from our government is a steadfast commitment to make a difference to housing in this country.

We have a broken housing market that is hurting millions of people around our country, and that is why we have such a massive agenda that we are delivering talking the problem – So returning to the question. Will Australians notice an improvement to housing affordability by the time of the next election? Well I think we’re already seeing change in the market, Sally.

And for everyone who is watching the market as we go week to week, you know, it’s a long time since I’ve picked up a Sunday newspaper and read article after article talking about first‑home buyers winning at auctions, but that’s what’s happening, and that is happening not only as a result of the government’s tax changes but as part of that. We’re also seeing a lot of auctions where the properties are being passed in, they’re not successful auctions.

What’s your read there? Look, I think the housing market’s cyclical in Australia, a very uncontroversial comment. We see periods of very significant house‑price growth and then we see the market make a correction, and that’s what we’re seeing at the moment.

So we’re in a market correction now? That’s correct, I don’t think that’s controversial at all. We’ve just been through what has been extremely high house‑price growth in the period from COVID, basically before COVID to today.

House prices have gone up just in that time by more than 50 per cent, and we are seeing a correction on that. But the main game here, Sally, is who gets to win these auctions and who gets to own these homes. Our government is reacting to what we’re seeing in Australia today, which is home‑ownership rates for young people falling through the floor.

Let’s not beat around the bush here. We’ve got a broken housing market that in the year that I was born was actually allowing ordinary people to own their own homes in this country, and that is changing. Not just changing and hurting young people, but changing what fairness and equality mean in Australia, and that’s why the government is so committed to this.

So what are the effects of your policy so far? If you’re saying we’re seeing more first‑home buyers being successful in these auctions, but we’re also seeing increased pass in rates, are both of things as a result of your policies? Well there’s a lot going on in the housing market at any one time.

If we look at the – More first‑home buyers, is that because of your policy change? Certainly, of course it is. And pass in rates, is that because of your policy change?

Well I think what you’re talking about there is, you know, modelling from the government that shows that the house‑price impacts of what we’re doing are important, meaningful but moderate, about a 2 per cent slowing of growth. And, Sally, just to remind you, house prices were already declining in Sydney and Melbourne before the Budget, so let’s not pretend this all to do with the taxes.

But the clearance rates are hitting levels not seen since April 2020, COVID times? So, Sally, there’s a lot going on in the housing market at any one time. The main driver of what goes on in that market over the long run is how many homes we build and how many people need a home.

In this short run it is what goes on with interest rates that directly and immediately affects how much borrowers can bid in an auction. But the tax system is a part of this. So again, I just repeat to you, the government has modelled the impact of our tax changes.

They are going to lead to somewhere around a 2 per cent slowing of growth and other major models have basically backed that in. So it’s not the main driver of what’s going on in the market. The main thing that these tax changes do is not adjust house prices, it tells us who’s going to win at the auction.

We are already seeing more first home buyers in the market, and that is a very, very good thing and a very important thing for our country. You’ve done this deal with the Greens in exchange for stopping self‑managed super funds from borrowing to purchase residential properties. If this means fewer people invest in residential property, will it add to the 75,000 new homeowners that Treasury estimates will be created by this?

Well the change that we’ve agreed to with regard to self‑managed super funds is a very small part of what goes on in the overall housing market right now. So just to give you a sense of the numbers, in 2024 I think there was something like 4,300 residential property transactions that related to this kind of borrowing in self‑managed super. That’s in the context of a housing market that does more than half a million property transactions each year.

So it’s a very, very small part of what’s happening here. But the Greens have made a good point about this. There’s been a number of inquiries that have said that this change should be made.

They’re not focused though on the housing piece; they’re really focused on the risk to the superannuation system. You’re listening to Radio National Breakfast; my guest is the Housing Minister Clare O’Neill. Yesterday the Opposition Leader Angus Taylor refused to say whether or not he supports multiculturalism, although later Liberal MP Aaron Violi said the party did still support the idea.

What did you think of Angus Taylor’s reaction to those questions on multiculturalism? If you can’t stand up and defend multiculturalism in our country you should not be the leader of a mainstream political party in Australia. We are the proudest and most successful multicultural country in the world.

I am so sick of watching the Liberals and the Nationals get eaten alive by One Nation. And they are inert, they are cowardly, they are frozen. When are they going to stand up and fight against the absolutely outrageous nonsense that One Nation are spreading right around this country?

You know, Pauline Hanson says there are no good Muslims in Australia. Why can’t Angus Taylor stand up and call that racism? Because that is what it is.

Now I’m seeing this again and again and I just say people elect us to parliament to lead, and I want to see some leadership. I don’t want it just to be left to Labor to defend Australian values against what One Nation is doing to this country. Angus Taylor and the Nationals need to stand up and start punching back.

At the same time, this Lowy Institute poll that was released yesterday showed that Australia’s attitudes towards migration are shifting, with a record 55 per cent now saying the number of migrants entering the country is too high. How do you get the balance here between defending multiculturalism but also recognising that there are concerns from the Australian society about the number of migration now?

Sure, sure. And as a country we should be capable of having a very important policy conversation about migration in this country, a legitimate and important conversation without resorting to the kind of racism and division that we’re seeing from One Nation. It should not be beyond us as politicians to manage that.

Now, migration is a very important policy topic for the country. Migration has been too high and that is why our government is bringing migration down. But let’s not say that that’s an excuse for the kind of division and racism that we are starting to see emerge as what is deemed to be a normal part of the public debate.

I mean we had, you know, Barnaby Joyce say something the other day about how people bidding at auctions are being beaten by people who look like they just arrived in Australia. Like when I got elected to parliament a politician would not have got away with saying something like that. But this is what we’re seeing happen to the political debate in this country, and I really want to see Angus Taylor, I want to see the Nationals standing up, denouncing these kind of ideas and defending what’s great about our country.

Last week One Nation leader Pauline Hanson said high migration levels are adding to housing pressures, do you agree? It’s absolutely a piece of the puzzle here. So migration is of course related to how many homes that we need in our country.

What we need to do is bring migration down and bring our home building numbers up, and that’s exactly what our government is doing. But really important that we not overstate the effect of migration. Can I just remind Australians that as we went through COVID our population dropped for the first time in 70 years and at that exact same time house prices went through the roof.

It is not the only driver, it is not the most important driver, but it is relevant. So what does the government need to do? Bring migration down, build more homes.

That’s exactly what we’re doing. Clare O’Neil, thank you for joining me. Thanks so much, Sally.

Clare O’Neil is the Minister for Housing, Homelessness and Cities.