Television interview - News24 Afternoon Agenda

TOM CONNELL, HOST: Joining me live now, our panel, Assistant Minister to the Prime Minister, Patrick Gorman, and former Liberal MP, Jason Falinski. Thanks both for your time. We heard Tanya Plibersek touting the 5 per cent deposit scheme, Patrick Gorman.

Some stats on it today, so 10 per cent of individuals in it are $190,000 plus per year and the highest couple $675,000. Does that couple really need help buying a house? PATRICK GORMAN, ASSISTANT MINISTER TO THE PRIME MINISTER: We wanted to help first home buyers across the board around Australia.

We were really open about getting rid of some of those caps that have been put in place in arbitrary ways. The reality is - : What do you mean arbitrary ways, what's arbitrary about it? : When you had smaller schemes that have been - existed in the past, you didn't have as high threshold. And we were seeing a range of people not able to get into the housing market.

We are happy to be supporting first home buyers. The vast majority of people using this scheme are on very average incomes and it is helping them into a property market they were otherwise priced out of because they had to get that 20 per cent deposit. Now - .

So, you’re not worried at all about those sort of figures, being about 10 per cent? You said 'vast majority,' but 10 per cent on are in the top marginal tax bracket. Do they need help getting into the housing market? : We are really happy to be helping all first home buyers into a home of their own.

The reality is that the people who this is helping are people who work for an income, work for a living. That is where they get their income from. It is helping people get into the housing market.

It has helped people in my electorate. It is about 200,000 people across the country - are benefiting. We see more benefit in the future because again, young people won't have to save up those very large deposits.

And of course, the default rates are incredibly low as well. : Jason, your mate Andrew Bragg's had a crack at this scheme a bit. I wonder if that means the Coalition won't go near again its previous policy of the mortgage tax offset plan that was proposed for first home buyers earning up to $250,000. Was that a bit of largesse you should steer clear of in the future?

JASON FALINSKI, FORMER LIBERAL MP : Tom, I think that we should steer clear of all government largesse, frankly. And the problem with the 5 per cent scheme is that number one, it's not means tested and it's not targeted. And we've seen a lot of government programs that have gone massively over budget because of the fact that they haven't been well targeted.

And the second thing is that these are exactly the sorts of schemes that were introduced in the United States in the mid-90s to encourage people into home ownership, which ultimately led to the Great Recession of 2008. So, these things are never a good idea. And frankly speaking, we should end this policy as quickly as possible. : I think I ask you this about every six months to a year, Jason.

So, this is the moment. You've got a reprieve after this. Where are you at?

You going to run next election? : Tom, with your encouragement, who knows what might happen. : My encouragement. It's up to me, is it? : Well, you and Pat keep, you know, needling me, encouraging me to do it. I'm not sure that it's not a trick, to be honest with you.

I'm not sure if you two aren't goading me into the briar patch, but anyway, I’ve got another six months. : Ask you in six months, that's where you're at? : Yep, I'm off now. Yep, I'm out of here now. . So, you'll tell us in six months? : No, you'll ask me again in six months.

I think is what will happen here. : Okay, sure. I mean, you're not answering my question. You're clearly still a politician.

Look at this evasiveness. : Do you know what, Tom? If I decided, if I ever decided to go back into public life, I will make sure that you and Pat are the first two to know - after my wife and daughter. So, the third and fourth. : Wife, daughter, fine.

Can you make me between Pat? He’s a shocking gossip, it'll be everywhere before we get it on News24. : I agree, that's a good point. That's a good point.

Okay. I'll give you 24 hours before I tell Pat. : August 3rd. Okay, we'll mark that down, February 3rd.

Look forward to finding out, or at least asking you again. Pat, what about big rent increases? So, does the Government have a watch on this?

They're up significantly. We saw the Treasury forecast of, what was it? $2 a week.

Are you watching this to see unintended consequences of your changes on tax affecting investment on housing. : What we know for a period of time is that we have seen rents increasing and we have said for a period of time that our approach when it comes to making sure that people can get into affordable rentals is to do the work we've been doing for some four years with the Housing Australia Future Fund.

To get more supply in, in affordable homes and in social housing. That has been our approach. And then when it comes to the work that we've done with the states and territories around getting those 1.2 million well-built homes around Australia by 2030.

We continue to do that work as well. That is the best approach. : Is it a watch that, if they're going up and you feel as though the impact could be coming from your tax changes, that you go, 'well, we didn't mean this to happen, what can we do about it'? : Look, Tom, there will be people who will come up with different arguments every single day of the week as to why the very important and necessary tax changes that we made in May should not go ahead.

I support those changes. They have been good for first home buyers. They have been good to make sure that we get some of the distortions out of our tax system.

And again, when it comes to making sure that we have affordable rentals, we want to make sure that we have more housing supply in Australia. I was at the Pier Street development, which is an affordable housing development in my electorate, with the Prime Minister and the Premier of Western Australia just a couple of months ago. That is putting new supply, backed by our Government's programs, in so that more people can get affordable rentals. : Luckily, Treasury never gets its modelling wrong, so it'll all be exactly bang on.

Jason, I know you - you've bombarded me a bit close to the program, with all these stats on renting. I did ask for it, but, you know, bit more notice next time. Let me dumb it right down, as I do most complex topics.

For whatever's happening right now, the tax changes haven't actually taken effect yet, so can you sheet home the rent increases to what Labor's just done and hasn't taken effect yet on housing investments? : Well, the honest answer to that is: we'll see. But what Domain basically said was that we've seen a 6.4 per cent increase in rents over the last 12 months.

Almost half of that happened in the last quarter alone. And in that quarter, only about half of that quarter had the effects of the Budget in there. So, what they're kind of saying is ‘we think that – : - was it the May Budget occurred in the middle of the quarter.

You can't directly say the day the Budget was handed down, rents went up from an effect that won't come into place until the middle of next year. : Tom, to be honest with you, we need more data. That's absolutely right. However, what the economists are basically looking at is this event - there is correlation between the announced tax changes and a massive jump in rents.

We will need to look over the next two quarters to see if that continues. And correlation is not causation. But at the moment there is a strong correlation between the change in policy and the increase in rents. : I'm going to end that there because we're sort of agreeing and that's rare for us, Jason.

So, let's just hold that precious and move on to the next topic. I'll start with you on this, Jason - One Nation Victoria, they've had their launch today. Warren Pickering might be about to become a household name, or maybe not.

He's the lead candidate. How will they go? How will they go in the Victorian state election and what will the impact be on the future ones, including the federal election? : Look, Tom, between the three of us, I think this is going to be really interesting.

Because I think One Nation has largely been about Australians expressing their frustration with the current political system, how they think Australia is going - the direction that Australia is going in. And voting for One Nation has kind of been like a free vote. It wasn't going to change the government in Farrer, Malinauskas was unbackable odds to win in South Australia.

But Victoria is the first election where it really matters. So, if their numbers hold up in Victoria, as opposed to what I think we've started to see, which is a bit of a surge to the Liberal Party in Victoria. But if One Nation's votes hold up in Victoria, then yes, this is a real realignment in Australian politics, and it needs to be taken seriously. : I like the way Jason says ‘between the three of us’, I hope he knows that we're being broadcast around the nation.

Patrick is the watch for - : Now you tell me! : If you knew, if you thought we weren't Jason, we would have had a lot more stronger views. We both know that. Very quickly, Pat, the outer suburbs must be the watch for Labor, in terms of the One Nation influence in particular. : Labor fights for every vote, and I've always said that you've got to respect your opponent - or in this case, opponents - in both the Liberal Party and One Nation.

I think you see in Victoria, as you do before every state election, there's a lot of people fighting it out for the votes of the Victorian people. Of course, I back Ben Carroll and his team to do the hard work and persuade people that another term for Labor - which have done really important work in terms of making sure that you've got more infrastructure for people in Victoria.

The work that Ben Carroll's done when it comes to investing in education, he's been a great partner for us there. And when it comes to One Nation, all of those names that you just rattled off in Victoria, they're all riding on Pauline Hanson's coattails. : I'm going to end it there. I must admit, yeah, it is spending, Jason.

So, let's end on that. We've been having a crack at you lately, Jason. I'm going to end on agreeing that it is spending.

But Pat does love saving investing. Subscribe and stay up to date Connect with us PM&C acknowledges the traditional owners and custodians of country throughout Australia and acknowledges their continuing connection to land, water and community. We pay our respects to the people, the cultures and the elders past, present and emerging.