REGULATIONS AND DETERMINATIONS
Senator BRAGG (New South Wales) (18:48): I move: That the Treasury Laws Amendment (Help to Buy Exemptions) Regulations 2025, made under the Corporations Act 2001 and National Consumer Credit Protection Act 2009, be disallowed [F2025L01140]. I move this disallowance motion because it is a skewed priority for this government and this parliament to be pursuing. The reason I say it is a skewed priority is that, if you fail to have the houses constructed that Australians need to live in but simultaneously overstimulate the demand side with Canberra's gimmicks, you end up with a worse situation, and that is the reality that Australia's younger people are now living.
They're living that reality because the supply side has collapsed, and the numbers are very clear: 200,000 houses a year were completed in this country under the last government; now we are down to 170,000, and it doesn't look like we're going to improve. Then there are the five per cent deposits, which are not means tested, and the two per cent deposits with the shared-equity schemes and the other things.
These are all heating up that entry-level point of the market. What we see in the data that has come through in the first month of the operation of the five per cent scheme, which is now not means tested and does not have place caps, is the largest uptick in prices at the entry level in years. The reality is that first home prices are too high.
At the upper end of the market, those prices aren't moving. Our concern here is not the prices of the houses for the very wealthy or the people who can look after themselves. We want to have a country where a person can purchase a house on an average wage.
The problem with the inflation in the house prices at the entry level is that that is getting further and further away. No matter how well-intentioned some of these demand-side measures may be, they are counterproductive because they are making the dream illusory or impossible. In the case of the five per cent deposit scheme, we're looking at a 95 per cent mortgage, which is a very heavy amount of debt for people to be carrying.
That has brought forward the demand from others who would not usually use government programs. This disallowance motion relates to the Help to Buy program, which was announced by the government in opposition back in 2022. We said at the time that, under this shared-equity program, you'd perhaps be sitting around the Christmas table with mum, dad, the kids and Mr Albanese.
That won't be the case this Christmas, because the government haven't even been able to get the scheme in order. It's taking a long time to work through all the various issues they need to work through with the states. Even if you were relying on this being the great hope—the hope of the side, as it were—you'd be waiting a long time.
This disallowance takes us into some of the mechanics. One of the things the government has done to lay the groundwork for this scheme is to exempt the Commonwealth from the credit laws. The government's view is: 'Well, the credit laws are for other people.
They can be applicable to the banks, the private financiers, the credit unions and everyone else. They can all comply with the rules that we've set. Don't forget, of course, that we also say that we're against red tape, even though we've created 5,000 regulations in the first term and 700 regulations in this term.
But we hate red tape.' If you can keep up with it and you can fashion it into something that's coherent, then you're doing better than I am. The point is that exempting the Commonwealth from the credit laws means that there will be no checks and balances for the Commonwealth portion. The way this scheme works is that the Commonwealth will provide up to 40 per cent of the value of the house.
The other 60 per cent—or the other 58 per cent, given it's a two per cent scheme—would be provided through a loan from a bank or financial institution, and that bank or financial institution would have to go through the checks that the credit laws demand, such as the capacity to repay and the other capability assessments that you would expect to be undertaken.
But for the Commonwealth share there will be nothing. There won't be any checks. Mr Chalmers—Dr Chalmers, or whatever he calls himself—will send a cheque.
The carrier pigeons will take the cheque. It will be 40 per cent, and there will be no questions asked. The problem with that is that we're looking at a $6 billion scheme.
Maybe, when you're running deficits as far as the eye can see and you're covered in red ink, it doesn't matter. But I think it does matter, because the Australian people would look at that and say, 'Well, why would we be signing over our taxpayer funds without any sense of whether that money will ever be returned; why would we do that?' I guess that's really the point.
That's really getting to the heart of this disallowance. The coalition does not believe in or—and I put on record for transparency—support this program. We voted against this program.
This program was agreed to with the Greens, okay? We voted against it. I am surprised, noting our objection to the policy, that the government has decided to exempt itself from the credit laws and therefore will not be undertaking any due diligence as to how up to $6.3 billion of taxpayer funds will be spent.
I have to say that I probably don't have a great record of agreement with ASIC—in general, I don't think they've performed strongly—but I thought on this occasion they did make some constructive and important comments. They warned the government against doing this, and they made the point that the Crown is captured by the National Consumer Credit Protection Act for good reason.
If the Crown is giving credit, then it's credit like any other credit and should be assessed. But the government knows best, and they decided these corporate cops—I mean, maybe the government thinks, like we do, that they're pretty hopeless. That's fair enough.
But the government took the view that, 'Well, these people don't know anything; we'll just ignore them and put that piece of paper in the bin.' They went on their merry way, and they've exempted themselves from the credit act. When the taxpayer underwrites up to 40 per cent—well, they don't underwrite it; they literally provide the 40 per cent for the house. They're not underwriting it.
This is not a guarantee scheme. This is a funding scheme. They give the money over.
The person has got to get their conveyancer and get their lawyer, and they buy the house. The 40 per cent Commonwealth share is just transferred over. That's it.
All the best for the future! Hope for the best! It's a 'hope for the best' scheme.
The taxpayer is expected to hope for the best. Maybe the market will go up; maybe it will go down. Maybe something good will happen; maybe something bad will happen.
Maybe it will be foreclosed upon; maybe it won't be. Either way, there will be no checks and no balances. I think this is a reckless approach with taxpayer funds.
As I said, noting our objection to this scheme, we don't believe that the Australian people want to co-own their private house with the government. That's our objection. Putting that aside, if you were going to spend $6 billion, surely you would think, 'Well, we want to try and get some of it back; we should at least maybe think about our risk management plan, because it would be good if we could get some of that back in the future because then we can pay off the debt and we can pay for other services the community might want.' I think it is a reckless approach, and that's why I urge the chamber to think carefully about whether or not we want to be setting up a two-tier system.
Should we have a two-tier system? I think the answer is no. I think if you want to get into the business of providing credit then, surely—I think this is interference, by the way—there's got to be some kind of commitment to competitive neutrality.
If it's good enough for everyone else to have to comply with the tests that people would expect—the capacity to repay and everything else—why wouldn't the Commonwealth do that? Ultimately, this is a pattern of behaviour we've seen across the government—that there is a set of rules for the economy and then there is a set of rules which applies to the government sector, where the government will effectively act as a business in so many forms that they are prepared to write their own rules and prepared to set their own standards.
I think that the Australian people will judge this very harshly, if there are monies lost in this scheme. Let's imagine that that money is going to be expended over the term of this parliament. They've got $6.2 billion that they want to spend on the scheme.
By the way, this money is largely off-budget, but it's still public money. I mean, welcome to Australia 2025. When you look at the public finances, you've got no idea, really, what's going on, because there's a huge failure of integrity.
The Help to Buy funds have been borrowed by the Commonwealth. They're not on the main budget bottom line. They're borrowed by the Commonwealth, so they do hit the national debt number.
The taxpayer is taking on debt. They're borrowing this money. This money is then given to people for up to 40 per cent of their property.
The taxpayer will want to know what happened. We'll be asking questions about where that money has ultimately gone. What is the return over the course of this parliament on that $6 billion, if it is to be expended?
At this rate, maybe none of the money will ever actually leave Canberra, because this was a promise from 2022. It seems to be taking a long time. I make the point—and, Acting Deputy President, I compliment you on your attire.
The ACTING DEPUTY PRESIDENT ( Senator Ciccone ): Thank you, Senator. Senator BRAGG: The point of this disallowance is very clear. We do not believe it is appropriate for the Commonwealth to exempt itself from its own credit laws when it is providing money to people so that they can acquire a property.
I note again our objection to this scheme and put it on record for transparency, but I want to make it very clear that our objection in this regard is about competitive neutrality and the safety of public funds. Will there be any provision or any check that the Commonwealth will undertake to ensure that taxpayer funds are going to be returned in some form? Will there be any risk management plan at all?
It looks like there will be none, because the government doesn't want to apply any protection or any oversight on the up to 40 per cent that will be provided to people for the Commonwealth's share in the Help to Buy scheme. That is the question before the Senate today. The question is: should the Commonwealth be able to exempt itself from its own rules, and should taxpayers have to accept the fact that the government doesn't give a rats about $6 billion of taxpayer funds?
It's not going to do any checks. It's not going to bother to ask whether the money is ever going to come back. Ultimately, if the answer to the question is, 'The government of Australia doesn't care about whether the $6 billion will ever be returned,' then I think the government will be judged very harshly.
I urge the Senate to consider the disallowance very carefully and support it and force the government back to the drawing board. It should not exempt itself from the credit laws. It should, on this occasion, listen to the advice of its corporate regulator, which has said to it that you should not exempt the Crown from the credit laws.
If the Crown is providing credit then like any organisation it should be subject to the same obligations, because, of course, the Crown's money is not the Crown's money; it actually belongs to the Australian taxpayers. So I urge the government to reconsider, and I urge the crossbench to vote for this disallowance today. The ACTING DEPUTY PRESIDENT: I assure the Senate that Senator Bond is not in the chair this evening!