3 July 2017
Transcript - #2017133, 2017

Interview with Stan Grant, 730

Subjects: Housing market; Labor’s proposal to smash the housing market and drive up rents; Liberal Party.

STAN GRANT:

Treasurer nice of you to join us. House price rises are softening. That is obviously good news for some people. It’s a very different market around Australia. Overall, what are we seeing and why?

TREASURER:

What we have seen particularly this last quarter is house prices, say, in Sydney from around 5 per cent growth down to around 0.8. This was the quarter where we introduced these new regulation changes for the banks which meant they were trying to limit their growth in interest-only lending, which predominantly is what many of the investors do. We saw that hot part of the market, particularly in Sydney and Melbourne for investors, we have seen that cool off. It's been very much a scalpel, a calibrated approach. What we have to be careful about is the exact point you have made Stan - while the market has been running hot in Sydney and Melbourne, that isn't the case in Perth, Adelaide and Brisbane and Darwin, in particular. You have to get a balanced response that doesn't cause more problems somewhere else, than the problem you are trying to fix on the east coast.

GRANT:

I suppose you are referring there to the Opposition's approach, which has been to attack taxation...

TREASURER:

Negative gearing and capital gains tax.

GRANT:

...tax, yes. One of the things that you have pointed out here is we've seen an increase in owner-occupiers.

TREASURER:

That's right.

GRANT:

If, indeed, negative gearing was the approach, that would also see an increase in owner occupiers with fewer investors wouldn’t it?

TREASURER:

No that would be taking a sledgehammer to the property market, you wouldn't have a safe landing, which is what we’re moving towards, you’d have a crash landing, or a hard landing. That would have flow-on effects into the economy more broadly. You have a quarter of the investment property, the rental property in this country, owned by mum and dad investors. Now, you need people to own rental stock, otherwise people's rents go up. And this is why that has always been - we think - a very ill-considered way to deal with issues that are happening in the Sydney and Melbourne markets. You don't go and take a sledgehammer which then affects everybody and particularly in places like Perth or Darwin and Adelaide. So, this is a much more calibrated, much  more clever way, and we're getting the results, I think, as the latest data is confirming.

GRANT:

Another concern is mortgage stress. We know it takes more of the pay packet and longer to pay off a mortgage. Is that still a concern for you?

TREASURER:

It is. The other thing that is concerning me even more these days - because with interest rates being low we have seen less of that - what we have seen more of, though, now is increasing rental stress, particularly for people on low incomes. This is why in the Budget we announced a comprehensive housing package, which just didn't deal with first home buyers and the tax cut for them to save for their first deposit or downsizers later in life, but new incentives for development of affordable accommodation, affordable rental accommodation. In the social housing sector, we extended the homelessness funding permanently. It was a comprehensive package, and rising rents, particularly for those on low incomes, we think, is a concern.

GRANT:

You have been able to put some positive spin on the news we have seen today. Here's the problem - given the political climate that we are seeing - you know the question that's coming - the political climate we're seeing right now - Tony Abbott speaking out, Christopher Pyne last week, the questions about leadership, internal dispute - is the public really listening?

TREASURER:

They are not listening to those sorts of things.

GRANT:

Well, the opinion polls would tell us they are. We continually see that people are frustrated with what they see from politicians, and the old adage in politics – and you know is - disunity is death. We saw that in Labor. Are we seeing a rerun?

TREASURER:

No. I think we're seeing a lot of dust being kicked up around these issues. I don’t think Australians are particularly interested in them at all, I think Australians are interested in housing costs, electricity prices. On Saturday, I was sitting there in the main street of Gymea, doing my usual clinic, in a mobile office, and people wanted to talk to me about electricity prices. They weren't interested in the issues you have raised.

GRANT:

At the same time the Prime Minister was talking about his own future, saying that he would step down, leave politics, if he lost his job. The polls are saying he will lose his job at the next election. He may not last that long.

TREASRUER:

People can speculate as they like. We have a plan to take us to the next election and beyond and it’s an economic plan, whether it is putting downward pressure on rising houses costs or electricity prices, guaranteeing Medicare and the essentials that Australians rely on. A generational

achievement when it comes to real needs-based school based funding, affordable child-care which we were able to get through the Parliament, bringing the rule of law back to the building sites, where John Setka and his mates just want to run over everybody. It's been a real year of achievement. That is what the Prime Minister was talking about on Saturday. Journalists were talking about something else.

GRANT:

You’d have to admit it’s also been a year of this constant sniping and the questions about Tony Abbott's future. How do you bring an end to that? Is it time for Tony Abbott and Malcolm Turnbull to sit down and work their way through this? Is it time for Tony Abbott to be brought back to the frontbench?

TREASURER:

Stan, it’s not about Malcolm or and it’s not about Tony. It is about people watching this program and the 24 million Australians, which is what the Prime Minister is focused on. I'm not interested in the confected soap opera which is being endeavoured to be portrayed and neither is the Government. The Government is focused on the things I'm talking about. Electricity prices is a real issue for businesses, it’s a real issue for jobs, and a real issue for householders, people on lower incomes and that’s why the Government’s effort is focused on solving these hard problems. The personalities - frankly - just don't care. Just don't care.

GRANT:

Before you go, I do want to ask you a question about the head of Border Force, Roman Quaedvlieg who’s now taken leave. The official statement is - this is a matter that's under consideration. I appreciate it's not your portfolio. You were previously Immigration Minister. As a senior member of the Government, can you let the public know what this might be about?

TREASRUER:

I can't. I don't have any further information than what you have. It isn't in my portfolio. So that's a matter for that portfolio to deal with. The announcement has only been made in the last few hours.

GRANT:

You have had no contact with the Minister? No-one's discussed this at a Government level, you know nothing at this point?

TREASURER:

There is no information I can add to what you have there. What I do know, though, is this - Australia under the Turnbull Government has the strongest border protection laws and strongest border protection and Border Force officers of anywhere in the world. It stopped the boats. It's keeping our immigration under control and giving Australians great confidence about our immigration program. That is what Border Force is doing. And Border Force will be doing that tomorrow morning, they were doing it this afternoon, they were doing it when we stopped the boats and will keep doing it under a Turnbull Government.

GRANT:

Treasurer, good to talk to you.

TREASURER:

Thanks a lot.