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The Vote Panel: Everyone is promising houses

As we close in on election day, housing affordability has become a central issue of this campaign. People’s mortgages are going up and it could put upward pressure on rents.
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As we close in on election day, housing affordability has become a central issue of this campaign.

First, Labor announced its solution, the Help to Buy scheme and then just a few days later, the Reserve Bank increased the cash rate from its historic low of 0.1% to 0.35%.

People’s mortgages are going up and it could put upward pressure on rents.

So, how are cost of living pressures factoring into the decision voters will make in just two weeks time?

Today, to analyse all the latest events, we’re joined by:

Chief political correspondent for The Saturday Paper, Karen Middleton,

Columnist for The Saturday Paper, Paul Bongiorno, and

Election analyst from The Tally Room, Ben Raue.

 
Read Transcript

[Theme Music Starts]

 

RUBY:
From Schwartz Media and 7am, I’m Ruby Jones and this is The Vote.

 

As we close in on election day, housing affordability - has become a central issue of this campaign.

 

First, Labor announced its solution - the Help to Buy scheme…

 

Archival Tape -- Anthony Albanese:
“A Labor government will create a new Help to Buy programme, a national shared equity scheme that will provide an equity contribution from the Commonwealth for 10,000 aspiring homeowners on low and middle incomes. Each and every year.” 

 

Archival Tape -- Scott Morrison:
“Labor has a plan where they want the government to own your home, and not only that, you're last in line when it comes to your home. The bank has the first call over it, the government has the second call over it, and you come last when it comes to your own home.” 

 

RUBY:
And just a few days later, the Reserve Bank increased the cash rate from its historic low of 0.1% to 0.35%...

 

Archival Tape -- Josh Frydenberg:
“We don't have an axe to grind with the Reserve Bank. They are independent of government.”  

 

RUBY:
Which will have significant ramifications for those with mortgages …

 

Archival Tape -- Jim Chalmers:
“The defining issue of this election is the full blown cost of living crisis which has emerged on the Morrison Government's watch.” 

 

RUBY:
So, how are cost of living pressures factoring into the decision voters will make in just two weeks time?  

 

Today, to analyse this - and all the latest events on the campaign trail, we’re joined by:

 

Chief Political Correspondent for The Saturday Paper, Karen Middleton, election Analyst from *The Tally Room*, Ben Raue, and Columnist for *The Saturday Paper*, Paul Bongiorno.

 

It’s Friday May 6. 

 

[Theme Music Ends]

RUBY:
Hello, everyone. How are you? Hi, Karen. 

KAREN:
Hi.

RUBY:
How are you this week?

KAREN:
Good, thank you.

RUBY:
And, Paul, welcome.

PAUL:
Yeah, hi there, Ruby. Good to see you.

RUBY:
Are you well? 

PAUL:
Well, I'm well. Getting anxious by the moment.

RUBY:
No need for that. And Ben, welcome.

BEN:
Hello.

RUBY:
So, Paul, this week the Reserve Bank lifted the cash rate for the first time in more than a decade. And what that really means is that people's mortgage repayments will go up and of course, renters will be impacted, as well as landlords compensate for having to make bigger repayments on their loans. There's no doubt, is there, that this is going to hurt for a lot of people? 

PAUL:
Well, there is no doubt. For one thing, Australian households are the most indebted in the world. That's just to start with. Now, I do notice that the Prime Minister and the Treasurer are saying that people are well prepared and 70 to 80% of them, depending on the bank, are 1 to 2 or even three years ahead on the repayments. That's all good. But of course those of us who've had mortgages in the past know that it takes a long time to pay off a mortgage, and if interest rates are ratcheting up, it gets harder as it goes. And there's no doubt that is going to happen. And there was a figure this week based on analysis of the Australian Prudential Regulation Authority that showed almost 300,000 Australians have borrowed six or more times their annual income or have a loan to value ratio of more than 90%. So it's certainly going to hurt those people. 

RUBY:
And Ben, do we have a sense of where those people actually live? Because, as Paul said, Australian households are the most indebted or amongst the most indebted in the world. But do we know where those households are and which states? Therefore, this issue will be the most pressing?

BEN:
I mean, I'm sure there's plenty of them in every electorate, but there is a concentration that you do find. We used to talk about the mortgage belt, the suburbs, kind of on the outer edge, the places where people are newly establishing, buying houses. I don't think it would exclusively be there, of course, because there's a lot of infill now, people buying older houses and they still need to take out loans for that. But it's, it's kind of a famous part of Australian politics that that kind of outer edge to places like Lindy's and MacArthur's in Sydney this election, places like La Trobe in Melbourne, maybe Casey, two kind of outer suburban fringe seats are the ones I think that are particularly worth watching. 

KAREN:
Ruby, interestingly, The Sydney Morning Herald had a look at this this week and they also included Reid, which is a highly marginal Liberal seat that looks like it could go to Labor. They included Dobell, which is further up towards the Central Coast, and interestingly they included Wentworth, which is a very, we thought, well-heeled seat in the eastern suburbs of Sydney. So maybe people are heavily geared there as well because of the low interest rates. And you know, all of these seats are in play at this election. So if you expand that to the seats that Ben listed in places like Victoria and in other states, the interest rate rise is really going to have potentially a big impact in this election campaign.

PAUL:
The government consoles itself by saying that, well, people won't blame us. They know that the Reserve Bank is independent and it makes the decisions, but that opens up all sorts of other arguments. And historically even going back to the 2007 election, the wisdom is that if not all voters blame the government when interest rates start rising, a hell of a lot of them do. 

RUBY:
Well, I did want to ask about that, because the coalition, they're very much trying to make the case that interest rates are not political, they're independently set by the Reserve Bank. And then also that there are these international pressures at the moment, the war in Ukraine having an impact. So do you think that that argument is working? Do you get the sense that people are willing to accept? I suppose firstly that this is not something the government controls and secondly, that this rise was actually necessary to counter inflation? 

PAUL:
Well, the Reserve Bank governor doesn't agree that it was all international pressures. In fact, he uses bank speak, but domestic capacity constraints are increasingly playing a role and inflation pressures have broadened. In other words, the $20 billion plus in the May budget of economic stimulus, that is billions being pushed into the economy now and in the next few months ahead. Without a doubt, contributing to inflation.

KAREN:
And of course, Ruby, the government's trying to turn this into a virtue, which is interesting. It's sort of a refuge when you're in strife, I think. But they're saying, well, okay, maybe things aren't going well at the moment, but rather than blame us, the government, as they say, for for this situation, think about what it would be like in the future if you have someone who's managing the economy worse than us. So they’re trying to suggest that Labor would be worse managers of the economy and that really when things are going bad, you shouldn't blame the government for it. You should stick with the government because things could get worse.

RUBY:
A bit of a stretch, maybe… 

KAREN:
It’s kind of a slightly desperate argument, but you can see how it might resonate with some people if they have concerns about labour. And that's why. Labor is putting so much energy and effort into proving to people that they are safe. Economic managers talking about how they manage the global financial crisis and trying to reassure people they are a safe pair of hands. 

RUBY:
Okay, so Labor's obviously trying to make the case that this is a government failure. The cost of living is rising under the Coalition. Housing as well is becoming less and less affordable. And to that last issue, Labor has announced that the housing policy almost a week ago now, and as I understand it, the way it would work is under a Labor Government the Commonwealth would basically take an equity stake on behalf of home buyers, specifically single people who are earning up to $90,000 and couples who make less than 120,000. The government basically covers 30 to 40% of the cost of the home that these people might want to buy. But the programme itself, it has only 10,000 places a year. So is this a policy that is really going to answer people's anxiety about being able to buy a home one day, do you think?

KAREN:
I guess there are two criticisms you can make of the policy upfront. One is the one you identified that it doesn't help very many people, 10,000, you know, amongst a very large number who'd be looking for to try and get into the housing market. And secondly, just like the government scheme, it could have a stimulatory effect on the housing market and that could have the opposite effect of what you want. You know, all people holding the economic levers want to do now is to try and cool the economy down a bit. And if the problem is that house prices are rising too quickly and making it hard for people to get into the market, then providing subsidy schemes that encourage people in are not going to put any kind of a dampener on that. Having said that, we already have an unofficial subsidy scheme in place. It's called the bank of Mum and Dad.

So if the Government is criticising the Opposition for suggesting that, you know, the Government, I think Simon Birmingham, the Finance Minister, said, oh, you'll have Anthony Albanese sitting at your kitchen table, well effectively being a part owner of your property while you've already got your mum and dad in a lot of cases sitting at the kitchen table because they have loaned the money so well. In a lot of ways it's an equity argument that at least you're providing the same opportunity to very low income people who don't have parents with enough money to loan them and get them into the market. And so, you know, it's an equity measure very much in that vein. And in that sense, you know, both parties are offering the same kinds of things. The Labor Party being focussed particularly at the lower end.

PAUL:
And by the way, don't forget that Labor has accepted and endorsed the Liberal policy. So the 50,000 people a year that the Government says it will underwrite or guarantee their mortgages, they
still get that if Labor wins the election. So it's the 50,000 plus the 10,000.

KAREN:
And the Liberals have raised some questions about the Labor policy too. What happens if you want to renovate the home and what happens if somebody dies? What happens to the home after that? Because if the government still owns part of it and they're trying to use that to turn that into another death tax scare that worked so well for them at the last federal election campaign. So both sides will take any opportunity to try and exploit something they say is a vulnerability. And the government is trying to go very hard on this aspect of this housing policy.

PAUL:
I doubt people who are trying to get a roof over their heads will be deterred by that, y’know. transparently fallacious argument. 

RUBY:
We'll be back in a moment.

[Advertisement]

Archival Tape -- Anthony Albanese:
“ I won’t be negotiating or doing deals with the Greens after the election…”

Archival Tape -- Anthony Albanese:
“…this is a complete distraction to make people think the Greens are more important than they are.”

Archival Tape -- Ben:
“So, just confirming, if you needed one additional seat to form Government, and that was held by the Greens, you won’t negotiate?”

Archival Tape -- Anthony Albanese:
“Correct.”

RUBY:
Karen, we've obviously been talking about the race between Labor and the Coalition to win this election and to form government. But there is a lot else at stake. The Greens, for example, believe that they have a chance to hold the balance of power. So do the independents. Everyone keeps talking about it. I spoke with the Greens leader Adam Bandt this week and he was throwing doubt on Anthony Albanese's commitment to not work with the Greens. And when it comes down to it, his right isn't in the event of a hung parliament. Both sides, Labor and the Liberals, they will be furiously negotiating with anyone they can to form government.

KAREN:
Absolutely. And a hung parliament is still a very real possibility in this environment. If we believe what the opinion polls are saying and also what internal party polls of the major parties are saying is a very good chance that some of those so-called deal independents could get themselves elected. I know the Greens are hopeful of their own prospects in the Lower House in Queensland, in states like Griffith, Ryan and Brisbane. Personally, I think it's more likely that Griffith will stay with Labor and that Ryan and Brisbane may potentially swing to Labor. They're vulnerable Liberal Party seats. So I doubt that the Greens could get enough of a vote to secure those lower house seats. Anything's possible and they certainly polling well there.

If there's a hung parliament…in fact the last time we saw a hung parliament was under the Labor Government when Julia Gillard was Prime Minister they were quite effective and they got a lot of legislation through some quite big things too. You remember Julia Gillard introduced the National Disability Insurance Scheme and the person who was in charge of the negotiations on her behalf at that time was Anthony Albanese. So he certainly has experience in negotiating with independents. But everyone negotiates afterwards if there is the potential for a hung parliament because otherwise the only other alternative is having another election...

PAUL:
Exactly.

KAREN:
…and nobody really wants that. 

RUBY:
Yeah, and so Ben, Karen mentioned earlier that the Greens do seem particularly confident in Queensland going into this election and there is one Senate seat in particular in Queensland that Adam Bandt was talking about a lot when I spoke to him the other day. So do the Greens have a chance of gaining another senator there?

BEN:
Yeah, they have a good chance of gaining a senator in Queensland as well as in South Australia and in New South Wales. In Queensland there's only two Labor senators and no Greens up for election. So this kind of unless the left vote was very low, probably there's room for a third left senator and it probably won't be Labor. The Greens have a good chance there. 

RUBY:
And then there have been reports that have come out about One Nation nominating candidates at the very last minute and concerns about the process around that. So could you walk me through what we're hearing and what you think One Nation is trying to do by signing up these candidates?

BEN:
So there was a story a few days ago about a candidate nominating in two different electorates. And that candidate who ran for One Nation and the small party called the Federation Party then came out and said that One Nation actually told him they didn't need him and they weren't going to use his nomination form. And so he nominated for someone else and then One Nation submitted his form. Since then, another candidate who had put his name forward to run for One Nation in Parramatta was saying that he was contacted by One Nation on the day the nominations closed, saying There's something wrong with your form. Can you fill out this other form? Please leave the electorate name blank. And he noticed that there was a reference to the seat of banks, which is not where he wanted to run. So it's kind of suggesting that one nation was scrambling in the last minute, trying whatever they could to get people to run in places that weren't really where they wanted to run. The thing that I find really fascinating, though, is it seems like, if anything, that one nation is trying to avoid having local candidates. It turns out they cannot. In Parramatta lives in Victoria, they're running a candidate for Townsville, which should be quite a pretty good area for them. I'm sure they have people in Townsville they can. If Townsville is from Victoria, they candidates in Grayndler and Wentworth are from Queensland. Like if anything they seem to want these candidates to lie low and not do anything which I find particularly fascinating. Sometimes that's a necessary evil, but like that they're discouraging them, I find really interesting. 

RUBY:
And Paul, your final thoughts on the state of play? We've two weeks to go now until the election.

PAUL:
You'd have to say that apart from week one, which Anthony Albanese more or less gifted to Scott Morrison, Scott Morrison has had a dreadful campaign. Apart from the tightening that we saw at the beginning of the campaign, Labor and Newspoll in the last two Newspolls has stabilised. So you'd have to say Labor goes into the last two weeks with the election to lose. That doesn't mean to say they're not going to lose it.

RUBY:
Your final thoughts, Karen?

KAREN:
I think things have shifted over the last week and a half against the Coalition internal polling from both the major parties suggesting that it's getting harder now for the Coalition to retain government. And that's not to say, as Paul says, that things can't change in the last couple of weeks, but there's a trend now that is sort of heading slightly in that direction. And they would be hoping very much for some circuit breaker to try and persuade anyone who is inclined towards voting Labor or at least fighting against the government. And to change their minds. They've got their campaign launch coming up right near the end of the campaign and they'll use that as a springboard and try to get momentum into the final week. And they may have more scares up their sleeve to try and shake people's confidence in the Labor Party. But at the moment Labor is in a good position and as long as Anthony Albanese doesn't make more mistakes that caused people to doubt him in that first week, I think they would say they are on track to potentially win this election.

RUBY:
Hmm. Well, thank you all so much for joining me once again. 

KAREN:
Thanks, Ruby.

PAUL:
Thank you. Bye. 

BEN:
Thank you.

[Advertisement]

RUBY:

Also in the news today,

 

Ukrainian president Voldymr Zelensky confirmed in his national address that a further 344 people have been rescued from the besieged city of Mariupol in a second evacuation operation. 

 

As Russian and Ukrainian troops remain locked in what has been described as a 'bloody battle' in a steel works outside the city of Mariupol, Zelensky said there were still civilians, women and children trapped in the steel works and that negotiations were ongoing to rescue those who remained trapped. 

 

**

 

And in Sydney, a parliamentary inquiry has found the state's regional healthcare system is in crisis.

 

The report, tabled in NSW parliament on Thursday, outlined chronic staff shortages and under-resourcing in regional and rural communitie across the state. The report concluded that there has been a "historic failure" to fix workforce issues.

**

7am is a daily show from The Monthly and The Saturday Paper. It’s produced by Elle Marsh, Kara Jensen-Mackinnon, Anu Hasbold and Alex Gow. Research assistance for this episode by Meghan Dansie.

Our senior producer is Ruby Schwartz and our technical producer is Atticus Bastow.

Brian Campeau mixes the show. Our editor is Scott Mitchell. Erik Jensen is our editor-in-chief. 

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio. And original music in this week's episodes was composed by Alex Gow.

I’m Ruby Jones, this is 7am. See you next week.

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