Stephen Jones MP (member for Whitlam), the shadow financial services minister and shadow assistant treasurer, has suggested that the Labor Party will imminently announce new initiatives aimed at tackling the rising cost of home ownership, adding that the Australian Labor Party (ALP) is “deeply concerned” with the issue.
Speaking to Momentum Media in an exclusive interview focusing on the Australian Labor Party (ALP) and its plans for the financial services, credit and superannuation sectors (available via the Mortgage Business Podcast Network), Mr Jones was asked whether the ALP was concerned about housing affordability, and if so, what measures it would seek to take to help make home ownership more affordable for Australians.
The shadow assistant treasurer responded: “[We’re] deeply concerned about it. And, if you think about the overall market of consumers, let’s call them Australians, not everybody’s got the same problem.
“They’re a group of Australians on low wages or from whatever their life circumstance is (personal crises, all the rest of that) who are never going to be in the position where, for whatever reason or another, they’re going to be able to afford their own home.
“This group of Australians needs a very different solution to young professionals who look at the price of houses going up in the places where they want to live, but know if they save right and get the right sort of advice, they’ll be able to enter the market at some point in time.
“Then there’s another group of Australians who want to upsize or downsize. And there’s different solutions that are going to be needed for each of these groups.”
Mr Jones continued by adding that the segment the ALP was particularly concerned about the group of people who are “going to be squeezed between – depending on government policy settings – the ‘never be able to afford to get a home’ and ‘will be able to but not sure when’.”
The assistant treasurer highlighted that escalating house prices had meant that, in the last 12 months, home owners had seen their equity rise far beyond what they could have earned in “just about any job that they had” – particularly in Sydney.
Mr Jones said: “[T]hat’s great if you’ve got a house, but that ain’t great for the next generations of Australians who are trying to get in [to the property market].”
As such, he said that “a bunch of different solutions” would be needed to provide tailored support to these segments.
Mr Jones said: “If we try and use one ideal model about what home buyers are like, we’ll get it wrong…
“So, different solutions [are needed] in every part of the market. Some of it is government providing support for social housing. Some of it is about government working with market and property developers to get more affordable housing (that is; a housing stock which is going to be available for people to enter the market)… There’s no doubt that there’s a supply issue there.
“But I also think we’re going to have to start looking at different ownership models as well and different entry-point models. So, whether they’re shared equity models, whether they’re common title models, there are a bunch of different things that we need to look at so that somebody can enter the property market, have a roof over their head, build a capital base for themselves, and maybe use that to move into the house of their dreams.
“That’s a very long answer, but I think it’s the right answer. What we know is just chucking grants out to people is just going to inflate the prices of things. So, we’ve got to be much more focused on the way we intervene in these areas.”
When asked whether the ALP would be looking to change housing taxes, Mr Jones reiterated that the ALP would not be “touching negative gearing”.
“We’re not touching any of those things. We've been quite clear on that stuff,” he told Momentum Media.
“We will be looking at other sorts of solutions. Jason Clare, my good colleague, has already made some announcements and there’ll be more things to come in the housing space.
“I won’t steal his thunder – better tune into what Jason and Anthony Albanese have got to say over the coming months.”
As well as addressing housing affordability, the shadow financial services minister also addressed broker remuneration, his own experience of using a broker, and key areas he would like mortgage brokers to focus on in the near-term.
In closing, Mr Jones was asked what a Labour government would wish to offer the financial services credit and superannuation advice sector should it win the federal election in May.
The shadow financial services minister and shadow and shadow assistant treasurer commented: “Stability and certainty is key. We have had five years of unprecedented regulatory change. A whole heap of that has not been digested by the sector, whether it’s your large institutions or your small partnerships trying to run a financial advice firm or brokerage firm.
“We’ve had a tsunami of change. What the industry needs now is stability and certainty. So, whether it’s in superannuation (yep, want to ensure that 12 per cent SGL is guaranteed and that funds are well run, well managed, delivering great outcomes to members)... Stability and certainty is what is needed there. And let’s just focus on the issues that need to be fixed instead of going around looking for problems that don’t exist.
“As I’ve said, time and again, I think the thing that we need to get right is the advice stuff because it’s broken and consumers are suffering.
“We need to get with the changes in the payment system as well. Our regulation isn’t fit for service.
“But for all of the other areas of the finance industry: stability and certainty and letting you digest the stuff that’s already in the system and focus on what is going to be a very difficult time for consumers as interest rates are rising, cost of living pressures are getting greater.
“We need you guys focusing on the needs of consumers, not looking over your shoulder for the next wave of regulatory change that’s going to be coming to from whoever’s in government.”
You can listen to the full podcast interview with shadow financial services minister and shadow assistant treasurer, Stephen Jones MP (member for Whitlam), on the Mortgage Business Podcast Network, here.