Housing Reform Battle: Government's 5% Deposit Scheme Faces Expert Criticism
Finance Minister defends housing policy amid warnings it could drive up property prices
Finance Minister Katy Gallagher has staunchly defended the government's plan to expand the 5% deposit guarantee for first-home buyers, despite criticism from former Reserve Bank Governor Ian McFarlane who warned it would "mainly show up in higher prices."
Speaking from Hobart, Gallagher emphasized that the policy aims to give first-home buyers "a fair crack" at entering the housing market. She insisted the approach differs fundamentally from opposition proposals by combining demand-side assistance with significant supply investments.
"Our plans are more homes and lower cheaper deposits and the opposition's are less homes and higher prices." - Finance Minister KatyGallagher
The government claims to have 28,000 homes currently under construction, with plans for up to 55,000 more through the Housing Australia Future Fund, and an additional 100,000 announced specifically for first-home buyers. According to Gallagher, this comprehensive approach distinguishes their policy from opposition proposals.
"You cannot see our 5% guarantee in isolation of the other huge investment that we've been putting into housing for the last three years." - Finance Minister Katy Gallagher
When pressed on potential risks to taxpayers, Gallagher defended the existing program's track record, noting that among approximately 100,000 participants, only three defaults have occurred. She maintained that the expansion "doesn't change anything about what you can borrow" but rather enables entry to the housing market with lower deposits backed by Commonwealth guarantees.
"We're doing all that we can do in housing to make sure that those that want to get into home ownership can get into home ownership." - Finance Minister KatyGallagher
The Minister also firmly rejected any possibility of reforming negative gearing or capital gains tax concessions for property investors, distancing the government from proposals advocated by the Greens party, who have indicated such reforms would be "front and centre" should a minority government scenario emerge.
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