Interview with Kieran Gilbert on Sky News

Subjects: Albanese’s flight upgrades, lending buffers for first home buyers

E&OE………

Kieran Gilbert

Let's go live to the Shadow Assistant Minister of Home Ownership, Andrew Bragg. Andrew, what do you make of this story? Do you think it's up to the Coalition now to refer this to the NACC if you think something's gone on or something wrong has been done, should it be referred?

Senator Bragg

Well Kieran, I think the main point here is that if there is a Minister regulating a sector and accepting various benefits, then that Minister needs to be very careful about managing conflicts of interest and the perception there is conflict of interest. So I think that's where it really sits.

Kieran Gilbert

Is the fundamental problem here, as you see it, the personal trips where economy tickets were bought and then upgrades given? Is that the issue here where it wasn't say for a Parliamentary or political related trip?

Senator Bragg

Look, if there was a systemised programme then that, I think, may be a real a problem. And as I say, if you are regulating a industry, in effect as a Minister, you need to be extremely careful and thorough that you are not creating a conflict of interest, or the perception of a conflict of interest. And I would say that given the extensive reporting here, that it has crossed the line into a considerable perception here.

Kieran Gilbert

Okay, so in terms of where to from here, what should the Coalition do on this issue? Is there something further that you would see as an appropriate course of action here?

Senator Bragg

When the Senate resumes in a few weeks, no doubt we will look at any avenue to ensure that there is the appropriate transparency and disclosures which may be necessary. And that will happen in a few weeks when Parliament is sitting.

Kieran Gilbert

On to an issue you've had responsibility on, and this is some hearings into financing homes, mortgages and so on, and looking at, specifically, this idea of a buffer for first home buyers, what conclusion have you come to at the back of those hearings?

Senator Bragg

We are very worried that first home buyers are bearing the brunt of this very blunt instrument, which is where the Prudential Regulator, APRA, applies a 3% buffer to all loans. And we believe that is disadvantaging first home buyers who have fewer assets at the get-go and therefore are less able now to have a loan or borrow enough to buy that elusive first property.

Kieran Gilbert

Is the risk here, though, if you reduce the buffer at the start, that people get in over their heads, essentially from the get-go?

Senator Bragg

Well, no one is arguing that there should be a zero buffer, but right now the buffer is set at 3%, which is the same level it was at when the official cash rate was at 1%. And so it hasn't been dynamic, it hasn't shifted. And so what that means is the typical prospective home buyer is being assessed at 9.5%, not 6.5%. And that has a disproportionate impact on people with fewer assets and younger Australians. So it's a real concern that it's such a blunt tool.

Kieran Gilbert

How many first home buyers would this assist if, if APRA were to reduce the requirement on the banks for a buffer for those first home buyers? How many more people would be able to get into the market? And would it have a flow on impact on house prices?

Senator Bragg

Well, the investment analyst Barrenjoey, have estimated that you would get another 50,000 new first home buyers each year if you made some of these changes. And, Kieran, no one is suggesting that there be no buffer or there'd be a lower buffer for other Australians. We're particularly focused on how we can tilt the scales here for first home buyers, because the way to have a proper housing policy is to build the houses and then to find sustainable ways, practical ways, to bend those scales for first home buyers. And I think this is one of the best ideas in the policy marketplace.

Kieran Gilbert

And finally, in terms of the banks themselves, I was looking at the submissions. They're not of one view here, are they, the big banks? There's some different views as to what should go on. CBA, for example, wants the status quo to remain. Are the banks looking for some reform? Why are we seeing those differences now?

Senator Bragg

Well, I think that commercial operations will often have various reasons for making their policy statements. And I suspect that those with the greatest market share have the greatest amount to lose from a more competitive system where, frankly, people can move around, but also new people can come in and get those loans. So I think there are a variety of commercial and other motives there. But the reality is that there are mixed views amongst the banks and a lot of third party stakeholders. And I would say the balance is in favour of making a shift where first home buyers can get a better deal on the buffer and can get a better deal on their capital risk weighting, which affects the cost of their mortgage. And I think these are very practical and sustainable ways of getting more first home buyers into the market.

Kieran Gilbert

Home ownership spokesman for the Coalition Andrew Bragg. Thanks, appreciate it.

Senator Bragg

Thanks Kieran.

[Ends]