Scott Morrison has told renters that the best way the government can support them is to help them buy a home, in what housing experts have described as a “let them eat cake” moment.
The prime minister made the comment on Channel Nine’s Today show on Wednesday morning after being asked why there was not more support for renters in the federal budget handed down on Tuesday night.
“This is about Australians getting into homes,” Morrison said. “The best way to support people renting a house is to help them buy a house.”
Morrison said the expansion of the home loan guarantee scheme, which allows people to borrow up to 95% of the value of their property without having to take out mortgage insurance, was support for people struggling with rental affordability because “people buying houses are renters”.
“Ensuring that more renters can buy their own home and get the security of home ownership, that was one of the key focuses of this budget and was one of the key pledges that I’ve delivered on since the last election,” he said.
Dr Chris Martin, a housing policy expert at the University of New South Wales, said the prime minister’s comment was “a real let them eat cake moment”.
“Thirty percent of low income people on the private rental market do not have $500 in savings for emergencies, let alone a 5% deposit for a home loan,” Martin said.
He said the first home loan guarantee, which was doubled to 50,000 places a year in the budget, would “help a relatively few people who are already in a position close to attaining home ownership”.
“This guarantee allows them to borrow more than they would otherwise be able to and outbid someone at an auction, possibly setting a new price at the same time.”
Martin said the $2bn increase to the government guaranteed liability cap of the National Housing Finance and Investment Corporation, which raises the total cap to $5.5m, was welcome but not enough to reverse decades of underfunding of the social housing sector.
“Social housing is not funded to grow,” he said. “It has been on starvation rations for the last 20-30 years and it is still on starvation rations in this budget.”
‘Second-class citizens’
Dr Cassandra Goldie, the chief executive of the Australian Council of Social Service, said the federal government was “treating renters like second-class citizens”.
“Renting should be a decent, secure, long term option for putting a roof over your head and having a home,” she said.
“The best way to support renters is to lift their incomes so they can better afford rent, and build social housing.”
Goldie said the $5bn commonwealth rental assistance program worked out at just $73 per week for a single person, an allocation that has not increased in real terms in more than 20 years. Meanwhile, rents in regional Australia have grown by 18% since the pandemic began.
“The housing measures announced in last night’s budget will only push up house prices,” she said. “They won’t help people on the lowest incomes keep a roof over their head.”
Dr Michael Fotheringham, the managing director of the Australian Housing and Urban Research Institute, said a policy that assumed most people could buy a house, or even that they wanted to, was no longer fit for purpose.
The proportion of Australians living in private rental properties, whether because of increased mobility or a lack of housing affordability, has grown as the proportion of people who own a home or live in social housing has fallen.
“So we can’t just ignore it, and ignore how people are living within it,” Fotheringham said.
