22nd Jun 2021, 9:03 PM – Senate Treasury Laws Amendment (2021 Measures No. 3) Bill 2021 - in Committee - Limit on the guarantee

The majority voted against an amendment introduced by Tasmanian Senator Nick McKim, which means it failed.

Senator McKim explained the purpose of this amendment:

This amendment would establish in legislation, rather than leaving it to regulation, a minimum deposit requirement for the purchaser for all loans guaranteed by the National Housing Finance and Investment Corporation. This amendment would set the minimum deposit requirement at five per cent, which is the current level set under the First Home Loan Deposit Scheme. Loans issued with less than a five per cent deposit are also tracked by APRA as an indicator of high-risk lending. By the prudential regulator's own measure, the Family Home Guarantee as proposed by the government, requiring a mere two per cent deposit for single parents, will encourage and increase higher risk spending.

Amendment text

(1) Schedule 2, page 5 (after line 8), at the end of the Schedule, add:

2 At the end of section 51

Add:

Limit on guarantee

(4) The Commonwealth must not guarantee a loan for which the deposit paid by the borrower or borrowers is less than 5 per cent of the value of the residential property.