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senate vote 2021-06-22#16
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mackay staff
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2021-07-30 10:23:59
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Title
Bills — Treasury Laws Amendment (2021 Measures No. 3) Bill 2021; in Committee- Treasury Laws Amendment (2021 Measures No. 3) Bill 2021 - in Committee - Limit on the guarantee
Description
<p class="speaker">Nick McKim</p><p>I move Greens amendment (1) on sheet 1302:</p><p class="italic">(1) Schedule 2, page 5 (after line 8), at the end of the Schedule, add:</p>- The majority voted against an [amendment](https://www.openaustralia.org.au/senate/?id=2021-06-22.252.1) introduced by Tasmanian Senator [Nick McKim](https://theyvoteforyou.org.au/people/senate/tasmania/nick_mckim), which means it failed.
- Senator McKim explained the [purpose of this amendment](https://www.openaustralia.org.au/senate/?gid=2021-06-22.249.1):
- > *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:*
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- > *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.*
<p class="italic">2 At the end of section 51</p><p class="italic">Add:</p><p class="italic"> <i>Limit on guarantee</i></p><p class="italic">(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.</p><p>I spoke about this amendment in my speech in the second reading debate.</p> <p class="speaker">Jenny McAllister</p><p>Labor does not support the amendment proposed by the Greens. The two per cent threshold contained in this proposal is very similar to programs that have worked well for years, like Keystart in Western Australia. Borrowers will need to qualify for this program under the thresholds for bank lending and credit history to show that they do have the capacity to service the loan. Increasing the threshold would lock out those who would otherwise qualify and would have little effect on preventing mortgage stress. This measure provides a guarantee so that costly mortgage insurance is not required, and a deposit of only two per cent is required for eligible participants.</p><p>Many single parents have sound credit histories. This would reward that, ensuring they could gain access to homeownership without needing a prohibitive level of deposit. Raising this to five per cent would slow down and impede access for those people. This scheme should be expanded so that more people qualify, not fewer.</p> <p class="speaker">Jane Hume</p><p>The government will also be opposing this Greens amendment. The family home guarantee will allow eligible single parents to purchase a new or existing home with a deposit of as little as two per cent, because this will establish a pathway to homeownership for single parents with dependants who have struggled to save a deposit while renting or restarting their lives following a relationship breakdown. The deposit challenge is even harder when you're on a single income and raising children, particularly if you're not eligible for first home buyer programs.</p><p>As with all home loans, regardless of the size of the deposit, a lender will only extend a loan of this nature to a borrower who has the capacity to service it. This means that credit providers, when undertaking their serviceability assessments to determine a consumer's borrowing capacity with a deposit of as little as two per cent, must consider whether the consumer can repay the loan without going into substantial hardship.</p> <p class="speaker">Andrew McLachlan</p><p>The question before the Senate is that the amendment on sheet 1302, moved by Senator McKim, be agreed to.</p>
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