Former RBA governor Dr Philip Lowe said government spending was a big factor contributing to cost-of-living pressures. Image: Screenshot.
New data from Housing Australia shows Labor’s 5 Per Cent Deposit Scheme has helped 102,000 first home buyers since it was expanded in October last year.
One in two first home buyers nationally are now using a first home buyer scheme to get into the market.
A total of 3106 of those have been in the ACT, bringing the total to 7207.
Since Labor brought the scheme in 2022, more than 280,000 Australians have taken advantage of the support.
Labor has jumped on the figures as some bright news in the face of an onslaught of criticism over the current state of the economy and cost-of-living pressures.
Headline inflation jumped to 4 per cent in August, up from 3.5 per cent in July, driven by higher housing costs and rising fuel prices.
The Reserve Bank of Australia raised interest rates on Tuesday to a 15-year high of 4.6 per cent – the fourth hike this year.
Treasurer Jim Chalmers is under constant attack over the state of the economy and the growing pressures on Australian households.
His mantra has been that the Middle East war and other global uncertainties have been devastating for the Australian economy.
Former Reserve Bank governor Philip Lowe joined the chorus of dissent on Wednesday (30 September), saying government spending was a big factor contributing to cost-of-living pressures.
“Government spending has been adding to demand progressively over time, and that’s putting upward pressure on inflation,” he said.
Dr Chalmers dismissed the criticism, saying his focus was not on commentary.
“My focus is on continuing to provide the responsible economic management that is necessary, in uncertain global conditions,” the Treasurer said.
“That includes rolling out cost-of-living relief, cutting taxes, finding savings in an ongoing way … I have acknowledged for some time that the inflation challenge in our economy has a number of factors associated with it.”
Following a rough few days on the economic front and Labor’s credentials being severely questioned, the government is keen to spread some “good news” on housing.
Last year the Federal Government expanded the 5 Per Cent Deposit Scheme scheme to all first home buyers, removing income caps, uncapping the number of places and increasing property price limits.
In NSW, 28,158 people took up the offer over the last year. In Queensland, it was 20,125, and 33,413 in Victoria.
Based on median prices and assuming a 5 per cent deposit, the scheme has saved Australians more than $2.5 billion in lenders mortgage insurance since Labor came to office, with $1.4 billion in the last year alone under the expanded scheme.
Anthony Albanese was the first to point out the positives in the new first home buyers data.
“The expanded 5 per cent deposit scheme removes barriers for first home buyers, helps them get into their own home faster and saves them tens of thousands of dollars,” the Prime Minister said.
“When it comes to housing challenges, we’re tackling it from every angle – making it easier for first home buyers, boosting supply and helping renters get a better deal.”
The PM promised more cost-of-living measures would be announced soon, but said Australians would have to wait for the Mid-Year Economic and Fiscal Outlook (MYEFO) announcement later this year.
Housing Minister Clare O’Neil added her voice to Mr Albanese’s, saying the Housing Australia figures show the scheme is working.
“In just one year, more than 100,000 first home buyers have used the expanded 5 Per Cent Deposit Scheme to get the keys to their first home,” she said.
“We’ve got a $47 billion agenda to build more homes, to help renters get a better deal, and to get more Australians into home ownership.”
Opposition Leader Angus Taylor isn’t going easy on the government over how it’s managing the economy.
He repeated his accusation that the Treasurer was addicted to spending.
“We want to see an economy where Australians can get ahead, but what we saw yesterday [Tuesday] with the 16th interest rate increase under Labor is a hammer blow for hard-working Australians,” Mr Taylor said.
“This is a big hit to Australians with a mortgage, small businesses, households who are trying to get ahead, but it’s got harder and harder under this government.
“And it’s not just mortgage costs, of course, it’s higher fuel prices, higher insurance costs, grocery costs, you name it, across the board, inflation has stayed high.
“We were promised by Labor before the last election, and the previous election, that inflation would come down, interest rates would come down, and we’ve seen the exact opposite.
“Now, each morning, this Treasurer wakes up with a new excuse, a new excuse, and frankly he’s run out of excuses.”
