❓ Opposition questions the Premier's justification for seeking interest rate relief from the Commonwealth while Keystart borrowers pay higher rates. The Premier defends Keystart's benefits and financial management.
AnsweredQoN 920Legislative Assembly
QuestionView source ↗
INTEREST RATES —
KEYSTART LOANS
920. Mr D.C. NALDER to the Premier:
I refer to the Treasurer's
comments yesterday on Gareth Parker's 6PR show, on which he complained
that this government is paying loans to the commonwealth at four and half per
cent interest rates when he could get market rates at around two per cent.
Why is your government asking for
interest rate relief from the commonwealth government, when the Premier is refusing to provide similar interest rate relief to
struggling Western Australians on Keystart, who are paying 4.79 per cent?
KEYSTART LOANS
920. Mr D.C. NALDER to the Premier:
I refer to the Treasurer's
comments yesterday on Gareth Parker's 6PR show, on which he complained
that this government is paying loans to the commonwealth at four and half per
cent interest rates when he could get market rates at around two per cent.
Why is your government asking for
interest rate relief from the commonwealth government, when the Premier is refusing to provide similar interest rate relief to
struggling Western Australians on Keystart, who are paying 4.79 per cent?
AnswerView source ↗
I
did not hear the Treasurer's remarks, but one thing is apparent in this
question time: the shadow Treasurer is always afraid to ask the
Treasurer a question. He is always afraid. The Leader of the Opposition does
not ask any questions. Question time has become very odd over the course of the
last few months. The opposition is now, essentially, comatose in question time.
Whatever is on their phones is just so interesting, because they spend the
entire time tapping away on the phones, so it is really interesting. Those who
do interject do not add anything.
Several members interjected.
The SPEAKER : Members!
Mr M. McGOWAN : Those who do
interject should be on their phones, and those who are on their phones should
probably be interjecting. It is just an observation.
I did not hear the Treasurer's
remarks, but I saw an article in the newspaper. We are obviously seeking a similar
arrangement to what has been secured for Tasmania in relation to historic
housing debts in that there is an obligation on Western Australia, apparently,
that goes back some years to repay some debt in relation to some public
housing. Tasmania, through the efforts of Senator Jacqui Lambie, has had its
housing debt waived. For the commonwealth to do it for one state—apparently
it did it for South Australia as well—but not do it for other states, I
do not think is a tenable position. I do not think that is a fair position.
Therefore, the Treasurer has now
written to the federal Treasurer, which is right, to request the same deal for Western
Australia that South Australia and Tasmania have received, on the basis that
the payments that we were going to be making, which are, in effect, I think,
$30 million or so a year, would be invested in social housing and homelessness
initiatives, which is an entirely reasonable and defensible position on the
part of Western Australia. I expect everyone would support it.
The member then segued into
Keystart. The thing about Keystart, as opposed to an ordinary loan, is that there
is no mortgage insurance and there is a very low deposit. It is a sort of
gateway loan. If people get into the housing market with no mortgage insurance
and very low deposit, they prove they can do it and they move on to other
financial institutions over time. That is the model that has been adopted,
which was explained to members last week by the Minister for Housing. There was
then the securitisation of the Keystart loan book, and that, I think, has added
complexity to the interest rate argument. Members have to remember that there
are a lot of benefits with Keystart. It has more available finance, no mortgage
insurance and low deposit, which is attractive to a lot of people. That is opposed to a mainstream bank that
may have, initially, a lower interest rate but a much higher deposit levels and mortgage insurance, which makes it much more difficult to get a loan.
We are, in effect, protecting the public interest, making loans available,
making sure it is sustainable and defensible for the long-term, making sure
Keystart does not go the way of other institutions of that nature in other
states that went broke some years ago. Therefore, I think prudent financial
management of Keystart and the state is a good thing to do.
did not hear the Treasurer's remarks, but one thing is apparent in this
question time: the shadow Treasurer is always afraid to ask the
Treasurer a question. He is always afraid. The Leader of the Opposition does
not ask any questions. Question time has become very odd over the course of the
last few months. The opposition is now, essentially, comatose in question time.
Whatever is on their phones is just so interesting, because they spend the
entire time tapping away on the phones, so it is really interesting. Those who
do interject do not add anything.
Several members interjected.
The SPEAKER : Members!
Mr M. McGOWAN : Those who do
interject should be on their phones, and those who are on their phones should
probably be interjecting. It is just an observation.
I did not hear the Treasurer's
remarks, but I saw an article in the newspaper. We are obviously seeking a similar
arrangement to what has been secured for Tasmania in relation to historic
housing debts in that there is an obligation on Western Australia, apparently,
that goes back some years to repay some debt in relation to some public
housing. Tasmania, through the efforts of Senator Jacqui Lambie, has had its
housing debt waived. For the commonwealth to do it for one state—apparently
it did it for South Australia as well—but not do it for other states, I
do not think is a tenable position. I do not think that is a fair position.
Therefore, the Treasurer has now
written to the federal Treasurer, which is right, to request the same deal for Western
Australia that South Australia and Tasmania have received, on the basis that
the payments that we were going to be making, which are, in effect, I think,
$30 million or so a year, would be invested in social housing and homelessness
initiatives, which is an entirely reasonable and defensible position on the
part of Western Australia. I expect everyone would support it.
The member then segued into
Keystart. The thing about Keystart, as opposed to an ordinary loan, is that there
is no mortgage insurance and there is a very low deposit. It is a sort of
gateway loan. If people get into the housing market with no mortgage insurance
and very low deposit, they prove they can do it and they move on to other
financial institutions over time. That is the model that has been adopted,
which was explained to members last week by the Minister for Housing. There was
then the securitisation of the Keystart loan book, and that, I think, has added
complexity to the interest rate argument. Members have to remember that there
are a lot of benefits with Keystart. It has more available finance, no mortgage
insurance and low deposit, which is attractive to a lot of people. That is opposed to a mainstream bank that
may have, initially, a lower interest rate but a much higher deposit levels and mortgage insurance, which makes it much more difficult to get a loan.
We are, in effect, protecting the public interest, making loans available,
making sure it is sustainable and defensible for the long-term, making sure
Keystart does not go the way of other institutions of that nature in other
states that went broke some years ago. Therefore, I think prudent financial
management of Keystart and the state is a good thing to do.
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