❓ Mr. McGowan questions the Minister for Housing and Works about Keystart Home Loans increasing interest rates for new customers by 1.03%, significantly more than the Reserve Bank's increase. The Minister defends the decision, citing increased demand and the need to slow Keystart's uptake to balance taxpayer interests.
AnsweredQoN 817Legislative Assembly
QuestionView source ↗
KEYSTART HOME LOANS — INTEREST RATE INCREASE
In light of the recent Social Housing Taskforce report that recommended people be given every opportunity to acquire their own house and the recent Reserve Bank decision to lift interest rates by 0.25 per cent of one per cent, I ask — (1) Is the minister aware that Keystart Home Loans WA, over which he has control, has lifted rates for new customers by 1.03 per cent effective tomorrow? (2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL
In light of the recent Social Housing Taskforce report that recommended people be given every opportunity to acquire their own house and the recent Reserve Bank decision to lift interest rates by 0.25 per cent of one per cent, I ask — (1) Is the minister aware that Keystart Home Loans WA, over which he has control, has lifted rates for new customers by 1.03 per cent effective tomorrow? (2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL
AnswerView source ↗
(1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(1) Is the minister aware that Keystart Home Loans WA, over which he has control, has lifted rates for new customers by 1.03 per cent effective tomorrow? (2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(1) Is the minister aware that Keystart Home Loans WA, over which he has control, has lifted rates for new customers by 1.03 per cent effective tomorrow? (2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(2) How does it help new home purchasers by lifting rates by more than four times the official interest rate rise? (3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(3) Did the minister urge the Keystart board not to lift rates by more than official rate rise? (4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(4) Will the minister do anything to correct this decision? Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL replied: (1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
(1)-(4) No person who was a client of Keystart last week will receive an interest rate rise that is higher than the 0.25 per cent the member for Rockingham referred to. Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr M. McGowan : Correct. That wasn’t my question. Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : I know. I will get to the member’s question in a second. Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Keystart plays an important role in people meeting their housing aspirations in Western Australia. There has been a massive increase in demand for Keystart loans. I will provide some figures to illuminate the matter to the house. In the 2007-08 financial year, 2 385 loans were advanced by Keystart at a total cost of $619 million. In the past financial year, 5 340 loans were advanced by Keystart, at a total value of moneys advanced of $1.5 billion. The challenge for Keystart is that, historically, people came in and there was quite a high churning out at the back end of the Keystart product, so the total borrowing limit of Keystart remained relatively static. In the past 12 months or so, for a range of reasons, more people have been using Keystart than would normally be the case, and fewer people have been exiting. The net result is that Keystart’s borrowing limit will soon be at $3.5 billion. My view is that that is getting towards the upper limit of what we would expect to be Keystart’s total borrowing limit. After all, Keystart is there to provide people with an avenue to home ownership when other avenues are not made available to them. Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr E.S. Ripper : You have the lowest level of housing starts since September 2001, so you must take some action. Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : We have taken action. There has been a $900 million increase this year in the amount of money Keystart could lend. Almost $1 billion of extra money was made available to Western Australians in government assistance in borrowings to build houses, with record levels of people participating in Keystart loans. However, there is still a broader policy challenge. How big should we let Keystart’s net borrowing limit grow to? My advice and my understanding is that we must slow down the rate of Keystart’s uptake. Does that mean that some people who may have been able to access Keystart may not? It possibly does. We have done a couple of things. Not just interest rates have been adjusted. We have increased the deposit needed to get a Keystart loan from two per cent to four per cent. We have increased the history of savings people have to show. We do not believe Keystart should have been a market leader. The Keystart rate of interest has in recent years been at the bottom end of the market. In the past six months or so Keystart was a market leader in relation to interest. My view is that the taxpayers of Western Australia should not be subsidising a service that provides market lending rates of interest to people in the market. That is not Keystart’s role. I have said to the Keystart board via the Director General of Housing — Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr M. McGowan : Do you support a four-fold increase? Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : Hang on! Let me finish. I have said that Keystart’s rate of interest for new loans should be the average of the standard variable rate of the four major banks. I think that is a fair outcome. Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Yesterday the Premier and I met for an hour or so with the Governor of the Reserve Bank. We discussed Keystart, and he went to some length to express his concerns about the existence of programs like Keystart. A lot of people have concerns about governments entering into low-deposit borrowing for thousands and thousands of Western Australians. Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr E.S. Ripper : Keystart has a long and successful history. Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
Mr T.R. BUSWELL : It does; we are not denying that. But we are saying that we need balance. We have made the decision. My view is that it is a good decision on behalf of the taxpayers of Western Australia because we are trying to balance the interests of taxpayers, who ultimately sit behind Keystart, whilst providing first home buyers in particular access to funds in Western Australia.
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