Economic Security Strategy

DAVID BEVAN: Let's go to Jenny Macklin. She's the Federal Minister for Families, Housing and Community Services. We caught up with her just before we started the program.

In a moment - you'll hear in the interview we try and get down to the nuts and bolts of what money is likely to flow into your pockets and how can you get hold of that money over the next few weeks and months. But we begin by asking her about the housing market.

Jenny Macklin joins us now. Good morning Jenny Macklin.

JENNY MACKLIN: Good to be with you both.

DAVID BEVAN: Jenny Macklin, the Government is trying to stop the Australian economy falling into something quite terrible, and a lot of people appreciate that. But aren't you at risk of simply putting up the cost of housing by handing out such large first homeowners grants?

JENNY MACKLIN: We don't think so. We think this is about really encouraging, especially those young people who've been thinking about buying their first home, really encouraging them to make that decision. It is a big decision for young people and we hope that this increase in the first homeowners grant will encourage them to make that decision. It's only for a short period of time. It will be available until the end of this financial year, and that's really to target the effort and encourage people to make that decision now.

DAVID BEVAN: But isn't the thing stopping young people getting into the housing market the high cost of housing? And if you left...

JENNY MACKLIN: Well...

DAVID BEVAN: But if you left...

JENNY MACKLIN: Well, that's why...

DAVID BEVAN: But if you left...

JENNY MACKLIN: That's why we're wanting to give them this ...

DAVID BEVAN: Yes, but if...

JENNY MACKLIN: ... [indistinct] support.

DAVID BEVAN: But if you left it alone the price of houses are likely to come home - come down. And what you're really afraid of is that there's going to be a housing crash. This is about propping up the housing market more than it is about young people getting into the market.

JENNY MACKLIN: We do want to give this support to those who want to get into their first home and that's why we've made this decision and, as I say, limited it for a period of time to really say to people, now is the time to make that decision.

MATTHEW ABRAHAM: Jenny Macklin, just a few nuts and bolts things...

JENNY MACKLIN: Yes.

MATTHEW ABRAHAM: The - this increased first homebuyer grant of $14,000 and $21,000 for new homes, that will apply from yesterday?

JENNY MACKLIN: Yes.

MATTHEW ABRAHAM: For contracts signed as of yesterday...

JENNY MACKLIN: Yes.

MATTHEW ABRAHAM: ... or does it apply at settlement? How does it work?

JENNY MACKLIN: No, it's at the time of signing the contract, so it is important that people get in there and sign these contracts. That's - and the contracts have to be entered into before the end of June next year.

MATTHEW ABRAHAM: And if you signed the contract on Monday, bad luck?

JENNY MACKLIN: These are always difficult decisions...

MATTHEW ABRAHAM: Yes.

JENNY MACKLIN: ... so you have to choose a date.

MATTHEW ABRAHAM: Now, in terms of the pension payment...

JENNY MACKLIN: Yes.

MATTHEW ABRAHAM: ... will that be as a cheque, a lump sum cheque up-front, is it a weekly payment, how will that work?

JENNY MACKLIN: The vast majority of pensioners and families receive their regular payments into their bank accounts via Centrelink. So for most people they will get this lump sum paid into their bank accounts in the fortnight starting 8 December. So people do not have to contact Centrelink. If they're already on the aged pension, the disability support pension, a carer payment, a carer allowance, veterans' pensions, family tax benefit A, these amounts will come into their bank accounts from 8 December.

MATTHEW ABRAHAM: Can you run us through just those categories you mentioned, quickly, what does each category get?

JENNY MACKLIN: The aged pensioner, the disability support pensioner, the carer payment recipient, the veterans pensioners, and there are a few other categories, wife and widow pensioners, partner allowees, they will all receive, for singles $1400 each, couples will get $2100 between them. So all of those people will receive those payments in the way that I just described, through their bank account. Self-funded retirees who hold a Commonwealth Seniors Health Card will also get the same amount, so $1400 for a single and $2100 for couples.

MATTHEW ABRAHAM: And just another nuts and bolts question from a caller to our breakfast program this morning, the Bald Brothers, a woman had recently been widowed, I think a week or so ago. Now, what would her situation be?

JENNY MACKLIN: It depends - she really should contact Centrelink because it depends where her application process is up to. So I just need to be careful, not knowing the exact circumstances.

DAVID BEVAN: And another caller to our Breakfast program asked what if you're a couple, one of you is on the pension, one of you is not. You're treated as a single pensioner I guess?

JENNY MACKLIN: Once again it really - these particular cases, I really would encourage people to contact Centrelink because it really depends on your eligibility as of yesterday. So rather than get into individual circumstances when I don't know all of the details of families...

DAVID BEVAN: You're also...

JENNY MACKLIN: ... it's too tricky.

DAVID BEVAN: You're also handing out, what is it, $1000 as a one-off...

JENNY MACKLIN: A thousand dollars.

DAVID BEVAN: ... payment to eligible families...

JENNY MACKLIN: Yes.

DAVID BEVAN: ... now - who have their child in care. What does that mean?

JENNY MACKLIN: These are people - all families who are receiving family tax benefit A. And just to give you - I won't go through all of the different income cut-offs, but to give you one example; for a family with two children, the family income that they have to have is anything under $111,000. So that's for two children and it goes up if you've got more children.

MATTHEW ABRAHAM: And that's a combined family income?

JENNY MACKLIN: Combined family income.

DAVID BEVAN: Right. And, again, that just turns up in your bank account?

JENNY MACKLIN: Yes, some families do - a very small number of families have already decided that they want to receive their family tax benefit as a lump sum at the end of the financial year. If that's what they've already decided they'll get the $1000 per child at the end of the financial year.

DAVID BEVAN: Okay. What happens when all of this money is spent by about Christmas and the world is still in troubled economic times? What happens if we're still heading towards a recession then? What, do you hand out another round of cheques?

JENNY MACKLIN: Well, two things. One is that the reason for the Government taking this decisive action and doing it early is really to make sure that we encourage economic growth. So if people do go out and the pensioners get the jobs done around the house that they haven't been able to afford to do, that they buy an extra present for their grandkids, that will actually help the economy. So that's a positive thing...

DAVID BEVAN: But that - what's your advice? That will sustain an economy for what, three months, six months?

JENNY MACKLIN: Well, it's equivalent to about one per cent of Gross Domestic Product, so it is a substantial boost to the economy. But the Prime Minister has made it clear that we are continuing to watch these issues very carefully, and if we need to take additional action we will.

MATTHEW ABRAHAM: Whatever happened to, I suppose the agenda of just a few months ago? I mean, you came to office criticising the Howard Government's handout mentality, and now we have the mother of all handouts. Has all that - all those niceties, have they just been jettisoned?

JENNY MACKLIN: I don't think anyone could have expected what's happened in the global economy over the last few weeks. And what's important in these very, very difficult economic times around the world is for governments to act quickly when they see a problem arise. And I think that's what's been so important with the Prime Minister's announcement yesterday. We did see this problem coming, we've acted very quickly to sustain economic growth and to provide support where it's most needed.

MATTHEW ABRAHAM: Has everyone abandoned worrying about inflation now? I mean, the 4.2 per cent target or whatever it was, is that oh well, we'll just tuck that away until things are okay again, we'll worry about it?

JENNY MACKLIN: Well, you've seen two things happen in the last week. The Reserve Bank decided last week that they would cut interest rates, really to encourage economic growth. They too want to make sure that we maintain economic growth in Australia. And yesterday the Prime Minister decided to use the main measure that governments have available to them to really encourage individuals in the economy through increased budget spending to get out there and sustain the economy through increased activity.

MATTHEW ABRAHAM: Mmm. So the inflation dragon doesn't need to be slain yet.

JENNY MACKLIN: Well, what's important now, as a result of these dramatic changes on the world economy, is that we've got to sustain economic growth. That's the primary objective we have now and why the Government has acted so decisively.

MATTHEW ABRAHAM: Minister for Families, Housing, Community Services, Jenny Macklin, we do appreciate your time coming on 891 Mornings this morning. Thank you very much.

JENNY MACKLIN: My pleasure.