RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

The Morrison government’s latest stimulus effort is a grants project aimed at home renovations.

But there are serious concerns that its real focus is on paying back Coalition voters.

Today: National correspondent for The Saturday Paper Mike Seccombe on the HomeBuilder package and the power of tradesmen.

Archival tape -- reporter:

Scott Morrison is hoping Australia will build its way out of recession brick by brick.

Archival tape -- reporter:

Australians dreaming of building a new home or making major renovations will now be eligible for $25,000 grants, to turbocharge the construction industry during the Covid-19 recovery.

Archival tape -- reporter:

Construction companies are being overwhelmed by interest from Queenslanders looking to cash in on the free $25,000 HomeBuilder grant.

Archival tape -- reporter:

The government says the scheme will support over a million jobs post-Covid19…

RUBY:

Mike, at this point, how powerful are tradesmen in Australian politics?

MIKE:

Well, quite powerful. And this is particularly the case because over the past few decades, they have moved their political allegiance. It's hard to be precise about when this political migration began. But Ian McAllister from the ANU… McAllister reckons that the migration dates to the mid 1980s.

So regardless of exactly when it started, the shift was important to the election of John Howard's government back in 1996, when Howard called these people his quote “battlers” unquote.

Archival tape -- reporter:

The seat of Lindsay, based around Penrith, was the heartland of John Howard’s Battlers...

MIKE:

And then, of course, they were rebadged as Tony's Tradie's when they helped the Abbott government into power.

Archival tape -- snippets:

Tony’s Tradies
Tony’s Tradies
Tony’s Tradies are getting a massive benefit out of this budget.

MIKE:

And we can say, I think, that without them, Scott Morrison almost certainly wouldn't be our prime minister today.

Archival tape -- unknown:

… and boy have they voted on the weekend. It’s clear here in Queensland there has been a high-vis revolution against a do-nothing state Labor government…

MIKE:

So they're a pretty influential bloc.

RUBY:

You covered John Howard's rise. How important did those tradesmen look at the time and how significant was it for Labor to lose them?

MIKE:

[Laughs] I wish I could remember exactly how important they looked at the time. I mean, it was noticeable. But what but what's been more noticeable then and now is that there's been just a big realignment in politics generally. You know, probably starting around that time and increasingly so. And this has been significant for all parties, right. So the calculus of assembling a voter base has become more complicated over time.

RUBY:

So, Mike, what made this bloc of once Labour voters part of the coalition's base?

MIKE:

Well, there's a large variety of factors in play. You know, once upon a time, you could look at the colour of someone's collar and it was a reasonable indicator of how they'd vote. But now there's a whole lot of other factors in play: age, sex, education, how we socialise, where we live, things like that. But a big one, a big consistent one, remains assets. So people with lots of assets tend to be conservative voters. Doesn't matter what your background, socially and in those other contexts.

What counts is how much you've got in the bank and what assets you own. And as it turns out, Tradies are doing quite well. The stats show they tend to earn quite a lot of property - you know, not only their own houses, but rental houses. They own a large share of the self managed super funds. They own a large share portfolio, collectively. According to Ian McAllister's latest figures, they are the group that is particularly likely to vote conservative: men with trade qualifications.

RUBY:

And so why does that matter now?

MIKE:

Well, I started looking into it when Scott Morrison announced his latest economic stimulus measure. You know, the so-called HomeBuilder package - another of those, you know, conjoined words with a capital letter in the middle - HomeBuilder.

And the deal that is being offered here is, to say the least, a bit unusual.

RUBY:

So what is it?

MIKE:

Okay. Well, essentially, it's a grants program for homeowners and homebuyers, you know, similar to a lot of similar schemes that we've seen run over the decades. But there are some unusual features about this one. For a start, it's not limited to first homebuyers - as is normally the case - which were seen as a way of helping people into the market. Anyone can get into it.

People can get their 25,000 dollar grant if they build a house or if they substantially renovate a house. So you have to kick in 150,000 at least. And that's an interesting thing because it doesn't actually add to the housing stock. I mean, it doesn't give us any more houses at the end. It just gives some homeowners rather nicer houses than they previously had.

In addition to that, I might add, they can get any other homebuyer incentives that are on offer from state government. So, you know, it may not wind up being 25,000 for some people. It may wind up being 50,000 or or so, because they will also be able to reap the benefit of other schemes on offer at a state level.

Applicants have to enter into a contract before the end of this year, and construction will have to begin within three months of the contract date. And like I said, the project must have a minimum value of 150,000 dollars. There's a maximum value of 750,000 dollars. So the limits that have been placed on the value of projects will likely prevent, you know, hugely wealthy people in the inner suburbs of the major cities from accessing the scheme.

But it will benefit still people who are pretty well-off, because it's available to people earning roughly two and a half times the median household income, which, you know, is quite well-paid people.

And of course, the short timeframe, as many experts have pointed out, means that people who are applying for this will probably have their finance lined up already. Which is to say that a lot of the grant recipients would have carried out the work with or without HomeBuilder. This is just cream for them. I mean, I was looking at the Nine media’s Domain section the other day, and they had a whole story on how you could, you know, upgrade your cabinetry or, you know, get a better bathroom fittings courtesy of HomeBuilder, which seems to me to be, you know, not exactly what the usual intent of our home grants scheme is.

RUBY:

We’ll be back in a moment.

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RUBY:

Mike, we’re talking about the Morrison government’s HomeBuilder scheme - and some of the issues with it. So why is the government doing it?

MIKE:

Its benefit is dubious. I mean, one commentator, Emma Dawson, who's the executive director of the progressive think tank Per Capita, just wailed into it the other day.

Archival tape -- Dawson:

I was pretty dismayed by it as a policy announcement. I think it is poorly targeted, likely to exacerbate inequality in income and wealth in the country...

MIKE:

She described it as, and I'm quoting, the most mendacious piece of public policy since Peter Costello decided to give tax refunds to people who didn't pay income tax.

Archival tape -- Dawson:

Cranking up more private debt by transferring public debt into private household assets is just an economically backward thing to do

MIKE:

And her take on it was that it was structured for the purpose of pork barrelling the coalition's electoral base.

Archival tape -- Dawson:

We are essentially using government debt, public debt, to transfer to private wealth in the form of household assets. So yeah, I’ve got a lot of concerns about it.

MIKE:

If you look at the Australian election study for the most recent election - last year’s - it shows that 50 percent of all homeowners gave their first preference votes to the coalition parties. Among people who owned not only their own home, but also rental property - an investment property - the figure was 57 percent. So that's that's, you know, a big part of the Coalition base. Among people who rented, though, voters who rented, just over a quarter voted conservative.

RUBY:

So you're saying that many tradesmen vote conservative and they'll benefit from this scheme. And also, half of homeowners vote conservative and they'll benefit as well.

MIKE:

Yes, that's that's exactly right. People who are inclined to vote for the coalition will benefit from this.

RUBY:

But, Mike, did the government just need to act quickly and get money out of the door? Stimulate the economy?

MIKE:

Well, yes, that's that's certainly partly true. The construction industry, it's actually gone okay so far because there's a pipeline effect here and things take a little time to work their way through the system. And construction wasn't shut down like a lot of other sectors during the early part of the pandemic. But the projections are that things are tapering off.

But the fact that the money can be used to fund renovations, particularly, is questionable, because it doesn't increase the stock. And it doesn't do anything about the key issue of housing affordability. I spoke with Adrian Pisarski, who's the executive officer of National Shelter, which is the peak body for social housing groups. And he pointed out that setting a minimum value of 150,000 means that a lot of smaller work that might be actually necessary will be excluded. You know, stuff that would allow older people to make changes if they wanted to continue living in their homes into old age, you know, to upgrade their fittings. There was nothing that indicated that you should make homes more energy efficient or no considerations of that kind. It was simply, you know, build it; pretty blunt in that regard.

And the money could have been better spent in the view of a very wide range of people. You know, a lot of organisations - the Housing Industry Association, the Master Builders, CFMEU, a whole raft of welfare groups - have been advocating: just build a lot more social housing stock because there's a huge shortage of social housing in Australia. We know that a lot of people have been forced into the private rental market and are really struggling. So there's a very, very strong argument that the government could have put this money into building up Australia's very depleted and very rundown stock of public housing.

RUBY:

Why do you think the government didn't go with those options?

MIKE:

Well, I can only go back to the election study data. Homeowners, and even more so people own rental properties, are inclined to vote for the coalition. Renters are more inclined to go for Labour and the Greens, and people who work in construction and who I might add disproportionately own not only their own homes, but others, are inclined to vote for the conservative. So, you know, I think that Dawson’s argument was essentially correct, that this is a scheme that will be good for the conservative electoral base.

I mean, rather than calling it HomeBuilder, I would be inclined to call it VoteKeeper.

RUBY:

Mike, thank you so much for your time today.

MIKE:

Not a problem. Thank you.

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**

RUBY:

Also in the news -

Victorian Labor MP Adem Somyurek has been sacked from Cabinet and has resigned from the Labor party, following allegations of branch stacking.

A Channel Nine report aired claims Mr Somyurek handed over thousands of dollars in cash and used parliamentary employees to create fake branch members.

The same report also aired recordings of him using offensive and misogynistic language about a ministerial colleague.

Mr Somyurek said the recordings were of private conversations between him and a long-time friend… and denies the branch stacking claims.

The Victorian Premier Daniel Andrews says he’s referred the allegations to police and the state's anti-corruption authority.

And several major projects will have their approval times slashed, as the Federal government fast-tracks billions of dollars of building work.

The Prime Minister Scott Morrison has named 15 ‘priority projects’ to stimulate the economy, including the Olympic Dam mine in South Australia, and the Inland Rail from Melbourne to Brisbane.

I’m Ruby Jones, this is 7am, see you tomorrow.