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One month ago, I argued that the Australian Treasury’s modelling of Labor’s 5% deposit scheme for first home buyers was proof that Treasury had become a propaganda arm of the federal government.
Under Labor’s First Home Guarantee scheme, which came into effect at the beginning of October, virtually all first home buyers can purchase a home with only a 5% deposit, without requiring lenders’ mortgage insurance, as taxpayers will guarantee 15% of the mortgage.
The Treasury’s modelling, released ahead of the scheme’s introduction, forecast that the policy would only lift home values by 0.5% over a six-year period.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.