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.
