In the lead up to the 2016 federal election, Good Shepherd Microfinance asked team members what financial inclusion issues they’d like to see addressed during the election campaign and by the incoming government. With the election still in the balance, Renee Hancock, General Manager – Innovation and Marketing, says the new Government should concentrate on making the great Australian dream a reality for people on low incomes.
I will always remember the excitement of buying my first home. The auction hammer going down, the excitement of putting the sold sticker on the real estate agent’s sign, the nervousness in signing a contract. Yes, it needed a lot of work but it was our place to call home. But for many people owning your own home seems like an impossible dream. Shouldn’t we strive to make home ownership a possibility for all?
I’m not talking about those people currently squeezed out of the market by price rises, or those affected by policies such as negative gearing and stamp duty. These people will have the opportunity to save more or capitalise on a market correction.
I’m talking about the people who you don’t even think about when you think ‘home owner’ – people who, themselves, don’t consider they’ll ever be able to enter the market. They’re on low incomes, living in social housing or affordable rental and perpetual rent payments hinder their ability to save sufficient funds for a house deposit.
But they always pay their rent and hold down steady employment. Surely these people should be able to live the dream also.
Both the Australian and Queensland governments have released discussion papers on housing affordability which is a welcome start. As they’re reviewing submissions and contemplating action, I encourage them to keep an open mind and be willing to challenge the pre-conceived ideas about people on low incomes. I’d also encourage them to think beyond affordable renting, to affordable home ownership where the individual has the opportunity to accumulate assets, build wealth and achieve financial independence.
When the No Interest Loan Scheme (NILS) was proposed 35 years ago, people laughed at the idea that you could give an interest free loan to someone struggling to get by and expect to see your money again. But the Sisters of Good Shepherd, never ones to leave the status quo unchallenged, took a chance and founded a program that now lends around $20 million a year with the support of NAB and has 94 per cent of loans fully repaid.
As long as we can provide an affordable repayment structure for people on low incomes, they will maintain their repayments. Like many of us, they aspire to own a home, they can see the financial security it would provide them and their children, and they’re willing to commit to a plan that will make it happen.
And let’s not talk ourselves into thinking the individual is the only one who would benefit from such an initiative. There’s a deficit of public housing available across Australia – enabling residents to purchase their homes will free up capital for reinvestment in new developments, and will mean people can build equity and reduce the likelihood of regression into financial difficulty which inevitably has a financial impact on Government. It will help tackle intergenerational poverty.
We also encourage government and the financial sector to challenge the idea that homeownership needs to be a two way relationship between a borrower and a bank. Let’s look for partnerships that can help drive the process and new ways of providing finance for people who are traditionally excluded from banking products.
There’s no shortage of programs where government, businesses and community organisations have worked together with great effect; the Saver Plus program brings together the Brotherhood of St Laurence, ANZ and the Australian Government, and our StepUP, AddsUP and Good Money programs are run in partnership with NAB and various governments.
What I’ve learned about partnerships is, as long as there is will and some sharp and flexible minds at the table, you can make things happen.
Let’s make home ownership for people on low incomes happen. We’re calling on the incoming Australian Government to look at innovation beyond industry, and consider how fresh thinking can promote financial inclusion by enabling home ownership for people on low incomes…because every person deserves a place to call home.
General Manager – Innovation and Marketing
Renee Hancock looks after innovation and marketing at Good Shepherd Microfinance. She is responsible for the organisation’s new and emerging programs including areas such as insurance, housing and savings. She has a long career in corporate social responsibility, communications and marketing in both the not-for-profit and corporate sectors.