One Nation's Economic Proposals: A Mixed Bag
Barnaby Joyce, now One Nation's Treasury spokesperson, has floated several economic ideas, but only one—the concept of a people's bank—deserves serious consideration, according to Greg Jericho, a Guardian columnist and chief economist at the Australia Institute. Jericho dismisses Joyce's suggestion that the Reserve Bank of Australia should have power to call for spending cuts, arguing it would politicize the central bank and undermine democratic accountability.
The People's Bank: A Good Idea Revisited
The idea of a publicly-owned bank is not new. In 2009, six high-level economists recommended it after the global financial crisis, and it has long been Greens policy. Jericho supports it because it could challenge the dominance of Australia's big four banks—Commonwealth, Westpac, NAB, and ANZ—which together hold more than two-and-a-half times the home loans of the rest of the banking sector. They generate 80% of interest income from housing loans, a level higher than before the GFC. Jericho notes that the big four's success stems from an oligopoly, not superior business acumen, and that government-owned banks can be profitable: in 1989-90, the Commonwealth Bank delivered a A$110 million dividend to the government before privatization.
More competition could reduce the gap between loan and deposit rates, which has grown to pre-GFC levels. Jericho suggests that any entity, including Australia Post, could help improve competition, lower fees, and reduce the big four's oligopoly power.
30-Year Fixed 5% Mortgages: A Flawed Proposal
One Nation also proposed offering 30-year fixed mortgages at 5%, which would be attractive given current three-year fixed rates of 6.74%. However, Jericho argues this policy would likely increase demand and house prices, undermining recent efforts to cool the market. The loans would be capped at A$11.5 billion, replacing the Housing Australia Future Fund (HAFF), which uses its A$11.5 billion to generate A$500 million annually for social and affordable housing. One Nation's plan would instead fund around 15,600 home loans (based on the average loan of A$735,000), a fraction of the 120,841 first-home buyer loans taken out in the past year.
Jericho raises unanswered questions: eligibility criteria, loan size caps, whether loans would be first-come-first-served, and if they would only apply to new housing. He notes that Joyce later described the proposal as a "discussion piece, not policy."
Conclusion: Borrowing Good Ideas, but Lacking Substance
Jericho concludes that One Nation's best ideas are borrowed—like the people's bank—while their own proposals, such as the 5% mortgage, lack substance and risk worsening housing affordability. He urges focus on policies that genuinely reduce the big four's oligopoly power.
