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One Nation proposes government-backed 30-year fixed mortgages
One Nation has unveiled its plan to establish a government‑funded “people’s bank”, alongside an overhaul of the Reserve Bank of Australia’s powers and inflation target.
The minor party has outlined a proposal for a new public bank that would offer 30‑year fixed‑rate home loans at 5 per cent, alongside a push to give the Reserve Bank of Australia (RBA) greater license to pressure governments on spending.
One Nation said it would scrap the Albanese government’s $11.5 billion Housing Australia Future Fund and redirect that money into a new lending institution operating through Australia Post outlets, which would provide long‑term fixed mortgages at a concessional 5 per cent rate.
The loans would require a 5 per cent deposit, which the party said borrowers could source either from their superannuation savings or a first home buyer grant.
One Nation presented the policy as a way to “take on” the major banks by undercutting their mortgage pricing.
With new owner‑occupier rates averaging about 6.2 per cent in May, according to RBA data, a 5 per cent fixed rate would sit far below prevailing market offers.
The concept revives One Nation leader Pauline Hanson’s longstanding political interest in a state‑backed lender.
Before the June 1998 Queensland state election, Hanson proposed a “people’s bank” that would extend loans to farmers and small businesses at a fixed 2 per cent interest rate.
Concerns over cost, demand, and credit risk
However, economists have raised red flags about the scale and risk profile of the plan, with UNSW economics professor Richard Holden saying that the funding allocated from the Housing Australia Future Fund would be overwhelmed by likely demand.
He said the policy “could require anywhere from 10–50 times its proposed $11.5 billion funding envelope, as Australians would likely flood the institution with loan applications”.
“In the current environment right now, a 5 per cent 30-year fixed mortgage, I can’t imagine why any single person who’s on a standard variable rate paying more than 100 basis points more than that, would not refinance,” Holden said.
He described the proposal as “a very, very bad” idea, saying that “if you’re charging below-market terms, then you worry about the selection of people who you get in your mortgage pool”.
Meanwhile, Jonathan Kearns, chief economist at investment management company Challenger, questioned whether the plan properly accounted for potential losses in a downturn, saying that a 5 per cent deposit provided a slim equity buffer for the government if borrowers fell behind on repayments and mortgaged properties had to be sold.
“In Australia, it’s not unusual to have declines in housing practice in the order of 5–10 per cent that we’re likely to experience now,” he said.
He said the scheme was “an exceptionally risky policy”, noting that “you’d be transferring all of that risk onto the government’s balance sheet, and not just for borrowers that you’ve deemed to be needy, but for all borrowers”.
Over the weekend, One Nation’s treasury spokesperson Barnaby Joyce declined to guarantee that all of the party’s policies would be submitted to the Parliamentary Budget Office for formal costing before the next federal election.
One Nation has defended its proposed low-interest home loan scheme, with leader Pauline Hanson saying the policy would be limited to $11.5 billion in funding.
She said that the economists’ estimates that it could expose taxpayers to costs running into the hundreds of billions were “made up” and the program’s cost would be taken from the Albanese government’s Housing Australia Future Fund.
“That money has already been spent in the budget, it was just a reallocation,” Hanson wrote on social media.
“This is how the media twists the story and lies about One Nation policies.”
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