The Coalition has vowed to reserve the 5 per cent Deposit Scheme exclusively for citizens if it secures government, shutting permanent residents out of the widely used program.
Opposition Leader Angus Taylor used a speech to the Menzies Research Centre on Tuesday (14 April) to announce that a future Coalition government would bar all non‑citizens from accessing the government’s flagship 5 per cent Deposit Scheme.
Unveiling the policy as part of a broader crackdown on migration and a renewed focus on what he called “Australian values”, Taylor said the deposit guarantee needed to be recast as a benefit for citizens alone.
Setting up that argument, he said citizenship demanded a higher standard than simple residency and needed to be treated as such.
“Central to these values is that citizenship is a privilege – it’s not a handout, and permanent residency must reflect that same expectation, a genuine commitment to Australia, demonstrated through contribution, integration, and respect for our values,” Taylor said.
He said that this philosophy should determine who was eligible for government subsidies and concessions.
“That principle must also extend to how we allocate taxpayer-funded support,” he said.
The Opposition Leader said he had been shocked by the scale of permanent resident participation in the scheme since Labor widened eligibility in mid‑2023.
“That’s why I’m appalled by revelations that nearly 50,000 non-citizens have used Labor’s first home buyer 5 per cent Deposit Scheme,” he said.
“Labor opened this scheme to permanent residents in 2023, but such a loan scheme – financed by the Australian taxpayer – should be reserved for Australian citizens.”
Taylor said winding back that expansion would be a core Coalition commitment, making clear that permanent residents and any other non‑citizens would no longer qualify for the scheme if he became Prime Minister.
“The Coalition will close this scheme to anyone but Australian citizens,” he said.
“And this is just the start, we will look at further measures to reserve key social and economic entitlements for Australian citizens, and we’ll have more to say about that in due course.”
The 5 per cent Deposit Scheme has become a key plank of the Home Guarantee Scheme and now underpins close to half of new first home loans.
High uptake, low defaults
The comments come despite data showing that the Home Guarantee Scheme had generated minimal direct losses for government to date.
Under the 5 per cent deposit model, the Commonwealth guarantees part of an eligible buyer’s loan, allowing them to purchase with a smaller deposit and avoid lenders mortgage insurance, with a cost to taxpayers only incurred when a borrower defaults.
Housing Australia data shows that there have only been 12 defaults since its launch in 2020, representing less than 0.01 per cent of total guarantees.
Following the July 2023 expansion that added permanent residents and enabled joint applications between friends and family, more than 48,000 non-citizens have used the scheme.
Housing Australia reported in late March that more than 300,000 Australians in total had bought or built a home with support from the program.
Government defends permanent resident access
Responding to Taylor’s announcement, Immigration Minister Tony Burke stressed that allowing permanent residents to access government programs was a longstanding feature of the Australian system.
“That particular policy has been completely consistent with how all those other policies have been run,” he said.
He added that the idea of permanent residents being eligible for government entitlements had been in place “for decades”.
The Coalition’s stance follows continued calls from One Nation Leader Pauline Hanson for the 5 per cent Deposit Scheme to be restricted to citizens and sharpens political debate over whether non-citizens should share access to government housing support schemes.
[Related: 5% Deposit Scheme tops 300k buyers]
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