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 National 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.
A harder-edged role for the central bank
The party’s economic agenda also reaches into the governance of monetary policy.
Joyce revealed the minor party’s plan to pare back aspects of the RBA’s current structural autonomy and equip it to directly lean on governments over their spending and regulatory decisions.
Under the proposal, the RBA governor would be able to issue explicit “directives” or public critiques aimed at pushing the federal government to cut outlays in pursuit of lower inflation.
One Nation is also seeking to redesign the RBA’s existing 2–3 per cent inflation target band, with Joyce saying that a lower target should be considered to force tighter discipline over both monetary and fiscal settings.
Yet former RBA governor Bernie Fraser believes the central bank already places substantial weight on inflation.
Fraser said the RBA had a tendency to “over-emphasise on inflation”, adding that any fiscal policy advice from the central bank would likely end up “interfering with government policy to improve wellbeing and living standards”.
Fraser said that choices about pensions and social programs should remain firmly in the hands of elected governments.
“It’s not for the Reserve Bank to be telling the government whether it should be spending money on pensions or on helping on social things,” he said.
He said that monetary and fiscal policy needed to work “hand in glove”, yet added that this was already built into the system via the Treasury Secretary’s seat on the RBA’s board.
“I think that the RBA has got enough to do if it does its job properly with the inflation and labour market obligations it has, and that they have regard to information that can come from the secretary of the Treasury during their participation in Reserve Bank board meetings,” Fraser said.
“So, it’s not something that I would be thinking that would be a helpful step.”
[Related: Calls intensify for government to set up a bank]
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