TOM STEINFORT, HOST: Welcome back. Australia’s property value debate is really intensifying this morning. Economists warning that first home buyers are being trapped in a negative equity minefield. Joining us to discuss today's headlines is Minister for Industry and Innovation Tim Ayres and Nationals leader Matt Canavan. Hello to you both. Tim, I’ll start with you. Your Government's Budget was supposedly all about fairness. So, what would you say now to the young Aussies who brought property using Labor's 5% deposit scheme and are now just watching their equity evaporate?

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Well, that 5% deposit scheme has meant that hundreds of thousands of young Australians have got access to a home far earlier than they otherwise would. They've saved hard, but they've been able to get a home with a much smaller deposit because the Government's stepped in and backed them. They don't have to pay mortgage insurance. The Coalition's been running a scare campaign about this. But that scheme that the Coalition opposed, the changes we've made in the budget are about tilting the scales in favour of young people, making sure that first home buyers actually get a fair crack in this market. It's a difficult change, but it's an important change, and alongside of all the other measures that Labor has undertaken in the housing market, it's about giving young people a fair go.

HOST: Yes, but you didn't acknowledge the question there. What about everyone facing negative equity now?

AYRES: Yeah, look, house prices will move up and they will move down, but they increase over time. They've increased by hundreds of percent over the course of the last 25 years, 400%. They are many multiples of the salary of an ordinary wage earner. And this is about redressing that balance. So, house prices will grow over time. These changes mean that young people will actually be able to get a crack. They will just grow more slowly. That's what Australians want. Whether you've got a home now or whether you want to own a home. That’s what this is all about.

CANAVAN: I'm just gob smacked at the dismissive nature there of a Government Minister in regards to young Australians who, if they have to take a 5% deposit, by definition would be in massive amounts of debt just starting their lives. And now they've had a kick in the guts with a Government-induced crash of the property market by bunch of tax changes that were based on lies. I mean, the problem here is, I asked about this in the Senate yesterday and the Government hasn't even looked at this issue. They have no data, they haven't asked for advice, they haven't asked for modelling. They've just been completely dismissive, as you've just seen, of the heartache now that thousands of Australians find themselves in. Hundreds of thousands of Australians have actually taken this up, find themselves in thanks to the Government's mismanagement of the economy.

AYRES: That’s just rubbish, Matt. We’ve done this in estimates, that’s just rubbish. That’s just hyperbolic, angry garbage.

CANAVAN: I mean, when the property market crashes like this, the Government seems to be happy with it. That is bad for everyone. It's bad for sellers, it’s bad for first home buyers, it’s bad for the economy. And the Government needs to take this seriously. We can't just let the bottom fall out of the most important asset that Australians own. It’ll hurt everyone if that happens.

HOST: All right, we'll look at another –

AYRES: I mean, honestly, this is the most negative approach to this set of questions –

CANAVAN: – the most negative environment we've had for decades, that's right. It's one of the most negative.

AYRES: Hundreds of thousands of people have used this 5% deposit –

HOST: – I’m sure you could yell at each other on this topic for hours. We’ll move along if we can.

AYRES: – and there are less than 20 of them that have ever defaulted. This is a good scheme that gets young people into a home.

HOST: All right, thank you. We'll move along now because we want to talk about debt of a different type here, and that's the national debt. We've got a big milestone we're about to pass. Not one to really celebrate. About to top a trillion dollars in national debt for the first time. Tim, I know you'll say that, you know, it would have been bigger under the Liberals, but how are we going to pay this off? Where's the plan?

AYRES: Well, it certainly would have been bigger under the Liberals and Nationals because they planned for it to be bigger. This Government, the Albanese Government, has taken prudent action to make sure that where we get savings, we're delivering them into paying off debt. But we're also taking an approach here that's about backing families around cost-of-living issues. The milestone that's important today is that the minimum wage lifts above $1,000 for the first ever, 6% increase in the minimum wage, 4.75% for the rest of award earners. Tax cuts today, $1,000 instant tax deduction and $250 tax offset for every Australian wage earner. These are the kind of measures that matter. We're prudent fiscal management, but also delivering today on July 1st, a whole series of measures for working Australians that are going to make a real measurable difference to people's lives.

HOST: Well, Matt, I guess the issue here would be that giving out more tax cuts and promoting more payment schemes is not going to bring down debt.

CANAVAN: What we have to do though is get our economy going. That's the worst thing at the moment. The reason this large debt is a big concern to our country is because under this Government, we've had the worst productivity performance on record and it's not even close. So, it's making it very hard to service this debt. And we're seeing interest rates go up because of that. Now, Tim says that we planned for it to be bigger. What a load of rubbish. What happened was at the end of COVID it was, it was expected to be bigger. And then we had the Ukraine war, and this Government had a massive, in fact the biggest terms of trade boom in our nation's history and completely wasted it all.

AYRES: Always excuses for the Morrison Government’s fiscal performance. Lots of excuses.

CANAVAN: We still ended up at a trillion dollars in debt. And then Tim has the gall to say, oh, wages are going up 4.75%. Well, in the Government's budget, inflation is expected to be 5% this financial year. So, you get a 4.75% wage increase, but prices are going up 5%. That's what he left out. You’re actually going backwards. Going backwards. If you know basic maths, Tim, you're going backwards. And then because of this debt and spending, interest rates are expected to go up again next month and that will mean all of that is wiped out. All of your wage increase, all those extra prices you have to pay. All gone.

HOST: We’ll move along because Aussie teachers are being told to stop using terms like Rizz, aura farming and lock in and as they attempt to engage disinterested students. Matt, what do you make? Is this a W or should we just let them cook?

CANAVAN: I don't know. I think it's just a bit of six, seven here. One or the other.

HOST: We've never looked older. Tim, you got the Midwinter Ball tonight. You're bringing a bit of rizz for that?

AYRES: I have no idea what you just said, Tom. It's really beyond me. It always was pretty dreadful as a school kid when the teacher tried to do the ‘hello, fellow kids’ routine. Yeah, look, that's the best I can do.

HOST: If that's the best you can do, I'd hate to see the worst. Great to see you both. Hey, enjoy festivities tonight. Appreciate your time on the show this morning.

AYRES: Take it easy.