Should Parliament have more power in setting mortgage rules?

“What I mean is that the regulator, the Australian Prudential Regulation Authority, has been allowed to set the rules for first home buyers in the dark without any real scrutiny or interest from the government,” Bragg continued, describing the personnel making decisions at APRA as “unelected bureaucrats”.

Stressing that monetary policy should still be made “independent of executive government”, Bragg said that the types of decisions he feels parliamentarians can handle fall outside of that description.

“The Parliament should be prepared to set rules for mortgages: how they are organised, assessed and regulated,” he explained.

“Of course, we need advice from independent experts, and it’s sensible to have operational independence for APRA, but these issues are too important to delegate entirely,” the Senator said.

Bragg used this opinion piece to emphasise his views on the 3 per cent mortgage serviceability buffer that APRA imposes.

“It might make sense to have a 3 per cent buffer when the official cash rate is 1 per cent, but much less so when it is set at 4.35 per cent.

“The buffer is bad news for prospective first home buyers, and it can also create mortgage prisons, where refinancing is impossible,” he said.

Bragg cited analysis from investment bank Barrenjoey that suggested up to 50,000 first home buyers could buy a home with adjustments to the current lending rules, such as by lowering the serviceability buffer.

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