Pauline Hanson's One Nation reveals bold plan for a 'people's bank' to make your mortgage cheaper - but taxpayers could face huge risks

Published: 02:53, 15 July 2026 | Updated: 02:56, 15 July 2026 One Nation has unveiled a plan to establish a government‑funded 'people's bank' with the promise that it could make Australians' mortgages cheaper. Senator Malcolm Roberts said this week that the public bank would operate through Australia Post outlets and offer a 30-year fixed-rate home loan at five per cent. The loans would require a five per cent deposit, which borrowers could source either from their superannuation savings or through a first home buyer grant. The move would undercut commercial lenders, with the average rate on new owner-occupier loans sitting at 6.2 per cent in May, according to data from the Reserve Bank of Australia. Roberts added that the scheme would be funded by abolishing the Albanese government's $11.5billion Housing Australia Future Fund. However, economists warned the scheme could overwhelm the system, leading to increased house prices and risk of significant losses during downturns. Professor Richard Holden, chief economist at the University of New South Wales, called the policy a 'very, very bad idea'. He said the federal government may need to spend hundreds of billions of dollars to fund the scheme because Australians would likely flood the bank with applications. Pauline Hanson's One Nation has unveiled a plan to lower mortgage rates through a government-funded 'people's bank'  The loans would require a five per cent deposit, which borrowers could source either from their superannuation savings or through a first home buyer grant (file image) 'If you're charging below-market terms, then you worry about the selection of people who you get in your mortgage pool,' Professor Holden told the Australian Financial Review on Monday. 'And of course, governments just aren't very good at running commercial enterprises. 'There's a reason why the big four banks have been around for a really long time – they're actually really good at doing their core business of assessing credit and matching borrowers and lenders together.' Professor Holden said he could easily see demand for half or more of all mortgage lending flowing to the government.  'In the current environment right now, a five 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,' he said. Challenger chief economist Jonathan Kearns said the policy was 'exceptionally risky' and was concerned it hadn't accounted for potential taxpayer losses during housing downturns. 'In Australia, it's not unusual to have declines in housing practice in the order of five to 10 per cent that we're likely to experience now,' he said. 'It's an exceptionally risky policy, and 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.' One Nation Senator Malcolm Roberts (pictured with Hanson) said the bank would operate through Australia Post UNSW economics professor Richard Holden described the policy as a 'very, very bad idea' However, One Nation leader Pauline Hanson rejected the economists' view that costs could exceed the $11.5billion cap, taking to X to describe the AFR's report as 'made up'. 'One Nation's five per cent interest mortgage plan from a People's Bank won't cost hundreds of billions,' she said on Tuesday.  'This is how the media twists the story and lies about One Nation policies.  'Malcolm Roberts explained the proposal in full... That money has already been spent in the budget, it was just a reallocation. 'It's capped at the $11.5billion that's already been taken out of the budget - that's all that One Nation would have re-allocated.' Hanson's comments came days after One Nation's Treasury spokesman, Barnaby Joyce, appeared to distance himself from the proposal. He told Sky News it was 'a discussion piece - it is not policy'. 'As it goes forward, we need to discuss it, accept it, or dismiss it,' he said. One Nation has also announced its plans to review government charges on new homes and introduce a five-year moratorium on charging goods and services tax (GST) on building materials to help reduce the cost of new housing projects. Hanson first proposed a 'people's bank' ahead of the 1998 Queensland election, which promised to provide low-interest loans under favourable conditions to farmers and small businesses.