The Housing Industry Association (HIA) has thrown its support behind the Turnbull Government’s to focus on first home buyer access and reducing the costs of new housing supply.
Treasurer Scott Morrison is currently in London, looking to find ways to open up our housing market to more people and help solve the crisis in some of our cities, taking the UK as a lead. Turnbull has also appointed Victorian MP Michael Sukkar to the Treasurer’s office to help tackle housing affordability.
HIA chief executive – Industry Policy, Kristin Brookfield said housing affordability was a dominant policy issue this year and also a complex one to solve.
“A suite of policies to address low housing affordability is required and these policies need to come from the Federal government, state governments, and from cooperation between the two levels,” Brookfield said.
“Changes to negative gearing (and capital gains tax) are not the appropriate policy focus to addressing Australia’s housing affordability challenge.
“Reducing the cost of new housing supply and tackling the deposit gap faced by aspiring first home buyers is the appropriate core focus,” she said.
Brookfield noted that a ‘bond aggregator’ model to increase public and social housing supply was a good start while consideration of allowing first homebuyers to access super savings to support a housing deposit is another policy worthy of a debate.
“A well-designed housing infrastructure fund must also be part of the Federal government’s consideration. A federal government-backed policy to reduce the price of non-essential infrastructure currently being paid for by new home buyers would play a crucial role in reducing the cost of new housing supply.”
Independent research conducted for HIA by Independent Economics, using the same model as that used by Commonwealth Treasury, provides compelling evidence that amending negative gearing provisions would be a retrograde step as it would reduce both Australian living standards and housing affordability.
“In an ‘ideal’ world the two keys to fully addressing Australia’s housing affordability challenge are boosting residential land supply and eliminating stamp duty on residential property conveyances,” Brookfield said.
“Both represent large policy challenges, and can be achieved with cooperation between state governments and the Federal government.”
“The Henry Tax Review ‘blueprint’ correctly recognised that reforms to housing supply and housing assistance need to come before everything else. Consideration of any policies to amend negative gearing or capital gains tax concessions forget this important finding, provide false hope to aspiring home buyers, and will lead to a deterioration in housing affordability,” Brookfield added.