The release of the Federal Opposition’s Housing Affordability Plan is an important addition to the housing affordability debate that is occurring in Australia, but it does contain some unwelcome elements says the Property Council of Australia.
“This industry believes in getting Australians into housing. We see it as the primary tool by which Australians can build financial security and establish deep connections to their local community”, said Ken Morrison, Chief Executive of the Property Council of Australia.
“Every Australian should be concerned about what is happening in our largest cities.
“There is much in the Opposition’s Plan that we agree with, there are parts where we don’t agree, and other parts that appear to be focused on the day’s headlines rather than offer serious solutions to our housing affordability challenge.
“The most important plank is the commitment to negotiate a new National Affordable Housing Agreement in a renewed effort to work with the States to lower the cost and increase the supply of new housing.
“This is the right approach and according to research commissioned by the Property Council, has the potential to also add $3 billion to the economy.
“While not explicitly mentioned in the Opposition’s policy, national competition payments provide a real opportunity to incentivise the States to undertake substantive planning reform and unblock Australia’s planning regimes. The Opposition’s announcement is aligned with discussions the Government is already leading through COAG.
“The decision of the Coalition Government to abolish the National Housing Supply Council was a mistake and we applaud the commitment to re-establish it. The policy recognises that if you can’t measure and understand housing markets then you can’t set good policy.
“We are pleased that the bond aggregator idea, which has already been mooted by the Treasurer, is being embraced by the Opposition. This appears to be an area of common ground where government can move quickly to provide a new source of low-cost, reliable financing for community housing organisations.
“We support the establishment of an $88 million Safe Housing Fund to increase support for women and children escaping domestic violence.
“We are not insensitive to financial stability issues, but would like to see modelling on the impact of the decision to limit direct borrowing by self-managed superannuation funds on housing. The SMSF sector is already heavily regulated and we believe that government should use the data it has available to it to stress test the suitability of this practice. The Opposition’s argument there has been a significant lift in lending is not a sufficient reason to curtail the practice.
Mr Morrison says disappointment in the policy lies in its decision to ‘blame the foreigner’ for housing affordability rather than accepting that most of our housing affordability challenges in our major cities are the result of the log-jam of regulation and excessive taxation across the three levels of government.
“The announcement to increase fees for purchases of property by foreigners works well for talkback radio but it won’t put one ounce of downward pressure on house prices.
“The current application fee and penalties regime is less than two years old and there has been no evidence of substantive rorting despite the increased compliance efforts.
“We have seen almost no evidence of the ‘vacant property’ phenomena that the Opposition is trying to solve. It makes no sense for investors to leave vacant properties that could be generating an income. This appears to be a policy position that is seeking to solve an ‘urban myth’.
“The Opposition has missed an opportunity to help pensioners downsize their home without financial penalty. We believe some minor, low cost changes to existing pensioner assets rules could release tens of thousands of family homes across Australia into the market place. In Government, Labor began exploring these options.
Mr Morrison said the Federal Opposition and the industry continue to have a major difference of opinion in relation to negative gearing and capital gains tax.
“Our views about negative gearing and capital gains tax are on the record. We believe it is the wrong approach for jobs, investment, and renters. Nevertheless, the issue of housing affordability is vital to our economy and our community, and as such, we will work with the Opposition on areas where we can find common ground.”
Media contact: Paul Ritchie | [email protected]