There are signs federal Labor might be prepared to engage on the crucial, but politically tricky issue of housing affordability in the lead up to the election. Reports today say they are “considering introducing a superannuation-style savings account to help Australians buy their first home”
The Opposition says it is examining whether people should be able to use part of their pre-tax earnings to save a deposit.
Labor’s Housing spokeswoman Tanya Plibersek says the Opposition is considering a range of options to help first home buyers.
“We’re looking at a way that people could put in money directly from their pay packet each week, save it over a number of years and finally take out a lump sum, but only for a deposit for a home,” she said.
I don’t think any one measure will work on its own. Changes like this might work if they are part of an integrated package of measures.
This type of proposal would need to be targeted very tightly, or it could just end up as another tax break to add to all the other tax breaks that are already distorting the housing market – potentially costing a lot of money while also possibly contributing further to upward pressures on housing costs.
There is a meeting of the country’s housing Ministers in Darwin this week. This report in The Age says that
the states are set to demand a big overhaul of government housing policies, amid plunging affordability and claims that billions of dollars of Commonwealth rent help has flowed to the wrong people. The states and territories will use a national conference of housing ministers in Darwin on Wednesday to unveil a six-point plan they claim will lift access to government housing, improve home ownership rates and boost affordability for renters.
There’s no shortage of ideas about how to fix the housing affordability crisis, but until we get a consistent and cooperative national approach on it, we won’t get very far. As the report in The Age makes clear once again, whilst ever Peter Costello remains in office, we won’t get further than blaming the states and ignoring the evidence that the Commonwealth’s ‘assistance’ is partly contributing to the problem.
Treasurer Peter Costello says housing affordability is a state issue. He argues that the Commonwealth already provides substantial tax incentives, including capital gains tax discounts for investment properties and negative gearing, allowing investors to write off losses against income.
Labor has released a discussion paper, which you can access here, prior to holding a national housing affordability summit later this month.