GRATTAN INSTITUTE URGES ACTION ON HOUSING AFFORDABILITY

  

The release of the Grattan Institute’s report on housing affordability overnight underlines the fact that there is more to be done on tackling this important issue.

 

The report, titled ‘Housing Affordability: re-imagining the Australian dream’ makes a number of recommendations for governments at all levels in Australia to deal with housing affordability.

 

Far removed from the ‘mission accomplished’ attitude of this Government, the report states there are serious ramifications of not dealing with the issue.

 

The report states that ‘rising housing costs are widening inequality within generations’ and ‘rising housing prices are increasing wealth inequality’ (page 83), and goes on to say that ‘higher house prices and more debt makes the economy more vulnerable to economic shocks’ (page 85) and ‘risks from high house prices and leverage are through a slowdown in spending and higher unemployment’. (page 87)

 

The report’s number one recommendation for reducing the demand for housing is to limit negative gearing and reducing the capital gains tax discount.

 

Unlike Scott Morrison, who is willing to put the vibe before any advice from institutions such as the Grattan Institute and the International Monetary Fund, Labor has put reforming negative gearing and capital gains tax at the centre of our housing affordability strategy – a policy that is also good for the budget and good for jobs.

 

The report also recommends establishing a ‘National Housing Research Council’ to collect nationally consistent data on issues related to housing supply and demand, including data on the operation of state and local government land use planning systems, infrastructure charges and migration.

 

The Abbott Government in 2013 abolished the National Housing Supply Council, which has resulted in no independent source of comprehensive research and data to help inform the government on Australia’s housing needs.

 

Labor has committed to re-establish the National Housing Supply Council to provide an ongoing independent advisory body on boosting housing supply.  A revamped National Housing Supply Council with an expanded remit will:

Provide advice on how state and national policies are tracking against housing policy objectives;

Better tracking and accountability of funds spent through the national agreements; and

Provide advice on Commonwealth land holdings and opportunities for development release to boost housing supply.

 

The Grattan Institute also recommends against schemes such as the Government’s First Home Super Saver Scheme, saying it would ‘make little difference to affordability’. One thing is for sure about the Turnbull government when it comes to housing affordability; if it doesn’t work, it’s almost certain they’ll want to do it.

 

Only Labor has a comprehensive plan to tackle housing affordability, which will also increase financial stability, reduce homelessness and boost jobs.