Housing affordability crisis needs a comprehensive solution, not just a lick of paint

13 May 2019

The Government’s first home buyers’ announcement, which was matched by the Opposition, is not the answer to our housing affordability crisis. ACOSS warns that the Government’s budget forecasts, combined with its unprecedented tax cuts, put funding for housing and other services at risk.

ACOSS CEO Cassandra Goldie said:

“The bipartisan first home buyers’ package will help some first home buyers but it’s not the answer to the entrenched housing affordability crisis.

“ACOSS has concerns about its possible impact on the cost of housing, the risk of negative equity for some people, and the risk of encouraging some people into housing debt they can’t sustain. We’ve had many policies to subsidise first home purchase from both sides of politics over the years. While they benefit some, they often disadvantage others by lifting home prices.

“We need to seriously tackle the underlying drivers of Australia’s chronic housing affordability crisis, like negative gearing and capital gains tax concessions. Our housing tax concessions have driven housing prices through the roof, rewarding speculative private property investors at the expense of people trying to secure a home.  Curbing negative gearing will help ease the boom/bust cycle in housing and make housing more affordable for all.

“People struggling to afford to rent urgently need commitments from both parties to lift Newstart and Rent Assistance, strengthen social housing, and boost private investment in affordable housing generally.

“The Labor Opposition has announced changes to negative gearing and the capital gains tax concession that we welcome. The Opposition has also announced a new rental incentive for investors to deliver 250,000 affordable homes with 20,000 in first term but has stopped short of making a specific commitment on social housing.

“The Government is putting existing investment in housing and other essential services at risk by relying on over-optimistic budget forecasts that have growth in expenditures falling by half over the next four years, and offering $300 billion in tax cuts.

“The Opposition is offering more modest tax cuts and has committed to raising revenue by lowering housing and other tax breaks, which disproportionately benefit people who are already wealthy,” Dr Goldie said.

For more information on ACOSS analysis of the Government’s budget forecasts and tax cuts, see https://www.acoss.org.au/wp-content/uploads/2019/05/190506-FINAL-ACOSS_future-of-services-briefing_May2019.pdf

For a comparison of housing policies, see https://www.acoss.org.au/2019-election-policy-tracker/