HIA supports housing policy focus from federal government: Kristin Brookfield

GUEST OBSERVER

The Housing Industry Association, the voice of Australia’s residential building industry supports the Turnbull Government’s focus on first home buyer access and reducing the costs of new housing supply.

Housing affordability is a dominant policy issue in 2017, but it is also a complex one.

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.

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.

In this regard a ‘bond aggregator’ model to increase public and social housing supply is a good start. Consideration of allowing first home buyers to access super savings to support a housing deposit is another policy worthy of 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.

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. 

Kristin Brookfield is the Chief Executive Industry Policy at the Housing Industry Association (HIA). You can contact her here.