Scott Morrison has laid out Australia’s housing affordability problems, ranging from young people trying to raise a deposit to older people using their superannuation lump sum to pay off the mortgage.
The treasurer also used a pre-budget speech in Melbourne to discuss shortages in the rental and community housing markets.
He reiterated a national affordable housing agreement with the states wasn’t working and “just shovelling money out the door” won’t solve the problem.
“Obviously there’s not a single national housing market and affordability is not impacting all Australians the same way or at the same time,” he told an audience at an Australian Housing and Urban Research Institute address in Melbourne.
“However, it is worth remembering Sydney and Melbourne are home to forty per cent of Australians and the significant housing challenges faced in Sydney and Melbourne do have national implications.”
Housing affordability is expected to be a key plank of the May 9 federal budget.
Mr Morrison admits there’s no single or easy solution and blamed previous governments for avoiding the issue.
“Failure to confront these issues in the past can be traced back to the problems we face today,” he said.
Obstacles to housing supply had to be removed. These include planning delays and regulation, infrastructure and services, development costs, taxes and charges and access to sites, including government land.
He’s also made clear the federal government won’t be touching negative gearing, after describing it as a “structural component” of Australia’s housing market.
“Disrupting negative gearing would not come without a cost, especially to renters, let alone the wider economic impacts,” he said.
“Proponents of disruptive negative gearing changes have ignored this fact.”
But Opposition Leader Bill Shorten said the government was being “pig-headed” because Labor got in first with it plan to reform negative gearing tax concessions.
“They would rather play politics and stamp their foot than help young Australians get into their first home,” he told reporters in Brisbane.
However, the Property Council of Australia agreed with the treasurer that it was better to use “a scalpel rather than a sledgehammer” to boost housing affordability.
“It’s why we believe there is scope, as part of broader tax reform, to reduce the capital gains tax discount to 40 per cent (from 50 per cent) in the May budget,” PCA chief of housing and policy Glenn Byres said in a statement.
Industry super fund Cbus CEO David Atkin said funds could play a role in investing to help improve the supply of affordable housing.
But said letting first home buyers dip into their retirement savings for a house deposit was not the answer and “should be ruled immediately”.
Mr Morrison declined to comment on reports the government could provide incentives for older people to downsize to free up housing stock.
Marcus Leonard at tax consultants BDO said the stamp duty cost of changing residences was now so high it discouraged people from moving.
“While the best option would be to remove stamp duty completely from residential housing, the provision of stamp duty concessions for older persons when they downsize their houses may have some effect in providing some more supply to the system,” he told AAP.
The Treasurer also indicated foreign investors who bought units but kept them empty and out of the market had not escaped his attention.