Treasurer looks to tackle housing affordability

Scott Morrison has called for a bi-partisan approach to affordability on supply side, involving efforts from state and federal government

Australia's new Federal Treasurer, Scott Morrison, has called for national leadership to solve the current housing affordability crisis.

Throughout the past few weeks, Morrison and Treasury Officials have been facing questioning around what the government can do to unlock the supply of new housing and make it easier for first home buyers to compete with investors.

“I think it's a really important issue for Australians. They want to be able to have the aspiration to buy their own home,” Morrison told the ABC’s World Today programme.

“I think that's a good aspiration. I think that's something that we should aspire to where we can achieve it, and we want to be able to facilitate that.”

Morrison said it was important that the government take a bi-partisan and rational approach that involves state and territory governments, while noting recent state government decisions in New South Wales aimed at increasing housing supply were "encouraging".

“We do need to do all we can in the area of competition policy and regulatory reform … to ensure that we have a competitive regulatory system when it comes to housing development right across the country, not just New South Wales.”

The government has also suggested new efforts to assist older home owners to downsize and use part of the equity in their houses as retirement funds.

In the past, federal government policies have focused on the demand side by giving advantages to first home buyers struggling to enter the market, such as the Howard government's first home owners' grant.

Coalition backbenchers on the House Economics Committee quizzed Treasury officials about potential options for support on the supply side, with concerns around the influence of foreign investors in the market, and changes to self managed super funds being used to buy houses.

Treasury official Paul Tilley has said attacking the problem from the supply side makes the most sense, but noted that constraints existed around rezoning and urban infill due to the NIMBY mentality of many citizens.

The Treasurer’s intentions were welcomed by building association Master Builders Australia, which agreed that efforts must be made on the demand side, with involvement from both state and federal government.

According to Master Builders Australia CEO Wilhelm Harnisch, improving housing affordability should include a number of structural reforms across planning, development and approval processes, along with the cutting of excessive infrastructure charges.

“A regulation modernisation agenda is needed to improve competitiveness and efficiency,” said Harnisch.

“Boosting the supply of both private and public housing is essential to ensure more Australians can have access to appropriate and affordable housing; structural reform is the answer and not removing negative gearing.”

Harnisch also expressed the importance of national leadership when the constitutional responsibilities lie with state governments.

“National leadership will rely heavily on working cooperatively and collaboratively with state and territory governments through COAG and other processes,” he said.

“The problems surrounding housing affordability and their solutions are well known but the missing piece has always been a positive national agenda for reform.

“Master Builders therefore welcomes the Treasurer's pointed reminder that the housing market is in need of reform and his plans to do something about it.”