Turnbull government to pursue new housing affordability package
TREASURER Scott Morrison has all but ruled out changes to negative gearing in the May Budget in a major speech on housing affordability.
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TREASURER Scott Morrison has all but ruled out changes to negative gearing in the May Budget in a major speech on housing affordability.
In a scene-setting, pre-Budget speech today the Treasurer focused heavily on the lack of affordable housing for Australia’s renters, as well as the challenges facing young Australians and retirees.
Mr Morrison argued that Labor’s proposal to strip back negative gearing tax breaks would not help those looking to buy their first homes.
“Regardless of one’s opinions of the merits or otherwise of negative gearing, it is an established and structural component of Australia’s housing markets,” Mr Morrison said.
“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.”
Despite The Australian’s reports today that the Government’s housing package was likely to include changes to superannuation rules and tax breaks for retirees, the Treasurer made no firm announcements in his address to the Australian Housing and Urban Research Institute in Melbourne.
It’s understood the package will include a mutual-obligation superannuation plan for first-home buyers, tax breaks for downsizing the family home in retirement and a social housing plan to alleviate rental stress.
In his speech, Mr Morrison strongly warned against any measures that would prevent ‘mum and dad investors’ from entering the market.
“If mum and dad investors were not part of our private rental market, there would be fewer rental properties available, meaning higher rents, further crowding out of those on lower incomes and even greater pressure on already overstressed community and social housing resources,” he said.
Opposition leader Bill Shorten slammed the Government’s refusal to alter negative gearing rules.
“If we want to male sure that the great Australian dream of being able to afford your first home doesn’t turn into the great Australian nightmare of being locked out of the housing market, the big test is ‘Will you reform negative gearing?” Mr Shorten told reporters in Brisbane today.
The Labor leader accused the Treasurer and Prime Minister of being “pig-headed” on negative gearing reform because it was a Labor policy.
“Deep down in the core of the Turnbull Government, they know if they want to resuscitate the Australian dream of owning your own home, they immediate to act on negative gearing but this is a Government who is so pig-headed, they would rather play politics and stamp their foot than help young Australians get into their first home,” he said.
Earlier, The Australian reported the housing package will focus on lowering entry barriers to the housing market, institutional investment in social housing, rental affordability, regional relocation incentives, foreign property ownership, investment and housing in retirement.
The superannuation model believed to be favoured would allow first-home buyers to divert superannuation contributions into a home savings account, to be matched dollar-for-dollar by contributions from personal savings, according to The Australian.
The amounts available and the time period over which it could be accessed would be capped.
The government is also considering a plan to unlock federal government land for housing to address supply shortages facing the states.
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