Liberal Senator Andrew Bragg says anti-housing states should get Commonwealth funding cut

The Prime Minister has slammed the Coalition’s plan to “hit the states hard where it hurts” in order to ensure they meet housing targets and increase home ownership.

The prime minister says the Coalition’s plan to consider cutting GST payouts to state and territories as punishment for not fulfilling their housing targets “doesn’t make sense”.

Appearing on ABC’s Insiders, the opposition homeownership spokesman said states and territories needed to do the heavy lifting in increasing housing supply, flagging harsher punishments for jurisdictions which don’t comply.

“I want to make an important point here that NIMBY-ism is poison for young people, and when you see councils and states block developments, particularly apartment buildings, that is a disaster for young people,” he said.

“There are a lot of different things you could do in terms of the financial arrangements that exist between the commonwealth and the states,” he added, pointing towards a New Zealand policy which links housing completions to council funding.

Liberal Senator Andrew Bragg said the Coalition will look at implementing financially punishments on states which fail to meet housing targets. Picture: NewsWire/ Martin Ollman

Senator Bragg added the Albanese government’s current Housing Australia Future Fund, which supports states and territories to build 30,000 homes over five years, was “a failure,” with the Coalition committing to slash the policy.

Asked by host David Speers whether the Coalition would dock GST distributions, Senator Bragg said the Opposition had yet to announce its supply policy, but said the punishments were “under consideration”.

“We have the vertical fiscal imbalance where we collect most of the revenue and give it to the states,” he said.

“We need to be creative and find a way to hit the states hard where it hurts, otherwise I fear we will drift into a situation where the housing problem will get worse before it gets better.”

But Anthony Albanese said the Coalition’s plan to cut GST was further proof Peter Dutton did not “support” the states.

“We have had in the past people like Julie Bishop and others making it clear that Peter Dutton didn’t support WA, getting its fair share of GST,” he said, speaking in Perth on Sunday.

Prime Minister Anthony Albanese says the Coalition’s plan to cut GST ‘doesn’t make sense’ for the states. Picture NewsWire / David Clark

“And today, Andrew Bragg has put Australians on notice that he’s coming after the GST.

“And he’s coming after it hard, to quote him, he will hit the states hard where it hurts.

“Well, I have news for Andrew Bragg and for Peter Dutton – states are just where people live.

“It’s the people of Western Australia and other states who’ll be hit hard where it hurts and where it will hurt is education, health, TAFE, infrastructure, that’s where it will hurt.

“And Andrew Bragg has made it very clear that it is under consideration such a move against the states and against them getting their GST.”

Mr Albanese said it didn’t “make sense” to threaten states with GST cuts.

“It is their money that people contribute,” he said.

“That was the deal that was done all those years ago, and it makes no sense whatsoever.

“What we’re doing is working cooperatively with the Cook government here about building more homes.

“I tell you what the coalition can do if they want more homes built, get out of the way.”

Any moves to alter GST distributions would come under immediate attack from the states, with annual funding splits generating a war of words between commonwealth and state governments every March, when the funding is revealed by the Commonwealth Grants Commission.

The revenue stream contributes about 23 per cent to state governments, which have lesser capacity to generate income from state-based taxes.

The Coalition has yet to announce its plans to increase housing supply, but Senator Bragg said noncomplying states should be given financial penalties. Picture: NewsWire/ David Swift

Senator Bragg also defended the Coalition’s plan to allow Australians to use their superannuation to buy a home. While the plan to then-government proposed before the 2022 election was capped at $50,000, Senator Bragg has flagged the Coalition would consider increasing that amount.

While the move has been criticised by the industry and economists who say it could drive up property prices, Senator Bragg said it would allow more Australians to enter the housing market.

“The key determinant for your success in retirement is not your superannuation balance. It’s your housing status. So that’s why we make no apology in allowing people to use their own money to get a house,” he said.

“I think it’s one of the best ideas in the policy marketplace because unless you have access to the bank of mum and dad, and a lot of Australians don’t have access to that bank … your super is your biggest pool of capital”.

Originally published as Liberal Senator Andrew Bragg says anti-housing states should get Commonwealth funding cut