Federal treasurer Scott Morrison’s May budget is expected to have a significant focus on the nation’s housing affordability crisis.
According to The Australian it will likely target everything from lowering entry barriers to the housing market, institutional investment in social housing, rental affordability, regional relocation incentives, investment and housing in retirement.
New figures, expected to be released this week by the treasurer, reveal 1.3 million Australians now negatively gear properties.
Morrison argues that the Opposition’s plan to pull back on negative gearing tax breaks will only increase the cost of renting.
“Disrupting negative gearing would not come without a cost, especially to renters, let alone the wider economic impacts … this would not be good news for the 30% of Australian households who rent,” he will say in a pre-budget speech to the housing sector today.
As part of tackling the problem, Morrison is likely to introduce an Affordable Housing Finance Corporation. This would use a “bond aggregator” model, similar to what is used in the UK, to boost investment into community and social housing around Australia.
As for first home buyers, Morrison will call on state governments to release more land and increase the supply to the market.
It is the first budget to apply policy to an area driven largely by interest rates,but Morrison acknowledges that his government must take that risk.
“Our response must be comprehensive — there is no silver bullet,” his speech says.
“One budget will not turn these issues around in isolation, but we can make a start. There are no single or easy solutions and the payback is achieved in some cases over a generation – not an electoral or budget cycle.
“Others have sought to oversimplify the issue by promising Australians they would all be able to buy the house they wanted at the price they can afford by changing one tax. It’s not only wrong and dangerous policy, it’s cynical and cruel.”
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