The recent release of the Federal House of Representatives Standing Committee on Tax and Revenue’s report on housing affordability and supply has been welcomed by organisations across Australia.
Both the Property Council of Australia (PCA) and the Real Estate Institute of Australia (REIA) are waiting with bated breath to see if the recommendations will be implemented to help solve the national housing crisis.
PCA chief executive Ken Morrison said the report lays out “commonsense solutions” to deal with the “complex and wicked” problem of affordable housing.
“What’s new in this report is a recognition that the Federal Government, and not just the states or local governments, can have an important role in leading and shaping the state of housing in this country,” Mr Morrison said.
“We warmly welcome the recommendations that suggest the Federal Government could encourage or require better planning systems at the state and local levels, through financial incentives, infrastructure support or cash grants.
“The report also recognises the potential of ‘build to rent’ housing to provide quality rental accommodation and an additional form of housing supply, and we support the recommendation to have Treasury conduct a further detailed review into the benefits this could bring.”
Mr Morrison said the inquiry’s report placing a strong focus on housing choices for Australians is pleasing.
“It’s important that older people have the choice to live where their kids are now growing up, giving teachers and nurses the opportunity to live close to work, and that couples have greater scope to buy a home where they can raise their young family,” he said.
“The PCA believes more could be done to encourage non-government sources of capital into the creation of affordable and social housing – an omission from the report – and we urge policy makers to closely consider the recommendations of the National Affordable Housing Alliance.”
Additionally, the PCA supports other recommendations including more transparency around developer contributions, continued support for the National Housing Finance and Investment Corporation, and avoiding experimentation with negative gearing and capital gains tax settings.
“We note the strong critique of the planning ‘spaghetti bowl’ that has contributed to housing affordability from the Labor members of the Committee and the importance they attach to federal leadership and the productivity benefits of reform.”
REIA president, Hayden Groves, said while housing affordability is decreasing, the sector has become a “political football”. He said the fundamentals of supply, affordability, and the dream of owning your own home must have bipartisan support across Australia.
“The COVID-19 pandemic allowed us to look at housing in an entirely new way and give it the attention it deserved,” Mr Groves said.
“At the height of the pandemic, homelessness challenges were addressed immediately, and Australia’s 40,773 strong property management workforce stepped up and managed an imposed rental eviction moratorium.
“Seventeen programs were introduced by state and federal governments to assist first home buyers achieve their dream of owning their first home and they returned to the market in droves.”
The majority of the 16 final recommendations in the report are supported by the REIA as they directly relate to the three recommendations put forward by the Institute in response to the Housing Inquiry.
“REIA advocated for policies to enable supply, to build more houses and to get government right, including phasing out stamp duty on a coordinated national basis. All three of these recommendations have been met within the Committee report and deliver a roadmap to significantly increase housing supply and therefore affordability though policy reform,” Mr Groves said.
“A coordinated national approach is needed to phase out this antiquated tax [stamp duty] that prevents Australians from moving houses and getting new jobs.”
Mr Groves said that on average, stamp or transfer duties total four per cent of the cost of a home, and recent data suggests over 90 per cent of first home buyers say this is a major deterrent.
“Consultation is needed as to whether this is captured by a land tax or a broader-based tax … this will require leadership from all of Australia’s state and federal treasurers to achieve what the introduction of the GST promised to do and failed: axe the tax,” Mr Groves said.
“The complexity and breadth of the 16 recommendations just reinforce the need for a national plan for housing affordability and supply with both federal and state governments held accountable.”
Mr Groves said the private sector and social and affordable housing can coexist, contrary to popular myth.
He said the lack of bi-partisan support of the Report is “disappointing” and emphasised the need for housing supply and affordability to be solved through a national plan.
“The reality of the matter is we need increased social and affordable housing stock and increased private stock with up to 1.6 million new homes needing to be built by 2030,” he said.
“They are not mutually exclusive and in fact need to be considered together in order to achieve the right supply mix for all so every Australian has a home.”
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