Earlier in the week, I lamented how how the issue of housing affordability has received next to no attention from Australia’s politicians in the lead-up to the Federal election, and pointed out the Coalition’s 2010 housing policy, which contained many sensible statements on freeing-up the supply-side of the market in order to restore affordability.
Today, reader Powermonger kindly pointed towards the Labor Party’s 2007 housing policy discussion paper, which also contained some sensible statements (but also a lot of rubbish).
Some of the more sensible statements around improving housing affordability, included:
- The need for housing policy coordination so that enough houses are built; Reform of government planning frameworks to reduce costs; Strategies to reduce the cost of development and supply of housing; Policies to assist first home buyers to save for and attain a foothold in the housing
- Market Strategies to increase the supply of affordable private rental properties; Reform of the Commonwealth Rent Assistance scheme; and Proposals to boost the supply of social, emergency and Indigenous housing.
The policy statement also made some sensible comments on first home buyer incentives:
“…analysis suggests that simply increasing the First Home Owners Grant in isolation may not make housing more affordable in the long run if it leads to inflationary pressures on the cost of homes. It is important that policy proposals designed to assist first home buyers, are economically responsible so that there benefits are not eroded through additional pressure on house prices”.
But then shot itself in the foot with the inconsistent aim of improving housing afforability without affecting the values of pre-existing home owners:
“Improving housing affordability does not mean reducing the value of existing homes, which are usually the primary asset of any individual or family.”
Overall, when evaluating the Rudd Government’s actual performance on housing affordability, you would have to give it an epic Fail. Not only did it fail to address the supply-side barriers to affordability, but it also poured petrol on the fire in 2008-09 when it implemented large additional first home buyer subsidies and loosened foreign ownership rules, which led to the massive post-GFC boom in home prices.
Rudd’s double-talk on housing policy should not be forgotten in the lead-up to this year’s Federal Election.
