Labor has accused the Turnbull government of burying a parliamentary inquiry into home ownership for fear of what it would reveal.
The inquiry, instigated by former treasurer Joe Hockey during the Abbott years, was a casualty of Prime Minister Malcolm Turnbull’s election trigger.
The double dissolution in July wiped out all committee work in progress in the lower house. As a result, the Inquiry into Home Ownership lapsed before it could issue any recommendations.
Labor MP Ed Husic, formerly the deputy chair of the inquiry, called on the government to prove its commitment to housing affordability by allowing the committee to release its report.
“We had a lot of people spend a lot of time and thought putting together the submissions to help guide the committee, and it’s a slap in the face to those people that the inquiry has lapsed,” Mr Husic told The New Daily.
“They should get cracking on it and get the report out. It shouldn’t take long at all.”
Mr Husic said he does not know what the report might have recommended, as a draft was not circulated to committee members before the election.
“I wouldn’t be surprised if they were concerned it was going to be too tricky to deal with, and that’s why they’ve gone off to plan B, which is just to browbeat the states. It’s not good enough.”
This week, Treasurer Scott Morrison identified a lack of supply as the main cause of housing unaffordability. He called on the states to relax regulations that prevent sub-divisions in the inner city and property development in outer suburbs.
Economist Saul Eslake, who testified at one of the inquiry’s public hearings, said the findings might have “challenged the party line” by agreeing with previous Labor-dominated committees.
“It’s not clear what this inquiry was going to say that the many previous inquiries haven’t. What might have made this report interesting is that it was chaired by a Liberal, if for no other reason than it might’ve had more of an impact,” Mr Eslake said.
“Thinking of the questions put to me by [Liberal MP] John Alexander, it might’ve reported something that challenged the party line.”
During an interview this week with Fairfax Media, Mr Alexander, the former chair of the inquiry, called on the government to restart it so it could address the imbalance in the market between investors and owner-occupiers.
In its terms of reference, the committee was instructed to report on potential reforms to the housing market.
Common themes emerged in the 65 written submissions and 30 hours of public hearings, including that:
- Negative gearing and capital gains tax concessions for investors should be curbed;
- Various measures should be used to increase housing supply;
- Shared equity schemes, such as ‘Keystart’ in Western Australia and ‘HomeStart’ in South Australia, should be expanded nationally;
- Stamp duties on new buyers should be replaced with a uniform land tax on property owners;
- More public funds should be invested in roads and public transport to make outer suburbs more attractive to buyers.
The Reserve Bank’s hidden gem
Perhaps more interesting than the politics of the inquiry, is the Reserve Bank’s contribution to it.
The submission received little media coverage, despite the best efforts of economist Dr Stephen Koukoulas.
“It’s 30 pages of really cold, hard, factual analysis,” Dr Koukoulas said. “It’s a great resource and I just beg people to read it. I can’t find fault with it. It’s solid as a rock.”
In the submission, the RBA confirmed that rising house prices are impeding first home purchases, but concluded that social and demographic factors are contributing as well.
Australians are marrying later and divorcing more often, the RBA noted. This hurts ownership rates because it is harder to save for a deposit or service a mortgage on a single income.
The rental market is also a factor. Cheaper rents are luring away potential buyers, while investors enjoy “relatively generous” tax treatment, the RBA noted.