Treasurer Scott Morrison encountered the angry face of the housing affordability crisis on Monday night as he fronted a town hall of voters one week after handing down the federal budget.
Speaking to 300 voters at Gosford’s Central Coast Leagues Club, Mr Morrison was grilled about a wide range of issues including the nation’s finances, tax policy, TAFE and identity politics.
But it was housing affordability that dominated the crowd’s attention, even sparking a testy exchange with one voter who asked the Treasurer why the government “gives preferential treatment to investors over young people who wish to buy one home”.
“I’m a fifth generation Australian, but the sixth generation, which is the best educated generation of my family, and they are employed, are the only ones who will never own a home,” the woman, who did not give her name, told the town hall for Sky News’ Paul Murray Live program.
She also told the Treasurer: “Please don’t give me the mums and dads spiel”, a reference to his oft-repeated reason for not tinkering with negative gearing – because many who use the benefit are “mum and dad investors”.
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In response, Mr Morrison outlined the government’s housing package, which includes a savings scheme for first home buyers to salary sacrifice and increased incentives for state and local governments to build more housing, before he turned to “mum and dad investors”.
“That’s ludicrous,” the woman said, interrupting. “They are investors. We’re all mums and dads. These are the kids that may never be mums and dads because they can’t afford a roof over the kids’ heads.
“I have watched auction after auction for the last two years, and seen groups of young people being bombed out of the market by investors, it’s not $30,000 or $60,000 a year these houses are going up.
“The last two auctions I went to were half a million dollars over the reserve of the property. Now, something’s wrong. How can the kids get a home?”
Amid groans from the audience, Mr Morrison said that “the something that is wrong is that we’re not building enough houses”.
Noting the government had taken away some tax concessions for foreign investors, he emphasised the need to also focus on providing affordable housing for the 30 per cent of people who rent.
He said that tinkering with negative gearing, as Labor has vowed to do, would have unintended consequences.
“I’ve been arguing you’ve got to use the scalpel not the chainsaw,” he said.
In the lead-up to the federal budget, the government had initially flagged a significant focus on housing affordability, before a $75 billion infrastructure package eventually emerged as the budget’s big-ticket item.
It says it has opted for a more measured approach to avoid a housing crash, but the package has been slammed by Labor as a “damp squib”.
Asked by host Paul Murray why negative gearing couldn’t be limited to a few properties, Mr Morrison warned that changing the tax concession would lead to further reduced property values in cities where prices were already falling.
“Over in Perth where they’re watching tonight, property prices have been going down,” he said. “In Adelaide, they’ve been running flat. In Hobart, Darwin, they’ve been going down.”
He said if the government chose to “play around with the tax system”, it “might have some impact”, but would also consign others to an “undermining” of their property values.
The town hall meeting came on the same day the Turnbull government failed to register a significant poll bounce following the budget, with Labor leading the Coalition 53-47 across two separate surveys.