Federal Treasurer Joe Hockey has accused critics of “playing the man”, defending his comments that the best path to home ownership is getting a good job that pays well.
Mr Hockey’s political opponents have labelled him as out of touch after he dismissed suggestions that Sydney property was unaffordable.
He went on to advise young people looking to buy their first home to “get a good job that pays good money”.
Mr Hockey was on the defensive today.
“Let’s not play the man, let’s actually deal with the policy,” he told the ABC’s AM program.
“Housing is very expensive and I understand that. Look, I totally understand that.
“When you’re committing so much of your wage to your mortgage, it’s a big ask, with all the other pressures in life.
“Yes, it is difficult for first home buyers to get into the market, there’s no doubt about that.”
Mr Hockey said the best way to tackle housing affordability was to increase supply, pointing to the responsibility of state governments when it comes to land release and planning decisions.
He also accused the Opposition of wanting to push down prices, an assertion Labor is frustrated by.
“We’ve got the Treasurer of Australia just on these crazy rants, day after day, without any factual basis behind it at all,” Labor’s finance spokesman Tony Burke said.
“No-one is asking for prices to fall. No-one is putting that forward.”
He has accused Mr Hockey of “hysteria” when it comes to discussing other parties’ efforts to tackle housing affordability.
The debate erupted last week when Treasury secretary John Fraser told a Senate estimates hearing that the markets in Sydney and parts of Melbourne were unequivocally in a price bubble.
The Australian Council of Social Service (ACOSS) released a statement condemning the Treasurer’s remarks.
“Not everyone has the luxury of simply switching to a better-paying job,” the statement reads.
“The reality is there are nearly 800,000 people who can’t get a job right now, with five people competing for every available job vacancy.
“Job opportunities are not opening up at the rate needed, and wages growth is almost flat.
“Young people and those on low incomes are being locked out of home ownership and the private rental market remains an expensive and insecure place to be.”
Changing negative gearing will raise rents: Hockey
The Coalition dismissed a proposal from the Greens to scrap negative gearing for any investment property purchased from July 1, to save billions of dollars and reduce competition for first home buyers.
“If you change negative gearing in a market like Sydney, with a very low vacancy rate, you are going to push up rents, which will have an horrendous impact on some of the lowest income families,” Mr Hockey said.
Labor has not ruled out changes to negative gearing, which has been part of a discussion paper the ALP has been getting feedback on.
“We’ve got nothing on the radar we’re about to announce,” Mr Burke said.
“But in terms of the discussion paper we’re working through… we haven’t ruled that one out.
“We’ve ruled out anything that would be retrospective and flatly ruled out anything that would have a negative impact on supply.”
Bank of America Merrill Lynch chief economist, Saul Eslake, said the Greens’ proposal was something he had suggested himself and that it would provide about $4 billion worth of savings.
“I’m not sure I would spend all of the revenue that would raise in the way the Greens suggest, I would rather it apply to reducing the deficit or part of a broader range of tax reform,” he said.
“It would be a useful contribution to funding a broader package of worthwhile tax reform, and as the Greens suggest, and I agree, it would also take some of the heat out of the housing market.”
Mr Hockey maintained the best options to make buying a home easier were to build more houses and improve the overall economy.
“The best thing we can do as a government is help to create more jobs and better paying jobs,” he said.