News National Malcolm Turnbull seizes housing affordability as key to his comeback

Malcolm Turnbull seizes housing affordability as key to his comeback

stamp duty increase in NSW
Both sides of politics in NSW support an increase in stamp duty for foreign buyers. Photo Getty
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Malcolm Turnbull has seized on housing affordability as one issue that could help drag his government out of the electoral doldrums, according to sources close to the Prime Minister.

Treasurer Scott Morrison is currently in London with a mission to take a lead from Britain in finding ways to open up the housing market to more potential home buyers and help solve the crisis in Australian cities.

Add to that Mr Turnbull’s decision last week to appoint Victorian MP Michael Sukkar as Assistant Minister to the Treasurer with the task of tackling housing affordability, and it becomes clear the government is taking the issue seriously.

Mr Sukkar insists the housing crisis is an “extraordinarily high” priority for the Prime Minister.

home buyers
Malcolm Turnbull must open the housing market. Photo Getty

That view was reinforced by another government source, who said the Prime Minister wants to be seen to be acting on the issue.

“Malcolm is genuine in wanting to see something done on housing affordability, but it has also become too much of a hot political topic for us not to be seen to be acting in this space,” the source said.

“We need something to help turn the polls around, and if we can make progress with housing, it could be a win-win situation.

“The problem is being able to achieve something substantial. Kevin Rudd promised the earth on housing when he was in opposition and then found out how hard it was to deliver once he got into government.

“We are under no illusion about how difficult this issue is, but we think something can be achieved.”

Mr Morrison is embarking on a string of briefings in the UK detailing how the Conservative government there opened up access to bank data and changed how that data is created and shared.

Scott Morrison
Scott Morrison is on a quest to find out ways in which their government can open up the housing market. Photo Getty

The so-called open banking standard will help more startups offer cheaper housing financing products.

Last year, an Australian parliamentary committee recommended banks here be made to, by July 2018, open up access to their customers’ data and thereby make it easier for them to switch financial institutions.

The Treasurer will meet with the Open Data Institute, the Bank of England and the Financial Conduct Authority while in Britain.

He will also meet with his UK counterpart, Chancellor of the Exchequer Philip Hammond.

But while the government seems keen to follow some of the examples the Brits are setting over housing affordability, abolishing negative gearing doesn’t appear to be one of them.

Mr Sukkar has already dismissed changing Australia’s negative gearing regime, while Labor is continuing its pledge to make significant changes to the system.

Shadow assistant treasurer Andrew Leigh said there was more to learn from the UK conservatives about housing affordability than just innovative financing methods.

Andrew Leigh
Andrew Leigh speaks on how to learn from UK conservatives about housing affordability. Photo AAP

You’ve got to distinguish between a policy which builds a small number of homes at the bottom end of the market and one which could make a difference right across the wide swath of the market,” Dr Leigh said.

“So sure, we should look at innovative financing solutions but let’s not pretend that that’s going to make it easier for middle Australia to buy a house.

“Here you need to look at something else the Conservatives have been doing over in the UK.

“In the 2015 budget the British Conservatives decided to make changes to negative gearing. The British Conservatives, against a scare campaign in which some of the tabloids said it was going to drive down house prices, saw through significant changes to negative gearing of the kind that Labor has been proposing in Australia.

I’m worried that the Treasurer will come back touting a plan which will really only help a few rather than one that will help many.”

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