A federal government minister has rejected criticism regarding the government’s housing affordability plan, saying that there’s “no silver bullet” for tackling housing affordability issues.
Speaking to the media, Minister for Revenue and Financial Services Kelly O’Dwyer claimed that calls for legislative changes in the form of widespread tax concessions would not address housing affordability concerns, which she believes require a varied policy approach.
“Well, I think it perhaps is a slight misunderstanding of what in fact the government has done on the housing affordability package and the changes that passed through the parliament very recently,” the minister said.
“We believe there’s no one silver bullet to impact and help those people who are looking to purchase a home. If there were, it would have been done by now.
“We believe you need to tackle this issue in a number of ways and it needs to be very carefully calibrated because, obviously, there is no one housing market.”
Ms O’Dwyer criticised the Australian Labor Party (ALP) for advocating policies that she believes are Sydney-centric, and she argued that a nationwide tax reform would be the “wrong response”.
“The Labor Party likes to sort of suggest the housing market is Sydney. Certainly, that’s an important housing market and there are different markets within Sydney itself,” the minister added.
“[But] the idea that you would, for instance, change taxation policy which would impact the whole of the nation where there are, of course, very different things going on in Perth and then Northern Queensland because of what might be happening in parts of Sydney seems to us the wrong response.”
The federal parliament recently passed elements of the Turnbull government’s housing affordability plan, which the minister believes will “help people, particularly first home buyers, save for their deposit”.
From 1 July 2018, first home buyers (FHBs), through the First Home Super Saver Scheme (FHSS), will be able to access their tax-exempt voluntary superannuation contributions, as well as the rate of deemed earnings, made from 1 July 2017.
“[If] they [first home buyers] want to contribute up to $30,000 into superannuation, they will get the benefit of the very substantial tax concessions that do apply and they will then, particularly if they’re in a couple for instance, have access to about $60,000 in savings that can provide the deposit, which will then mean they can get the loan that they need to purchase a property,” Ms O’Dwyer continued.
The government’s FHSS will also provide an incentive for older Australians to downsize in order to free up housing supply, which Ms O’Dwyer hopes will boost supply and ease home prices.
The minister said: “We have provided in the most recent budget incentives for older Australians to downsize from their family home by saying you can put up to $300,000 from the proceeds of the sale of that property into your superannuation over and above the contribution limits if you sell that property.”
The revenue and financial services minister also stated the government’s intention to work with state governments on land release projects, and she stressed that easing cost pressures in the renting market is also high on the Turnbull government’s priority list.
“We also believe it’s important as well to ensure that for those people who might be renting that they have affordable housing as well,” the minister said.
“It’s not just those people who are looking to purchase a property but also making sure we have affordable housing for those people who are renting properties as well.”