housing affordability & the political circus

  1. bbm
    2,264 Posts.
    This report is laughable. How in the hell would housing become more affordable if taxes and stamp duty are to be eased. Seems like a short term solution for a long term problem. Atleast John Brumby has offered $1000 cash back after spending $359000....lol

    It's always amusing how politicians pass the buck when the pressure is on. Yes Mr Costello, it was you that introduced the FHOG that put Australians in this mess in the first place.....you gotta lovem'.

    From Ninemsn.

    Costello takes on states over housing

    State governments will be urged to cut local taxes and release more land in a federal government push to make it easier for young people to buy their first home.

    Treasurer Peter Costello said he wanted the federal and state governments to discuss housing affordability at next month's Council of Australian Government's Meeting (COAG).

    The treasurer made it clear it was up to the states to do more to help alleviate the growing crisis in housing affordability, which is making it harder than ever for first home buyers.

    But Labor, the Housing Industry Association (HIA) and state governments hit back and said the federal government also had a key role to play in helping to make housing more affordable.

    New figures from the HIA and the Commonwealth Bank found housing affordability for first home buyers had hit a 13-year low, with an average 25.3 per cent of household income needed to pay the average mortgage.

    Mr Costello said the rising house prices had been driven by low interest rates and strong employment levels, but the overall level of home ownership had not changed over the past 20 years.

    He ruled out changes to the government's $7,000 grant for first home buyers, and ruled out any change to negative gearing to help curb price rises.

    Mr Costello said a cut in state stamp duties would be the best way to encourage new entrants into the housing market.

    "A reduction in stamp duty would go a long way," Mr Costello told reporters.

    "It is also said incidentally, that releasing more land would be of assistance in getting more supply onto the market, and that sounds to me a sensible idea."

    Opposition treasury spokesman Mark Latham said rising house prices, particularly in Sydney, meant many people could no longer afford to buy a home.

    "We're losing a large part of the great Australian dream, which is something that all Australians should be worried about," he said.

    Mr Latham said the federal government should look at incentives to help people save for a house deposit.

    HIA senior economist Caroline Lemezina said the government needed to hold an inquiry into the range of federal, state and local taxes on new homes.

    Ms Lemezina said home buyers faced 20 different taxes and charges on new house and land packages, on top of the GST and stamp duty.

    "We would like to see a broad review that looks at all taxes and charges, not just stamp duty," Ms Lemezina told AAP.

    She said it was crucial for the states to release more land for housing, and she urged the government to increase the first home owner's grant for people who built their first home.

    State governments rejected Mr Costello's suggestion stamp duties were to blame for declining affordability.

    Acting NSW Premier Andrew Refshauge said federal policies were to blame, including high levels of migration to Sydney.

    "That's outside our control. Those levers are with the federal government," he said.

    Victorian Treasurer John Brumby said his state had moved to cut stamp duty for first home buyers, who would save more than $1,000 on a median priced Melbourne home from July 1 next year.

    Victorian Planning Minister Mary Delahunty said the government was releasing land in growth areas over the coming 15 years.

    Premier Peter Beattie said Queenslanders already enjoyed some of the lowest stamp duty rates, and questioned how the state could fund essential services without the revenue.

    A spokesman for Western Australian Treasurer Eric Ripper said the state needed to keep stamp duty because of cuts in commonwealth grants to the states.

    A spokesman for South Australian Treasurer Kevin Foley sad the state would need increased funding to compensate for lowering stamp duty.

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