Australian Institute of Progress Executive Director Graham Young said that as the problem in the housing market wasn’t a lack of funds for investment, but a lack of stock, Labor’s $2 Bn will just make prices more expensive for everyone.
“If Labor wants to tackle housing affordability it either needs to address the supply or the demand problems.
“My suspicion is that this ‘Social Housing Accelerator’ scheme is meant to demonstrate the government cares about housing affordability and not much more. Unfortunately, by neglecting the root causes all it will do is accelerate unaffordability.”
Mr Young said that the major problem is that there are not enough dwellings for the number of people needing them and this is a result of a downturn in the industry caused by resource shortages and builder collapses; a slight increase in household size during COVID; excessive regulation in the development of residential land; and a massive increase in Australia’s population due to immigration.
“None of the solutions should cost the taxpayer anything.
“Reducing the immigration rate will actually save the economy money as new immigrants bring upfront capital costs with them.
“Liberalising planning laws can only be done by the states but would actually raise money for them via an increase in stamp duty receipts and land taxes.
“No one can do anything about bankruptcies in the building sector, and the only thing the Commonwealth could do for resource shortages would be to scale back its own construction spending.
“When you put more money into a sector where resources are limited you create inflation, and when it is government money you will redirect resources from the private to the public sector.
“This policy will increase the price of real estate and make it harder for private investors and home buyers, while limiting the amount of social housing that can be purchased by governments because of the inflation this money will cause which will inflate their costs as well as everyone else’s.”
Mr Young said that there is a misconception that the state needs to build affordable housing.
“Left to their own devices developers and investors will ensure the mix meets the need.
“Many more people qualify for social housing than receive it, and all of these are in the private rental market at the moment. The really needy amongst them receive additional welfare benefits to enable them to pay the rent.
“There is a simple solution that has worked for the whole period of humanity’s history, and it’s not the government putting its hand in taxpayers’ pockets to pay for housing.”