Housing supply critical, but not sufficient to solve the housing affordability problem
Australian Institute for Progress Executive Director Graham Young said that after Opposition Leader David Crisafulli’s Budget Reply speech there was at least a policy debate with some substance, but the most important elephant, government overspending and debt, was never mentioned.
“It was great to see housing as the centrepiece of his reply. It is an area we have put a lot of policy work into, and it was good to see that the LNP has plans to ensure infrastructure is available to allow new subdivisions to be built.
“But they won’t be built unless something is done to tame total state government-created demand in the economy.
“Many construction projects are on hold because build costs are too high. In fact, I am told that the only projects that stack-up at the moment for developers are niche luxury, and townhouse developments.
“Only a small part of this cost blow-out will be fixed by a regulatory review of the building industry, which, while important, will do nothing to stem the excess demand created by the government.
“It won’t be fixed by abandoning the Pioneer-Burdekin Dam either, as the opposition leader appeared to suggest in a throwaway line.”
Mr Young said that the increase in state debt was created by the government taking an over-sized share of the state’s economy, and so squeezing the private sector, including private home developers and buyers, yet this was not addressed by either the government or the opposition.
“On housing the commitment of an additional $2 billion for infrastructure and making this available to councils on a competitive basis, is welcome, but when we are adding the equivalent of another Mackay to Queensland’s population, clearly insufficient.
“Compared to the government’s approach it is welcome, but not good enough.
“Both sides are tinkering with stamp duty when what Queensland needs is a proper revamp of its tax system, along with reform of the Commonwealth Grants process.
“Perhaps the presumptive next government could promise to refer this to their promised, and most welcome, re-instituted state Productivity Commission.
“One issue they could look at is how current land tax thresholds discourage investors from owning more than one rental property.”
Mr Young said there were a number of bad ideas in the speech which he hoped wouldn’t survive a transition to government.
“Government shared equity housing schemes have been tried over and over again – Queensland had one under Labor in the 90s – but achieve little apart from a slight change in the composition of those buying. It won’t increase housing stock, and it will slightly increases house prices.
“Their promise to build 53,500 social houses in the next 20 years will not fix the social housing problems of today, assuming the government will actually manage to build and fund that many.
“It requires a radically different approach where the housing is paid for now without the government having to own it. The problem isn’t a need for more housing, as most people who qualify for social housing are living in a dwelling at the present time, but how to pay for adequate housing within the existing housing stock.”
Mr Young said it was encouraging to hear Mr Crisafulli give credit to the government for some of its policies, and also be prepared to borrow some.
“There are too many policies to critique them all, but no matter who wins the next election Queensland is a great state, but has a lot of problems, and we look forward to lobbying whoever the eventual winner is to adopt policies which realise this state’s potential.”