Housing Is Not a Priority for Labor's Failed Policies

There are three major failures in Labor’s housing policy.

These failures mean that there will be no correction of the depressing trajectory where younger Australians are missing out on home ownership.

According to the ABS, 55 per cent of millennials own their own home. This is a 15 per cent drop from 1991.

Millennials and gen Z will be the hardest hit by Labor’s complete failure on housing policy.

Firstly, the lack of supply of new homes is the most acute issue. The reason there are not enough houses is because not enough have been built or are being built.

It seems Labor knows this because they have set out targets for supply in each of the states.

They’ve promised 1.2 million new homes in the next five years. 75,000 in NSW each year.

But documents from NSW Treasury shows that NSW Labor only plans to build 36,000 new homes a year for the next five years. The state planning Minister hilariously said the gap was “greater than we thought”.

Canberra’s targets have no compliance mechanism. For example, the Labor Government in Canberra doesn’t intend to take any action against their friends in Macquarie st for providing only 50 per cent of the houses needed.

There has been nothing done to link federal funding to the housing targets which is the one big lever the Commonwealth maintains.

We have recently learned that Labor in Canberra will directly undercut their own plan through their hamfisted multinational tax policy.

Labor’s multinational tax bill is a dog’s breakfast. The bill has been amended by the government itself 89 times.

The latest amendments directly undermine the housing targets.

New housing projects could be cancelled thanks to Labor’s tax bill which prevents certain tax deductions where foreign debt is used.

The Property Council CEO Mike Zorbas said it will undermine projects “as large as apartment dwellings potentially housing up to 1,000 people. If you replicate that across the economy, look at different capital and regional cities and put that sort of pressure on the housing supply pipeline, you have a genuine problem. You certainly won't be in a position to set the ambitious delivery targets of 1.2 million homes by 2029.”

Incredibly, when asked about the impact on housing supply and whether they had modelled the impact, federal Treasury said that they ‘haven't done modelling to analyse the impact’ of the Bill on housing supply.

It is a shambles.

The second failure is the Labor Party’s “help to buy” scheme. This policy was announced during the last federal election. It proposes to put 10,000 people into houses each year through a scheme where the government owns up to 40 per cent of the house.

Help to buy will cost taxpayers $5.5 billion. It is a policy which gives up on home ownership through a partial nationalisation of the private housing market.

In the UK, a similar scheme seems to have left many in negative equity whilst distorting the market.

This policy was due to commence on 1 January 2023. The legislation for the scheme has not even passed Parliament.

In 2021, 35% of households were homeowners with a mortgage, which is roughly 3.3 million households. That means only 0.3% of existing mortgage holders would even have been eligible for the scheme per year.

This centrepiece of Labor’s housing policy is a tiny scheme, which will be lucky to pass by the two year anniversary of Labor’s election to government in May. Another shambles.

The third problem relates to Labor’s age old problem that it is beholden to vested interests.

In this case, the problem is simple: Labor doesn’t want to allow younger people to use their super for a first home deposit because it would damage their best mates at the unions and super funds.

Instead, Labor has devised a plan to encourage super funds to invest in build to rent housing which the funds own, rather than people.

Labor believes your super should be able to invest in any Australian house except your own. This is the twisted logic of the government for vested interests.

Many Australians would like to use their super to access a first home deposit or to use their super to pay down their mortgage like an offset.

For millennials, the numbers are stark.

In 2020-21, the average super balance for millennials in their 30s was around $70,000. Last year, the medium home deposit amount in Sydney was $158,000.

For many millennials, this is the biggest pool of money they have. It may be the only shot in the locker for people without access to the bank of mum and dad.

But Labor won’t entertain this debate because they want to keep super locked up for the unions. In the 2022-23 financial year, super funds managed to give over $37m of your money to the unions and related groups.

Now we hear Labor will tinker with negative gearing and capital gains tax arrangements which will exacerbate the supply crisis. It’s pretty simple. The only thing that higher taxes will achieve is fewer houses.

This is a depressing failure for young people. Australia needs a housing policy which supports both supply and demand to ensure everyone has an opportunity to get onto the housing ladder.

Unlike Labor, the Liberal Party will never give up on home ownership.