Leadership needed to fix housing affordability

18 December 2003

The Productivity Commission Inquiry on First Home Ownership presents a once in a decade opportunity to address the yawning housing affordability gap.

The Housing Industry Association (HIA)  is pleased that the Productivity Commission Report has given fulsome acknowledgement to the issues raised by the Association in its submission to the Inquiry. These include the:

• The inappropriate and excessive indirect tax burden imposed on new home buyers by all levels of government;

• Rigidities in urban land release systems;

• Need for more equitable, efficient and transparent methods of funding major economic and community infrastructure.

The Productivity Commission’s report clearly identifies areas where all levels of government have some responsibility and can make a meaningful contribution to improving the affordability of homes. Political differences need to be put to one side so that there can be a mature and coordinated response to the Commission’s work.

The housing affordability debate has for too long been a game of blame-shift. This game must stop. The consequences of sitting on one’s hands or pointing the finger at other levels of government would be an unacceptably high cost to social cohesion and stability.

HIA is calling on the Australian Government and the States to demonstrate to the community the leadership to make a genuine effort in tackling the housing affordability crisis.

The Council of Australian Governments is the best placed forum to develop cost-effective policy responses to the major findings contained in the Productivity Commission Report.

Unless governments seriously confront these reform issues, the structural problems that have driven the recent affordability episode will remain. They will continue to drive up the cost of delivering land to home buyers, making any slow down in house price growth likely to be short-lived.