The Coalition has accused Labor of overseeing a “trifecta of failures” in the housing market, as new industry modelling warns the federal budget’s housing tax changes could result in fewer homes being built and higher rents.
Analysis commissioned by Master Builders Australia, the Housing Industry Association, the Property Council of Australia and the Real Estate Institute of Australia predicted the combined impact of the Government’s housing measures would reduce new dwelling starts by 10,700 between the current financial year and 2029-30.
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The modelling also forecast rents could rise by about $10 a week, while cumulative GDP would be cut by about $1.05 billion and more than 4700 construction jobs could be lost.
Opposition declares a ‘trifecta of failures’
Deputy Opposition Leader Jane Hume seized on the figures on Sunrise on Friday, accusing Labor of worsening conditions for renters and investors.
“This is just a denial of reality,” she said.
“There’s a trifecta of failures that Labor have overseen in the housing market. Fewer homes are being built. Rents are higher. And now there is less investment as well.”
Hume criticised the government for forecasting a much smaller impact on rents.
“The fact that Labor knew that they were pushing up rents when they increased taxes on housing is bizarre in the first place,” she said.
“They put a number in their budget, and now we’re hearing that that number is going to be about five times higher than Treasury anticipated.
“You can bury your head in those Treasury numbers. But Australians will tell you that their rents are going up, that the approvals for loans are going down, and the market is tanking because of Labor’s taxes.”
Government backs Treasury figures
Health Minister Mark Butler rejected the industry modelling, saying he was “confident” in backing Treasury’s figures.
Butler questioned the modelling produced by the property and construction groups, arguing the organisations had an interest in opposing changes to the housing market.
“Time and time again, we see industry modelling, usually from industry bodies who don’t want governments to change anything that might affect the way in which they’re making a profit,” he said.
Jane Hume has condemned the Labor Party’s handling of the housing crisis in a heated Sunrise debate with Mark Butler. Credit: Sunrise
Butler also pointed to recent lending figures as evidence the government’s policies were supporting new housing construction.
“Loan approvals are actually up. Loan approvals for new buildings, which was the whole purpose of this policy, are at record levels,” he said.
“The ABS said they’ve never been as high, to build the new homes that we need, not to have investments swishing around existing stock.”
Hume disputed that assessment, arguing demand for new homes had weakened.
“New home borrowers have dried up. No one’s buying new homes right now because they know that if they buy something today, the value of that home will go down, not up,” she said.
Coalition calls for housing tax overhaul
The Coalition called for the government to scrap what Hume described as “toxic taxes” and take further action to boost housing supply.
“By linking migration numbers to housing, you can reduce demand pressures,” Hume said.
“By making sure that you invest in that enabling infrastructure, you can build up to 400,000 new homes that wouldn’t otherwise have been built.”
“By changing the National Construction Code and slashing red tape, you can reduce the cost of building a new home.”
“By axing Labor’s toxic taxes, you will encourage more confidence in the market again, because this has been a terrible failure of policy from the Labor government.”
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