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The housing crisis



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i£*1 ALEXANDER DOWNER '"«% Shadow Minister for Housing, Small Business & Customs

THE HOUSING C R IS IS I COMMONWEALTH ™"

I PARLIAMENTARY library I m ic a h

The F e d e r a l O p p o s i t i o n has r e l e a s e d today a 24 page Position

Paper on the housing crisis which shows that home ownership for

first home buyers is becoming the privilege of the rich, that the

L a b o r G o v e r n m e n t ' s p o l i c i e s have substantially contributed to this process and which offers a six point strategy to resolve the

housing crisis.

Shadow Minister for Housing, Alexander Downer, said in Canberra today that in real terms home loan repayments Australia-wide are $213 a month or $49 a week higher than they were in March 1983.

"in that same period, real after tax incomes have declined", Mr

Downer said.

" A v e r a g e h o m e l o a n r e p a y m e n t s h a v e r i s e n fro m 1 9 . 2 % of a

households real disposable income in March 1983 to 30% today.

" o b v i o u s l y that m e a n s m a n y fewer p e o p l e are able to purchase

their own homes.

"That is why public housing queues have risen by 50% since March

1983 .

"By d r a m a t i c contrast, last financial year Mr Hawke spent $1.2

m i l l i o n of t a x p a y e r s m o n e y on r e n o v a t i o n s to the L o d g e and

Kirribilli House, including almost the equivalent of two annual mortgage repayments on re-upholstering dining room chairs.

"The Government - and many sections of the media - say there is

nothing the Government could have done or can do about the demise

of home ownership.

"This assertion is totally false.

"First, the G o v e r n m e n t has chosen to use one tool of economic

p o l i c y to o v e r c o m e A u s t r a l i a ' s b a l a n c e of p a y m e n t s c r i s i s :

i n t e r e s t rates. It has had six y e a r s to r e f o r m the l a b o u r

market, to lower taxes to enhance competitiveness and incentive and to reduce spending.

"if it had done those things, interest rates would be lower now.

"Secondly, at a time of rising housing costs Labor has reduced

support for low income families to buy their own homes from 46%

O ffice No. (08 ) 3 9 1 0 8 8 8

t ■ >

of the h o using budget (1981/2) to just 22% of that budget

(1987/88). If they believed in home ownership they would have helped people achieve it.

"The forward estimates show that support for first home buyers in 1988/9 will be $178 million. In 1985/6 it was $242 million.

"Thirdly, Labor ignored the issue of land availability until it was too late.

"Labor has had six years to produce effective housing policies. They've done next to nothing.

"Now, six years later, they've set up three reviews of housing policies, reviews which reveal the Government realises its

present policies are wrong but that it doesn't have any idea what to do".

" I call on the Government to tell us their policy now".

Mr Downer said that unlike the Labor Government, the Coalition offered a six point action plan to get more Australians into

their own homes. '

•we will provide an immediate and substantial increase in support for low income first home buyers through an upgraded first home owners scheme.

•we will eliminate the deposit gap for many low income first home buyers by the Government providing for the cost of mortgage insurance. $30 million spent on this program will provide 20,000 extra households with a home of their o w n .

.we will abolish the capital gains tax on all but

speculative capital gains.

•we will convene a National Land Supply Conference with the States to develop more efficient and co-ordinated strategies on existing and new housing land.

•we will c h a n g e the C o m m o n w e a l t h / S t a t e H o u s i n g

Agreement to enable the States to pursue more flexible and progressive policies on the sale of public housing to tenants.

.we will d r a m a tically change macro-economic policies thereby lowering home loan interest rates.

Contact: Alexander Downer Canberra 774500 Adelaide 3395152

January 20, 1989