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Budget 2008: No surprises or short term solutions for housing affordability.

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SUSSAN LEY MP Federal Member for Farrer

Shadow Minister for Housing Shadow Minister for Women

14 May 2008

MEDIA RELEASE For immediate release

No surprises or short term solutions for housing affordability Although Mr Rudd’s announcement of $2 billion to improve housing affordability is welcome, it does not produce any results in the short term and it is not clear that it will ever deliver the numbers of new homes or rental properties that the government claims.

Shadow Minister for Housing, Sussan Ley MP, said money deposited in the much trumpeted First Home Saver Account cannot be withdrawn until at least four years after the first deposit is made.

“It is clear that these accounts will not be available on 1 July as the government promised when they were announced,” she said.

“When will they be available Mr Rudd?”

“Similarly the rental affordability scheme provides incentives for developers to build rental properties but given the numerous complicated conditions they would need to comply with, where is the evidence that a single incentive will be taken up?

Ms Ley said the Housing Affordability Fund is designed to improve the development approval process and State governments are able to apply for the money which is clearly ridiculous.

“State governments and Local Councils should not be given slush funds to encourage them to do what they should be doing anyway,” she said.

“May I remind Mr Rudd (again) of the following real reasons for the worsening housing affordability problem:

Limited land supply induced by restrictive land release policies of state and local governments is the main reason for rising housing costs.

Government taxes, fees, levies, charges and compliance costs are adding enormously to the cost of new housing and now represent a quarter to a third of the cost of a new house and land package.”

Ms Ley said Labor’s response to the housing affordability problem could have been simple: tell your Labor state mates to lift their game.

“Failing that, a sensible short term measure would be to double the First Home Owners grant to $14,000 for people building their fist home as the Coalition did when in government. After all, shouldn’t it be homeowners rather than developers and local governments who receive the dollars under any scheme?” Ms Ley said.



Media contact: Georgina Wilson (02) 60213264 0428 213264