‘We’ll build you 55,000 new homes’

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Opposition leader Bill Shorten is set to announce Labor’s plan to tackle the housing affordability crisis

Labor has pledged to address Australia’s housing supply problem.

LABOR leader Bill Shorten has promised to build 55,000 new homes and punish investors who hoard empty properties if his party wins government.

The Opposition is diving headfirst into the housing affordability debate by releasing its own eight-point plan before the Turnbull government can define its proposals in next month’s Budget.

Under Labor’s plan, investors whose properties lay empty would be penalised in all major cities and self-managed super funds would be banned from directly borrowing for real estate purchases. More than 55,000 new homes would also be built over three years, boosting employment by 25,000 new jobs per year.

However, tasked with selling the Opposition proposal on morning TV, senior Labor MP Anthony Albanese had to be asked repeatedly whether the plan would actually make houses more affordable.

Asked by Today host Karl Stefanovic “Will it make houses cheaper?” Mr Albanese began to stumble, prompting Stefanovic to fire back: “You don’t know?”

Mr Albanese then launched into a complicated answer about the market.

“Our overall policy will certainly make housing more affordable. A range of measures, there’s not a single solution,” he said. “You got to deal with supply, you’ve got to deal with what’s happening in the market, and we’re dealing with it.”

Labor has pledged to address Australia’s housing supply problem.

Labor has pledged to address Australia’s housing supply problem.Source:News Corp Australia

Treasurer Scott Morrison has promised the government’s May 9 Budget will address Australia’s crippling housing affordability problems, but the detail has been thin.

Labor’s pre-emptive announcement is in part aimed at highlighting the government’s difficulties with the issue.

The government has had internal strife over their policy, in particular a rejected proposal to unlock superannuation savings to buy a first home. There are concerns the housing affordability theme might have raised voter expectations which won’t be met.

Labor will argue the Abbott-Turnbull governments ignored warnings to act on unfair and distortionary housing tax concessions — negative gearing — and on the risks associated with increased borrowing in superannuation funds.

Labor would limit the tax benefits from negative gearing and capital gains — neither move publicly backed by the Coalition government — but would match Treasurer Morrison’s plan for a bond aggregator to fund community housing.

Foreign housing investors would face increased fees and penalties for breaches. There would be increased spending on accommodation for the homeless, moves to improve the National Affordable Housing Agreement and revival of the National Housing Supply Council and the port folio of housing minister.

The Council of Australian Governments would be used to co-ordinate a more efficient and uniform vacant property taxes across all of Australia’s major cities.

Vacant housing should be used to put a roof over people’s heads, not as an asset locked up by a property speculator, says the Labor policy. And Labor would restore the general ban on direct borrowing by superannuation funds, as recommended by the 2014 Financial Systems Inquiry, to help cool an overheated housing market partly driven by wealthy self-managed super funds.

The policy says there has seen an explosion in borrowing from $2.5 billion in 2012 to more than $24 billion today.

Foreign Investment Review Board (FIRB) data has shown the amount of foreign investment purchases almost tripled over the three years to 2014-15, despite rising from a low base.

Screening fees on foreign investment would be doubled, as would the financial penalties applying to foreign investment in residential real estate.

And Labor pledges it would provide $88 million over two years for a new Safe Housing Fund to increase transitional housing options for women and children escaping domestic and family violence, young people exiting out-of-home care and older women on low incomes who are at

risk of homelessness.

This would reverse the cuts made in the 2014 Budget.

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