Well whilst the boys have the difficult job of trying to justify why you should give your votes to the Coalition or Labor parties, I get the fun job of ripping apart both sets of policies to find out who benefits and who doesn’t.
Starting day two into the 2007 election campaign, I think the first policy I’ll have a look into will be Labor’s new housing affordability plan. With the Liberal party announcing their housing affordability plan in July, it will be very interesting to see who comes out on top in either plan, and whether either plan actually has some substance or if its just smoke and mirrors.
So what do we know so far? Well we know the Federal Government has around $6 billion worth of surplus land around our major capital cities which could be turned into housing. Now assuming that this land is out west a bit and not in places like Vaucluse or Bondi, that is a fair bit of land just sitting there which isn’t really being utilised, so what are they going to do with it?
Well the Liberal Party have said that they plan to audit it, work out why the land isn’t being used, whether it has any future benefits to the government or whether it should be released and then if it is released will it hurt surrounding property prices. The audit is also meant to find ways of streamlining and speeding up the current process for land release.
Not anything too exciting, so let’s have a look at Labor’s policy… well its to review the current Commonwealth Property Disposals Policy and speed up the process by putting the onus on the government to say why land shouldn’t be released rather than the old policy where someone had to justify why it should be released.
So in both cases it seems they are both looking at ways of releasing land more quickly, great, so anywhere in particular targeted first? Well Labor have selected the Ingleburn Army Camp, and the Liberals have selected the Ingleburn Army Camp…so in short it’s South-West Sydney that’s the target, but what about the rest of Australia? Housing prices have increased significantly nationally, any plans anywhere else? Unfortunately not it seems which is very disappointing.
It see’s both parties haven’t even given much consideration for the public transport needs or even infrastructure requirements for a South-West Sydney land release, both leaving it up to the State government to solve that problem.
So where are we with these policies so far:
- Both Liberal and Labor want to speed up land release and review/change current processes
- Both Liberal and Labor plan to release land in South-West Sydney in the near future, but have no plans elsewhere in Australia.
Surely there must be a point of difference somewhere here? Well it seems the Liberal Policy more or less ends there, so lets have a look at the rest of the Labor policy.
Part Two of the Labor housing affordability plan is to offer tax breaks to private companies which they would then rent out a 20% less the market rate. On paper this sounds great, but what are the catches? And how does this help housing affordability?
Well first off, only families would be eligible for the discount, so that instantly rules out the University student or people just entering the workforce, but naturally someone has to miss out. These families would have to have an income of less than $80,000 and would be means tested annually, meaning if they suddenly got a pay rise within the family, they could be kicked out, but $80K is a fair bit of cash, so again a reasonable requirement on the plan.
So now the question asking, how does make housing more affordable? The only way I can see it is these discounts are going to push down rentals in an entire area as surrounding properties will now need to compete with these government subsidised rentals so will lower their prices, which does have an income on a properties value, especially as an investment property.
Also with no set requirement for the person renting to save the money they are saving from the cheaper rent it won’t necessarily help anyone buy a new property, but in reality no government can force that…
So looking at the pro’s and con’s of Labor’s second phase housing affordability plan, we will have between 20,000 – 50,000 places around Australia eligible for around 20% cheaper rent. That’s a positive for who get into those places, however it appears everyone else will subsidise that 20% through their taxes, not really good if you miss out or own your own place.
Next the lower rentals will push down housing prices and rental values, great if you’re looking to buy, but bad if you already own in those regions affected.
I guess though, it’s like every policy, pending where you sit in your life will decide whether you love this or hate it…
Share This
Loading ...