COAG Economic Reform Council should target housing affordability

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The Property Council of Australia has welcomed Shadow Treasurer Chris Bowen’s proposal for the creation of a new independent COAG Economic Reform Council to drive long-term reform priorities, and called for its first focus to be on housing affordability.

“There is still much that needs to be done to improve the efficiency of federal-state relationships and boost economic growth,” said Ken Morrison, Chief Executive of the Property Council.

“Almost three decades of economic growth risks lulling us into complacency about the importance of further reform to stimulate growth and tackle critical issues such as housing supply and affordability.

“While the housing market in Sydney and Melbourne is cooling, and our politicians seem to be talking less about it, the problem of housing affordability is far from resolved.

“Property Council research into an incentives-based deal between the Commonwealth, state and territory and local governments to fix planning systems and boost housing supply showed a $3 billion boost to the economy could be achieved, while tackling the issues which impact on housing affordability across Australia.

“Meaningful and sustainable progress on housing affordability should be a priority for a body such as that proposed by Labor,” Mr Morrison said.

Mr Morrison added that affordability could only be tackled if taxes on housing were also part of the mix. The Residential Development Council’s ‘Taxes and Charges on New Housing’ report shows taxes range from 17 per cent to 25 per cent around Australia on houses and apartments.

“Government taxes and charges are the biggest cost component of buying a house or apartment after the actual cost of construction in Australia and well ahead of the cost of greenfield land.”

Source: Property Council of Australia