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Morrison's housing affordability fix focuses on supply

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Scott Morrison is making housing affordability a key issue for his second budget, but one centred on supply rather than cash handouts.

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The Treasurer says the Victorian government has had a “good crack” at trying to ease housing affordability pressures, but he still believes supply is the key issue.

The state’s housing package announced on the weekend includes scrapping stamp duty for home purchases under $600,000, taxing vacant housing stock and a shared ownership plan with the government so buyers don’t need as big a deposit.

“Good on them for having a good crack at this,” Morrison told Ray Hadley 2GB radio today.

“But at the end of the day, if that just means people just bid up more at the auction because they can borrow more because they don’t have to pay stamp duty then obviously that will take prices in one direction … without addressing the supply issues.”

There was a great risk of developers and vendors being the only beneficiary of the Victorian move, and that’s why the Federal Government abolished first home owners’ grants some time ago.

“You have got to get more houses built,” Morrison said.

And not just on the fringes of cities, but right across the board.

Australia has an older generation looking for a certain type of accommodation and low-income earners struggling to pay their rent, the treasurer said.

Prime Minister Malcolm Turnbull agreed, saying there’s a need to free up zoning and planning to get more dwellings approved, especially around transport infrastructure such as railway stations.

“It is a big challenge, but it is one that we are absolutely focused on,” he told reporters in Melbourne.

Labor mocked the treasurer’s latest thoughts, labelling him as “Scott Morrison 10.0”, who has had “more versions than iTunes”.

“He keeps on rebooting himself desperately hoping he can come up with something to provide traction,” shadow assistant treasurer Andrew Leigh told Sky News.

The treasurer talked about home ownership but had ruled out changes to negative gearing and the capital gains tax discount.

They were issues most economists say inflate the housing market by tilting the hand towards investors and away from first home owners, Leigh said.

– AAP

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