Housing is a state issue: Leyonhjelm
A crossbench senator has questioned why the federal government has made housing affordability its problem and an issue that erupted into open warfare among its frontbench last week.
Ministers were openly arguing for and against allowing young people to tap into their superannuation to help build a home deposit, which former Liberal John Hewson described as an “embarrassing free-for-all”.
Treasurer Scott Morrison has made tackling housing affordability a key plank of his second budget on May 9.
But other than flagging a mechanism to encourage the private sector to invest in cheaper community housing, there are question marks about what else he can do to counter rampant house prices in Sydney and Melbourne.
Mr Morrison has ruled out making changes to tax concessions that favour housing investors, such as negative gearing.
“Why the hell is there a debate at all concerning the federal government?” Liberal Democratic senator David Leyonhjelm told Sky News on Sunday.
“The levers that the federal government has at its disposal really aren’t all that useful in terms of housing affordability.”
Issues like housing supply, stamp duty and land tax were very much a state issue, the senator said.
Dr Hewson said it was very bad politics to raise expectations beyond what you could deliver.
“Expectations are now running pretty strongly that there is going to be a fairly quick silver bullet, instantaneous type solution,” he told Sky News.
Former Labor minister Craig Emerson agreed.
“They have erected a very large hurdle …. which they will not be able to jump, they’ll fall at the first one,” Dr Emerson said.
Dr Hewson said Prime Minister Malcolm Turnbull must impose some discipline to end the government’s embarrassing free-for-all on tackling housing affordability.
When he was leader he needed to put a management strategy in place.
“My solution, and it may not be transferable, is to give everybody a job, make them feel important in the policy development process,” he said.
“Kept them so damn busy they didn’t have time to do all this stuff, and the ones you didn’t like you sent them off overseas.”
Aside from housing, Mr Morrison has said he will persist with the government’s 10-year business tax plan, which so far has only been partly legislated for companies with a turnover up to $50 million and to a rate of 27.5 per cent.
Senator Leyonhjelm said there was a huge political row over “such a piddling amount”.
He has just returned from a trip to the US and several Republicans he met with said President Donald Trump is determined to stick with the agenda he took to the election, including company tax cuts.
“If Trump reduces their company taxes down to even 20 per cent, our situation is going to look like a joke,” he said.