Page 5407 - Week 13 - Tuesday, 16 November 2010
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ensuing increase in demand. This will benefit existing home owners at the expense of those seeking to purchase, including first home buyers.
The Reserve Bank in their evidence to the Senate committee inquiry agreed with this statement and argued that, as a supply strategy, the first homeowner grant is inefficient and inflationary. The Reserve Bank said:
… it is now widely accepted that policies that simply give people more money to spend on housing are likely to be capitalised into higher housing prices.
The Australian Council of Social Service CEO, Clare Martin, has also raised concerns about the impacts and equity of the scheme. The Greens share these concerns and highlight the Productivity Commission finding that a greater community benefit would be realised if it were redirected to support the housing needs of low income households in rental, public or community housing. The scheme has not delivered higher rates of homeownership and has done absolutely nothing to assist those who simply cannot afford to buy a home.
This is significant expenditure, and I would very much like to ask what analysis has been done and what are the costs and benefits to the ACT of this scheme. It seems to me that we are just blindly following and no-one has been listening to the chorus of criticism from some of the most highly respected economic minds in the country and now internationally.
The irrationality of the expenditure is only augmented by the economic climate we find ourselves in. Global uncertainty and now a reduced GST revenue forecast for the ACT mean we need to be even more careful in our expenditure decisions. An open-ended scheme with no demonstrable benefits seems far from prudent economic management.
The Greens do not oppose the grant entirely, but, given the overwhelming evidence, our view is that we must evaluate the scheme in the context of our broader affordable housing strategy. The opportunity cost of the scheme is significant. Think what could be done for public housing with that money and the impact that would have on rental demand and rental affordability.
The government is currently undertaking an internal review of its affordable housing strategy, and the Greens agree that a comprehensive review needs to be undertaken. We do need to have a comprehensive look at our strategy. This should be a public process, and it should include all the initiatives around both homeownership and rental affordability. This includes the first homeowners grant and the stamp duty concession scheme, as well as other government charges and assistance schemes.
The Greens support initiatives that assist people to move into homeownership, and we would very much like to see a comprehensive plan that is effective, efficient, targeted, proportionate and actually assists people improve their circumstances and enjoy the benefits of homeownership.
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