Media Statement - 4th July 2007
Secret Treasury documents released overnight have scuttled John Howard’s claims that wide-scale land release by State Governments alone will solve the housing affordability crisis.
Treasury documents obtained by the Seven network under Freedom of Information state clearly that the impact of land release on housing affordability has been overstated:
While better land release and land use policies by the States and Territories are likely to improve affordability to some extent, the various reports probably overstate this effect. – p31
Further, the Treasury documents warn that John Howard’s calls for wide-scale release could lower property values down for existing homeowners, with potentially damaging consequences.
It should be noted that policies to increase affordability for first home buyers by increasing land releases may lead to lower property prices. This may impact on existing home owners, especially those with high household debt levels - p. 114
Clearly land release and planning policies have a role in housing affordability, but John Howard’s calls for wide-scale land release could inflict serious financial pain if this lowers property values and forces existing home-owners into negative equity.
The housing affordability crisis simply will not be solved by more tired and facile finger-pointing from John Howard.
The housing affordability crisis needs federal leadership and a Prime Minister who acknowledges that eight interest rate rises despite his promise to keep rates at record lows are central to the crisis.
As the Treasury documents note, these eight rate rises under John Howard have stretched heavily indebted households to the limit, with more interest rate pain in the pipeline.
The Treasury documents have bluntly exposed just how arrogant and out of touch John Howard has become when he claims that “Australian working families have never been better off”.
Australia needs fresh ideas – and above all an end to John Howard’s blame-game – so we can start tackling the housing affordability crisis head-on.