Given the broad remit of the Productivity Inquiry, we have focussed on the issues that most critically impact housing. These are:
- Tax impacts – Taxes are up to 50% of housing costs. We need to broaden the tax base to reduce tax costs, maintain negative gearing & the capital gains tax discount to support rental supply.
- Regulation impacts – National Construction Code (NCC), environmental & planning approvals all significantly impact productivity, increasing costs and delaying delivery of housing by up to 10-12 years.
The only way to improve access to home ownership and affordable rental, is housing supply boosting initiatives. We are simply not building enough homes. The lack of land supply, slow environmental/planning approvals, restrictive development controls, high construction costs and property taxes are choking new supply.
Industry supports genuine, economy-wide reform that reduces property costs, improves productivity and growth. This means stimulating faster approvals, enabling infrastructure funding and a stable tax regime that encourages long term investment in housing. Many of the improvements can be made through better tax and regulation.
Rentals are the lowest they can be under negative gearing and anything that changes the regime, makes it harder for renters.
Any significant change to the capital gains discount, will impact the supply of rental housing and does not actively improve housing affordability.