Housing is the right problem but our leaders have the wrong policies

In short, Albanese and Dutton risk exacerbating the problem they are claiming to solve.

Both proposals have other shortcomings. Labor’s plan for 5 per cent home deposits will encourage first-time buyers to take on higher debt, exposing them, and Australia’s financial system, to greater long-term risk.

The Coalition claims that under its mortgage deductibility scheme, a first home buyer with a taxable income of $120,000 with a $650,000 loan and an interest rate of 6.1 per cent will receive a benefit of around $12,000 a year. The benefit will be limited to single people earning up to $175,000 a year and couples earning $250,000 combined.

But Dutton’s plan has drawn fire from experts for introducing an unjustified distortion to Australia’s creaking tax system. Hamilton warns the policy also “dramatically narrows the income tax base.”

The Coalition already has a plan to allow first-time buyers to withdraw $50,000 from their super to put towards a home deposit. With Sunday’s announcement, it now has two policies that boost housing demand rather than supply.

Albanese and Dutton have been right to make housing affordability a priority at this election. But the policies they propose are reckless and misguided.

Young voters dreaming of homeownership deserve much better than the proposals put forward on Sunday.

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