Treasurer Scott Morrison failed to tackle the growing woes of first home owners in this year’s federal budget, choosing instead to focus on the merits of negative gearing for those who already own their homes.
For Malcolm Turnbull’s government, backtracking on negative gearing is not an option as this could very well be his electoral poison. Those who are in favour of ending it to make the Australian housing market more affordable to first home buyers should vote Labor in the upcoming elections.
It also does not help that the government is no longer giving handouts for first home buyers. Back in 2000, the Howard government gave $7,000 grants to first home buyers to offset the GST. Kevin Rudd doubled that in 2009, fueling 20 and 13 per cent price hikes in Sydney and Melbourne over the next year.
But now, it seems like the government has given up on helping millennials buy property. Previous Labor treasurer Wayne Swan simply axed the First Home Owners grants without offering any alternative scheme to help.
But thanks to the Reserve Bank, wage earners above $80,000 now have a chance to save up extra money because of tax cuts and low interest rates. Still, those earning less than $80,000 will miss out.
“Lower interest rates and this extra fiscal stimulus in the budget are a positive because they improve affordability for home buyers,” said Domain Group chief economist Andrew Wilson. “But this isn’t a first home buyer budget.”
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