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Posted: 2024-09-01 01:53:37

The Coalition would consider docking GST payments from states that don't build enough new homes in a bid to force them to do the "heavy lifting" on increasing housing supply.

The shadow assistant minister for home ownership, Andrew Bragg, told ABC's Insiders on Sunday that stronger measures are needed to encourage the states and local councils to support new developments. 

"We need to be creating and finding a way to hit the states hard where it hurts," he said.

"Otherwise, I fear that we would drift into a situation where the housing problem will get worse before it gets better."

The government has pledged to build 30,000 new social and affordable homes under its $10 billion Housing Australia Future Fund, which the opposition has said it would scrap if elected at the next election.

Earlier this year, Prime Minister Anthony Albanese agreed to provide $9.3 billion to the states and territories over five years for homelessness and crisis support and social housing, and a further $1 billion for community infrastructure to speed up the home-building process. 

The Coalition is yet to announce its housing supply policy but Senator Bragg said penalising states that don't build their share of homes "would be under consideration".

Houses under construction on a bright, sunny day

Coalition Senator Andrew Bragg says the states need to do the heavy lifting on building more homes.  (ABC News: Keana Naughton)

"Nimbyism is poison for young people and when you see councils and states block developments, particularly apartment buildings, that is a disaster for young people," he said.

"We don't run the planning system in Canberra, but we have to find a way to get local councils and states to actually do the heavy lifting here."

Health Minister Mark Butler on Sunday said Senator Bragg's comments cast uncertainty over state and territory budgets. 

"Certainty for states around their GST arrangements is really critical for those budgets, and those budgets at the end of the day deliver hospitals, schools and policing services," he said.

"This massive curve ball that Andrew Bragg has thrown at the state governments right now will be a concern to all Australians."

Senator Bragg also reaffirmed the Coalition's previously announced plan to allow first home-buyers to withdraw their superannuation for a property deposit, claiming it would make a "minuscule or nil difference" to house prices.

"The key determinant for your success in retirement is not your superannuation balance, it's your housing status," he said.

"Allowing people in their 30s, for example, to use their money to get a first home will set them up for a much better lifestyle in retirement, because if you are a retired renter on the pension, your life is going to be much more difficult than it otherwise would be."

The Coalition's policy currently states that a maximum of $50,000 could be withdrawn, but Senator Bragg said they were considering increasing the threshold.

Close up of Andrew Bragg.

Senator Andrew Bragg has said the federal government needs to "hit the states hard" to encourage housing suppy. (AAP: Lukas Coch)

Former prime minister Scott Morrison took the same policy to the last election, sparking criticism from economists who said it would not solve the root of housing affordability.

Under the 2022 policy, only people who already had a 5 per cent deposit would be able to apply for the scheme and any money taken from super would have to be returned if the home was sold. 

In response to claims that the policy would push up demand, and therefore house prices, Senator Bragg said the impact would be negligible and it was "crazy" not to allow people to use their own money to buy a home.

"This would be about tilting the scales for first home-buyers where they have no access to the bank of mum and dad," he said.

"Many Australians have no access to that bank, so this is their biggest pool of capital."

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