Victoria criticises Federal Government on home ownership

The Victorian government has today launched an attack on the federal government, accusing them of not acting sufficiently to arrest the decline in home ownership levels.

With a meeting of the nation’s treasurers scheduled to take place today in Canberra, the home ownership problem is set to dominate the agenda. The Victorian Treasurer, Tim Pallas, has set the tone for the debate by calling attention to a perceived lack of promise fulfilment.

“Quite frankly, when the Government talks about opening up the opportunities for people to get into the housing market, they haven’t really matched their rhetoric with any substantial action,” Mr Pallas said.

The representatives of each state will brief the Federal Treasurer Scott Morrison on the actions they have each undertaken to try and combat the housing affordability problems, and are expected to press for more centralised action.

This development comes after a report earlier this week warned that retired Australians were having to resort to using superannuation savings to meet mortgage payments as a result of the housing affordability changes.

A report by the Australian Institute of Superannuation Trustees (AIST), along with independent economist Saul Eslake, has reiterated the problems highlighted by the states, such as a report. The report claims that the overall reduction in home ownership amongst all age groups is a serious threat to the adequacy of Australia’s retirement income system.

Mr Eslake has reprised Mr Pallas’s call for better government action on the issue.

“It [the Federal Government] has been doing so little [on the housing affordability crisis] or doing things to make the problem worse rather than help to solve it,” Mr Eslake told Radio National Breakfast.

While he admits it has become the rational decision for retirees to commit their superannuation to paying off mortgages, Mr Eslake has decried the fact that people are still finding themselves paying off mortgages at that time of their lives, and pointed to the threat it poses to the retirement income scheme as it stands.

“They will increasingly use their super to pay off their mortgage debt which means they won’t be using their super to fund their retirement incomes and instead will be relying on the pension,” he said.