The Government says it wants to put ‘downward pressure on the rising housing costs’. Scott Morrison said that every family or individual who has a roof over their head- that they can rely on – then all of life’s other challenges become more manageable. But then went on to say there are ‘no silver bullets’ to make housing more affordable.

Australians are clearly concerned about housing affordability, so much so that over 45% say they would be willing to see the value of their home stop growing to improve the situation.

With these numbers in mind, it is perhaps surprising that state and federal governments have done so little of any substance in housing policy for decades, if anything you could argue they’ve contributed to the problem rather than improved the situation.

But this budget has delivered some measures by the Coalition that they say will make home ownership more achievable for ordinary Australians.

From the 1 July 2017, Australians can contribute up to $15,000 per year in voluntary contributions up to $30,000 in total that can be withdrawn fro a first home deposit. Withdrawals will be allowed from 1 July 2018 and Couples will be able to access the scheme and combine savings for a single deposit.

Effectively what this does is allow first home buyers to contribute money from their pre-tax income  towards a housing deposit – in a manner similar to salary sacrificing.

Who does this really help?

It’s going to help middle to high income earners as they are the ones who will be able to afford to deposit up to $15,000 a year into their super.  We also asked treasury what happens if you put in that money but then don’t have enough for a house – and the money just sits there- you won’t be able to access it until you are eligible for super. So this could be just another way for wealthy people to park their money somewhere with a low tax rate.

What about housing for young families?

To help free up larger homes for younger families from July 1 next year older Australians considering downsizing will be given the option to contribute $300,000 from the sale proceeds of their home into superannuation as a non-consessinoal contribution.

The Government is also looking at allowing Managed Investment Trusts to be used in developing and owning affordable housing.

To get these trusts to consider providing affordable housing, the Government wants to provide a sweetener by enabling direct deduction for rent straight from tenants welfare payments and increasing the capital gains tax discount to 60% for investments in affordable housing.

This is part of a broad government strategy, where it is managing people’s income support. They see it as managing risks as it ensures rent will be paid in time, effectively offsetting the risk of renting to low income households.