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A federal election is just six days away – apparently policy purity will have to come later

It has all the hallmarks of a fiscal stimulus measure. It pulls forward into the market those people earning less than $125,000 who currently face saving a little bit more to reach the 20 per cent threshold.

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That’s a group of people coming into the market who, bidding against each other, will help push up prices.

The steep fall in house prices over the past 18 months in Sydney and Melbourne is doing more to make the housing market more affordable than any government intervention.

First home buyers have been responding to this improvement in affordability. As Morrison noted just four weeks ago when data showed a further lift in first time buyers, their share of the total market has climbed 5 percentage points since the last election.

That’s been due to the fall in prices which has been driven, in part, by tighter lending standards enforced on the banks by the nation’s regulators and described as a “scalpel” by Morrison and Treasurer Josh Frydenberg.

Now, the Coalition wants to implement a policy that circumvents those lending standards via the balance sheet of federal taxpayers.

For a party that has shown it is unafraid to be adventurous on the policy front, Labor’s decision to match the Coalition suggests its sole focus for the next few days is on winning Saturday’s election. Policy purity will have to come later.

Two years ago Morrison as treasurer announced the Coalition’s response to soaring house prices by allowing first home buyers to access part of their superannuation.

So underwhelming has it been, with just 4 per cent of all first time buyers accessing the scheme in its first seven months of operation, that six days out from an election the Coalition outlines a policy with almost no idea how it may affect the market.

All the while a tax policy which the Treasury and Reserve Bank knows hurts first time buyers – the use of negative gearing – goes unmolested by the Coalition as it ramps up its attacks on Labor’s policies.

Not to be outdone, Labor could hardly put down its copy of the Communist Manifesto long enough before backing in the Coalition’s policy.

For a party that has shown it is unafraid to be adventurous on the policy front, Labor’s decision to match the Coalition suggests its sole focus for the next few days is on winning Saturday’s election. Policy purity will have to come later.

Adding to the policy confusion, Morrison also announced $25 million will be pumped into the National Housing Finance and Investment Corporation to “conduct comprehensive research into housing demand, supply and affordability in Australia”.

Five years ago the Abbott government killed off the National Housing Supply Council, whose job was to “monitor housing demand, supply and affordability … and to highlight current and potential gaps between housing supply and demand”.

That was then, when market forces were still all the rage within the Coalition.

Now it’s only a few days away from demanding the democratic socialisation of industry, production, distribution and exchange.

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

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