NIMBY states should get funding cuts: MP

Liberal senator Andrew Bragg says the Coalition would consider cutting GST payouts to state and territories as punishment for not fulfilling their housing targets.

Appearing on ABC’s Insiders, the opposition homeownership spokesman said states and territories needed to do the heavy lifting in increasing housing supply, flagging harsher punishments for jurisdictions which don’t comply.

“I want to make an important point here that NIMBY-ism 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.

“There are a lot of different things you could do in terms of the financial arrangements that exist between the commonwealth and the states,” he added, pointing towards a New Zealand policy which links housing completions to council funding.

Senator Bragg added the Albanese government’s current Housing Australia Future Fund, which supports states and territories to build 30,000 homes over five years, was “a failure,” with the Coalition committing to slash the policy.

Asked by host David Speers whether the Coalition would dock GST distributions, Senator Bragg said the Opposition had yet to announce its supply policy, but said the punishments were “under consideration”.

“We have the vertical fiscal imbalance where we collect most of the revenue and give it to the states,” he said.

“We need to be creative and find a way to hit the states hard where it hurts, otherwise I fear we will drift into a situation where the housing problem will get worse before it gets better.”

Any moves to alter GST distributions would come under immediate attack from the states, with annual funding splits generating a war of words between commonwealth and state governments every March, when the funding is revealed by the Commonwealth Grants Commission.

The revenue stream contributes about 23 per cent to state governments, which have lesser capacity to generate income from state-based taxes.

Senator Bragg also defended the Coalition’s plan to allow Australians to use their superannuation to buy a home. While the plan to then-government proposed before the 2022 election was capped at $50,000, Senator Bragg has flagged the Coalition would consider increasing that amount.

While the move has been criticised by the industry and economists who say it could drive up property prices, Senator Bragg said it would allow more Australians to enter the housing market.

“The key determinant for your success in retirement is not your superannuation balance. It’s your housing status. So that’s why we make no apology in allowing people to use their own money to get a house,” he said.

“I think it’s one of the best ideas in the policy marketplace because unless you have access to the bank of mum and dad, and a lot of Australians don’t have access to that bank … your super is your biggest pool of capital”.