Chris Bowen says the opposition can afford the policy because it is ‘closing loopholes’ for the wealthy

This article is more than 1 year old

This article is more than 1 year old

Labor will match Scott Morrison’s election pitch to first homebuyers, saying it can afford to support the government’s home deposit scheme because it is “closing loopholes” for the wealthy.

After the Coalition used its campaign launch on Sunday to announce the new housing affordability measure, Labor’s shadow treasurer, Chris Bowen, criticised the government for the 11th-hour decision, but supported the proposal.

“After six years of failure, and six days before an election, the Liberals are desperately trying to tell young Australians they understand their struggles to buy their first home,” Bowen said.

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“First homebuyers know the Liberals are out of touch and only for the top end of town. We back genuine support for first homebuyers – that’s why we are also reforming negative gearing for future purchases, so young Australians don’t have to keeping losing out to wealthy property speculators.”

Under the plan, unveiled by the prime minister at the Liberals’ formal campaign launch in Melbourne, first homebuyers who have been able to save for a deposit of at least 5%, will be able to access a government guarantee for the remainder up to 20% of a house’s value.

The Coalition said the measure would shave years off the time it takes for young Australians to save for a home deposit.

The $500m in equity will be made available through the National Housing Finance and Investment Corporation and will be available for singles earning up to $125,000 a year, and couples earning up to $200,000.

It will also save borrowers up to $10,000 by not having to pay Lenders Mortgage Insurance.

“Getting into the housing market is a point of pride for Australians and a rite of passage. It requires hard work and even harder saving, but we want to make it that bit easier,” Morrison said.

“We want to help make the dreams of first homebuyers a reality.”

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The value of homes that can be purchased under the scheme will be determined on a regional basis, reflecting the different property markets across Australia, while the investment corporation will partner with small lenders to boost competition in the market.

Morrison used the announcement to target Labor for its proposed negative gearing changes, saying the scaling back of the tax incentive for investors would lead to a drop in the value of homes.

But Bowen said the Coalition was protecting a system that made it more difficult for buyers entering the market.

“Morrison will keep spending billions of dollars on loopholes for wealthy investors to buy their 6th or 7th house.”