Ripper calls out affordable housing policy

Former state treasurer Eric Ripper says government policies that make housing more affordable are politically unpopular.

Mr Ripper, who was Western Australia's treasurer between 2001 and 2008, stood up at a Bankwest Curtin Economics Centre lunch today, marking the launch of the group’s latest housing affordability report.

Speaking about the potential abolition of stamp duty for some homebuyers to encourage more market activity, Mr Ripper said such a move would not necessarily be popular.

“The stamp duty argument is part of the more general problem, which is that most of the policies that would make housing more affordable are in fact politically unpopular,” he said.

“The stamp duty abolition would make more efficient use of housing stock because people would be not so inhibited in changing houses and downsizing … but that stream of revenue, if we want to fund hospitals, has to be replaced, with a land tax.”

He added that replacing stamp duty with a land tax would mean homeowners would face additional rates bills.

“Those people that have paid stamp duty 30 years ago and forgotten all about it have stayed in their house in Dalkeith for that period of time might be very surprised at the substantial land tax bill that they would have to pay,” Mr Ripper said.

“I think it’s a good reform but ... the second problem is it would reduce initially the revenue available to the government and that would have to be funded either by the Federal Government coming in and supporting reform or by borrowing a lot of money with the expectation of eventually paying it back.

“It’s only one of many problems we face the conundrum that to improve housing affordability we really should reduce the price of houses and people don’t tend to support that.”

Property groups including the Urban Development Institute of Australia WA are calling for stamp duty reform.