NICOLA SMITH: No magic solution to housing affordability but flashy offers win votes and risk making it worse

Opposition Leader Peter Dutton chose the verge of a muddy housing construction site in Upper Kedron, Brisbane on Monday morning to sell his election “dream” to struggling young Australians.

“It kills me when you hear young Australians saying I’m working hard. We’re both working hard. We’re putting money aside. We don’t ever think we’re ever going to be able to afford a home,” he said.

Mr Dutton used his official campaign launch on Sunday for his cornerstone promise to younger generations that “I will be a Prime Minister who restores the dream of home ownership.”

As week three of the hustings began in his home state of Queensland, he stood side by side with his son Harry, a 20-year-old second-year apprentice carpenter, surrounded by diggers and tradies at the vast building site to ram through his point.

Harry, who said he, his sister and mates were finding it “impossible” to save up for their own home, is exactly the kind of Gen Z voter the Coalition are trying to lure with their centrepiece pledge to relieve the nation’s housing crisis.

Gen Z and millennials are the biggest voting block in this election and both parties are making a minute-to-midnight appeal to their biggest concerns.

Mr Dutton’s Coalition has promised to allow first-time buyers of newly built homes to be able to deduct mortgage payments from income taxes if they are elected on May 3.

The “first home buyers mortgage deduction scheme” would mean a family on average incomes would be about $11,000 a year better off — or $55,000 over five years.

It would be limited to five years and the first $650,000 of a mortgage, and would also be means-tested at $175,000 for singles and $250,000 for couples

The plan, announced hours before Labor’s rival campaign launch on Sunday, attempted to outflank Prime Minister Anthony Albanese’s own offer of 5 per cent deposits for all first home buyers and a $10 billion pledge towards building them 100,000 new homes.

Both party’s sweeteners will likely be welcomed by young Australians suffering under some of the worst housing affordability in the world, where about 40 per cent of a household’s disposable income required to service a median priced property.

With homes in short supply, the Government is on track to fall far short of its target of 1.2 million homes built over the next five years.

But political leaders on all sides admit no one so far has found the magic bullet to getting exhausted young workers onto the first rung of the housing ladder.

Faced with a daunting crisis and obvious human angst, it’s easy to see the temptation of offering big-bang solutions on the eve of an election, in a grab for votes that has left top economists horrified.

As the Federal poll turns into a bidding war between major parties intent on a final spend-a-thon sprint, the nation’s economists have warned quick fixes risk inflating house prices and worsening a Budget already heading for $1 trillion in the red.

Chris Richardson, known as the nation’s chief Budget watcher, was scathing of the race for votes, accusing both sides of offering “Magic Pudding” solutions rather than meaningful economic reform.

“More money chasing the same amount of housing is the most well-worn path to failure in Australian policymaking,” he said on social media.

“The campaigns of both major parties are a dumpster fire of dumb stuff. Meantime, the world is on fire, and we here in Australia need smart policies way more than we need smart politics.”

Back at the building site, Mr Dutton was dismissive of economists’ concerns, deflecting to his “gamechanger” policy to ease young people’s “pain”.

With close polls showing neither Mr Dutton or Mr Albanese able to dispel the spectre of a hung parliament, both may be banking on young home seekers eager to take up their flashy offers.

And who could blame struggling voters if they did?

But if economists are to be believed, they risk being the long-term losers of short-term political gain.