Peter Costello will "audit" all commonwealth-owned land to identify areas that should be released for new housing as he tries to blunt Labor's winning housing affordability campaign.
The Treasurer has called on the states to work with him to identify all land that could be released for development to address the housing affordability crisis.
But Labor claims that Mr Costello's effort will not work, arguing that high interest rates are the main cause of housing unaffordability.
Mr Costello said high property prices were affecting first homebuyers and one way to balance prices was to release more land for development.
"It's not a demand problem, it's a supply problem - you've got to boost the supply of housing," Mr Costello said. [It is a demand problem, that needs to be solved by increasing supply of housing stock.]
"We should do an audit of all land, particularly in outer suburban areas, that should be released for new housing."
Mr Costello called on the states to work in conjunction with the commonwealth on the audit. "We will ask the states to look at any land that they have that could be released for housing," he told the ABC's Insiders program.
Queensland Premier Peter Beattie welcomed the move, but NSW Acting Premier John Watkins said his Government's land release program was sufficient to meet demand.
"We've got a plan to release properties throughout southwest and northwest and western Sydney because of the needs of this city," Mr Watkins said.
"We're releasing that land as appropriately and as quickly as we can to cater for the needs of this growing city.
"I think anyone that is critical of that actually doesn't know the level of detail or the level of land release that is occurring."
Documents obtained under Freedom of Information last week embarrassed the federal Government when they revealed that the impact of land release on housing affordability had been overstated.
"While better land release and land-use policies by the states and territories are likely to improve affordability to some extent, the various reports probably overstate this effect," the document read.
Kevin Rudd said a national audit ignored the fact that high interest rates were making mortgage repayments unaffordable. "Mr Costello's response today was simply to talk around the edges of this debate," the Opposition Leader said.
"What this shows is that after 11 years, Mr Howard's Government has gone stale and has lost touch with working families across Australia who are doing it tough meeting their mortgage repayments."
Labor Treasury spokesman Wayne Swan said the typical first homebuyer was paying the highest percentage of their disposal income in mortgage repayments in history.
Source: The Australian
