Federal Government

The Federal Government isn't really in a position to do much about housing affordability, as I believe they're restrained by the constitution of Australia; it's essentially the responsibility of the State governments. The Federal government are doing what they can with their first home buyer grants, but it's not helping much. There are a few actions they could take, though, that would send things in the right direction:

• They could also reduce immigration to pre-Rudd levels (or less)
  
• They could discontinue the tax deductibility of negative gearing

  Negative Gearing

  Negative gearing means that a rental property is losing money; if it is tax deductible against the rest of someone's income, it means that the price paid for the housing is inflated, as people can then claim a tax deduction on their losses; tax deductions from income is one thing, but personal tax deductions for losses is another.

Local Government

While planning is traditionally the responsibility of the local levels of government, in Victoria, the Local Government Act of 1989 says "A local law must not be inconsistent with any Act or regulation"; I would imagine the situation is the same in other states; hence the local government really has very little power over the problem. The only thing I know of that they can do is to ensure that their rates are taxing the undeveloped value of the land, rather than the developed value (and raising their rates to keep the revenue the same). This would have the effect of raising rates on undeveloped land, and lowering it on developed land, which would both decrease housing costs, and encourage those who are sitting on undeveloped land to develop it into housing or some other use.

State Government

This is where the problem lies. The various State Governments of Australia are responsible for both the policies that created the problem, and are the only ones able to create the policies that could fix the problem. Each state could begin by making Stamp Duty

Stamp Duty

Stamp Duty is a state government tax that is charged every time you buy a property. You can read more about it in Land Taxes. a fixed tax (see Land Taxes for details), but the major factor is their town planning policies. As the situation is different in each state, each state needs to be dealt with individually. Click on one of the states below for further information (not all states are yet complete):

• New South Wales
  
• Victoria
  
• Queensland
  
• Western Australia
  
• South Australia
  
• Tasmania
  
• Northern Territory

The rest of us

What can the rest of us do? There are basically two things:

1. Lobby the State Government to fix their problems (see the individual pages above under the State Government section). This is quite easy, although it may take some time. Contact your local member of the State Parliament, and express your opinions about the problem. This can be via letter, phone call, a personal visit, or whatever.
   
2. Vote for people who promise to fix the problems (again, see the individual states' pages for information)