VIRGINIA TRIOLI, PRESENTER: Returning to our top story this morning and the Government's plan to address the housing crisis. As we've been reporting, the ABC understand that Scott Morrison is in favor of a proposal to allow young first home buyers to divert some of their super to buying a house.

Yesterday the Treasurer ruled out any changes to negative gearing and he also called for more private sector investment to curb those soaring house prices.

AUDIO: SCOTT MORRISON, TREASURER: ”Disrupting negative gearing on scale that has been proposed by many would not come without a cost, especially to renters, let alone the wider economic impacts and proponents to disruptive large-scale negative gearing I think have glossed over this fact. It would not be good news for the 30% of Australian households who rent, particularly those on the lowest incomes.”

TRIOLI: The Treasurer speaking yesterday. Now Chris Bowen is the Shadow Treasurer and he joins us now from Australia's most expensive housing market, Sydney. Chris Bowen good morning and thanks for joining News Breakfast.

CHRIS BOWEN, SHADOW TREASURER: Good morning, Virginia, my pleasure.

TRIOLI: What would be the problem in your view with compulsory super payments, some aspect of them, being diverted into a special savings account for the first home buyer.

BOWEN: A couple of points Virginia, it takes a very special plan to actually drive up housing prices by increasing demand as well as undermining Australia’s retirement income system. This would actually overheat the housing market even more and it would - the only winners would be vendors who would have two first home buyers with access to super outbidding each other, spending their superannuation money.
This is just the latest Liberal attempt to undermine Australia's superannuation system. Malcolm Turnbull once said it was “a thoroughly bad idea”, Mathias Cormann said it was a bad idea as late as last month, and yet Scott Morrison, flailing around trying to find some answer on housing affordability when he refuses to use the main lever at his disposal, negative gearing reform means that he intends, he appears to be intent, on giving Australia a thoroughly bad policy which let me be clear, Virginia, Labor will oppose with every ounce of energy and every capacity and our availability in the Parliament and in the community.

TRIOLI: Well we will get to negative gearing in just a moment, we've just heard this morning that Derryn Hinch the Senator says that he won't support this. He say it is will die on the vine, it won't even get halfway up the flagpole. Do you agree, given your numbers and what you're saying this morning, is this pretty much the beginning and end of the idea?

BOWEN: I can only speak on behalf of the Labor Party, I can't speak on behalf of the crossbenchers, the Senate is very hard to predict. I can only make announcements on behalf of the ALP and I am making it very clear, as we have done very consistently, that we agree with the old Malcolm Turnbull that this is “a thoroughly bad idea”, we agree with Mathias Cormann it is a terrible idea, we will oppose it because it takes a very bad policy to actually make the housing situation worse and take a key brick out of Australia's retirement income system. See you are really saying to young Australians, "You can have a house or you can have a dignified retirement but you can't have both”.

And the final point Virginia, is he says there should be some sort of concessional savings mechanism for first home buyers. His Government abolished the first home buyers savings account which was separate to superannuation but provided some concessions. They abolished it. Just as they abolished our program to make it easier for seniors to downsize their homes, just as they abolished the National Housing Supply Council. Everything they now say they are doing would only be repairing some of the damage that they did in the early years of their Government.

TRIOLI: Well let's talk about the proposal to establish a bond aggregator as we see in the UK to support social housing projects, and to encourage some private investment there as well. What are your thoughts on that?

BOWEN: Look that's a fine idea, we've made it clear that we have no problem with that, if it's properly designed and we would need to see the detail as to how this Government proposes to design it. But there is nothing wrong with the idea in principle, but it is a small proportion of the issue. It is really about social housing and affordable housing, but it doesn't tackle the issue of the house prices which are putting home ownership out of the reach of ordinary Australians, young Australians in particular, who are working in jobs earning incomes which normally in the old days would have meant they could get a foot in the housing door, but can't under the current arrangements. Now a bond aggregator and increase in social housing is not going to fix that problem. It can be a small part of the solution, but it’s not going to fix the broader problem.

TRIOLI: Well look we will turn to negative gearing because you're still in favour of a crackdown on negative gearing, but what modelling has Labor done to ensure and to show that the rental market wouldn't be adversely affected by any major changes that you might propose? That's the nub of this point, just what happens to accessibility and actually getting access to homes?

BOWEN: That has been modelled to death Virginia and we've been through this debate consistently and constantly since we made the announcement 18 months ago.

TRIOLI: Sure, but to jump in there, the reason I ask the question, is that the argument rages and leaves everyone sitting on the sidelines, sitting there wondering what the truth might be. BOWEN: No. With respect, Virginia, it doesn't. It’s doesn’t rage. There is only one person now who makes that argument and it's Scott Morrison. I mean eminent economist after eminent economist have rejected that argument. It is a fallacy, it’s a falsehood, it’s a lie and he should drop it. The in fact of the matter is that when negative gearing was reformed in the 1980s, rents went up in a few markets in Australia, they went down in other markets. He draws on that historical analogy and he is wrong. It is a lie. He should stop pedaling it. Eminent economists have made it clear that that is just a complete falsehood. If you look at Saul Eslake, the Grattan institute, take your pick, of economists who have commented on this. This is just a complete fabrication by Scott Morrison to justify his policy inaction and quite frankly it’s a fraud upon renters right across the country.

TRIOLI: When it comes to supply, should Commonwealth land be used for housing as has been suggested by the Government?

BOWEN: Well, that can play a role as well, but again a limited role. I mean if there is surplus Commonwealth land, the fact of the matter is that most Commonwealth governments would have sold it in the past and I've had a look at this in the past and a lot of land owned by the Commonwealth which is kept for various reasons which might not be under active use just at the moment, but is being kept in reserve. Now if there is a decision taken that it's no longer needed and it can be added, well, sure, but again look we are talking about a 1 or 2 per cent improvement contribution to the problem. The Commonwealth doesn’t own land in you know, huge amounts in every capital city which could fundamentally change the housing market, that's just a fallacy as well.

TRIOLI: Now on some other issues this morning, was the inclusion of mental health and disability in the NDIS a mistake on the reflection looking at the cost blowouts to the system that we seem to be confronting right now?

BOWEN: No, I don't think so. The NDIS is fully funded. This again is a myth of the Liberal Government. Again of course as a system develops and emerges, you are going to find new challenges in it. Mental health is one of Australia’s health epidemics. We have a couple, we have diabetes and obesity, and we have mental health issues. It’s a good thing that mental health in particular is so much more on the national agenda. It used to be swept under the carpet and ignored by governments and the community, that's no longer the case. We are talking about it much more. It is a fact that it does need Government attention. I fully respect all the mental health experts whose have contributed to this debate, they bring forward very important experience to this debate, but it is a very important national health issue and it does deserve the attention of the Government.

TRIOLI: Now also we are hearing that the axe might be hovering over the Government’s $648 million work for the Dole program, of course that key centerpiece one of Tony Abbott's major first policy initiatives. Your thoughts on that?

BOWEN: Well this is the Liberal Party at war with itself. Again, Malcolm Turnbull and Tony Abbott going through this internecine war about policy. Step by step. Now, Work for the dole was introduced by Tony Abbott. If Malcolm Turnbull is going to get rid of it, he needs to come out and say so. You’ve had Liberal backbenchers by all reports going into lobby. We want to see properly designed labour market programs, assisting people back into the workforce, giving them work experience, sure, but giving them training, giving them that important on the job training as they go. That's been our approach all the way through. We've been consistent on that. If Malcolm Turnbull is going to scrap one of Tony Abbott's policies he should come out and give us the detail.

TRIOLI: Chris Bowen we will leave it there, thanks for joining us today.

BOWEN: My pleasure Virginia.