Low income earners struggling with rent could soon get a helping hand from the Commonwealth as it works towards a government bank to fund community housing.
The Government is flagging action on affordable housing amid an ongoing political battle over the issue.
It is establishing a taskforce to design a government lender that would provide cheap loans to community housing organisations.
Treasurer Scott Morrison said a government bank to fund community housing would help counter the growing number of low income earners facing rental stress.
Mr Morrison told the ABC that the housing debate often focused on first home buyers, but low income earners struggling to pay their rent were a major issue.
"If they can't be in sustainable, reliable accommodation, all of the other jobs get harder — the problems of joblessness, the problems of other ailments that they have to deal with, the problems of disabilities," he said.Budget package to address housing affordability
Mr Morrison said similar models had worked overseas to provide community housing groups with finance over longer periods of time and fill a gap in the sector.
"It's not the whole solution but it's certainly been part of the solution in many parts of the world," he said.
"That's very important but you've got to work right across the scheme."
Mr Morrison has confirmed there would be a package in the budget to address housing affordability, but has refused to be drawn on the details.
Housing affordability continues to be problematic for the Turnbull Government, with the Opposition using it as part of its campaign to paint the Prime Minister's team as out of touch.
Earlier this year, Deputy Prime Minister Barnaby Joyce responded to concerns over housing affordability in Sydney by saying "houses will always be incredibly expensive if you can see the Opera House".
His comments — which included suggesting people move to his regional electorate — were leapt on by Opposition Leader Bill Shorten, who said Government MPs "don't seem to care" about the issue.
This commentary has been compounded by Liberal backbencher John Alexander repeatedly calling for action from his colleagues, as well as rogue proposals such as Nationals MP Andrew Broad suggesting that banks forgo a deposit from first-home buyers who have a three-year rental history.
Addressing media on Friday, Mr Shorten said Labor had been looking at ideas similar to the Government's taskforce.
He said the Opposition would support sensible solutions, but said "fair dinkum housing affordability" would not be possible until the issue of negative gearing was addressed.
"For some Australians … the debate about home ownership is a pipe dream," he said.
"But you can't be serious about housing affordability if you deny the dream to this generation of Australians of being able to afford your first home when you have a system which prefers investors."How long would it take you to buy a house in your city?
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