Aussie John has a plan to fix housing affordability

Aussie Home Loans boss John Symond said yesterday he had presented Prime Minister John Howard with a solution to the problem because years of political buck passing had led to inaction at all levels of government.
Mr Symond's plan would give first-home buyers a tax deduction of up to $4725 a year for five years on annual home loan interest repayments of $15,000. That equates to a $400 monthly saving, reducing loan repayments from $1900 to $1500 on a $300,000 loan.
The maximum benefit would be available for new homes or units worth $200,000 to $500,000.
After getting on top of their mortgage repayments, borrowers would pay back half the benefit over the next five years - a maximum of $200 a month or $2362 a year.
"Housing affordability today, in all my 30 years in the business, is the worst it has ever been for first-home buyers," Mr Symond said yesterday.
"If we sit by and do nothing the crisis just deepens - that's what's happening at the moment."
Mr Symond met Mr Howard in Sydney for an hour on Tuesday to present him with the report and detail how the proposal would work.
Mr Howard yesterday told The Daily Telegraph he was interested in the proposal and would have a thorough look at it before releasing his own policy on housing affordability.
"I haven't made a decision, I'm not saying 'yes' or 'no' but I always look at something that John Symond puts forward," Mr Howard said.
"He's a very public-spirited man, he's contributed a lot and I always take his ideas seriously."
The scheme would cost the Federal Government $505 million per year and would be open only to people buying new dwellings - in an effort to stimulate construction and increase housing supply on city fringes.
Opposition housing spokeswoman Tanya Plibersek said the more that experts contributed to solve housing affordability the better.
"It's a very important issue for many Australians and the Government has been unwilling to propose any solutions of its own," she said.
The plan has been in development for the past four months in conjunction with economic analysts BIS Shrapnel, which yesterday predicted the Reserve Bank of Australia would raise its cash rate from 6.5 per to 7.3 per cent by 2011.
"Substantial interest rate rises in the next 12 months is unlikely but the risk is, if we've got strong construction activity, that they will rise significantly by 2010/11," BIS Shrapnel boss Robert Mellor said.
He estimated the number of Australians aged between 25 and 35 years - the average first home buyer age - would increase by 36,200 over the next five years.
Source: Daily Telegraph