CLS Rejects the Government’s 5% Deposit Scheme for Inequitable Demand Side Stimulus

The Government’s claim that the expanded 5% deposit scheme for first home buyers will improve intergenerational equity is absurd.

This policy is yet another example of governments creating problems through years of restrictive planning, over-regulation, and infrastructure mismanagement—only to then attempt to manoeuvre the economy with artificial demand-side subsidies that inevitably fail further.

By lifting property price caps to as high as $1.5 million in Sydney and removing income limits altogether, the scheme disproportionately benefits higher-income households and those already supported by wealthy families. Rather than levelling the playing field, it entrenches inequity while bidding up prices even further.

True intergenerational fairness will not come from fuelling leverage into a market starved of supply. It will come from governments stepping back: cutting red and green tape, freeing up land and planning approvals, reducing public investments in infrastructure that crowd out the private sector, fixing occupational licensing, capping existing tax concessions like the capital gains discount and negative gearing, and ensuring that skilled migrants can help meet labour shortages in construction.

Intergenerational equity is achieved when young Australians can buy or rent homes at prices set by open competition and abundant supply—not by temporary political fixes that inflate costs and transfer risk to taxpayers.