Victoria's move to abolish stamp duty for first home buyers purchasing a property valued below $600,000 will not work unless more homes are built, Treasurer Scott Morrison says.The state Labor Government has announced a suite of policies to tackle housing affordability over recent weeks, with Victorian Treasurer Tim Pallas calling on the Federal Government to "step up to the plate" and look beyond land supply — the primary issue cited by the Commonwealth when discussing housing.
But, while some policies are "really interesting", cutting stamp duty will not drive prices down, Mr Morrison told Sydney radio station 2GB.
"Good on them for having a good crack at this," he said."But at the end of the day, if that just means people bid up more in the auction because they can borrow more because they don't have to pay stamp duty, well obviously, that will just take prices in one direction.
"So you can't do that without addressing the supply issues at the end of the day."
Prime Minister Malcolm Turnbull also weighed in on the issue, saying stamp duty and tax were "relevant" but not as pressing as supply.
"It is a big challenge, but it is one that we are absolutely focused on," he said.
"It is a very important one, but we need federal, state and local government to work together."
The Government has confirmed there will be a package in the May budget aimed at addressing housing affordability, with Mr Turnbull describing the issue as a "key focus" for the Government.