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Bowen's bleak warning: We can't house kids

AAP logoAAP 22/09/2016 Elise Scott

Australia is a nation that can no longer house its own children.

That's the bleak declaration shadow treasurer Chris Bowen made during a speech on the economic importance of protecting the middle class on Thursday.

The middle class is built on home ownership, he says, but for too many that's becoming a pipe dream.

And he believes young Australians are already in the midst a home-ownership crisis.

"Young people unable to crack into the housing market strips them of one of the most fundamental wealth drivers through their lifetime," he told the McKell Institute in Melbourne.

It's not just the wealth created by owning a home, but equity leveraged to launch the careers of entrepreneurs, Mr Bowen argues.

"For many it is a means to a broader aspiration, of access to the capital which is built into the family home," he said.

"If young people can't afford a home, then that opportunity for wealth creation in the future will be cut off as well."

The shadow treasurer believes government housing policy is working against middle-income earners aspiring to buy a home.

It's why Labor wants to limit negative gearing to new properties and cut capital gains tax concessions.

Mr Bowen nominated three reasons for protecting the middle class:

* They have a high propensity to spend any income boost, driving economic growth

* They are the voice that signs off on openness policies, like trade and immigration agreements

* Middle-income parents invest in their children

"Middle-income families feeling the squeeze, chasing extra hours and second and third jobs have less time to read to their kids, less money to invest in their education," Mr Bowen says.

He blames the decline of unions for increased inequality and warns against cutting the minimum wage saying it's falling as a percentage of the median wage.

And those who work weekends deserve to be compensated with penalty rates until parliament, cabinet and company boards met routinely on Sundays.

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