Last-Ditch Property Pledge May Not Be Enough to Save Australia’s PM

(Bloomberg) -- Prime Minister Scott Morrison has made a last-ditch bid to boost his stalling election campaign with a pledge to help Australians get on the property ladder, as a new opinion poll showed his government remains on track to lose Saturday’s vote.

Morrison will offer guarantees for first-home buyers, meaning they only have to save 5% of the purchase price as a deposit instead of the 20% typically demanded by banks. With many young Australians priced out of the market by a five-year housing boom, the issue has been pivotal during the election campaign.

The new policy may not be enough, however, to engineer a come-from-behind victory. Morrison’s conservative government trails the left-leaning Labor party 49% to 51%, according to a Newspoll published by the Australian newspaper on Monday. Should that margin be replicated at the ballot boxes, Labor will win power for the first time in six years.

Last-Ditch Property Pledge May Not Be Enough to Save Australia’s PM

Morrison, a former head of the government-funded tourism board who became prime minister in August, is seeking to convince voters to give his Liberal-National coalition a third term in office, even after the government’s agenda was derailed by infighting and leadership changes. With a platform of sweeping tax cuts and by highlighting his management of the economy, he’s managed to cut Labor’s lead from 8 percentage points to 2.

But with the campaign now in its final week, Morrison’s momentum appears to have stalled.

Last-Ditch Property Pledge May Not Be Enough to Save Australia’s PM

Labor leader Bill Shorten has already targeted younger voters during the campaign, laying out a detailed policy platform scaling back tax breaks for wealthier Australians so the savings can be funneled into greater social spending targeted at lower-income earners. He’s also pledging more action to tackle climate change and to deliver bigger budget surpluses than those promised by the government.

Shorten, a former union leader, has improved his personal standing among voters. Monday’s Newspoll showed 38% rate him as preferred prime minister, up three points from a week ago. Morrison remains ahead on 45%.

The property market has been central to the election campaign. While prices are now falling, many Australians are trapped in the rental market. Shorten has already pledged to curb tax breaks for property investors that helped turbo-charge the market. He swiftly adopted Morrison’s deposit guarantee, meaning first-home buyers will get some relief regardless of who wins on Saturday.

The government committed as much as A$500 million ($350 million) to the plan, which will apply to couples with combined annual income of no more than A$200,000, or up to A$125,000 for singles.

“It can take nine to 10 years for an average household to save a deposit,” Morrison said Sunday. “We want to help Australians realize the goal of buying their first home by cutting years off the time it takes to save up.”

©2019 Bloomberg L.P.