Chief Minister Andrew Barr has defended the ACT government's land release program, arguing that the government has little control over house prices in Canberra's inner suburbs.
Mr Barr engaged in a fiery debate with opposition planning spokesman Peter Cain in a committee hearing over how much control the ACT government has on the territory's skyrocketing house prices.
Mr Cain argued that the government was responsible for controlling the release of land, and this had a massive impact on house prices.
But Mr Barr rebuked this point, saying the government's land release program represented less than 2 per cent of the total market.
"The price of land in Ginninderry is not going to have a substantive impact on the price of land in Forrest or Yarralumla or Reid or Turner, because that land is finite," he said.
The debate ignited following a question from Mr Cain on whether the government had done any modelling around how house prices would be affected by the government's current land release schedule.
Mr Barr said the land release program only contributed to the median house price in the greenfield sites where blocks of land were being released.
He said other factors had a far greater impact on house prices.
"There are other factors including low interest rates and planning and zoning, and of course income levels ... in the end the price of housing is the supply and demand," he said.
"The worth of a house is how much someone is prepared to pay for it and that is not within the ACT government's control."
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Mr Cain accused the Chief Minister's argument of being disingenuous.
"The Chief Minister should focus on using the lever he controls to fix problems he and his Labor-Greens government created, rather than lazily blaming things he cannot control," Mr Cain said.
"Linking the scarce availability of land for new houses to sale of established stock is disingenuous and shows a muddled grasp of economics.
"The Chief Minister is not focused on economic fundamentals. Everyone knows if you severely restrict the availability of something, prices go up."
ACT Liberal Senator Zed Seselja also criticised the Chief Minister's comments.
"The ACT government has a monopoly on land release. It controls the planning system, it levies the taxes on land, and it is the biggest developer of land in the Territory, but according to Barr this has no impact on prices," Senator Seselja said.
"This is not just delusional, but a cynical attempt to avoid responsibility for his deliberate, cruel policy of squeezing the supply of land for family homes and the disastrous effects on tens of thousands of young Canberrans."
