The Turnbull government appears to be moving toward establishing a government backed-bond vehicle for affordable housing as Treasurer Scott Morrison heads to Britain to seek guidance on Australia's housing affordability crisis and Prime Minister Malcolm Turnbull prioritises the issue.
Similar to the Clean Energy Finance Corporation, which the former Abbott government wanted to abolish, a housing bond aggregator would give affordable housing providers access to cheaper and longer tenor debt for the construction of new homes.
It was the leading recommendation of bureaucrats in a report handed to state and federal treasurers in December, who agreed to establish a taskforce to design the model by mid-2017. The report made an exemplar of Britain's Housing Finance Corporation, which in 2014-15 issued more than £4 billion ($6.55 billion) in loans to housing agencies.
Mr Morrison is scheduled to meet with a slew of British officials this week including Chancellor of the Exchequer Philip Hammond, who in a landmark speech in November announced the doubling of capital expenditure on housing, including a £2.3 billion housing infrastructure fund.
Housing affordability had become an unacceptable drag on Britain's productivity and needed to be addressed urgently, Mr Hammond said.
By contrast, the Turnbull government has acknowledged the challenge Australia faces but has backed away from reforms such as abolishing negative gearing and instead shifted responsibility to the states, calling on them to boost supply.
That is set to change in 2017, with Mr Turnbull using last week's reshuffle to appoint young Victorian backbencher Michael Sukkar as assistant minister to the Treasurer, with special remit over housing affordability.
"This is an extraordinarily high priority for the PM," Mr Sukkar told Fairfax Media on Sunday. "This was made clear to me when I was offered the role. It's an issue that has rightly gathered steam over recent years."
Mr Sukkar said the government would not countenance changes to negative gearing, but voters could expect a "big, multifaceted approach" that could extend to "serious tax reform" in co-operation with the states.
"We'll need to lead by example and with the levers that we control ensure that they are being pulled to address housing affordability to the greatest extent possible ... and perhaps incentivising the states to make some of the reforms they need to as well," he said.
Mr Morrison said he would meet with financiers and specialists in the affordable housing field to determine if Britain's policies were "fit for purpose in the Australian context". Britain was "leading the way on this front" with a number of initiatives, he said, but did not specify any programs.
The Treasurer flagged a desire to redirect the $10 billion-plus spent on housing each year by Australian governments, declaring it needed to be used "more efficiently in order to help disadvantaged households".
Mr Morrison was due to arrive in London on Sunday night and will also use the trip to spruik Australia's financial sector while laying the groundwork for a free trade agreement with Britain.
High commissioner to London Alexander Downer told the BBC Australia had provided a scoping paper to the British government for an FTA that could be struck within just eight months.
He said Australia would likely want easier access for business people operating in Britain, although they can already obtain a tier-two visa to remain in the country for up to five years.
A spokesman for Trade Minister Steve Ciobo said Mr Ciobo had a "productive meeting" with Britain's Secretary of State for International Trade, Liam Fox, last week as the two countries worked toward an "ambitious" FTA.
Despite the global march of protectionism, the Turnbull government is also pursuing a free trade agreement with the European Union. Mr Morrison will also travel this week to Germany, the current president of the G20.
A scoping paper on an FTA with the EU was still under negotiation and could not be released, a spokesman for Mr Ciobo said.