Two of the nation's big-bank bosses believe policies to reduce demand, such as capital gains tax changes, should be considered alongside increasing supply, as part of the housing affordability debate.
With the government split over whether to reduce the 50 per cent CGT concession for investors, Commonwealth Bank of Australia chief executive Ian Narev and his ANZ counterpart, Shayne Elliott, said on Friday that all options should be looked at.
"It's important we look at all supply-side and demand-side characteristics. We shouldn't be picking up policy A or policy B and saying 'lets change it'," Mr Narev told the ABC.
"We should be taking an integrated look at housing supply and housing demand and working out what is the set of polices that is going to help everyday Australians reach their dream and their right, which is to own a home."
"The starting point needs to be good discussion about housing supply and infrastructure, that's the only way to get sustainable change," Mr Narev said.
"Then beyond that yes, there is an appropriate debate about policies. But they've all got to work together. We should be looking at the whole of the housing system ... and looking at how a collection of policies can work together."
Mr Elliott agreed, saying it did not make sense to rule options in or out because this limited solutions and created the potential for distortion.
Finance Minister Mathias Cormann, who is close to Prime Minister Malcolm Turnbull, moved swiftly on Thursday to crush the prospect of any changes to CGT after The Australian Financial Review reported work was under way within government on options to be considered as part of a housing affordability package for the May budget.
The options under consideration include either reducing the 50 per cent CGT discount by a set amount, or phasing it in, meaning a property would have to be held for several years before the full 50 per cent concession was realised.
At present, the discount applies if the asset is held for just 12 months.
No responsibility
Although Treasurer Scott Morrison has conspicuously declined to rule out the idea, Senator Cormann, who has no direct responsibility for tax policy, on Friday again said the government had no plans or intention to touch CGT or negative gearing. Mr Turnbull has backed Senator Cormann.
The discussion has added resonance after Mr Morrison and Social Services Minister Christian Porter warned this week that taxes would have to rise if the Senate, as it will, blocks billions in cuts to welfare and higher education.
This sparked another skirmish on Friday after former prime minister Tony Abbott said Labor, not the Coalition, was the party of taxing and spending and that the government should avoid tax increases.
Senator Cormann told Sky News that Mr Abbott was being hypocritical because his 2014 budget contained several tax increases.
"I've been the Finance Minister both through the Abbott and the Turnbull Governments, and I was the Finance Minister when we introduced fuel excise indexation in the Abbott era. I was there when we introduced the Budget Repair levy and so on," he said.
Shadow treasurer Chris Bowen said the Coalition was incapable of formulating a tax policy.
"This is a Liberal Party and Coalition incapable of leading on housing affordability and providing real solutions to give first home buyers a level playing field to enter the housing market," he said.
