MICHAEL BRISSENDEN: The Federal Opposition has, of course, leapt on the Treasurer's comments about housing, but what answers does the Opposition have? Labor's finance spokesman is Tony Burke and he joins me now. Mr Burke, welcome to the program. It's easy to criticise, but what are you doing about it?

TONY BURKE, SHADOW FINANCE MINISTER AND MANAGER OF OPPOSITION BUSINESS: Well, Michael, I think you may well have managed to top how weird Joe Hockey's interview was yesterday with the one he's just given. 

We've simply said we need to have a public discussion, we need to work our way through the issue of housing affordability. We've got a discussion paper that submissions have closed on. That is going to be released in an orderly way and we're going to work through our processes on this and before the election we'll announce our policies on it. 

But in the face of that, Joe Hockey has just said on your program that he knows what Labor's policy is, and he's announcing it's about bringing house prices down. We've got the Treasurer of Australia just on these crazy rants day after day without any factual basis behind it at all.

BRISSENDEN: Obviously people are very keen to know what the Opposition is going to do about it, particularly when housing prices do run out of control. Do you think they should come down?

BURKE: What we need to make sure of, is we start by identifying the problem and working through what are the different policy levers, because there's a lot of policy levers that are relevant to this. 

BRISSENDEN: But you wouldn't want housing prices to fall in Sydney, would you?

BURKE: No one is asking for prices to fall, no one is putting that forward. The only person who's talking about that is Joe Hockey on your program now. Tony Abbott tried to give this a run in Question Time last week when we simply asked the question whether or not he agreed with the Treasury Secretary on whether or not there was a housing bubble. 

The reason people are concerned about the language of a housing bubble is because it does imply the exact sort of sequence of events that you just described. But what the Treasurer just said is that price is determined only by supply. Now everybody knows that's wrong. Issues of price are determined by both supply and demand, and at state and federal levels there are policies that impact on both, and we are able to look at all of them.

BRISSENDEN: The Reserve Banks says the Sydney property market is unbalanced due to the power of investors. The reality is that investors in Sydney at least are now buying more than half of all properties sold, according to the latest statistics, and yet you've ruled out doing anything to wind back sweeteners like negative gearing. Why?

BURKE: What you've just said there is wrong. We haven't ruled it out.

BRISSENDEN: So you'll look at it?

BURKE: We're the first Opposition in a couple of decades to say we're willing to include it in the conversation, we're willing to include it in the discussion and work our way through on it. What we have ruled out is anything that would be retrospective, we've ruled out, and anything that would have an impact on the provision of new housing supply.

BRISSENDEN: Okay, so there is a possibility that you could be looking at winding back negative gearing for future purchases.

BURKE: We've got nothing on the radar about to be announced or anything like that, but in terms of the discussion paper that we're working through and to have a sensible policy discussion, an adult policy discussion on housing affordability, we haven't ruled that one out. No, we haven't. But as I say, we've ruled out anything that would be retrospective and flatly ruled out anything that would have a negative impact on supply. 

At the state and federal level, there are impacts on both supply and demand. The supply issues that Joe Hockey has referred to, principally are at the state, but there are demand issues that are relevant here as well. Taxes on stamp duty are one of them. Negative gearing, capital gains concessions are other ones. All of these play into a mix which mean when somebody's going to buy a property, they're not simply competing with other home owners, they're competing with a disproportionately high number of investors. 

They've (inaudible) investors on the property market, there's nothing wrong with that. But the proportion, and it's a statistic that you just put to me that Joe Hockey tried to fudge by going into historical averages of how many people who bought houses in the last however many years were investors. The number of investors, both in the data that's coming out and in the anecdotal information that we're getting about auction clearances is getting higher and higher. That's got to result in an adult conversation, not the sort of hysteria that Joe Hockey goes on with.

BRISSENDEN: Ok Tony Burke, we'll leave it there. Thanks very much.

Tony Burke