Home build study rejects Labor’s plan

HOUSING for more than 2000 Tasmanians would not be built under Labor’s changes to negative gearing and the capital gains tax, a new report says.

New dwelling construction could drop by 1020 fewer homes across the state in the first five years of the policy, enough to house about 2200 Tasmanians, Cadence Economics research has found.

The modelling, released today, shows Tasmanian construction employment could also fall by up to 320 jobs and $106 million of industry output could be lost if the federal Opposition’s changes were implemented.

Labor leader Bill Shorten has vowed to abolish negative gearing on all but newly built homes and halve the capital gains tax discount to 25 per cent.

Labor says the current measures give investors an unfair advantage and push first- time home buyers out of the market.

Cadence Economics was commissioned by Master Builders Australia to test if Labor’s policy would increase the supply of new housing and employment in the building industry.

But Opposition treasury spokesman Chris Bowen said the research did not model Labor’s reforms to negative gearing.

“Master Builders admit they fail to account for the fact our policy fully grandfathers existing property investments, meaning any investment purchases before the start-date are protected,” he said.

“If property investors want to access negative gearing, they’ll need to buy a new property and that generates all of the construction and jobs that goes along with it.

“Labor is not ending negative gearing — it’s reforming it to ensure it works best for the economy and jobs,” he said.

Mr Bowen said Labor’s housing affordability policies put first-home buyers on a level playing field with investors.

Master Builders Tasmania executive director Matthew Pollock said the policy would add extra pressure to the rental market, especially in Hobart where vacancies were the tightest in the country.

“By placing obstacles in the way of housing investors, the policy changes would limit the inflow of accommodation to the state’s rental market and magnify the already considerable level of under-supply,” he said.

Nationally the Cadence Economics modelling showed 42,000 fewer new homes would be built in the first five years of Labor’s policy.

Master Builders said cutting the hidden costs of land and government red tape were essential to unlocking new housing supply.

jack.paynter@news.com.au