Hockey says no change on mea­sure that helps mid­dle Aus­tralia

Neg­a­tive gear­ing stays

Townsville Bulletin - - NEWS -

JOE Hockey isn’t about to soothe the Re­serve Bank’s con­cerns over neg­a­tive gear­ing.

The cen­tral bank be­lieves neg­a­tive gear­ing should be re­viewed with other hous­ing- re­lated tax con­ces­sions that could be fuelling spec­u­la­tive in­vest­ment in hous­ing.

RBA gover­nor Glenn Stevens has pre­vi­ously la­belled the steep price rises in Syd­ney and Mel­bourne as “crazy”.

But the trea­surer is stick­ing with his op­po­si­tion to mak­ing changes, say­ing there is a lot of mis­in­for­ma­tion about neg­a­tive gear­ing.

He says there are some 900,000 peo­ple who earn less than $ 80,000 that neg­a­tively gear prop­erty, more than dou­ble the num­ber of those earn­ing more.

“This is a way for peo­ple on medium in­comes or even lower in­comes to be able to get into the prop­erty mar­ket,” Mr Hockey said yesterday.

Mort­gage Choice boss John Flavell agrees, and be­lieves sim­i­lar con­ces­sions should be given to first home buy­ers that are given to in­vestors. “If we want to im­prove hous­ing af­ford­abil­ity and help more first home buy­ers in the mar­ket, we have to pull on the right levers,” Mr Flavell says.

But neg­a­tive gear­ing is another is­sue that the gov­ern- ment has ef­fec­tively ruled out from what is sup­posed to be a broad- based re­view of the tax sys­tem.

The gov­ern­ment has also said it will never make changes to su­per­an­nu­a­tion tax con­ces­sions and won’t be lead­ing the charge to lift the GST rate or broaden it base, leav­ing that to the states to pur­sue as they are the ben­e­fi­cia­ries of GST.

“Joe Hockey has called for a ma­ture de­bate about tax re­form and then ruled out most tax re­form,” shadow trea­surer Chris Bowen told ABC ra­dio.

“He is all hot air when it comes to tax re­form.” How­ever, the La­bor Party does not agree with mak­ing changes to the GST ei­ther.

Tax In­sti­tute pres­i­dent Stephen Healey be­lieves any se­ri­ous con­ver­sa­tion on tax re­form needs to put the GST and state tax re­form at its cen­tre.

“The time for in­ter- gov­ern­men­tal plat­i­tudes has passed and it is time for both fed­eral and state gov­ern­ments to se­ri­ously con­sider broad­en­ing the base and in­creas­ing the rate of the GST,” he says. The Busi­ness Coun­cil of Aus­tralia says a suc­cess­ful out­come to the tax re­view will re­quire keep­ing all op­tions on the ta­ble, but it will also re­quire a level of bi­par­ti­san­ship that has not been seen “for a long time”.

TAX­ING TIME: Trea­surer Joe Hockey says neg­a­tive gear­ing helps the lower- paid into the prop­erty mar­ket.

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