ALP’s negative policy to go to next election
Bill Shorten has defended Labor’s negative gearing policy, declaring first-home buyers are “subsidising” investors and needed government help as he comes under pressure to drop the proposed changes.
Amid warnings from global investment manager Pendal Group that the softening of house prices will “definitely escalate” by up to 5 per cent under Labor’s plan, the Opposition Leader hit back, talking up the benefits his policy would deliver to Australians trying to get into the housing market.
“It’s just not fair that first-home buyers don’t have a level playing field. Do you know how many people go to auctions? Young people and their parents — they save and save for a deposit and all of a sudden they face competition from property investors being subsidised with the taxpayer money of the people trying to buy their first home,” Mr Shorten said in his first press conference since October.
“(Negative gearing) is perfectly legal now, we don’t pass any judgment on what’s happened. If you’ve got it, you keep it, no worries, but hard decisions have to be made.”
If Labor wins the next election, it will limit negative gearing to new houses but people who now access the tax break will still be able to.
The policy will most likely take effect from July 1, 2020, assuming the election is held in the first half of next year.
“The reality is that what affects housing prices is supply of land, it’s whether or not there are foreign investors and to some extent it is negative gearing. The best way I can characterise our changes is we’re going to lower one of the gas burners underneath a boiling pot of house prices,” Mr Shorten said.
“I don’t think it’s fair first-home buyers get discriminated against under taxes they pay … (that) are being used to subsidise the property investor over a first homebuyer.”
Australian Taxation Office data published by The Australian on Wednesday revealed nearly as many Australians in Labor electorates negatively geared their properties as those in Coalition seats.
Josh Frydenberg has repeatedly said Labor’s policy would “smash” property values and hike up rents and yesterday rejected Mr Shorten’s claim that negative gearing was for the “fortunate few”.
“Tell that to the 1.3 million Australians who negative gear, including 58,000 teachers, 41,000 nurses & 19,000 police/emergency service workers,” the Treasurer said.
Mr Shorten and opposition Treasury spokesman Chris Bowen agree it would have some “downward pressure” on house prices.