Try and keep up! Liberals adopt position #732 on negative gearing

08 March 2017

The latest series of contradicting reports and positions from Turnbull Government Ministers on changes to negative gearing and the capital gains tax discount, show a Government at war with itself.

The Courier Mail reports that changes to negative gearing are under consideration by the Government.

And again today, the Assistant Minister Michael Sukkar has refused to rule out changes to capital gains tax discount.
This is despite the Prime Minister and Finance Minister recently ruling out any changes to negative gearing or the capital gains tax discount.

The Finance Minister made this clear on 20 February in an interview with ABC AM:
CORMANN: We went to the last election promising no increases in taxes on investment, specifically no reductions in the capital gains tax discount, no changes to negative gearing. We stick to our commitments. It is only the Labor party that is proposing to increase taxes on investment...interrupted

SABRA LANE: Sorry Minister, I want to talk to you about the Governments plans. You say that there are no plans right now, that may be publicly, privately behind the scenes you might be working on them.

MATHIAS CORMANN: I am not working on any plans I can assure you. The Government has no proposal in front of it. We have no plans, no intentions to do anything other than what we promised we would do in the lead up to the last election.

During Question Time on 16 February, the Prime Minister reiterated that: the government has no intention or plan to change capital gains tax or negative gearing.

There is clearly another major brawl brewing amongst the Prime Minister and senior Ministers over housing affordability and first home buyers are the last people being considered here.

We know that this time last year, the Prime Minister and Treasurer were rolled by Peter Dutton in Cabinet over plans to reform negative gearing.

The fact is, the Turnbull Government has no mandate for changes to negative gearing or the capital gains tax discount, especially given it ran a weak scare campaign against Labors reforms to both at the last election.
Meanwhile, the national housing affordability crisis goes unattended, with plenty of hollow talk from the Government, and no action.

The last 12 months of inaction has not come without a cost for first home buyers.

In the last year we have seen house price growth in Sydney running at 19.2 per cent and in Melbourne at 14.2 per cent [Core Logic RP Data, ANZ Research], continuing to push home ownership beyond the reach of aspirational young Australians.

And in January, Demographias 13th annual International Housing Affordability Survey showed that Sydney, Melbourne, Adelaide, Brisbane and Perth are in the top 20 least affordable housing markets.

Any housing affordability package without comprehensive reforms to negative gearing and the capital gains discount will not begin to help first home buyers get on a more level playing field with property investors.