In an address to the National Press Club back in April, Shadow Treasurer, Chris Bowen, dipped his toe in the water on negative gearing noting that “I have said previously that it would be irresponsible to rule out going to the next election with changes to, for example, negative gearing … I have said our principle will be, one, do not disadvantage people who have made investments in good faith under current rules and, two, do not risk reducing the supply of new housing or, if possible, improve the situation with the supply of new housing.”
Bowen’s comments were followed-up by opposition finance spokesperson, Tony Burke, who said the following about negative gearing in June:
We are the first opposition in decades that says that we are willing to include it [negative gearing] in the conversation… and work our way through it. What we have ruled out is anything that would be retrospective and anything that would have an impact on the provision of new housing supply…
Taxes on stamp duty, negative gearing, capital gains tax concessions – all of these play into a mix which means when somebody is going to buy a property, they’re not simply competing with other home owners, they are competing with a disproportionately high number of investors…
In the sidelines of the ALP federal conference over the weekend, Shadow Treasurer, Chris Bowen, confirmed that negative gearing remains on Labor’s radar, but appeared to weaken his stance somewhat, calling for a review rather than reform:
Negative gearing needs to be on the tax reform agenda but not necessarily abolished, shadow treasurer Chris Bowen says.
Mr Bowen says negative gearing has to be on the table in any tax review.
“I’m not saying it needs to be abolished. It needs to be dealt with,” he told an economic event on the sidelines of the ALP national conference.
The Labor-aligned McKell Institute released a policy paper in June recommending that negative gearing be limited to new builds and arguing that such a move could improve the Budget by some $42 billion over a decade.
McKell argued that a new-builds only policy “would have multiple benefits in the housing market: (i) greater price stability, (ii) increased access for new entrants, (iii) lower rental rates, and (iv) provide a boost in residential construction with an associated boost to employment, economic growth, and taxation revenues…”.
Indeed, such a policy also offers Labor the opportunity to out-flank the Government’s ‘do-nothing’ approach by nullifying the Government’s and property lobby’s lies that reforming negative gearing would push-up rents. After all, what better way to overcome concerns about rental supply and construction employment than providing incentives to boost supply?
Here’s hoping the Labor Party finds the cajones to follow through with meaningful reforms to property tax concessions.
