Last night, Labor Shadow Treasurer, Chris Bowen, appeared on ABC’s 7.30 Report where he said the following about negative gearing:
Well I’ve said a couple of things about negative gearing and housing affordability policies more generally. Now on negative gearing I would not rule out going to the election with changes. I don’t think anybody’s going to abolish negative gearing totally. Our principles would be that we should protect the investments made by people in good faith who follow the law of the land at the time they’ve done so and we’ve also got to ensure that we don’t adversely affect housing supply, and in fact, any policy that we implement would be designed to improve housing supply. That’s the key criteria. Again, we’re going through a very thorough process. I had a great meeting today with peak housing groups and experts, academics on housing affordability issues. It’s a very good conversation. Not all of them agreed with each other. They argued with each other and that’s what the process is about: getting those arguments on the table. But it would be irresponsible for me, as the alternative treasurer, to say that negative gearing should never be changed. Housing affordability is a big problem in Australia. Parents around the country are concerned about how their children will get into the housing market. – not just in Sydney; particularly acute in Sydney, but right around the country and there’s a proper conversation to be had.
So, according to the above, any reform announced by Labor would:
- Grandfather existing negative gearers; and
- Be designed to increase housing supply.
To me, this sounds like Labor is examining restricting negative gearing to new builds only – a sensible approach. Interestingly, it is also an approach broadly supported by the Master Builders’ Federation of Australia in 1987, when Paul Keating re-introduced negative gearing (see number 2 below).
It will be fun to watch how the property lobby reacts this time around if Labor proposes such a reform.
