Liar Morrison lies again on negative gearing


By Leith van Onselen

Last night, Australia’s treasurer for the Property Council of Australia, Scott Morrison, was interviewed on ABC’s The Business, where he continued spouting lies that Labor’s changes to negative gearing would cause property crises to crash, force-up rents, and threaten the economy:

Morrison: “Changing negative gearing is not an ambitious reform, it’s a bad idea. It’s going to undermine the value of people’s homes and it’s going to crash house prices”.

Ticky Fullerton: “It’s something Ken Henry recommended looking at”.

Morrison: “Well Ken Henry wasn’t right. I mean, on this issue. If you change negative gearing in the way that Labor propose you undermine the value of people’s homes, you will push-up rents at a time when no one can really afford for that to be happening. But importantly Ticky, when we look at the national accounts…, household consumption is central to what is driving the economy. Now if you go and undermine the value of someone’s home, that will obviously have an impact on consumer confidence and household consumption. And that’s the last thing our economy needs as we are going through this transition period.

So, changes to negative gearing isn’t reform, it’s just a tax grab from the Labor Party, who want to put up taxes, they have already said that they will increase the deficit, and they will increase the debt if they are elected to government. Now that is not a plan that can support stability for our AAA-rating”

Where’s the Scott Morrison who in February admitted “there are excesses” in negative gearing and that it has gone too far:

And why does the Coalition persist with the lie that Labor’s plan to direct negative gearing towards new builds would smash the economy and force-up rents, when it is exactly the same as the Coalition’s policy on foreign investment, where it has argued the complete opposite?

Here’s the chair of the foreign investment inquiry, Liberal MP Kelly O’Dwyer, explaining the benefits of this ‘new homes only’ policy:

“Currently the framework seeks to channel foreign investment in residential real estate into new dwellings in order to increase the housing stock for Australians to build, buy or rent. Foreign investment is encouraged in new dwellings whether they be apartments, units or homes because in addition to creating more supply, it also creates more jobs for the building and construction sector – all of which helps to grow our economy”.

Swap the words “foreign investment” for “negative gearing” and the arguments are identical.

In other words, stop lying Scott.

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Comments

  1. “You will push up rents at a time when nobody can really afford that to be happening”

    Umm…no…you won’t

    That is a complete oxymoron

  2. http://www.abc.net.au/news/2016-06-17/treasury-data-undermines-government's-negative-gearing-claims/7521930

    “A Treasury document obtained by the ABC under Freedom of Information (FOI) shows most of the windfall from the property tax break goes to high-income earners.

    The modelling said more than half of the negative gearing tax benefits go to the top 20 per cent of incomes in Australia.

    “Negative gearing benefits high-income families,” the document said.

    The report stated those in the bottom 20 per cent were getting just over 5 per cent of negative gearing tax benefits.”

    • The article is highly misleading – it wasn’t a Treasury document at all, it was an ANU document.

      • The document was cited in a brief and as an ex-APS college said when you write briefs, you only use trusted and verifiable sources of information. The fact a Treasury offical used this information in a high level brief means the report and it’s authors are a trusted source of information.

      • Citing it is not the same as producing it. In any case, the Treasury document hasn’t been released boradly from what I can tell (even though the ABC got it under FOI) so it’s hard to say what context it was cited in.

      • Of course not, do you research yourself every bit of information or do you follow guidelines and quote trusted sources and provide an analysis based on trusted sources?

  3. There was a politician called Scott
    Who got his balls all in a knot
    “Negative Gearing has gone too far”
    “Um … no … that Ken Henry is a galah”
    Mr Poopy Head has lost the plot

  4. Here is Matt Ellis (Rational Radical), an unhoused unhinged new father, out on fb with an interesting diatribe on NG:

    The LNP and the Real Estate lobby have truly jumped the shark this time. Tony’s Tradies have morphed into Turnbull’s Gearers, mirroring Turnbull’s own successful morphing into Abbott.
    Never has there been such a transparent, dishonest and vulgar attempt to create the average voter archetype, as the current efforts to normalise the aspirational negative gearer: A creature who employs large sums of debt to take on a loss-making investment at the expense of other taxpayers, on the speculation that capital gains will eventually make up for their interest losses – capital gains which are subsidised by other tax payers, extracted from the surrounding community and economy via the transmission of land values, and at the direct expense of prospective home owners.
    I count four ways that the truly ‘average’ voter who doesn’t negatively gear an investment in an established property is paying for such a parasite. They are subsidising the income losses via negative gearing, subsidising the speculative capital gains by discounting the tax owed on them, directly paying for those capital gains when they purchase a home, and worst of all, enjoying an empoverished economy as the land value increases enjoyed by the landlord are extracted out of the broader community and consumption economy, divert capital and credit away from productive value added investments, and drive up costs in the economy, lowering competitiveness and productivity.
    We are supposed to believe that this creature represents average Joe, and is deserving of no less than four serves of the public teat. These parasites are not battlers, they are rent-seekers, or ‘rentiers’, seeking something for nothing at the expense of others. Do not make the mistake of believing that the housing bubble benefits anyone except those that sell their properties into the market and take profits off the table.
    Anyone who buys a house to live in, upgrades their home, relocates for work, passes their house on to their children, or any other normal reason for purchasing a home, is empoverished by obscene house prices. If you never ‘cash in’ your property price gains, you are just paying more of your income to the bank, losing out from an imbalanced economy, and subsidising Turnbull’s Gearers.
    Do not be fooled, the housing bubble ONLY benefits the rent-seekers at the expense of everyone else. And that is precisely who Malcolm and the LNP are trying to protect and paint as average aspirational voters: the rent-seeking parasite.
    This is a new low in a country that has succumbed to banal vanity and made a virtue out of wealth. Yet I truly believe that the LNP underestimate the extent to which the body politic have woken up to these rent-seekers and no longer wish to pay for them.
    Labor steadily rose in the polls every week that the negative gearing / capital gains scare campaign carried on, so this ridiculous ad is possibly the biggest boon that Bill could have hoped for. Vote Greens or Labor to let the rent-seekers know that they will never be enshrined as the ‘average voter’, and that we will no longer fund their destructive speculation.

  5. Forrest GumpMEMBER

    If they are willing to lie about negative gearing, they will lie about everything else…including Medicare, subs, job n growth etc.

    LNP cannot be trusted.

    • adelaide_economist

      More fallout from Toxic Tony’s lies. There seems little awareness amongst our political class that acting like Gillard’s carbon tax/price was the end of the world and then embarking on a shameless and breathtaking repudiation of an entire swathe of promises under the Coalition would have no consequences.

  6. Tempted to vote liberal so when it all goes tits up NG reform isn’t blamed and it can be fixed for good.

    • There’s more at risk than just the economy. We need proper climate action and that will certainly not happen with these fuckwits sitting in the cockpit.

    • I’m placing Liberal above Labor, not because of the policies, but because my seat, Wills, is one of the dirtiest in the country for Labor.
      If the candidate had been voted in by the local members he’d get my preference out of the two.
      The fact that factional deals were done, and the seat has a recent history of stacking and general dodginess, means I can’t support them.

      • ceteris paribus

        We have got a great Greens woman candidate, footsore. Samantha has even risen to the height of Mayor within the erstwhile Soviet of Moreland. A move from Labor to Greens would have to be a big improvement for Wills.

  7. There are elements of truth in much of what Morrison says but the exageration and blatant inconsistencies do him a disservice. I don’t doubt that existing house price growth would ease and probably turn negative in real terms, but new builds would likely gains some benefit, but they are near the peak anyway so it may not have any practical benefit until the next cycle. And the point about newbuilds then being sold as existing housing without the benefit of negative gearing supporting that market I think is likely correct. But house prices for young people and the debt involved is an issue for those whose parents can’t help with security to gain the best interst rate and avoid mortgage insurance costs or income top ups or by going halves in a 2 bedder where one room is rented to service the parents loan or provide some income and the young adult(s) service half a loan from income.