Negotiations to form a minority government may have taken an interesting turn, with The Australian reporting today that the Coalition may cave to cross-bench demands to reform negative gearing:
Changes to negative gearing could be back on the table as the major parties look to win support during an election stalemate, with some crossbench senators refusing to rule out supporting Labor’s controversial plan.
… many crossbench MPs argue that negative gearing’s effect on housing affordability is an issue that must be tackled…
“My fear is that it will get back on the table,” Charles Tarbey, chairman of real estate franchise Century21, told The Australian. “I look at the independents and believe some candidates could force the government to do things it perhaps said it wouldn’t do.”
Sounds speculative to me. But any change would likely involve the Coalition’s original proposal to cap deductions that could be claimed at a certain level, say $20,000, rather than the adoption of Labor’s plan.
Though they wouldn’t admit it, Malcolm Turnbull and Scott Morrison might actually be happy about being ‘forced’ into such a reform in order to claim power.
We know that Turnbull has spoken out against negative gearing in the past, labelling it and the capital gains tax (CGT) discount a “sheltering tax haven” and “tax avoidance” in 2005, and arguing that it is “skewing national investment away from wealth-creating pursuits, towards housing”.
In a similar vein, Scott Morrison in February admitted “there are excesses” in negative gearing and that it has gone too far:
They both know it’s a rort, but for political reasons chose to back the status quo.
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