Turnbull’s and Morrison’s negative gearing disgrace

By Leith van Onselen

In 2005, Malcolm Turnbull spoke out against negative gearing, labelling it and the capital gains tax (CGT) discount a “sheltering tax haven” and “tax avoidance”, and arguing that it is “skewing national investment away from wealth-creating pursuits, towards housing”.

In a similar vein, Scott Morrison in February this year admitted “there are excesses” in negative gearing and that it had gone too far:

Yet despite them both knowing that negative gearing is a rort, they defended if furiously in the lead-up to the Federal Election, spuriously claiming that reform would “crush” investment, drive a “sledgehammer” through the housing market, would lead to surging rents, and would disadvantage middle-income earners.

Today, the truth has been revealed as to why Turnbull and Morrison performed a backflip on negative gearing: they were rolled by the conservative wing of the Coalition that backed former prime minister Tony Abbott in the September leadership spill, as revealed in a new book co-authored by my cousin Peter van Onselen. From The Australian:

Malcolm Turnbull and Scott Morrison argued in cabinet to tighten negative gearing concessions but were later rolled in a key economic committee by ministerial supporters of Tony Abbott…

In The Turnbull Gamble, the ­authors reveal the Prime Minister and the Treasurer were “all in favour’’ of making changes to negative gearing but in a “more considered” and “less extreme way” than Labor had.

Asked about the revelations in the book yesterday, a senior source confirmed Mr Turnbull and Mr Morrison had been in favour of changes to negative gearing to remove excesses from the system…

In their book, van Onselen and Errington write: “The issue was debated in cabinet, with Peter Dutton, Josh Frydenberg and Christian Porter arguing against making any changes.’’

All three supported Mr ­Abbott in the leadership ballot that elevated Mr Turnbull to the leadership in September last year…

According to the book, Mr Dutton pointed out the “political value in doing nothing so as to attack Labor’s changes ‘with clean hands’ ’’

Labor shadow treasurer, Chris Bowen, has been quick to jump on the revelation, claiming that Prime Minister Turnbull lacks “moral authority” and economic leadership. From The Canberra Times:

“Now we know Malcolm Turnbull and Scott Morrison agree [with curbing the policy] but they were rolled in the cabinet, the first time a PM and Treasurer had been rolled in the cabinet since 1973,” Mr Bowen told the ABC.

“This is an extraordinary development and Malcolm Turnbull lacks the moral authority to win the economic debate and the political authority within his own cabinet and that is why this government is completely devoid of an agenda, completely devoid of economic leadership.”

Herein lies yet another example of how Prime Minister Turnbull sold his soul, and abandoned the national interest, in order to hold onto power. Can the real Malcolm Turnbull please stand up?

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Leith van Onselen

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Comments

  1. I wonder to what extent it was going to be “less extreme” than the Labor policy? Were they going to implement an upper limit to claimable amounts? I don’t want to see house prices (or the economy) crash but reigning in the excesses to some degree is entirely reasonable. It’s a shame they didn’t go for it.

    • Josh MoorreesMEMBER

      I imagine it would involve something along the lines of exempting anyone born before 1965 from any changes.

  2. reusachtigeMEMBER

    I don’t care if it is Mr Malcolm or Mr Tony just as long as they keep and enhance negative gearing so as to encourage further housing investment!

    • ceteris paribus

      Absolutely. Either will do fine.
      On another note, Rob Burgess writes today in the New Daily that it is bemusing, to say the least, that while Morrison and Turnbull scream blue murder about the fiscal debt (with some justification), they have been madly pumping up the bigger, faster growing and more dangerous Australian private household debt through their staunch support of negative gearing and Capital Gains incentives.
      “Bemusing” indeed- but I am sure these learned men know exactly what they are doing. How else would they have got to the positions they are in.

  3. Ahahahaha, the fall from expectations once we had from Mr Turnbull. Bring back the onion muncher I say.

    • Absolutely awesome link.

      Come to think of it I seem to remember Julia Gillard / many Labor MPs voting against marriage equality last time too.

      It’s a shame how some of these relatively straightforward social reforms become political footballs and thus never take off.

    • A bug you say? The negative gearing and capital gains tax system appears to be working as intended to me.

  4. What I find disgusting is any politician talking about “moral authority”. As if morals has anything to do with politics these days…….

  5. It is amazing these guys get any votes at all. They certainly didn’t get my vote, and will not be getting it in future.

  6. The House just voted against a Royal Commission 75-73. If only a pair of backbenchers had crossed the floor.

  7. Negative Gearing – MT wants to reform but Loon Pond has changed his stance.
    Super – MT wants to reform but Loon Pond wants to amend policy.
    Same Sex Marrage – MT would like to offer free vote but Loon Pond has backed him into plebiscite.
    Racial Discrimination Act Amendment – MT says not on agenda but Loon Pond organising private members bill (Watch out for MT capitulation)

    Can the real MT please stand up?

    What the [email protected]#k has he got to lose? He might as well take on the loon pond because if he loses TA comes back and total coalition capitulation takes place and he can say I told you so, if he wins he gains back his respect from middle Australia and onward and upwards.

  8. The irony is of course is that if the ALP hadn’t released their NG/CGT policy, we would probably have had some changes to the “excesses” announced in the budget.

    And yes, while that still doesn’t excuse MT/ScoMo, the ALPs behaviour around Super and the SSM plebiscite shows that it is almost impossible to put up something approaching sensible policy that might change the status quo because the other side will make a political issue out of it.

    Who’s to know what the ALP might have done if the LNP had come out with a NG policy first.

    Politics sucks.

  9. > According to the book, Mr Dutton pointed out the “political value in doing nothing so as to attack Labor’s changes ‘with clean hands’ ’’

    Fuck the country. How can we win points?

  10. GunnamattaMEMBER

    MUNGO MacCALLUM. Scott Morrison – channelling Paul Keating or Joe Hockey.

    johnmenadue.com/blog/?p=7555

    t will take diplomacy, and even a modicum of humility, qualities that are normally foreign to the government’s autocrats, but it is likely to be the only way that anything worthwhile can be achieved. Without it, that trillion dollars of debt may not eventuate, but a shitload of it certainly will. If Morrison and Turnbull want to turn the Titanic around, it is time to stop heading single-mindedly to the iceberg.

    But for all their bluff and bluster, they do not look like the men in control of the ship and unless and until they can subdue the mutineers in their own crew, they never will. The reality is that they are negotiating from a position of weakness, which is no doubt why they are reverting to the revamped slogans of the past. For all Turnbull’s talk about innovation and the exciting times ahead, he is already starting to look like yesterday’s prime minister.

    And Morrison is certainly sounding like yesterday’s – or even the last decade’s – Treasurer. He desperately needs to find more than just repeating the same things. And if he insists on plagiarising his predecessors, it might be an idea to recall the consequences. After Keating gave his banana republic warning, he brought us the recession we had to have, causing enormous angst to the population and a blow to his own prestige from which he never really recovered. And when Hockey trumpeted the ending of the age of entitlement, he gave us the 2014 budget disaster, with ultimately knocked off himself and his prime minister.

    • Re: Hokeidonian

      “Upon taking up the role of Ambassador to the United States, the home of the Hockeys was rented out.[92]”

      Ending the age of entitlement one ITR at a time.

  11. Turmbot is standing up, it is quite clear what type of person he is, and it is equally clear he is not what so many thought he was.
    They had the chance to vote him out, many tried but many will live to regret that chance squandered.