Coalition launches new dumb front in negative gearing attack

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By Leith van Onselen

L-Plate Treasurer, Josh Frydenberg, has opened a new dumb front in the Coalition’s war against Labor’s negative gearing policy, arguing that delaying implementation by one year could blow a $6-billion hole in the federal budget. From The Courier Mail:

IF LABOR pushes back the start date of its signature negative-gearing policy by a year, it will put a $6 billion hole in the party’s savings war chest, Treasurer Josh Frydenberg says.

Opposition treasury spokesman Chris Bowen yesterday confirmed the implementation of the policy could be delayed by market forces and the election date, leaving in limbo when it will be implemented if Labor wins government…

Mr Frydenberg said even a one-year delay would rip $6 billion over 10 years out of the savings Labor says it can make to the budget.

“They seem to be hedging their bets on this particular issue, and if it doesn’t start as they say in 2019, if they were to win government, this would blow a $6 billion hole in their budget numbers,” he said. “The Labor Party have a policy that’s shambolic.”

The $6 billion figure was based on Treasury modelling on the medium-term impact of a one-year delay.

This is desperate stuff from the Coalition, whose arguments against Labor’s policy have stooped to lying about rent increases, crashing property prices, and now imaginary Budget holes.

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Given the Coalition vigorously opposes negative gearing reform and the Budget savings that it would deliver, how can it then credibly turn around and attack Labor for damaging the federal budget by delaying policy implementation?

If the Coalition is genuinely concerned about the Budget, shouldn’t it offer Labor bipartisan support and bring forward the projected $6 billion in savings?

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.