Shorten/Bowen stare down tax and banking doomsayers

By Leith van Onselen

The Property Council has vowed to make stopping Labor’s negative gearing and capital gains tax (CGT) reforms its top priority for 2019:

Property Council group executive for policy Mike Zorbas said… “More than two million Australians own an investment property… Through this they play a vital role in supporting the private rental market as well as providing for their own financial well-being in retirement.”

“That includes 1.3 million people who use negative gearing – the vast majority of whom are middle income earners with a single investment property.

“These are everyday Australians who are saving for their future and meeting the housing needs of the one third of Australian households who rent”…

Zorbas… says the changes will hurt those ordinary Australians who use negative gearing along with those who occupy rental property.

He also says that making such changes at this time risks negatively impacting investor sentiment at a time when the housing market is rapidly cooling.

In a similar vein, the Property Investors Council of Australia (PICA) has demanded Labor “come clean” on plans for negative gearing:

PICA chairman Ben Kingsley… is calling on the party to come clean on when it intends to implement the policy, calling it “ridiculous” and “absurd”.

He said, “Restricting negative gearing to new property was always a ridiculous so-called ‘solution’ to Sydney’s strong price growth, which has now well and truly dissipated because it was merely a sign of the peak of a market cycle.

“If the policy was absurd back then, it’s even more so now, with the national economy flat-lining due to a number of poor indicators including significant property price falls in our two biggest cities”…

“The majority of every Australian’s wealth is in their property so having the threat of their home’s value falling even further is no doubt part of the reason why our economy is in the doldrums,” he said.

“It’s clear that people are fearful about these dangerous changes, both property owners and investors alike, so if Federal Labor is thinking about introducing these measures as early as July this year buyers need to have enough time to organise their finances and come to the market in the next few months to meet this deadline.

Labor took its negative gearing and CGT policy to the 2016 federal election. It is taking exactly the same policy to this election. This policy has been publicly aired and fiercely debated for nearly four years.

You’d be hard pressed to name another policy platform that has been in the public domain for so long. So for PICA to demand Labor “come clean” is utterly ridiculous and absurd.

Thankfully, Labor leader Bill Shorten continues to stand firm and refuses to back down:

The Labor leader… declared the opposition would persist with contentious reforms to negative gearing, capital gains tax concessions and to existing the system of cash rebates for franking credits despite signs of a voter backlash, and an intensifying scare campaign from the Coalition.

Shorten said voters were ready for a government prepared to take tough decisions. “We’re not for turning. To put it directly – do people want a government or do they want a piece of plasticine?”

“Do people want a government with tax principles and fairness at their core or do they just want a lump of political putty?”

Voters are well aware that a vote for Labor is a vote for its negative gearing and CGT reforms. So if Labor enjoys a stomping election victory, as looks likely, then the property lobby needs to accept the result and recognise that Labor has a strong mandate to implement its reforms.

Shorten Labor is also standing up to criminal banking, via SBS:

Labor is proposing to pay hefty amounts to public and private sector whistleblowers who dob in dodgy bosses.

The ALP would also strengthen protection for whistleblowers and set up an agency within the Office of the Commonwealth Ombudsman to aid them.

Opposition Leader Bill Shorten says it is incredibly difficult at the moment for people to blow the whistle on crime and misconduct, with many people facing reprisals and some even never able to work again.

“Are we a country that says we want people to sacrifice everything to expose illegality or corruption and then we punish them?” he told ABC’s Insiders.

“What our plan means for people who are doing the wrong thing is that just beware of the person next to you because they might want the reward and not put up with the corruption.

“We want to say to whistleblowers: we’ve got your back.”

The plan would see whistleblowers receive a proportion of any financial penalty imposed on the guilty party.

This level is yet to be set, but under the tax whistleblowing policy Labor announced in 2017 the party mooted payments of 1 per cent of the fine or $250,000, whichever was higher.

Similar schemes are in place in the US, Canada and Britain.

Mr Shorten said the generous US scheme had led to some big breakthroughs in financial scandals because it encouraged people involved to come forward.

The proposal has been announced ahead of the release of the final report of the Financial Services Royal Commission, which came out of revelations by Jeff Morris, who exposed corrupt practices at Commonwealth Bank.

“The banking royal commission has highlighted appalling and even criminal misconduct in the banking sector,” Mr Shorten said.

Such as that currently being displayed by Treasury, the RBA and the Government is trying to dodge RC findings. Shorten also today reaffirms that Labor will throw the book at the banks:

“They already sound like they’re backpedalling on making the banks accountable. Let’s see what the report says. The reality is this is a government that can always find an excuse not to do something to bring the banks in to heel,” he told the ABC’s Insiders program.

“I’m not going to let the government off the hook. They didn’t want this and now they are already trying to say ‘well maybe we need to have an unethical banking sector, we don’t want to go too hard against our friends in the banks’.

“I pushed for the banking royal commission against the government. They mocked me, they abused me but in the end we got our way. Now it sounds like the government is trying to say, ‘well, maybe we need to have a bad banking sector to keep a banking sector’.”

And Chris Bowen taps the MB spirit, via the AFR:

In a tactic similar to that used by Kevin Rudd against John Howard in the run-up to the 2007 election, Mr Bowen will point out that many are not experiencing the benefits of the recovery.

“The Australian economy isn’t growing as broadly, as strongly or anywhere near as fairly as is should,” he will say in the Chifley Oration, to be delivered in Melbourne.

Labor will release a booklet on Monday claiming “Scott Morrison and the Liberals tell Australians they have never been better off”.

Mr Bowen will point out that economic growth and wages growth are forecast to fall, consumption is weak and productivity growth is low.

Opposition and government are different and these positions will come under a lot of pressure when/if Labor wins but for now they deserve praise.

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Comments

  1. Labor’s going to have to play this one carefully. In Tassie, Labor was wiped out by a pokies funded advertising campaign by the LNP. Massive revenue came through the door to fund the LNP campaign.

    “The Tasmanian Liberal Party (who won the election) declared more than A$400,000 from pro-gambling groups in the lead-up to the state election – equal to nearly 90% of the party’s declared donations, and a ten-fold increase on the amount gambling groups gave in the previous election.” https://theconversation.com/tasmanias-gambling-election-shows-australia-needs-tougher-rules-on-money-in-politics-110977

    Even pretty battle-hardened hacks admitted to being shocked by the brazenness of the vested interest campaign.

  2. i don’t believe them no sir i do not. well maybe not, but i won’t be surprised if they end up not coming thru with their promises here.

    it hink you guys over estimate just how much the average voter gives a crap about negative gearing or the capital gains tax, no one is paying attention to this debate except the nerds on blogs like this. this is some arcane abstract stuff that if implemented as proposed will only cause house prices to fall a little faster than they are already, which a lot of people don’t even want if they’re even paying attention in the first place.

    • Keep heart bud – while it is true that only nerds on obscure blogs are paying attention, amusingly enough, thats what all revolutions start from.

      See the system in aggregate can no longer differentiate between moral truths, so also cannot differentiate between fact and fiction. That is, the people up top have no idea what is real any more. Hence, nothing works, and nothing can work. So toppling the system is mostly a matter of poking a few times in the right places.

      Be cool – we are winning bigly. I get that everything is massively b*ggered at the moment. But think about how quickly the world has changed.

      At this time in 2016, the global progressive movement was poised to send us all to a socialist abyss, basically Venezuela, for a few centuries. Where are we today? Three short years, and you get a ring side view to the biggest moves in geopolitics since ww2. The amount of work that has gone in, by millions of everyday people, look around you – everything is different.

      The only thing keeping the leftist edifice alive today is what.. fumes from a broken Fed?

      We are winning – don’t begin to doubt it.

      • >… But think about how quickly the world has changed.

        In the old country we had a saying: “the year doesn’t bring what the hour can”

      • At this time in 2016, the global progressive movement was poised to send us all to a socialist abyss, basically Venezuela, for a few centuries.

        Statements like this would be a lot funnier if the people writing them weren’t serious.

  3. Labor really needs to get the message right on franking credits too. So many people on Twitter and elsewhere saying “Labor want to double tax dividends and penalise pensioners” etc., as it they’re getting rid of dividend imputation entirely, and not realising pensioners are exempt. A lot of this is the highly misleading and basically deceptive LNP messaging (‘retirement tax’). The scare campaign is really working disturbingly well, there’s so much misinformation floating about.

    • “A lot of this is the highly misleading and basically deceptive” I think Donald has a name for that…..

    • mild colonialMEMBER

      It’s definitely an issue but with the election not yet called this issue of interest to a minority could be fading by the time of the vote. They’re both issues affecting a rich minority mostly the same minority who vote LNP. Labor should stick to their guns

    • There is deliberate misinformation being spread by both sides on the cancellation of imputation credit refunds. Even many of the more articulate critics of it have not nailed the real problems. It is a deeply flawed brainfart bit of policy which is an easy sell because very few people understand how the existing system works in any detail. Labor have had the unfairness and general stupidity of the proposal pointed out to them but have chosen to continue to keep pushing the rich versus poor argument which is serving them so well.

      All they really had to do was be honest about where the real problem lies and impose some sort of income tax on zero tax rate retirement income earners.

      But that of course would have an equal negative impact on their precious Industry Super fund supporters, which is definitely a no-go zone.

      Oh, and how convenient that existing property holders are exempted from the negative gearing changes. Because it makes sense that those who have enjoyed the advantage for so long continue to do so while precluding any new (and probably younger) entrants participating in the largesse. Of course, a good number of our (especially older) parlimentarians have already got set with their very substantial negatively geared property portfolios.

    • Yep. Alleged 20 donations of $5000 each. And what do you know? … the cap is $5000. Coincidence?

      Labour/Liberal/The Greens… it doesn’t matter. They no longer represent the long term interest of Australia’s young and future generations.

    • Perhaps not much consolation, but at least they didn’t get off the last plane from Beijing…

      “Most of the $100,000 donors centre around long-time Labor supporter Jonathan Yee. Along with his family he owns the Emperor’s Garden restaurant in Sydney’s Chinatown, which was founded by his father Stanley in 1979.”

      • Philly SlimMEMBER

        but why is a restauranteur giving the ALP $100k? What is in it for him?

        There should be no foreign donations and a cap on individuals, all reported in real time via a web portal.

        We should also investigate moving to full public funding and ending donations. If you are giving more than a couple of hundred dollars folks usually want something in return.

    • Same for the Tassie election, thousand of dollars from the gambling industry right below the declaration cap. LNP and Labor still don’t really want to reform this area it’s part of the duopoly benefits.

  4. $250k max reward for a whistleblower is laughably low. Would you trade your career for a lump sum of $250k?

    Why index at 1%? My suggestion would be 30% with a cap of $20m. You need to set people up for life if they’re going to take the risk. What do you think Jeff Morris’s income is like these days?

    • Philly SlimMEMBER

      Agreed. For the folks who are closest to the auction, $250 is less than a years pay. Agreed it needs to be a proper incentive, not sure it needs to be $20m but definitely $5-10m.

  5. The most telling comment in all of that:-
    “I’m not going to let the government off the hook. ”
    Not “I’m going to do this about the banks” or “The government should do X about the banks”, but a simple I’m going to harass them for not doing anything about it, while likely not doing anything either once they obtain power.

  6. Forrest GumpMEMBER

    “These are everyday Australians who are … meeting the housing needs of the one third of Australian households who rent”…

    Is this dipsh1t seeking credit for the benevolent society of landlords?

    You’ve got to be kidding.

    There are 100,000 rentals that remain vacant at any one time. Some remain vacant for periods longer than 4-6 months due to the landlord refusing to ask for a suitable rent. How is is meeting the housing needs to of the 1/3 of Aussies that rent?

    Rental laws only allow for the maximum of a 12 month lease. How is this helping renters/

    Rental laws allow for no reason evictions of which are readily exercised by scrupulous landlords. How is this helping renters?

    Lets be factual here. Can these Rent Seeking bastards stop pretending to be good citizens. They are solely in it for the money by exploiting inefficient rental laws & a poor tax system that locks home buyers out of the market making it into a rental ponzi

  7. Property Investors in Australia are such a bunch of welfare whores. And just like the welfare whores, when it is threatened to take it away they start waling and screaming.

  8. So according to the vested interest groups representing parasite housing speculators, negative gearing did not cause house prices to rise – the bubble is merely cyclic – but removing, changing or even gently circumscribing its limits will drive house prices down – because they’re not cyclic and should continue to rise for ever! FMD.

    And according to even some on this site, the economically irresponsible, profligate, vote-buying pieces of largesse of the Howard-Costello government to banks, estate agents, speculators and property-obsessed SMFs should not be reversed because it’d be ‘stupid’ and ‘unfair’; a ‘brain fart’ imputation credits gift to mostly the comfortably tax-protected well off gets to be rescinded, and that’s also a ‘brain fart’, a punishment of the rich. FMD.