More and more good news is coming through on falling house prices.
Whingers are mounting. A leading supporter of Treasurer Jim Chalmers’ tax reforms has urged the Albanese government to reconsider aspects of its capital gains tax (CGT) changes if evidence emerges that they are damaging investment and productivity.
Committee for Economic Development of Australia (CEDA) chief executive Melinda Cilento said the government should closely monitor the reforms’ economic effects. While CEDA initially supported the changes, she argued further adjustments may be necessary if unintended consequences emerge.
Business groups argue the combination of CGT changes and negative gearing reforms could discourage investment, reduce business expansion, weaken innovation, and slow wage growth.
The Australian Chamber of Commerce and Industry and 26 industry groups warned that the reforms had not been adequately assessed and could undermine the government’s stated productivity goals. It’s pretty obvious that start-up capital should be carved out.
It is possible that the housing tax changes will hit businesses in the short term if banks curtail lending based on diminishing dwelling collateral.
So what, I say. As an adjustment is an adjustment, and the further the house price falls, the better. Banks may just have to learn how to lend against the business again.
Prime Minister Anthony Albanese rejected these criticisms, claiming much of the opposition reflected vested interests.
He argued the reforms would improve housing affordability for younger Australians and boost productivity by directing investment toward more productive areas of the economy.
He is quite right.
Just wait until house prices are cheap enough to hurt consumption and trigger interest rate cuts, pulling the AUD down, and cheap gas becomes available.
Although the idiot will probably derail this with his Indian immigration rush.
