Risking the dream
The issue of negative gearing has roared to the centre of our national political debate.
Last weekend Labor leader Bill Shorten announced major changes to negative gearing and to capital gains tax. The Parliamentary Budget Office estimates that Labor’s policy could raise $32 billion over 10 years (see here for more details).
These are risky changes for our industry and for the economy given they come at a time when growth is so delicately poised.
Major changes to negative gearing and capital gains tax would have far-reaching effects throughout the economy. If enacted, Labor’s policy will distort the market, hit rents, hurt jobs and make it so much harder for families to plan their economic futures – all this without any modelling of its impact on rents, construction levels, jobs or state budgets.
However, it is not only the Opposition that is being tempted by the possibility of big new tax licks.
As yet, we do not have clarity over the Turnbull Government’s position on property taxes. While some frontbenchers and backbenchers have expressed support for the existing system of negative gearing, the Government’s position appears to be fluid.
That’s why the Property Council is putting the case to politicians of all political backgrounds not to damage an industry that supports 1.1 million jobs throughout the economy and generates one ninth of our national income.
Two million Australians own an investment property. Property has always been part of the ‘Australian dream’ and it has been a proven means for Australians on middle incomes to build their wealth.
Playing around with negative gearing policy doesn’t make sense and it’s sure not worth the economic risk.