Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election
Shadow treasurer Chris Bowen has left open the idea of Labor going to an election with a policy of winding back negative gearing.
It might not be popular; almost 2 million Australians invest in property, with the majority of them making net rental losses that they use to reduce their income tax bill, costing the federal budget up to $5 billion a year in revenue.
But Labor might be prepared to wind back negative gearing for future investors in property.
Mr Bowen was pressed about it last night by Leigh Sales on 7.30.
“Negative gearing is on the table as something you’re having a look at?” she asked.
“What I said last time was that any changes we took to negative gearing would be taken to the next election,” Mr Bowen responded.
“Our principle would be that people who’ve invested in good faith with existing rules shouldn’t be disadvantaged and anything we do should not take away from new housing stock, which is very important for housing affordability.
“But of course when everything is being examined in a tough fiscal situation, any responsible opposition would be considering a range of measures. But we’ll be upfront about anything we do before the next election.”
Government rules out negative gearing changes
Prime Minister Tony Abbott ruled out changes to negative gearing last week, and was backed last night by Social Services Minister Scott Morrison.
Mr Morrison was speaking to former Labor minister, now Sky TV presenter, Graham Richardson, who argued negative gearing was a tax break for the wealthy.
This is not a rich person’s toy, this is not for the rich and famous.
Ken Morrison, Property Council of Australia
“That is actually not true,” responded Mr Morrison.
“Mate, a battler out there in the suburbs on $70 grand with the three kids, how many extra houses do you reckon he owns?” questioned Mr Richardson.
“You’d be surprised how many people … particularly in small business, who don’t earn a lot of money, have invested through negative gearing into properties to provide for their own retirement,” Mr Morrison replied.
“That is a fairly common practice. I know plenty of people … on meagre incomes. No, not even in a super scheme. They’ve just done it for their kids, they’ve done it for themselves, and they’ve made big sacrifices to do it.”
Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation.
“Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less,” he said.
“So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families.
“This is not a rich person’s toy, this is not for the rich and famous. This is for middle Australia saving to get ahead.”
Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia.
He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax.
The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors. Should we really believe the ABC has all the data? and the ATO just base their analysis on opinion.
Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes.
“I can’t think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing,” concluded Mr Eslake.
The post Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election appeared first on Positive Connections.
from Positive Connections http://ift.tt/1DrlZkL
No comments:
Post a Comment