Labor still to come to grips with negative gearing
Labor’s federal campaign review released today shows it is still blind to the economic harm of its negative gearing and capital gains policies.
Property Council research shows these policies would have hurt the economy, cost construction jobs and did turn away voters in marginal seats.
“Labor’s review is focused on campaign tactics rather than the harmful economic impacts of their negative gearing policy Achilles heel” said Ken Morrison, Chief Executive of the Property Council of Australia.
“This is an incomplete picture of the damaging impacts of its proposed negative gearing and capital gains tax changes on property owners, investors and the one-third of Australian households who rent.
“The review focuses on the impact of their policy on higher income earners, rather than the vast majority of property investors who own just one property and are everyday Australians, not rich property barons” Mr Morrison said.
Modelling undertaken by Deloitte Access Economics, commissioned by the Property Council, found Labor’s policy would have reduced economic growth and failed to meet its stated objectives of improving housing affordability and increasing housing supply.
“Labor’s policy would have shrunk the economy by $1.5 billion, delivered a $766 million hit to construction, cost 7,800 full-time construction jobs and made almost no difference to housing affordability.
“A survey of current and prospective property investors found Labor’s policy would have turned investors away from property and not stimulated investment in newly-constructed housing, as Labor claimed it would.
“At a time of declining housing construction and a slowing economy, these changes could have been catastrophic for the housing sector.
“Our polling also found that Labor’s negative gearing and capital gains tax policy was an important reason why people didn’t vote for Labor in key marginal seats around the country.”
“Six per cent of marginal seat voters said they would have voted for Labor if it weren’t for their negative gearing policy,” Mr Morrison said.
“Australians have now rejected Labor’s risky changes to negative gearing twice.
“The question remains: does the Opposition still support a policy that would shrink the economy by $1.5 billion, cost nearly 8,000 jobs and lead to less new housing being constructed?” Mr Morrison asked.
“As Labor continues its policy review process, it should ditch changes to negative gearing once and for all,” Mr Morrison said.
Deloitte Access Economics ‘Analysis of changes to negative gearing and capital gains taxation’ (July 2019)
Voter Attitudes to Labor’s Policies: Post-election Community Research Report (June 2019)
Investor Responses to Proposed Property Taxation Changes: Community Research Report (February 2019)
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