Greens attack on negative gearing dangerous threatens affordability

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Greens’ attack on negative gearing dangerous, threatens affordability

The Greens’ attack on negative gearing is misleading and their ill-conceived policy would serve only to worsen housing affordability for ordinary Australians.

Property Council of Australia Chief Executive Ken Morrison said the Greens should do their homework before advocating for changes that would hurt low and middle income Australians.

“The Greens’ plan to scrap negative gearing is dangerous and will only make housing affordability worse,” Mr Morrison said.

“Removing negative gearing would put the brakes on the supply of new housing and any interruption to supply would only drive prices higher for both renters and home owners.

“It would mean less rental accommodation and less newly constructed housing, which our major cities desperately need.

“It’s not credible to blame a century-old, fundamental plank of our taxation system for current housing affordability problems.

“If politicians want to solve housing affordability we need to focus on the planning blockages and the housing taxes which make the supply of new housing lower, slower and more expensive than what it should be.

“It is simply untrue to say that more than half of people with negatively geared rental housing investments are in the top 10 per cent of taxpayers.

“We would encourage the Greens to take a look at the actual ATO data, which clearly shows that at least two thirds of Australians who declare a net rental loss earn around $80,000 p.a. or less.

“That includes 42,000 nurses, midwives and aged care workers, 62,000 teachers and child carers, 12,300 emergency service workers and 83,000 clerical staff, all earning around or below this amount.

“These are not property barons – they are ordinary Australians saving for their future.

“According to reports the figures produced by the Parliamentary Budget Office are based on the abolition of negative gearing across all asset classes – not just residential property.

“The 2012-13 taxation statistics released by the ATO earlier this year explode the myth that negative gearing’s impact on the federal budget is spiraling out of control.

“The $2.35 billion decline in cumulative net rental loss is a result of the lower interest rate environment but also points to negative gearing being used overwhelmingly at the lower end of the property market – a key source of affordable rental accommodation.

“The property industry wants housing to be affordable and that’s why we have been advocating strongly for real policy solutions to address this problem, such as reform of the most economically harmful taxes like stamp duty and drastic improvements to planning frameworks – not just a cheap headline which doesn’t address the underlying issues.”

Media contact: Fiona Benson | M 0407 294 620 | Property Council of Australia