Greens’ attack on negative gearing threatens affordability

The Greens’ attack on negative gearing is dangerous and the party’s ill-conceived policy would serve only to worsen housing affordability, says the Property Council.

Greens’ deputy leader Senator Scott Ludlam (pictured) released the policy over the weekend, which would see negative gearing removed for all asset classes from 1 July 2015.

Property Council chief executive Ken Morrison has called the Greens’ plan to scrap negative gearing “dangerous” and a move that will “only make housing affordability worse”.

“The Greens’ policy risks our current record 200,000 housing construction starts for the provision of only 3,125 extra dwellings a year, it just doesn’t make sense.”

Morrison says scrapping negative gearing would put the brakes on housing supply, driving prices higher for both renters and home owners.

The 2012-13 taxation statistics released by the Australian Tax Office earlier this year contradicts claims that negative gearing’s impact on the federal budget is spiralling out of control – with a $2.35 billion decline in cumulative net rental loss recorded over the period.

“This decline 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 where it is a key source of affordable rental accommodation.”

Morrison says it is untrue that more than half of all people with negatively geared rental housing investments are in the top 10 per cent of taxpayers.

“The actual ATO data clearly shows that at least two thirds of Australians who declare a net rental loss earn around $80,000 a year 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,” Morrison says.

The Property Council calls on politicians to solve the housing affordability crisis by focusing on planning blockages and housing taxes which make the supply of new housing lower, slower and more expensive than it should be.

“The property industry wants housing to be affordable – and that’s why we have been a strong advocate for real policy solutions rather than cheap headlines that don’t address the underlying issues.”