Xenophon cautions on changes to negative gearing

The Opposition’s negative gearing proposals go “too far” and would harm investment in the property and construction industry, said South Australian independent senator Nick Xenophon at a Property Council panel discussion last week.

Speaking to a packed crowd of property professionals at a panel discussion on Thursday, Xenophon – who is widely tipped to hold the balance of power in the Senate after the 2 July elections – said he would not be supporting the Opposition’s policy if Bill Shorten is elected.

Other speakers on the panel with Xenophon included Liberal Senator for South Australia Simon Birmingham, Labor MP Nick Champion and Family First Senator Bob Day, who also said he would not support the Opposition’s policy. Greens MP Robert Simms said he wanted to see negative gearing concessions wound back in favour of $3 billion spending on social and community housing.

 “I think the Labor policy goes too far,” Xenophon said, adding that there may be opportunity for “tinkering around the edges” on negative gearing policy in close consultation with the property industry, but it would need to be “very, very carefully done and calibrated”.

The Opposition has promised, if elected, to limit negative gearing to new homes and to cut capital gains tax concessions from July 2017.

Daniel Gannon, executive director of the Property Council in South Australia, welcomes Xenophon’s comments.

“Nick Xenophon has been vocal about the issue of negative gearing for a number of years, and we are particularly pleased to see him acknowledge the series of unintended consequences that may arise from the Opposition’s questionable policy,” Gannon says.

“There are almost 130,000 South Australians who own an investment property, including 90,000 people who use negative gearing. The top two suburbs where investors who use negative gearing live are Golden Grove and Woodcroft, with Mount Gambier coming in at fourth place.

 “This means that negative gearing is the way that thousands upon thousands of average people secure their financial future. These aren’t property tycoons – they’re ordinary people using property to secure their financial futures and help strengthen the economy.”

 “The forum was a great opportunity for the industry to understand the diversity of views and policies that will affect our industry – and to unpack the implications for an industry that accounts for almost $11 billion in gross state product and 168,000 jobs in South Australia.

“Property is one of the few parts of the economy that is actually faring well across the country – and we can’t afford big risky policy changes that jeopardise our state’s economy,” Gannon concludes.