Labor’s negative gearing policy would have cost the economy $1.5 billion and was a key factor in the minds of marginal seat voters, finds fresh research from the Property Council.
The Property Council recently commissioned Deloitte Access Economics to analyse the impact of the ALP’s negative gearing and capital gains tax policy on new housing construction, housing affordability and rents.
Separately, the Property Council commissioned a survey of 1,600 voters across 16 marginal electorates to understand the impact of the ALP’s policy on the election outcome.
“Together these studies conclusively show this was the wrong policy, at the wrong time, and the voters knew it,” says Property Council chief executive Ken Morrison.
According to Deloitte Access Economics “construction of new housing would drop under this policy, not increase”, falling by 4.1 per cent.
All scenarios modelled showed a reduction in GDP and jobs over the period 2021 to 2031.
While house prices would decline under the policy, Deloitte Access Economic says these declines are unlikely to materially shift the housing affordability equation for buyers. Rents would also increase.
Labor’s policy “would have delivered a $766 million hit to construction, cost 7,800 construction jobs, made almost no difference to housing affordability by 2030, and shaved $1.5 billion off GDP at a time we can least afford it,” says Morrison.
Meanwhile, the survey of voters in marginal seats in New South Wales, Victoria, Queensland, Western Australia and Tasmania suggests the policy was a key factor in Labor’s electoral loss.
Almost two-thirds of non-Labor voters in these marginal seats said Labor’s plan to restrict negative gearing and increase capital gains tax was among several reasons why they didn’t vote for Labor. For 34 per cent of non-Labor voters, it was ‘very important’ reason why they didn’t vote for Labor.
Among non-Labor voters, six per cent of those surveyed said they would have voted for Labor, while a further 22 per cent said they would have considered voting for Labor, if they weren’t proposing changes to property tax laws. (All of the 16 marginal seats surveyed now sit with a margin of less than six per cent.)
When asked whether Labor should retain this policy, 62 per cent of those surveyed thought Labor should get rid of its negative gearing and capital gains tax policy.
What’s more, 68 per cent of previous Labor voters also agreed that the policy should be dropped.
Of those surveyed, 55 per cent thought that governments should encourage people to save for their future by investing in property, and 44 per cent wanted to own an investment property in the future.
Voters aged between 18-39 were among the strongest supporters of property investment, with 59 per cent agreeing government should encourage people to save for their future, and 65 per cent of this group interested in owning an investment property in future.
Download a summary of the Deloitte Access Economics analysis and the separate survey of marginal seat voters.