Fresh data shows the multibillion-dollar cost of the tax advantages, and a verbal battle over negative gearing and capital gains tax reduction has started. Both main parties have been questioned about their plans for the 2018 federal election, and voters are divided over the complex agreements.
Prime Minister Anthony Albanese and Opposition Leader Peter Dutton disagreed that either will be changed, despite the Greens' strong advocacy for reform and Adam Bandt's accusation that the capital gains discount is to blame for the housing crisis.
Chalmers Clarifies Treasury Inquiry
It was first reported last year that the federal Treasury had looked into a possible revision of the tax breaks given to property owners. When questioned about the Treasury modelling during Wednesday night's second debate, the prime minister responded, "It definitely wasn't ordered by us to do so. "
In the argument, Dutton argued that Albanese had a "problem with the truth" because Treasurer Jim Chalmers had openly declared in September that he was seeking "advice" from the Treasury on the matter. Chalmers tried to define such advice from "modelling" yesterday.
When asked about commissioning modelling, the prime minister responded, “This is not the same as commissioning models. I was looking for a view.” Chalmers stated that:
“Consulting on such a subject was normal practice, and changing to a negative ratio wouldn't get the sort of enhancement that we need so badly to see in our economy when it comes to supply."
Negative Gearing Sparks Political Clash
During the debate, according to shadow treasurer Angus Taylor, Albanese "lied" about intentions to raise housing taxes. Taylor said:
"The prime minister denied last night that his administration had created a model for negative financing changes. In September, the treasurer verified that it had.
The prime minister misled the Australian public on television about his secret intentions to increase housing taxes.”
According to Dutton, reducing negative gearing would make the rental industry worse. When debate moderator David Speers asked why his party would not change negative financing or the capital gains tax reduction, the opposition leader responded, "I have stated very clearly that we want a viable housing market, which includes rental shares.”
The Labour Party and the Greens would love to eliminate negative gearing, but doing so would prevent investment in properties that young Australians eventually rent.
Max Chandler-Mather Statements
According to a study issued by parliament today, the cost of income lost in the 2024–2025 financial year due to capital gains discounts and negative gearing adjustments was $11.9 billion. The total expected cost for the next ten years, from 2026–2027 to 2035–2036, will be $180.5 billion.
Max Chandler-Mather, the Greens' housing and homelessness spokeswoman, stated that the party would seek to eliminate "large tax handouts" for real estate owners.
According to Chandler-Mather, the Greens will apologize for decades of housing failure and stop providing tax breaks to investors who own several investment properties. These breaks are driving up home prices and preventing renters from purchasing a home.