Labor is facing calls from trade unions to limit negative gearing tax breaks to one investment property
Liberal senator Andrew Bragg has dismissed the Australian Council of Trade Unions’ (ACTU) proposal to limit negative gearing tax breaks as “absolute garbage”.
Speaking to ABC National Radio this morning, Bragg said the Liberal Party would be willing to work with Labor on reducing prohibitive red tape in order to get more houses built.
“Ultimately, they have put a lot of red tape on the building and housing sector over the last three years. Now they say they want to change course. I mean, I think it’s good. They want to change course, but it will be akin to turning around the Titanic,” said Bragg.
“We’re happy to help them find ways to cut red tape, and if good ideas come out of these roundtables, then we’ll back them.”
Bragg was far less amicable on the topic of negative gearing.
The ACTU is calling on Labor to limit negative gearing tax breaks to one investment property. The current system, which allows property investors to offset losses incurred from owning multiple investment properties, is locking workers out of the housing market, argues the ACTU.
“Limiting negative gearing and capital gains discounts to one investment property, alongside increasing supply will make a big difference,” it said last week in the lead up to the Economic Reform Roundtable later this month.
“It’s absolutely garbage. You can’t find a serious, independent economist who would say that would ever solve the housing crisis,” said Bragg of the ACTU’s proposal.
He continued: “What we have is a major problem of supply. The government has presided over the largest population growth since the 1950s, but also a massive collapse in housing construction, so we need to see more houses built.
“Raising taxes on housing is not going to result in any new houses being built.”
Analysis of Australian Tax Office data by RMIT researcher Liam Davies suggests that restricting negative gearing and capital gains tax breaks would impact one in seven property investors.
Labor has made no suggestion that it wants to limit negative gearing, but all options are on the table if Prime Minister Anthony Albanese (pictured)’s government hopes to increase Australia’s stagnating productivity rates.
Productivity will be the centre of focus on day two of the Economic Reform Roundtable, which will be hosted by Labor Treasurer Jim Chalmers between August 19 and August 21.
