With the ALP demanding the government adopt its negative gearing policy the Australian Institute for Progress has renewed its call for the ALP to reveal its negative gearing modelling.
Executive Director Graham Young said that Labor’s negative gearing proposal would be as effective at raising revenue as their mining tax.
The fact they were over-claiming savings was confirmed by external modelling of the policy done by ALP think tank, the McKell Institute, the ANU, and since by the Parliamentary Budget Office.
One of the major issues appears to be that while the policy taken to the election allowed for carrying forward of losses, the modelling publicly available specifically excluded this.
Carrying forward of losses means that the negative gearer still gets to claim their interest and other costs, but at some time in the future when the property becomes cash flow positive, or is sold.
If the ALP is not prepared to release the modelling then the policy could not even be seriously considered.
Mr Young said election research by the institute also showed that a number of people voted for the government on the basis of its negative gearing policy.
“Mr Shorten has to stop behaving like Wiley E Coyote. Australia had an election, we made a decision on a number of policies, and it is time for him to come down to earth.
“The trust deficit in contemporary politics is driven to a large part by the willingness of politicians to break promises.
“Insisting the government should break a promise and adopt a policy rejected by the electorate because the party that lost the election, partly on that policy, thinks it is a good idea, only adds to the cynicism.”
Mr Young also noted that Labor’s negative gearing policy would:
- Give Australia the second highest capital gains tax in the OECD, second only to Denmark
- Decrease the value of existing housing stock, potentially leading to a shock to the economy
- Decrease the availability of rental accommodation, so putting upwards pressure on rents
- Do little to address housing affordability for new home owners, which is a function of the deposit gap.
For further information please read:
- Chris Bowen serial offender on negative gearing
- Fix the deposit gap and leave negative gearing alone
- Kohler’s mistakes underline why negative gearing is threatened
- Shorten in policy disarray on housing affordability and negative gearing
- ALP would make Australia the second most expensive OECD country for Capital Gains Tax
- Negative gearing policy channels mining tax debacle
For comment, contact Graham Young 0411 104 801