Labor's two-pronged housing affordability package has them rowing the same boat in both directions, expending a lot of taxpayer dollars and going nowhere.
Tagged: Negative gearing
Labor's problem is this. If abolishing negative gearing is to improve housing affordability it has to decrease prices. But if it decreases prices it decreases the savings of all home owners.
Abolishing negative gearing is sold as a solution to housing affordability, but if it does nothing to reduce the price of houses, then it does nothing to solve affordability. Yet proponents of negative gearing continually tell us it will not affect house prices at all.
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.
Chris Bowen claims Australian property "concessions" are the highest in the world, getting it wrong twice in the same sentence.
This analysis shows the major issue with housing affordability is the time it takes to save a deposit, not negative gearing, and that mortgage repayments themselves are quite affordable by the standards of the last 23 years.
One of our best economic commentators makes fundamental errors about negative gearing, the ABCC and housing prices.
This morning Bill Shorten admitted on ABC Radio’s AM program that Labor’s negative gearing policy would not achieve its headline goal as a “Positive Plan to Help Housing Affordability”.
Such "low tax" countries as Germany, France, Italy and even New Zealand tax capital gains at 0%, but Labor would tax at a level second only to Denmark.
The Labor Party’s negative gearing policy has the potential to become a rerun of its mining tax – creating major upheaval and uncertainty but raising very little additional revenue.