Negative gearing: Peter Dutton says changes to tax concessions would ‘smash the housing market’

Anthony Albanese’s plan to consider negative gearing and capital gains tax changes will “smash” the housing market, according to Opposition Leader Peter Dutton, who warned West Australians would be “particularly affected”. In echoes of Labor’s rhetoric before it ripped up the old stage three tax cuts, the Prime Minister said on Wednesday winding back the concessions “was not our policy” but would not explicitly rule out another backflip after revelations Treasury officials were examining potential changes. Opposition Leader Peter Dutton — who is in Perth on Thursday — said West Australians in particular would be affected by the Prime Minister’s tax grab on negative gearing, which he said would “further smash the housing market”. “If you’ve bought a house in the last couple of years and have a big mortgage, the last thing you want Mr Albanese doing is changing the tax settings,” Mr Dutton said. Coalition analysis of tax office figures, supplied to The West, showed 6.5 per cent of WA taxpayers negatively geared their properties — above the national average of 6.1 per cent. The battleground seat of Tangney has the State’s highest proportion of taxpayers using the concession, at 8.5 per cent, followed by Durack (8.1 per cent), Moore (7.8 per cent) and Curtin (7.1 per cent). Speaking ahead of his visit to WA, Mr Dutton said the Greens were dictating Labor’s economic agenda. “Changing negative gearing will further smash the housing market. Rents will go through the roof if the Government starts playing with negative gearing,” he said. “This may as well be the Whitlam Government. They are wrecking the economy and their tax and spend agendaJU will just keep interest rates higher for longer.” Any move to overhaul the tax breaks would represent a major shift from the Albanese Government, which has resisted pressure from the Greens to resurrect the policies former leader Bill Shorten took to the failed 2016 and 2019 elections. It would also reset the Federal election fight over housing, with shadow treasurer Angus Taylor saying the Coalition would not support a “tax on housing” that restricted supply and increased prices. Mr Albanese, Treasurer Jim Chalmers and a host of ministers were peppered with questions on Wednesday after it was reported Treasury was asked to examine changes to negative gearing and capital gains tax concessions. The options modelled were different to Mr Shorten’s old policies and could include a cap on the number of properties an individual could negatively gear, the report said. The West confirmed Treasury has modelled some changes to the tax concessions. But senior Government sources stressed it was just one of a range of ideas being examined as part of continuing policy work. Mr Albanese said he hadn’t requested the Treasury modelling and did not know if Dr Chalmers had. But he played down the work, arguing it was routine business for the public service to examine policy ideas. Asked to rule out negative gearing changes at a press conference on Wednesday morning, he attempted to shift focus to Labor’s $32 billion housing agenda, which includes the Help to Buy and Build to Rent schemes that are stalled in the Senate. “What our Government is considering is fixing housing supply by getting our legislation through the Senate. That’s what we’re considering,” Mr Albanese said. Questions on negative gearing derailed Dr Chalmers’ press conference, which he hoped would focus on monthly inflation having fallen to 2.7 per cent. “We’ve got a housing policy and that (changes to negative gearing) is not in it,” he said. Mr Albanese made a similar comment when asked on ABC radio if negative gearing changes were back on the table. “No, it’s not our policy,” he said. Speaking later on 2GB radio, Mr Albanese said he had “no plans” to change negative gearing rules and hadn’t discussed the idea with “anyone”. The comments are a statement of fact but leave open the possibility that changes could form part of Labor’s re-election platform. Mr Albanese suggested that in order to move on negative gearing he would need to be sure changes would not “dampen” housing supply — a key concern from the property industry. “And I don’t want to do anything that impacts the supply of housing,” he told 2GB. The Greens, which are refusing to pass the Government’s supply-focused housing agenda unless it winds back negative gearing, seized on the reports as evidence Labor was “cracking under pressure”. “Labor said it was impossible,” Greens leader Adam Bandt said. “Now they admit it’s possible. They must commit to doing it.” Curtin MP Kate Chaney said “everything should be on the table” when it comes to tax reform. Labor has already backflipped on one major tax policy this term after it broke an election promise in January to rework the stage three tax cuts in favour of middle to low-income workers. At the time, Mr Albanese and Dr Chalmers — who for months insisted the Government’s position had “not changed” — said the broken promise was justified because the economic circumstances were different. Dr Chalmers did not respond directly when asked if Labor would mount a similar argument to justify changes to negative gearing, instead repeating the Government was proud of its stage three tax cuts. Scaling back the concessions would deliver a budget windfall, with Greens-commissioned Parliamentary Budget Office research estimating tax breaks will cost the Commonwealth about $176 billion over 10 years.