Is the federal government reconsidering its negative gearing stance?
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Having originally signalled the intention to push the tax cuts through in their original form, the Labor government’s shift in order to deliver savings to lower income brackets has been read by some as a willingness to rethink tax policies that the party had ruled out during the 2022 election.
The debate has been ignited by voices from across the political spectrum, with the Greens long advocating to change the policy that allows Australians to deduct the rental loss on negatively geared properties against their income.
On Monday, 12 February, Greens leader and member for Melbourne, Adam Bandt, said the party would be demanding significant changes to negative gearing and the capital gains tax discount as the Labor party sought Greens members’ support of the Help to Buy legislation, which is currently before Parliament.
“In negotiations with the government over the Help to Buy legislation, we’ll push Labor to end the tax handouts for big property investors, freeze rents and build public housing to help renters and first home buyers,” Mr Bandt said.
Last week, independent senators David Pocock and Jacqui Lambie urged the government to revisit the policy, noting that the majority of Australian federal politicians benefit from the current tax settings, with 65 per cent of all federal parliamentarians owning two or more properties, according to the register of interests.
And on Thursday, 8 February, former NSW premier Dominic Perrottet also opined that the government should be looking at negative gearing as it continues to assess methods of mitigating the current housing challenges facing the nation.
Addressing the Property Council of NSW, Mr Perrottet brought up the controversial policy in a discussion of how tax reform might play a part in addressing the short supply of houses.
“The society today is very different than it was 100 years ago, and the tax system that’s in place today is still reminiscent of that,” the former premier said.
“It should be changed in such a way that drives opportunity, and things like negative gearing should be looked at. It could drive supply,” he said, though Mr Perrottet noted he was not advocating for any specific change.
As recently as Sunday, 11 February, federal Treasurer Jim Chalmers shut down any suggestion that the government was considering changes to the policy, telling Sky News that negative gearing was “not something that we’re proposing, not something that we are considering, not something that we are working up”.
Asked why the government had ruled it out at this stage, Mr Chalmers said the government had “found a whole bunch of other ways to support the housing market and try and build more homes”.
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