No changes to negative gearing and a drive to increase private investment in the supply of housing are the key to making the market more affordable, Treasurer Scott Morrison says.
In a key pre-budget address to the Australian Housing and Urban Research Institute today, Mr Morrison will reaffirm the Coalition’s strident opposition to changing negative gearing tax concessions.
Mr Morrison has cited a 2016 COAG report which shows the Commonwealth’s yearly spend of $6.8 billion in improving housing affordability, and the states’ contribution of a further $5 billion.
Despite that, more Australians are experiencing rental stress, there are more homeless Australians, and the rate of Indigenous home ownership is not improving.
“We don’t need to spend more, and it’s not necessarily about spending less, provided we spend it better,” Mr Morrison will say.
Negative gearing was a key battle in the 2016 federal election campaign, after Labor announced it would wind back the tax concession for some properties.
The Coalition has always argued such a move would harm the market, rather than improve affordability.
“Disrupting negative gearing would not come without a cost, especially to renters, let alone the wider economic impacts. Proponents of disruptive negative gearing changes have ignored this fact,” Mr Morrison will say.
“This would not be good news for the 30 per cent of Australian households who rent.
“You cannot make the reckless ‘trust us’ assumption, as the Labor Party have done, that making significant changes to negative gearing would not have a negative impact on rents and the availability of rental stock.”
He will contend that more private investment is needed in affordable housing, to boost supply.