The Turnbull Government is staring down an internal revolt over housing tax breaks, with a prominent Liberal state minister breaking ranks over negative gearing.
NSW Planning Minister Rob Stokes is set to challenge Treasurer Scott Morrison over his stance on negative gearing tax breaks, which he says is making “the dream of home ownership” harder to come by.
Mr Stokes will use a speech in Sydney on Friday to attack negative gearing, arguing the Federal Government needs to focus on helping Australians who want to own their home rather than favouring investors with million-dollar properties.
But Finance Services Minister Kelly O’Dwyer has defended the government’s retention of negative gearing.
“A lot of average mums and dads rely on negative gearing to actually have a foot in the property market,” Ms O’Dwyer told the Nine Network on Friday.
“In fact, the majority of Australians who use negative gearing have got an after-tax income of $80,000 or less.”
The “simplistic solution” of scrapping negative gearing would not fix the housing affordability crisis, Ms O’Dwyer said.
“It’s got a lot to do with supply and demand and the truth is we’re just not building enough houses to meet up with the demand that is there,” she said.
“We need to look at a number of measures, it’s not just one simple solution that’s going to fix the housing affordability crisis.”
The Federal Government was working “hand-in-glove” with states and territories to help young families crack the market, Ms O’Dwyer said.
Opposition infrastructure spokesman Anthony Albanese said overhauling negative gearing — a key Labor policy despite its election loss — was crucial to fixing affordability.
“We’re in danger of developing a society whereby some people are able to buy their sixth, seventh, eighth home, but people trying to get into the housing market to buy their first home simply aren’t able to,” Mr Albanese said.
The federal government must cut back on excesses in the application of capital gains and negative gearing tax breaks, he said.