The Turnbull government has no intention of tinkering with negative gearing in the May 3 budget, rather making it a point of difference with Labor.
Prime Minister Malcolm Turnbull will make it clear that while tax reform is a key part of the May 3 budget, tax offsets through negative gearing will remain untouched.
Mr Turnbull will confirm the government’s stance in Sydney on Sunday.
He will take the opportunity to resume his attack on Labor’s proposal to limit negative gearing to new properties should it win the likely July 2 election, warning that would drive up rents and reduce home values.
But Labor senator Sam Dastyari believes the way negative gearing is structured is destroying housing affordability.
He said you have a prime minister who gets more tax breaks for having seven properties, compared to a young person who is trying to get his or her first.
“There is a generation of people being priced out (of the market),” Senator Dastyari told ABC television on Sunday.
“You’ve got to make sure you’ve got a tax system that is actually working for people and the current tax system isn’t. The current tax system is a rort.”
Government minister Michaelia Cash says what Labor is proposing is a tax on housing.
“We are not going to put a tax on housing … we are not touching negative gearing,” Senator Cash told Sky News.